On January 3, 2025, in Cause No. 24-BC03A-0004, C Ten 31 LLC v. Tarbox, et al. Judge Andrews in the Third Division issued an order and opinion resolving questions about the scope of the Court’s jurisdiction and the burden of proof for challenges to amount-in-controversy pleadings in the removal context.
The court determined that Section 25A.004(e) of the Texas Government Code, granting the court jurisdiction to provide “injunctive relief or a declaratory judgment” for “a dispute based on a claim within the court’s jurisdiction incorporates the amount-in-controversy limit of the other subsections, i.e., the $5 million limit, the $10 million limit, or the exemption from any amount-in-controversy limit for publicly traded companies. Tex. Gov’t Code §25A.004(b)-(d), (e). Thus, the Business Court does not have jurisdiction over an action for injunctive or declaratory relief if the rights at issue do not meet those requirements.
The court also held that where the notice of removal pleads that the monetary value of the rights at issue are within the Court’s jurisdiction and the petition does not plead otherwise, then the party seeking remand bears the initial burden of showing that the amount pleaded in the removal notice is fraudulent or that a different amount is established (i.e., by statute). While this framework is a departure from how similar matters are handled in federal court, this framework is consistent with the burden-shifting framework applied to jurisdictional challenges raised through pleas to the jurisdiction and motions for traditional summary judgment.”
The court's opinion and order is available here:
