USA – TEXAS Trends and Developments Contributed by: Daniella Main, Alix Allison, Richard Guiltinan and Catherine G. Pritchard, Vartabedian Hester & Haynes LLP
against any healthcare provider for a “claimed depar- ture from accepted standards of medical care, or health care, or safety or professional or administrative services directly related to health care” (Tex. Civ. Prac. & Rem. Code § 74.001 (a)(13)). As a result, the TMLA can apply to causes of action that may not seem like conventional medical malpractice. For example, in Collin Creek Assisted Living Center, Inc. v Faber , the Texas Supreme Court held that a lawsuit arising out of an injury to a resident of an assisted living facility qual- ified as a healthcare liability claim (671 S.W.3d 879, 884 (2023)). These types of cases cannot be heard by the Business Court, not even through supplemental jurisdiction. Likewise, personal injury lawsuits, which often involve medical expert testimony, are wholly excluded (Tex. Gov’t Code § 25A.004 (h)(2)). Healthcare enforcement actions also fall outside the Business Court’s purview. These claims typically include a government agency as a party, and the Business Court does not have jurisdiction over civil claims “brought by or against a governmental entity” (Tex. Gov’t Code § 25A. 004 (g)(1)(A)). For example, the Texas Office of the Attorney General handles Med- icaid fraud claims arising out of the Texas Health Care Program Fraud Prevention Act (formerly known as the “Texas Medicaid Fraud Prevention Act”). Licensing and sanctions disputes involve state entities such as the Texas Medical Board. And it is hard to envision an enforcement action that would meet the prerequisites for the Business Court’s supplemental jurisdiction. Moreover, False Claims Act cases, which frequently involve medical providers, cannot be removed to the Business Court because they involve a federal statute and are litigated in federal court. Early jurisdictional guidance On the other hand, enforcement actions often gener- ate ancillary litigation among private parties. The Busi- ness Court recently decided one such case involving investors in a laboratory management and diagnostic services company ( Riverside Strategic Cap. Fund I, L.P. v CLG Investments, LLC , 2025 Tex. Bus. 35, No 25-BC01B-0006 (1st Div.) (September 17, 2025)). The plaintiffs sued the defendants over alleged misrepre- sentations in a securities purchase agreement about the lab company’s compliance with applicable laws (id at *1). The basis for the allegations included two Medi-
care payment suspensions, a qui tam lawsuit and a criminal investigation (id at *2–*4). The Business Court granted summary judgment for the defendants, find- ing that the four-year statute of limitations period had run on the plaintiffs’ claims (id at *9). The Riverside case illustrates how the Business Court will focus on the commercial rather than the clinical side of medicine. Joint ventures involving healthcare providers are one business arrangement that may benefit from the Business Court’s efficiencies. Man- agement services organisations are another example. Hospital staffing, leasing and services agreements are also subjects of contract disputes and tortious inter- ference claims. For complex transactions, providers may consider forum selection clauses stipulating the venue in the Business Court, as long as the amount in controversy requirements are met. In addition, the recent amendments discussed above should broaden the Business Court’s applicability to the healthcare field in two key ways. • First, the changes to the amount in controversy requirements should bring more healthcare-related disputes similar to Riverside before the Business Court. • Second, identifying “pharmaceuticals, biotechnol- ogy products, and bioscience technologies” as examples of intellectual property will appeal to the pharmaceutical industry. And other ancillary ser- vices providers, such as medical device manufac- turers and distributors, may consider the Business Court for trade secret disputes – for example, over customer lists or the misuse of confidential infor- mation related to specialised products. Given the importance of these sectors to modern medicine, these new provisions should attract companies in the healthcare space to the Business Court. Looking Ahead: The Role of the Business Court and Strategic Implications With more cases testing the expanded jurisdictional framework, the Business Court is poised to deliver practical guidance across the sectors that power Tex- as’s economy and solidify its role as a national busi- ness hub. As Texas continues to attract more compa- nies to reincorporate, invest and transact in the state,
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