On May 8 in Aspire Commercial, LLC v. Christopher Stephenson and BES.AI, LLC, Judge Stagner of the Eleventh Division addresses the question of whether a party seeking to remove a case to the Texas Business Court must wait to do so until the district court resolves a pending application for injunctive relief. The answer is no.
Link to Background Background
Aspire Commercial, LLC sued Christopher Stephenson, alleging misappropriation of trade secrets under the Texas Uniform Trade Secrets Act and breach of fiduciary duty, and seeking injunctive relief. After preliminary proceedings, the district court entered a temporary restraining order against Stephenson. The district court also heard Aspire’s application for a temporary injunction but did not immediately rule, requesting supplemental briefing.
Aspire then filed an amended petition and request for injunctive relief, adding BES.AI, LLC as a defendant. The district court entered a second temporary restraining order against Stephenson and BES.AI.
While its application for an injunction was pending, Aspire discovered what it alleged to be additional misconduct that increased its claimed damages above the $5 million threshold required for removal to the Business Court. Before the district court ruled on the first application for a temporary injunction, and before it had heard the second application for a temporary injunction, Aspire removed the case to the Business Court.
Stephenson moved to remand, arguing primarily that removal was premature because Texas Government Code § 25A.006(f)(2) requires parties to wait until a pending temporary injunction application is resolved before removing a case to the Business Court.
Link to Business Court Clarifies: Texas Law Gives Parties the Option – Not the Obligation – to Initiate Removal After a Decision Is Made on an Application for Injunctive Relief Business Court Clarifies: Texas Law Gives Parties the Option – Not the Obligation – to Initiate Removal After a Decision Is Made on an Application for Injunctive Relief
Section 25A.006(f)(2) provides that, if a temporary injunction application is pending at the time a party discovers facts establishing Business Court jurisdiction, then the notice of removal must be filed “not later than the 30th day after the date the application is granted, denied, or denied as a matter of law.”
Stephenson argued this language prohibits removal until after the district court rules on pending applications for injunctive relief. The Business Court disagreed. Applying the statute’s plain language, the court concluded that § 25A.006(f)(2) provides only a “deadline” and “identifies the latest permissible date for removal.” The statute does not say that removal “may not be filed until” or “shall be filed only after” disposition of an application for injunctive relief. In other words, the party has the option – not the obligation – to initiate removal after a district court rules on an application. The court further reasoned that, had the Legislature intended to create a mandatory waiting period, it could have done so “through straightforward language expressly prohibiting removal while a TI application remained pending.” Because the Legislature has not set any such limitations, the court rejected the invitation to do so on its own.
Link to Additional Holdings Additional Holdings
The Business Court also rejected Stephenson’s challenge to Aspire’s allegations regarding the amount in controversy, as well as his forum-shopping argument.
Regarding the amount in controversy, the court reaffirmed that allegations regarding the $5 million threshold are to be construed liberally and concluded the threshold was met: Aspire pleaded sufficient facts to support more than $5 million in controversy. On the other hand, Stephenson neither produced evidence to show that Aspire’s allegations were somehow fraudulent nor proved that the amount had to be below the threshold.
Regarding Stephenson’s forum-shopping argument, the court concluded that motive is “immaterial to whether remand is proper.” The only relevant considerations are subject-matter jurisdiction and procedural compliance.
Link to Practical Takeaways Practical Takeaways
This opinion offers several important considerations:
- Act Promptly on Removal. If there is no benefit to a district court judge ruling on a pending application for injunctive relief, then consider removing the case to Business Court when facts establishing jurisdiction come to light. This opinion clarifies that there is no requirement that a party wait for a ruling.
- Support Jurisdictional Challenges With Evidence. When challenging the removing party’s jurisdictional allegations, buttress the challenge with evidence. This opinion shows that attorney argument, standing alone, is not sufficient.