By Chris Bankler

In Alamo Title Company v. WFG National Title Company of Texas, LLC, the Texas Business Court denied a motion to remand and held that the dispute fell within the court’s jurisdiction under Chapter 25A. The opinion offers a detailed discussion of the Texas Business Court’s topical jurisdiction provisions, concluding that the lawsuit satisfied the statute through two independent pathways: (1) allegations that a managerial official breached duties owed to the organization, and (2) claims relating to intellectual-property ownership or use—even though the plaintiff did not plead a standalone trade-secret claim.

Background

Alamo Title sued competitor WFG National Title Company, alleging WFG orchestrated a “mass raid” of employees and customers, including recruiting Alamo’s president and other employees. The petition alleges that WFG and former Alamo personnel used confidential information—including customer lists and compensation data—to compete against Alamo. The case was initially filed in Bexar County district court. WFG removed the case to the Texas Business Court, and Alamo moved to remand, arguing that the court lacked jurisdiction.

Amount in Controversy

The court first addressed the $5 million jurisdictional threshold. Applying the Business Court’s burden-shifting framework for jurisdictional challenges, the court held that WFG’s removal notice sufficiently alleged damages exceeding the statutory minimum and that Alamo failed to rebut that allegation with evidence.

Topical Jurisdiction

The most significant portion of the opinion addresses whether the lawsuit fits within Chapter 25A’s enumerated subject-matter categories. The court concluded that two separate statutory provisions independently supported jurisdiction.

1. Managerial-Official Breach of Duty

The court first examined jurisdiction under Texas Government Code § 25A.004(b)(5), which covers actions alleging that a managerial official breached duties owed to the organization by reason of the person’s status as an officer or manager.

The court emphasized, “Alamo concedes Hall, as its president, was a managerial official.”

The court further explained that the petition’s allegations necessarily relied on duties arising from that role:

“Alamo’s pleading alleges a managerial official’s breach of duties owed by reason of his status.”

Based on those allegations, the court concluded that jurisdiction was satisfied:

“On this basis alone under the record before it, the court can, and must, exercise jurisdiction of this suit.”

2. Intellectual-Property-Related Claims

The court also found jurisdiction under § 25A.004(d)(4), which covers actions relating to intellectual-property ownership or use, including trade secrets.

Although the plaintiff did not plead a standalone trade-secret claim, the court explained that the statute uses broad language:

“Subsection (4) is independently sufficient to confer jurisdiction on this court.”

The court emphasized that even indirect connections may qualify:

“Though even an indirect connection may satisfy Subsection (4) under Texas’s construction of the term relating to, this case does not push the term to any extreme.”

The court concluded that the allegations regarding misuse of confidential business information were sufficient:

“Alamo has pleaded its case. The court has jurisdiction of this action because it is one ‘relating to the ownership and use of intellectual property.’”

Jurisdiction Extends to the Entire Case

Finally, the court emphasized that once one jurisdictional hook exists, the Texas Business Court’s authority extends to the entire lawsuit.

“The term ‘action’ refers to the entire lawsuit—not individual claims or causes of action.”

Once jurisdiction exists under any statutory provision, the court may adjudicate all claims in the case.

Key Takeaways

1. Managerial-official allegations may suffice even if the officer is not a defendant.
2. A trade-secret cause of action is not required for intellectual-property jurisdiction.
3. Jurisdiction attaches to the entire lawsuit once one statutory hook applies.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For more information, please contact Chris Bankler or a member of the Trial & Appellate Litigation practice.

Meet Chris

Chris Bankler focuses on the resolution of disputes for businesses and financial institutions. He counsels clients through the process of complex business litigation, including general business disputes, fraud claims, breach of fiduciary duty cases, and complex business bankruptcy litigation. He has served as litigation counsel in more than 100 cases in state and federal courts, as well as FINRA and AAA arbitrations.