SIGNIFICANT FIFTEENTH COURT OF APPEALS DECISION: In re: Joseph Beard., No. 15-26-00136-CV (Tex. App.-15th. Dist. October 15, 2026).
Introduction
This case involves the scope of jurisdiction possessed by the Texas Business Courts.
Factual Background
In 2015, plaintiff Joseph Beard began employment at the venture capital firm, Perot Jain. His written contract provided that Beard would be “eligible for a 3 percent promote based on [his] involvement in business at [Perot Jain].” In 2020, Beard left Perot Jain and executed a “Separation Agreement and General Release,” which provided that Beard would receive a 3% promote based on his involvement in the portfolio companies listed in Schedule A of the release. Beard subsequently signed an additional agreement stating that he had been paid in full with regard to the Schedule A companies.
This would not be the end of the matter. One company, Access Healthcare, had been “omitted” from Schedule A. This company was sold in 2025 in a $2 billion dollar deal with Perot Jain. Unsurprisingly, Beard came knocking on Perot Jain’s door for his three percent. Also unsurprisingly, Perot Jain replied, in effect, “what three percent?” Thus, beginning this litigation.
Beard’s position is Perot Jain represented to him at the time of the 2020 separation, conducting a valuation of Access Healthcare at that time would be too difficult, and Beard would get his three percent when Access Healthcare was sold. Perot Jain’s position is different.
Beard filed suit in Dallas County District Court and Perot Jain had the case removed to Business Court. The question on appeal: was this removal proper?
Court of Appeals Ruling
The Fifteenth Court of Appeals, taking an expansive view of the Business Courts jurisdictional reach, answered in the affirmative. The Business Court has jurisdiction, under the Texas Government Code, in “an action arising out of a qualified transaction” and “in which the amount in controversy exceeds $5 million.” Tex. Gov’t Code Section 25A.004(d)(1). A qualified transaction is a transaction “under which a party…pays or receives, or is obligated to pay or is entitled to receive, consideration with an aggregate value of at least $5 million….” Id. Section 25A.001(14)(A). There was no dispute the transaction exceeded $5 million dollars. The issue was whether Beard’s causes of action for common law fraud, fraudulent inducement, promissory estoppel, quantum meruit, and breach of contract “arose out of” the sale of Access Healthcare.
The Fifteenth Court of Appeals held that it did. They held that the term “arise out of” means there is simply a “causal connection or relation, which is interpreted to mean that there is but-for causation, though not necessarily direct or proximate causation.” Beard at paragraph 10. The court of appeals rejected plaintiff’s argument that more than but-for causation is required. The court of appeals also rejected Beard’s argument that the Business Courts were not intended for individual litigant’s like himself but were for “big businesses.” Despite comments suggesting this from the Senate Debates on the bill that created the Business Courts, the court of appeals stated they must “construe the language the legislature enacted… not what the legislature…may have meant to enact.” Beard at paragraph 23. The court of appeals bottom line: “The Access Healthcare sale is a but-for cause of the litigation because it is one without the litigation could not have occurred.” Beard at paragraph 21. Hence, jurisdiction in the Business Court was proper.
The Beard opinion is favorable to business defendants as the easier it is to remove to the Business Court the fewer lawsuits will have to be litigated in the less experienced and less predictable County and District Courts.
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