As decreed by statute, a notice of removal must be filed “within 30 days after the date the party requesting removal of the action discovered, or reasonably should have discovered, facts establishing the business court's authority to hear the action.” Tex. R. Civ. P. 355(c)(2)(A). This second portion of the statute has left some room for ambiguity. 

Thus, the Texas Business Court, in Bakery LLC v. Naterra International, Inc., recently clarified when the clock starts for a party to remove a case to the business court. Previously, the business court considered a similar issue in SafeLease Insurance Services LLC v. Storable, Inc., where the court held that the 30-day removal clock does not begin running until a lawsuit is filed, since at that point no action exists for the court to have authority over. 

DrinkPAK, LLC v. PRIII/Crow Building C, LP also preceded Bakery LLC v. Naterra International, Inc. In DrinkPAK, LLC, the court concluded that a counterclaim does not create a new action. The more novel issue in Bakery LLC is the combination of the counterclaim with the fact that its filing does bring the action as a whole into the business court’s jurisdiction as a result of the amount in controversy being raised. 

In Bakery LLC v. Naterra International, Inc., the defendant filed a counterclaim, and the plaintiff attempted to remove the case to the business court. The defendant argued that the deadline to remove had passed because the plaintiff was aware that the counterclaim may be filed before litigation even began. The defendant had previously threatened to file its counterclaims and asserted in a demand letter to the plaintiff that the value of those counterclaims was over $60 million (well over the business court’s $5 million jurisdiction requirement). The Court dismissed this argument, finding that a counterclaim is not a claim in a suit until actually filed. 

The 30-day clock to remove a newly filed counterclaim begins when it is filed, regardless of whether the other party could have known about it beforehand, and its filing can bring the action into the business court’s jurisdiction. 

Key Takeaways

• The 30-day clock starts once a claim is pleaded, not when a party first threatens to bring the claim or when the parties first discuss the claim. 
• If a claim is added later down the line, that claim can bring the action as a whole into the jurisdictional purview of the business court. 
• A new counterclaim does not create a new action, but it can bring an existing action within the business court’s jurisdiction by fulfilling its amount-in-controversy.