In Bakery LLC v. Naterra International, Inc., decided on Sept. 15, 2026, Judge Melissa Andrews of the Texas Business Court’s Third Division addressed an important timing question: when does the 30-day removal deadline begin if counterclaims— rather than the original petition — first bring an action within the Texas Business Court’s $5 million amount-in-controversy threshold?
The court’s ruling may provide guidance for businesses and practitioners navigating the Texas Business Court removal process, particularly when counterclaims alter the stakes of litigation.
Background and Key Facts
The case began as a straightforward collection matter. In May 2026, The Bakery LLC and Ken Media LLC filed a suit on sworn account in state court, alleging that Naterra International, Inc. owed approximately $1.35 million for services rendered. Standing alone, this amount fell below the Texas Business Court’s jurisdictional minimum.
However, on July 1, 2026, Naterra filed counterclaims asserting damages exceeding $60 million. Within 30 days of that filing, the plaintiffs removed the action to the Texas Business Court, arguing that the combined claims now exceeded $5 million and arose from a qualified transaction.
Naterra moved to remand, contending that removal was untimely. Its argument rested on pre-suit communications: Naterra had responded to a demand letter by threatening to assert counterclaims valued at over $60 million. Naterra argued that this threat put the plaintiffs on notice that the amount in controversy would exceed the jurisdictional threshold, and the removal clock should have started then — or at least when the original petition was filed.
The Court’s Analysis
Judge Andrews denied the motion to remand, holding that the removal was timely.
The court explained that under Texas Government Code § 25A.006(f)(1)(A)–(B) and Texas Rule of Civil Procedure 355(c)(2)(A), a party must file its notice of removal within 30 days after it “discovered, or reasonably should have discovered, facts establishing the business court’s jurisdiction over the action.” The critical question, therefore, was what facts establish jurisdiction.
The court emphasized that jurisdiction depends on the “claims in the suit” — that is, claims that have actually been pleaded and joined in the action. The court held that counterclaims that have not yet been filed are not part of the lawsuit, regardless of whether a party has threatened to bring them. As the court observed, a party that threatens counterclaims “may elect to bring such counterclaims once suit is filed but may also elect to forgo some or all of them or to bring different or additional counterclaims.”
In other words, the court held that pre-suit threats are inherently speculative. A court’s jurisdiction cannot rest on “hypothetical future events that might occur.”
Critically, the court distinguished DrinkPAK, LLC v. PRIII/Crow Building C, LP, where the removal deadline was triggered when the defendants knew the originally pleadedclaims exceeded the jurisdictional threshold. There, the plaintiff’s own petition satisfied the amount-in-controversy requirement from the start. Here, by contrast, the plaintiffs’ original suit sought $1.35 million — well below the Texas Business Court’s $5 million minimum.
Practical Takeaways for Businesses and Practitioners
This decision may offer several practical lessons:
1. The removal clock starts when qualifying claims are actually filed. Pre-suit demand letters, settlement negotiations, or threats of counterclaims may not trigger the 30-day removal window. Parties should consider monitoring the pleadings themselves to determine when a jurisdictional basis and corresponding deadline is triggered.
2. Counterclaims may open the door to Texas Business Court jurisdiction. Even if a plaintiff’s original claims are modest, a defendant’s counterclaims, if and when asserted, may push the total amount in controversy over the $5 million threshold — providing either party an opportunity to remove.
3. Strategic timing may have limits. The court noted that adopting Naterra’s position would create an unworkable system: a defendant could threaten large counterclaims before suit, wait more than 30 days to file them, and thereby deprive all parties of a timely removal opportunity. The court rejected this outcome as inconsistent with the statutory framework.
4. Pre-suit communications still matter – but for different purposes. While pre-suit threats do not start the removal clock, they may serve as evidence of the value of claims once those claims are actually pleaded. Practitioners should consider documenting such communications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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