Taking Care of Business—Changes to the Texas Business Court

As a result of recent legislation, more cases will likely find their way to the Texas Business Court. On June 20, 2025, Governor Abbott signed House Bill 40 (“H.B. 40”) into law, which expands and clarifies the jurisdiction of the Texas Business Court and directs the Supreme Court of Texas to create new procedural rules “for the prompt, efficient, and final determination of business court jurisdiction.” H.B. 40 goes into effect September 1, 2025.

Key Takeaways from H.B. 40

• Expansion and Clarification of Jurisdiction. The Texas Business Court’s civil jurisdiction is expanded and clarified to include actions related to intellectual property (including trade secrets), as well as actions to enforce arbitration agreements.
• Lower Amount in Controversy Threshold. To invoke the Business Court’s civil jurisdiction, the amount in controversy threshold is lowered from US$10 million to US$5 million.
• “Qualified transaction.” The definition of a “Qualified transaction” is expanded to include a “series of related transactions.” Additionally, the minimum consideration requirement for a qualified transaction is lowered from US$10 million to US$5 million. These changes make it easier for contract disputes to fall within the Court’s jurisdiction.
• Actions Commenced Before September 1, 2024. Civil actions commenced before September 1, 2024 within the jurisdiction of the Texas Business Court may be transferred and heard by the Business Court on an agreed motion of a party. Parties will also need permission from the Court, “under rules adopted by the supreme court [of Texas] for the purpose.”
• Removal of Sunset Provisions. Provisions for the abolishment of non-operational divisions of the Business Court by September 1, 2026 were deleted, preserving possible expansion of the Court.
• Supreme Court of Texas to Establish Procedures. The Supreme Court of Texas is charged with establishing procedures for the prompt determination of Business Court jurisdiction for actions filed in that Court.

H.B. 40 set out several examples of provisions the Supreme Court of Texas may want to consider and potentially adopt, including provisions for jurisdictional determinations based on pleadings or summary proceedings, appropriate standards of proof, limitation periods related to asserting and waiving rights, review of jurisdictional determinations, interlocutory appeals, and accelerated appeals. Looking to the future, these rules will likely provide even more guidance for litigants who file lawsuits in the Texas Business Court.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Timothy S. Durst, an O’Melveny partner licensed to practice law in Texas; Whit Roberts, an O’Melveny partner licensed to practice law in Texas; Denise Scofield, an O’Melveny partner licensed to practice law in Texas; Kristin Alvarado, an O’Melveny counsel licensed to practice law in Texas; Joshua Jilovec, an O’Melveny associate licensed to practice law in Texas; and Molly B. Schuminer, an O’Melveny associate licensed to practice law in Texas, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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