On June 20, 2025, Texas Governor Greg Abbott signed House Bill 40 (HB 40), a piece of legislation that expands the Texas Business Court's jurisdiction and streamlines procedures to expedite commercial disputes. HB 40's notable changes include:
- Reducing the aggregate consideration necessary to be considered a "qualified transaction" for purposes of Business Court jurisdiction from $10 million to $5 million, and amending the definition of "qualified transaction" to include a "series of related transactions," which allows parties to satisfy the consideration threshold through a series of smaller transactions;
- Expanding the Business Court's concurrent jurisdiction (with Texas District Courts) to encompass a wide range of intellectual property disputes (such as those involving trade secrets), as well as claims arising out of, or related to, arbitration (such as an action to enforce an arbitration agreement, to appoint an arbitrator, or take other, similar actions authorized by an arbitration agreement);
- Requiring the Texas Supreme Court to adopt rules of civil and judicial procedure that provide for the prompt determination of Business Court jurisdiction;
- Allowing civil actions commenced prior to September 1, 2024, that are otherwise within the Business Court's jurisdiction to transfer to the Business Court on a motion of a party and permission of the Business Court under the rules to be adopted by the Texas Supreme Court; and
- Removing certain "sunset" provisions from the Texas Government Code that would have abolished non-operating business court pisions on Sept. 1, 2026.
HB 40 will become effective on September 1, 2025. With these amendments, HB 40 further demonstrates Texas's commitment to making its Business Court a sought-after destination in which parties can resolve a variety of different claims concerning business organizations and disputes, including claims that are focused on an organization's internal governance and managers, for many years to come.
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