Texas created its statewide Business Court system with the goal of offering a specialized forum for handling complex commercial disputes. Since we last reported, and effective as of September 1, 2025, the Texas legislature passed House Bill 40 (HB 40), bringing important changes to the Texas Business Court.
HB 40 has significantly broadened the Texas Business Court’s jurisdiction by lowering the monetary threshold for qualified transactions from $10 million to $5 million, as well as allowing aggregation of related transactions to meet the required threshold. Additionally, the court’s subject-matter jurisdiction now includes a wider array of business disputes, such as intellectual property and arbitration-related matters, making it a more comprehensive forum for a variety of complex commercial disputes. HB 40 also includes additional amendments making it clear that the Texas Business Court is here to stay.
Lower monetary thresholds
The most significant change to take effect is that the amount-in-controversy threshold for cases arising out of a “qualified transaction” has been lowered from $10 million to $5 million. The amendment also expands the meaning of “qualified transaction” to include a “series of related transactions,” which allows parties to reach the amount-in-controversy threshold by aggregating “the total amount of all joined parties’ claims.”
With the amendment, a broader range of commercial disputes will now fall within the court’s jurisdiction. The change is undoubtedly intended to drive additional cases into the Texas Business Court, which is now the preferred venue for handling complex business litigation in the state.
Broader subject matter covered
The Texas Business Court’s jurisdiction has also been expanded to include a broader range of business disputes. The court originally had jurisdiction over only corporate governance, fiduciary duty, and securities matters. But effective September 1, 2025, it now has jurisdiction over intellectual property disputes, including those involving patents, trade secrets, software, data security, and biotechnology.
HB 40 further provides the Texas Business Court with the authority to handle a variety of arbitration-related matters. Parties that otherwise have standing to file claims in Business Court may now turn to the court to enforce arbitration agreements, appoint arbitrators, and review arbitral awards. This change provides businesses with a more predictable venue for addressing arbitration issues that may arise.
Other notable changes
- Venue. HB 40 confirms that parties may include clauses designating the Texas Business Court as the exclusive venue for matters involving derivative proceedings, governance or internal affairs disputes, fiduciary duty claims, and other actions arising out of the Texas Business Organizations Code.
- The Supreme Court will create jurisdictional framework. The legislature has also tasked the Texas Supreme Court with creating rules and procedures for resolving jurisdictional disputes. This directive is designed to dispose of jurisdictional challenges early in a case and adheres to the Business Court’s purpose of efficiently addressing complex business litigation.
- Excluding consumer actions. While the Business Court originally had supplemental jurisdiction over claims for certain consumer transactions, HB 40 prohibits consumer claims in Business Court, regardless of whether the claim is otherwise within the court’s supplemental jurisdiction.
- Geographic and judicial expansion. HB 40 transfers Montgomery County (Conroe and The Woodlands) out of the inactive Second Business Court Division and into the Eleventh Division of the Texas Business Court (Houston). This will expand the Business Court’s venue to include more cases and to increase the Houston Division’s docket. In addition, when the Business Court was originally created, funds were not allocated for six rural divisions. These divisions were set to be abolished if they did not receive funding during the 2025 legislative session. However, the amendment removed such language, providing for an opportunity to fund the remaining six divisions during future legislative sessions.
Through HB 40, the Texas legislature made other minor changes to the Business Court, which can be found on the Texas Legislature Online website. However, the expanded scope and other changes discussed above make clear the importance of the Business Court in the Texas legal system.
Client Alert 2025-226
