News Summary
Texas has passed House Bill 40, lowering the threshold for cases in Business Courts from $10 million to $5 million. This change aims to make these courts more accessible to smaller businesses and expand their jurisdiction to include intellectual property disputes. The bill signals a significant shift in Texas’s business landscape, enhancing its appeal as a location for commercial activities. The Business Courts have already shown promising results, and further reforms may be on the way to streamline operations and promote efficiency.
Texas has taken significant steps to enhance its business litigation framework with the passing of House Bill 40 (HB 40), which is slated to become law on September 1, 2025. This legislation lowers the threshold for cases eligible for the statewide Business Courts from $10 million to $5 million, significantly broadening access for businesses embroiled in complex commercial disputes. It also expands the jurisdiction of these courts to cover intellectual property (IP) issues, trade secrets, and the enforcement of arbitration agreements.
Governor Greg Abbott signed HB 40 into law on June 20, 2025, after garnering bipartisan support in the Texas House of Representatives with a vote of 99-40 on May 13, 2025. The new rules require the Texas Supreme Court to establish guidelines for determining jurisdiction in Business Court cases. This move is part of a comprehensive effort to strengthen Texas’s position as a preferred location for business incorporation, akin to Delaware and New York, which are known for their business-friendly legal environments.
The primary objective of the Business Court is to streamline the resolution of high-stakes business disputes, thereby promoting efficiency and consistency within the legal process. Since its launch nearly a year ago, the Business Court has already made notable progress, with 53 cases filed in the first 100 days. Houston’s Eleventh Division received the majority of these cases, indicating a concentrated demand for specialized resolution in Texas’s largest city.
As of now, eleven cases have been successfully closed, highlighting the court’s capability to resolve disputes in a timely manner. Approximately one-third of the pending cases are removals from district courts, indicating that attorneys are increasingly seeking more specialized jurisdiction for their cases. Some judges have ruled that cases filed prior to September 1, 2024, do not meet the criteria for removal, creating a backlog that the Business Court is now tasked with managing.
In response to its initial caseload, the Business Court has established local rules to streamline motion practices and corporate disclosures, which are essential for expediting the litigation process. Docket management is also a priority, with cases being reassigned between divisions to achieve a more balanced workload among judges. These steps have been pivotal in addressing the challenges posed by an evolving caseload.
The enactment of HB 40 is expected to encourage more businesses to consider Texas as a prime location for dispute resolution. The changes also signify a commitment to refining the legal infrastructure surrounding business operations, thereby fostering a more favorable environment for commercial activities.
Looking ahead, discussions regarding potential future reforms are ongoing, including proposals for additional reductions in the amount in controversy that would qualify for Business Court consideration, as well as the possibility of extending the terms of judges overseeing these specialized cases. These discussions are indicative of the Texas legislature’s commitment to continuously improve the business climate and legal framework within the state.
As Texas continues to grow as a business hub, the alterations brought about by HB 40 signal a proactive approach to modernize its legal system and address the needs of the business community effectively. The anticipated benefits of streamlined disputes and enhanced legal support promise to position Texas as a leading jurisdiction for business litigation.
Deeper Dive: News & Info About This Topic
- Dykema: Can Texas Business Courts Handle More Cases Without Adding Judges?
- Pillsbury: Bipartisan Passage of House Bill Expanding Texas Business Court Jurisdiction
- Vinson & Elkins: Texas Business Courts Quarterly Update Q1 and Q2 2025
- National Law Review: Texas Legislature Strengthens Business Court with Expanded Jurisdiction
- Wikipedia: Texas Business Courts
- Google Search: Texas Business Courts
- Encyclopedia Britannica: Texas Business Courts
- Google News: Texas Business Courts
Author: STAFF HERE COLLEGE WRITER
The COLLEGE STATION STAFF WRITER represents the experienced team at HERECollegeStation.com, your go-to source for actionable local news and information in College Station, Brazos County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Brazos Valley Fair & Rodeo, Chilifest, and Aggie Muster. Our coverage extends to key organizations like the Bryan-College Station Chamber of Commerce and United Way of the Brazos Valley, plus leading businesses in education, biotechnology, and retail that power the local economy such as Texas A&M University, Fujifilm Diosynth Biotechnologies, and H-E-B. As part of the broader HERE network, including HEREAustinTX.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
