Retroactive Application of H.B. 40's Reduced Jurisdictional Threshold Permits Second Removal to Business Court
Read the Court's Opinion (PDF)
Judge Jerry D. Bullard
In OWL Assetco I v. EOG Resources, Judge Bullard held that the Texas Legislature's reduction of the amount-in-controversy threshold from $10 million to $5 million under House Bill 40 constituted discoverable "facts establishing the Business Court's jurisdiction" under Section 25A.006(f), permitting EOG to remove a previously remanded breach-of-contract action within 30 days of the statute's September 1, 2025 effective date. The decision clarifies that statutory changes affecting jurisdictional prerequisites can trigger the removal clock even after an initial remand.
Court Staff Summary
The Court addresses whether the Texas Legislature’s amount-in-controversy threshold reduction gives the Texas Business Court jurisdiction to hear a previously remanded action and whether the subsequent removal of the action was proper and timely. The Court examines the statutory construction of House Bill 40 and determines removal was both proper and timely under Texas Government Code 25A.006(f).
Background: A Water-Services Contract Dispute Returns to Business Court
OWL AssetCo I, LLC provides water-related services to oil and gas producers across multiple states, including New Mexico. EOG Resources, Inc. is an exploration and production company operating in the Permian and Delaware Basins. In December 2019, the parties entered into a contract concerning the transportation and disposal of produced water in and around Eddy County, New Mexico. On April 9, 2025, OWL filed a breach-of-contract action in Harris County's 152nd District Court, alleging EOG failed to ensure produced water met contractual specifications and seeking indemnification for approximately $8.22 million in property damages.
EOG initially removed the case to the Business Court on May 12, 2025, but Judge Bullard granted OWL's first motion to remand on July 25, 2025, finding the amount in controversy fell short of the then-applicable $10 million threshold. Between EOG's first removal and the remand order, however, the Texas Legislature enacted House Bill 40, which reduced the jurisdictional threshold to $5 million for actions arising out of qualified transactions under Section 25A.004(d)(1), effective September 1, 2025.
The Jurisdictional Question: Can Changed Law Support Re-Removal?
Two days after H.B. 40 took effect, EOG filed a second notice of removal, asserting the Business Court now had jurisdiction because OWL's $8.22 million claim exceeded the new $5 million threshold. OWL moved to remand a second time, advancing two arguments: first, that "a change in the law is not the discovery of 'facts establishing the Business Court's jurisdiction'"; and second, that EOG had not discovered any new case-related facts within 30 days of H.B. 40's effective date because "EOG has long-known the amount in controversy exceeds $5 million."
The Court's Reasoning: Plain Meaning and Legislative Intent
Judge Bullard rejected both arguments, holding that "EOG is sound in its plain-meaning interpretation of H.B. 40's jurisdictional establishment and it properly removed the action to this Court." The opinion emphasized that removal is proper when done "not later than 30 days after a party discovered or reasonably should have discovered, facts establishing the Business Court's jurisdiction over the action." Applying canons of statutory construction, the court explained:
In construing a statute, a court's "primary objective" is to determine legislative intent which, when possible, is discerned from the plain meaning of the words chosen by the legislature.
The court found that H.B. 40's enactment and effective date constituted discoverable facts establishing jurisdiction. The statute's language—"facts establishing the Business Court's jurisdiction"—was sufficiently broad to encompass changes in the legal landscape that bring a case within the court's subject-matter jurisdiction. Because EOG filed its second removal notice on September 3, 2025, just two days after the September 1 effective date, the removal was timely under the 30-day window prescribed by Section 25A.006(f)(1).
Practical Significance for Texas Commercial Litigators
This decision has immediate implications for practitioners navigating Business Court jurisdiction in the wake of H.B. 40. First, it confirms that the reduced $5 million threshold applies retroactively to cases filed on or after September 1, 2024, potentially bringing a substantial volume of mid-sized commercial disputes within the Business Court's reach. Second, and more significantly, it establishes that statutory amendments affecting jurisdictional prerequisites can restart the removal clock, even after a case has been remanded for lack of jurisdiction. Defendants who previously failed to establish Business Court jurisdiction should reassess whether H.B. 40 now permits removal.
The opinion also underscores the court's textualist approach to jurisdictional statutes. By focusing on the plain meaning of "facts establishing the Business Court's jurisdiction" and declining to read implicit limitations into the removal statute, Judge Bullard signaled that the Business Court will construe its jurisdictional grants broadly, consistent with the Legislature's intent to expand the court's docket. Plaintiffs seeking to avoid Business Court jurisdiction will need to structure their pleadings carefully, particularly in cases involving qualified transactions where damages may approach or exceed the $5 million threshold.