Texas Bar Journal • September 2025

The Legislative Update

Civil Litigation and Appellate Law

Written by Jerry D. Bullard

The following briefly describes some of the bills passed by the 89th Texas Legislature that will directly affect Texas civil trial and appellate practitioners. Unless otherwise indicated, all bills are effective September 1, 2025.

For more detailed and additional background information on the following bills, please go to Texas Legislature Online at www.capitol.state.tx.us.

Business Organizations/Litigation
SB 29¹ amends various sections of the Texas Business Organizations Code (TBOC) and does several things, including the following:

Allows governing documents of a domestic entity to specify that Texas courts shall serve as the exclusive forum and venue for internal entity claims.
Allows governing documents of a domestic entity to contain an enforceable waiver of the right to a jury trial concerning any “internal entity claim” (as defined by the TBOC).
Authorizes a corporation to form a committee of independent and disinterested directors to review and approve certain corporate transactions and then petition a court having jurisdiction to hold an evidentiary hearing to determine whether the directors appointed to the above- described committee are independent and disinterested. The court shall hold a preliminary hearing within 10 days after appropriate notice to shareholders and then hold the substantive hearing promptly.
Establishes a rebuttable presumption that directors and officers act in good faith, on an informed basis, in furtherance of the interests of the corporation, and in obedience to the law (i.e., codifies the “business judgment rule”).
Limits a cause of action for an act or omission of an officer or director to a claimant who (1) rebuts the elements of the presumption created by the business judgment rule and (2) proves that the act or omission constituted a breach of duty and the breach involved fraud, intentional misconduct, an ultra vires act, or a knowing violation of law. A claimant bringing such claims must plead with particularity the circumstances constituting fraud, intentional misconduct, ultra vires acts, or knowing violations of law, which closely aligns with the pleading standards for fraud and mistake under Federal Rule of Civil Procedure 9(b).
Establishes a new 3% ownership threshold for shareholder actions.

The changes in the law under SB 29 became effective May 14, 2025.

Civil Justice System/Judiciary/Business Court
HB 40² amends the Civil Practice and Remedies Code and the Texas Government Code to (1) modify the Texas Business Court’s jurisdiction and procedures to expedite commercial disputes, and (2) “clean up” other statutory provisions to expressly include the Business Court. For example, HB 40:

Expands the definition of “qualified transaction” to include a series of related transactions applying to one or more parties and reduces the minimum consideration value for qualified transactions from $10 million to $5 million.

Adds to the court’s jurisdiction: (1) actions arising or related to intellectual property and trade secrets; (2) actions to enforce an arbitration agreement or review an arbitral award involving an amount of $5 million; and (3) certain multi-district litigation pretrial matters if the court otherwise has jurisdiction.

Reduces the amount-in-controversy threshold from $10 million to $5 million for non-corporate governance- related claims (e.g., breach of contract).
Amends the statutory venue provision to establish venue by law, governing documents, or written agreement.
Revises the 30-day removal timeline provisions to include service of process as a triggering event for a party to seek removal.
Permits pre-September 1, 2024, cases that are within the Business Court’s jurisdiction to be transferred to and heard by the Business Court on an agreed motion of a party and the Business Court’s permission. The Supreme Court of Texas (SCOTX) must adopt transfer- implementation rules.
Removes the sunset provisions for the unfunded 2nd, 5th, 6th, 7th, 9th, and 10th divisions (but does not activate those divisions), and moves Montgomery County to the 11th Division.

SB 293³ amends various provisions of the Texas Government Code to increase judicial compensation, require reporting of certain judicial-related information, and revise certain judicial disciplinary processes under the State Commission on Judicial Conduct (SCJC). More specifically, among other things, SB 293 does the following:

District court reporting: No later than July 20 or January 20 of each year, as applicable, a district court judge is required to submit to the presiding judge of the administrative judicial region in which the judge’s court sits certain information for the preceding six-month period. Each judge must attest to: “(1) the number of hours the judge presided over the judge’s court at the courthouse or another court facility; and (2) the number of hours the judge performed judicial duties other than those described in subdivision (1),” including the number of hours the judge “performed case-related duties; performed administrative tasks; and completed continuing education.” The presiding judge of each administrative region is required to submit the district judge information to the Office of Court Administration (OCA) in a manner prescribed by the Supreme Court of Texas, which is required to promulgate rules establishing guidelines and instructions regarding the submission of district judge information.
Appellate court remote proceedings: Absent exigent circumstances, an appellate court must participate in oral argument presented through teleconferencing technology from a courtroom or other facility provided by the court or the state of Texas.
Summary judgment procedures: Trial courts must hear motions for summary judgment (via oral argument or written submission) within 45 days after a response is filed and provide a written ruling within 90 days after submission or argument. Compliance with the deadlines must be reported to OCA on a quarterly basis.
Judicial compensation: The annual base salary of a district court and Business Court judge would be increased to $175,000. SB 293 also includes a phase-out of the link between judicial compensation and legislative pensions.
SCJC reforms: SCJC procedures related to complaints, investigations, formal proceedings, and sanctions must be modified and, effective June 20, 2025, certain conduct- related statutes were amended. The myriad changes are too numerous to adequately summarize in this report, but the Supreme Court of Texas will be adopting rules to implement the statutory changes. Also, in November, Texas voters will vote to determine whether to modify the membership, powers, and duties of the SCJC.

Uniform Trade Secrets Act/Sealing of Trade Secrets
HB 4081⁴ creates new provisions in the Texas Uniform Trade Secrets Act regarding the sealing of documents that are alleged to contain trade secrets. HB 4081 adds Section 134A.0065, which outlines the procedures a party must follow to seal such documents. An overview of the changes are as follows:

Requests to seal party’s own trade secrets: A party seeking to seal its own alleged trade secrets must file a notice of sealing and an affidavit that (1) generally describes the “type of information contained in the document”; (2) provides “contact information for subsequent notice of any motion to unseal the document”; and (3) states the “factual basis for the party’s allegation that the info constitutes a trade secret.” The party must also deliver a copy of the document to be sealed to the trial court in a sealed envelope labeled to identify the corresponding notice of sealing and serve a copy of the notice, affidavit, and document on each other party to the action.

Filings that include trade secrets claimed by another party: A party filing a document that allegedly includes another party’s trade secrets must: (1) file a notice of sealing and a statement “generally describing the type of information contained in the document” and identifying person who claims the document includes the trade secret; (2) “deliver a copy of the document to be sealed to the trial court in a sealed envelope labeled to identify” the corresponding sealing notice; and (3) serve a copy of the notice, affidavit, and document on “each other party to the action” and any non-party “who alleges the document contains the person’s trade secret.”

No later than the 14th day after the date a person who alleges a document contains the trade secret receives a notice of sealing, the person must file in the same cause an affidavit: (1) “generally describing the type of information in the document”; (2) “providing contact information for subsequent notices of any motion to unseal the document”; and (3) stating the “factual basis for the allegation that the information in the document constitutes a trade secret.”

Trial court’s treatment of alleged trade secrets and supporting documents. Once the trial court receives a notice, affidavit, and sealed document, the document shall be treated as permanently filed under seal. As a matter of right, at any time before or after judgment, any person may intervene in a trade secrets-related action to seal or unseal a document. If a person alleges the person’s trade secret was filed of public record, the person can “seal the document containing the alleged trade secret by taking the same actions with respect to the document” that a party to an action “is authorized to take with respect to the party’s alleged trade secret.”

“The trial court retains continuing jurisdiction to seal or unseal a document” filed under the new provisions. Any person may move to unseal any document filed under seal. The motion and notice of hearing shall be served on the parties to the action in which the document was filed, and on the person who submitted an affidavit by certified mail, return receipt requested, by the 14th day before any hearing on the motion in the trial court.

“The trial court shall grant the motion and unseal all or part of the document if the person who alleges that the document contains the person’s trade secrets fails to demonstrate by a preponderance of the evidence that the document, or a part of the document, contains a trade secret. If a trial court determines that only a part of the document should be unsealed, the trial court shall redact all information that contains a trade secret before providing the document to the movant.”

“An order granting or denying a motion to unseal a document” is considered severed from the action and “is a final judgment that may be appealed by any party or intervenor who participated in the hearing preceding the issuance of the order.”

bruce bower JERRY D. BULLARD is a judge on the Texas Business Court, 8th Division. Since 2004, he has monitored legislation impacting the judiciary and the civil justice system and provided updates to interested members of the bench and bar. Bullard is a graduate of Baylor University and the University of Texas School of Law.