Judge Jerry Bullard
The Business Court denied the motion to remand filed by Plaintiff OWL AssetCo1, who challenged the jurisdiction of this Court after House Bill 40’s implementation. The Court concluded that the removal of this case was proper under Subsection 25A.006(f) of the Texas Government Code.
OWL Assetco I, LLC v. EOG Resources, Inc. (No. 25-BC11A-0052; 2025 Tex. Bus. 47; December 5, 2025) arose from a contractual dispute involving the transportation and disposal of produced water in New Mexico. OWL filed a breach of contract action against EOG in Harris County district court, claiming that EOG did not ensure that the produced water met the contract’s specifications and seeking indemnification for property damage. EOG moved to remove the case to Business Court in May of this year. OWL moved to remand on the basis that their claim didn’t meet court’s $10 million amount-in-controversy threshold. The court agreed and remanded the case. Soon thereafter, the Texas Legislature enacted HB 40, which halved the amount in controversy threshold to $5 million. This change took effect for cases filed on or after September 1, 2025. On September 3, EOG filed a Second Removal Notice, claiming that the Business Court now had jurisdiction under Sections 25A.001(14)(A) and 25A.004(d)(1), Government Code. OWL responded with its Second Remand Motion, arguing the Business Court lacked jurisdiction because a change in law is not tantamount to discovery of facts, and EOG failed to discover any new case related facts within 30 days of HB 40’s effective date. (In other words, EOG knew that the amount in controversy exceeded $5 million.)
In an opinion by Judge Bullard, the court determined that it had jurisdiction and denied the motion to remand. Under the statute, “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.” § 25A.006(f). Applying a plain text interpretation of the statute, the court stated that HB 40’s reduction in the amount-in-controversy threshold “is a ‘fact’ sufficient to establish this Court’s jurisdiction.” The 30-day removal period thus ran from the date EOG “discovered or reasonably should have discovered” the change in the law. In other words, in accordancer with the court’s decision in Safelease Ins. Services LLC v. Storable, Inc., 2025 Tex. Bus. 6, 707 S.W.3d 130 (3rd Div. 2025),“the 30-day removal deadline in Section 25A.006 ‘pivot[s] on the discovery of facts ‘establishing the business court’s jurisdiction to hear the action.’” In this case, “no set of facts could establish this Court’s jurisdiction over this action before the implementation of H.B. 40’s lower amount-in-controversy threshold.” Then, and only then, could EOG “discover facts establishing this Court’s jurisdiction over the action.” It’s second removal motion was thus timely.
Judge Bullard further observed that HB 40 retroactively applies to all cases filed in the Business Court since its inception. Clearly, the Legislature intended for cases like this one to go to the Business Court. “To conclude otherwise,” he added, “would contradict the Legislature’s intent and effectively dissuade parties from removing cases with less than $10 million in controversy to the Business Court.”
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
