The Texas Business Court continues to develop precedent regarding its own jurisdiction. In Angela Yaun v. Battle & Sands Energy Corp., et al., Cause No. 25-BC11B-0094 (Tex. Bus. Ct. Mar. 3, 2026), Judge Grant Dorfman of the Eleventh Division (in Houston) denied a plaintiff’s motion to remand, providing guidance on two key jurisdictional questions: what constitutes a “qualified transaction,” and which dollar threshold applies following recent legislative changes.
Background and Key Facts
Angela Yaun brought suit against Battle & Sands Energy Corporation and related defendants, alleging they breached an agreement to pay her a perpetual royalty of $1.00 per ton on frac sand sold from a quarry in Beeville, Texas. Her claims included breach of contract, equitable estoppel, quasi-estoppel, fraud, and statutory relief under the Texas Sales Representative Act (TSRA). The defendants removed the case to the Texas Business Court under Texas Government Code § 25A.004(d)(1). Yaun challenged removal through a motion to remand, arguing that: (1) the dispute did not involve a “qualified transaction,” and (2) the amount in controversy failed to meet what she believed was the applicable $10 million threshold.
The Court’s Analysis
What Constitutes a “Qualified Transaction”?
The Business Court swiftly disposed of Yaun’s first argument. The governing statute defines a “qualified transaction” as a transaction — or series of related transactions—under which a party “pays or receives, or is obligated to pay or is entitled to receive, consideration with an aggregate value of at least $5 million.”
The Court found that Yaun’s alleged royalty agreement plainly met this definition. Whether made verbally or confirmed in writing, the agreement constituted a transaction under which Yaun claimed entitlement to receive consideration potentially exceeding the statutory threshold.
Which Dollar Threshold Applies?
The more nuanced issue concerned the applicable jurisdictional amount. Yaun filed her lawsuit on Aug. 25, 2025 — approximately one week before House Bill 40 (HB 40) took effect on Sept. 1, 2025. HB 40 lowered both the “aggregate value” requirement for qualified transactions and the minimum damages amount from $10 million to $5 million, which was done to expressly increase the number of cases that qualified for Texas Business Court jurisdiction.
Yaun contended that the pre-HB 40 threshold of $10 million should govern her case. However, the court disagreed, pointing to a critical provision in HB 40: the legislature made its changes applicable “to civil actions commenced on or after [Sept.] 1, 2024” — not Sept. 1, 2025. This retroactive application date meant the $5 million threshold applied to Yaun’s case despite its August 2025 filing date.
Amount in Controversy Analysis
Having established the $5 million threshold, the Court turned to whether that amount was actually in controversy. Under the Business Court’s burden-shifting framework, a party’s good-faith allegation of damages controls unless another party presents evidence that the amount was falsely asserted to obtain or avoid jurisdiction.
Yaun submitted a declaration attempting to calculate damages below the threshold, but her own math undercut her argument. She estimated defendants could owe her approximately $1.6 million through year-end 2025, with an additional $4.8 million potentially accruing over the following 24 months — totaling roughly $6.4 million for just the first three years of a perpetual royalty obligation.
The Court found this evidence supported jurisdiction, noting it “plainly establishes the possibility — plausibility, even — that Yaun’s damages claim could satisfy the Business Court’s jurisdictional minimum.”
Key Takeaways for Businesses and Practitioners
- Understand HB 40’s Retroactive Reach. Practitioners should note that HB 40’s reduced $5 million threshold applies to cases filed as far back as Sept. 1, 2024 — not just those filed after the law’s effective date.
- Perpetual Obligations Carry Value. When calculating the amount in controversy for ongoing payment obligations, courts may consider the full potential value of the arrangement, not merely amounts accrued to date.
- The Burden-Shifting Standard Matters. Parties challenging or defending Business Court jurisdiction should understand that good-faith allegations in pleadings or removal notices often control unless affirmatively rebutted with evidence of false assertion.
- Alternative Jurisdictional Bases May Apply. The Court noted that Yaun’s TSRA) claim might independently support jurisdiction under § 25A.004(d)(3), highlighting the importance of evaluating all potential grounds for Business Court jurisdiction.
Conclusion
This opinion reinforces that the Texas Business Court takes a practical approach to jurisdictional analysis, focusing on the realistic scope of disputes rather than narrow calculations designed to avoid the court’s reach. Businesses involved in significant commercial transactions should consider consulting with experienced counsel to evaluate whether their disputes may fall within — or outside — the Business Court’s jurisdiction.
