Texas Business Court Decision – Monday, August 11, 2025
No. 25-BC11B-0027 OWL Asset 1, LLC v. EOG Resources, Inc. (Eleventh Division, Judge Bullard) 25-bc11b-0027-owl-assetco1-v-eog-resources-2025-tex-bus-30.pdf
Civil Case – Jurisdiction. OWL sued EOG Resources for breach of contract in Harris County district court for breach of contract after OWL spent $8.2 million remediating three produced water spills between 2022 and 2025. OWL relied on the parties’ 2019 agreement governing produced water deliver and disposal responsibilities as the basis for recovery. EOG filed a counterclaim seeking $929,192 in liquidated damages and then removed the case to the Business Court without OWL’s agreement. EOG asserted Business Court jurisdiction on two statutory grounds – Section 25.004(d)(1) and (e) of the Texas Government Code [(d))1) a qualified transaction with over $10 million in controversy; (e) covering declaratory judgments regarding rights under the parties’ agreement]. OWL moved to remand for lack of jurisdiction under either provision.
HELD: (1) The amount in controversy does not exceed $10 million, even if the court aggregates the claim and counterclaim; (2) when OWL provided evidence that the amount in controversy did not meet the jurisdictional threshold, the burden shifted back to EOG to present controverting evidence raising a fact issue on the amount in controversy to avoid remand, which it failed to do; (3) although pending legislation (House Bill 40) would lower the jurisdictional threshold to $5 million effective September 1, 2025, the change does not affect the court’s present jurisdiction, and without present jurisdiction, the court lacks power to stay proceedings or defer its ruling; and (4) with respect to EOG’s claim that its request for a declaratory judgment creates Business Court jurisdiction, Section 25A.004(e) confers jurisdiction where there is a dispute based on a claim within the court’s jurisdiction under subsections (b), (c), or (d); here, there is no jurisdiction under (d)(1), a necessary prerequisite for jurisdiction under (e). Remanded to Harris County district court.