USA – TEXAS Trends and Developments Contributed by: Daniella Main, Alix Allison, Richard Guiltinan and Catherine G. Pritchard, Vartabedian Hester & Haynes LLP
Octane Energy Operating, LLC (“Octane”) had entered a Letter Agreement involving reciprocal waivers for “off-lease penetration point” permit applications. Initially, Slant filed suit in Texas district court, alleg- ing Octane’s refusal to permit drilling in a designated section breached the waiver and agreement, causing Slant to lose millions in anticipated revenue. After non-suiting in district court, Slant refiled in the Business Court and argued that the waiver, barring any objections to all future off-lease drilling, consti- tuted a qualified transaction exceeding USD10 mil- lion. The Business Court agreed, finding the waivers formed a single contract valued over USD10 million – even though the precise amount could not be deter- mined. Further, the Business Court found that Octane presented no evidence disputing the valuation, there- fore emphasising the fact-specific inquiry required to prove the amount in controversy. In contrast, in Black Mountain SWD , the Business Court remanded a breach of contract case to Tex- as district court because the amount in controversy did not meet the statutory threshold ( Black Mountain SWD, LP v NGL Water Sols. Permian, LLC , 718 S.W.3d 281 (Tex. Bus. Ct. 2025)). Black Mountain SWD LP (“Black Mountain”) alleged that NGL Water Solutions Permian LLC (“NGL Permian”) underpaid royalties on barrels of transported saltwater in breach of an existing royalty agreement. NGL Permian removed the case to the Business Court without Black Mountain’s consent. In response, Black Mountain argued removal was improper because it sought only past-due royal- ties, which did not meet the jurisdictional threshold. The Court agreed and concluded that the amount in controversy was limited to past damages tied to unpaid barrels, and on that record, would not exceed the USD10 million requirement. The Business Court has also transferred cases to state court when the venue is improper. In another case involving NGL Permian, the Eleventh Division granted the defendants’ motion to transfer to Loving County, Texas because the crux of the dispute concerned real property under Tex. Civ. Prac. & Rem. Code § 15.011 – overriding a venue provision contained in the parties’ shut-in agreement ( NGL Water Sols. Permian, LLC v Lime Rock Res. V-A, L.P ., No 25-BC11B-0005, 2025
WL 1445867 (Tex. Bus. Ct. May 20, 2025)). As such, companies should be aware that transfers may be appropriate where claims are better suited for state courts. Efficient resolution of claims Recent developments in the resolution of Primexx Energy Opportunity Fund, LP, et al. v Primexx Energy Corporation , highlight the Business Court’s capacity to expedite complex energy-related disputes ( Primexx Energy Opportunity Fund, LP v Primexx Energy Corp. , 709 S.W.3d 619 (Tex. Bus. Ct. 2025), reconsideration denied, 713 S.W.3d 416 (Tex. Bus. Ct. 2025)). After years of the litigation pending in state and federal court, the case was resolved within a year of filing in the First Division. Limited partner plaintiffs, Primexx Energy Opportunity Fund LP and Primexx Energy Opportunity Fund II, alleged breaches of fiduciary duty and contract against the managing general part- ner, Primexx Energy Corporation, and the controlling partner, BPP HoldCo LLC (“HoldCo”), a Blackstone- affiliated entity. The plaintiffs claimed HoldCo misused its drag-along rights to compel the sale of the limited partnership to Callon Petroleum Company. In granting the defendants’ motions for summary judgment, the First Division reinforced Texas’s com- mitment to freedom of contract – within the bounds of public policy – as a “sacred right”, signalling the Busi- ness Court’s willingness to enforce parties’ negotiated terms to the fullest extent permitted by law. For oil and gas litigants, Primexx reinforces the primacy of contractual terms in complex transactions. The Impact of the Texas Business Court on Healthcare Litigation in Texas By design, the Business Court cannot hear some of the most common types of cases affecting the medi- cal field. Claims under the Texas Medical Liability Act (TMLA) – Chapter 74 of the Texas Civil Practice and Remedies Code – are statutorily excluded from the Business Court’s jurisdiction (Tex. Gov’t Code § 25A 004 (h)(1)). Medical malpractice suits are the fore- most example of such claims, but they are not the only example. Notably, the TMLA has a broad definition of “health care liability claims” that covers causes of action
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