Reed v. Rook TX

2025 Tex. Bus. 23

The Business Court of Texas,
Third Division

JERRY B. REED, §
§
Plaintiff,
§
v. § Cause No. 25-BC03A-0007
§
ROOK TX, LP, et al., §
Defendants. §
§
═══════════════════════════════════════
Syllabus *
═══════════════════════════════════════

On a motion to remand, the Court holds that this action concerns a limited
partnership’s “governance, governing documents, or internal affairs,” and thus falls
within the Court’s jurisdiction under Section 25A.004(b)(2) of the Government
Code, because it concerns when the partnership was formed, whether it was formed
for improper purposes, and whether the plaintiff can recover partnership proceeds
from its partners and others. In doing so, the Court rejects the movant’s argument
that Section 25A.004(b)(2) applies only if an organization’s governance, governing
documents, or internal affairs are the predominant focus of the case.

*
The syllabus was created by court staff and is provided for the convenience of the reader. It is not
part of the Court’s opinion, does not constitute the Court’s official description or statement, and
should not be relied upon as legal authority.
2025 Tex. Bus. 23

The Business Court of Texas,
Third Division

JERRY B. REED, §
§
Plaintiff,
§
v. § Cause No. 25-BC03A-0007
ROOK TX, LP, et al. §
§
Defendants. §
═══════════════════════════════════════
OPINION AND ORDER
═══════════════════════════════════════

¶1 Before the Court is plaintiff Jerry Reed’s motion to remand, the re-

sponse filed by defendants Rook TX, LP (Rook TX) and Rook GP, LLC (Rook GP)

(collectively, Rook), Reed’s reply, and Rook’s sur-reply. 1 The Court DENIES the

motion.

Introduction

¶2 Reed won a $7.5 million Lotto Texas jackpot in May 2023. In this suit,

he alleges that his winnings would have been $95 million greater if Rook and other

1
Rook’s Motion for Leave to File Sur-reply is GRANTED.

1
defendants had not illegally manipulated the system to enable Rook to claim the $95

million jackpot in April 2023. With respect to Rook, Reed alleges that Rook GP mis-

represented Rook TX’s date of formation to the State of Texas when it claimed the

$95 million lottery winnings and that Rook was created to hide the identity of the

defendant-conspirators who rigged the lottery.

¶3 The question before the Court is whether it has jurisdiction over the

action—principally, whether this is an action “regarding” Rook’s “governance,

governing documents or internal affairs.” 2 The Court holds that it has jurisdiction

over this action because Reed’s claims against Rook (and against all defendants

through his derivative theories) concern (a) Rook’s formation, as effectuated by its

governing documents, (b) the legitimacy of Rook’s purpose and operations, and

(c) whether Reed can recover Rook’s lottery proceeds from Rook and/or its interest

holders and other payees. While these are not the only matters that Reed’s action

concerns, neither are they tangential or extraneous matters.

Procedural Background

A. Reed’s suit alleges that Rook was created to hide the identity of conspirators
who rigged the April 2023 lottery and lied about its formation date to claim
the lottery winnings.

¶4 Reed brought this suit in the 353rd District Court in Travis County,

Texas. In his second amended petition, Reed asserts claims for “money had and

2
TEX. GOV’T CODE § 25A.004(b)(2).

2
received,” 3 negligence per se, and four derivative theories of liability: civil conspir-

acy, “aiding and abetting,” “assisting and participating,” and “concert of action.” 4

At this stage, the Court will presume, without deciding, that Reed has pleaded viable

causes of action.

¶5 Reed’s claims center on the same factual nexus: defendants conspired

to rig the April 2023 lottery through conduct that violated Chapter 466 of the Gov-

ernment Code (“State Lottery Act”) and Chapter 401 of the Administrative Code

(“Administration of State Lottery Act”). Specifically, he alleges:

• Rook violated Sections 466.307 and 466.308 of the Government Code,
which make it a crime to (a) “intentionally or knowingly influence[] or at-
tempt[] to influence the selection of the winner of a lottery game” 5 or
(b) claim, or aid another in claiming, “a lottery prize or a share of a lottery
prize by means of fraud, deceit, or misrepresentation.” 6

• Other defendants violated Sections 466.305 and 466.3054, which bar the
sale of lottery tickets on credit and certain group-purchase arrangements. 7

3
A claim for “money had and received” is equitable in nature. Plains Expl. & Prod. Co. v. Torch
Energy Advisors Inc., 473 S.W.3d 296, 302 n.4 (Tex. 2015) (citing Stonebridge Life Ins. Co. v. Pitts,
236 S.W.3d 201, 203 n.1 (Tex. 2007)). It is “a category of general assumpsit to restore money
where equity and good conscience require refund.” Id. (quoting MGA Ins. Co. v. Charles R. Chesnutt,
P.C., 358 S.W.3d 808, 813 (Tex. App.—Dallas 2012, no pet.)). It is a quasi-contractual doctrine to
prevent unjust enrichment. 64 TEX. JUR. 3d Restitution Etc. § 4; see also Plains Expl., 473 S.W.3d
at 302 n.4; MGA, 358 S.W.3d at 815.
4
2d Am. Pet. at 14–16.
5
2d Am. Pet. at 13; see also TEX. GOV’T CODE § 466.307(a), (b).
6
2d Am. Pet. at 12–13; see also TEX. GOV’T CODE § 466.308(a), (c).
7
2d Am. Pet. at 8, 13; see also TEX. GOV’T CODE §§ 466.305, 466.3054. Reed’s pleadings also
mention Section 466.155 but do not relate any of the factual allegations to that statute, which re-
lates to the denial, suspension, or revocation of a license to sell lottery tickets. TEX. GOV’T CODE
§ 466.155; 2d Am. Pet. at 16.

3
• All defendants violated section 401.304 of the Administrative Code,
which sets out the general “draw game” rules, including the procedures
for selling tickets and claiming draw game prizes. 8

¶6 With respect to Rook, Reed alleges that Rook violated Section 466.308

by “misrepresenting the creation date of the entity claiming the $95 million jackpot

and the date that entity received the ticket.” 9 Specifically, Reed asserts that when

Rook GP claimed the lottery prize on behalf of Rook TX, it represented that Rook

TX was formed on March 1, 2023 and received the winning lottery ticket on April

21, 2023, but Rook TX was not actually formed until June 15, 2023—after the April

2023 lottery drawing. 10 He also alleges that Rook was formed as a “vehicle[] to hide

the identity of the company(s) and individual(s) who received the proceeds of the

illegal game rigging scheme.” 11

B. Rook removed the action to this Court, and Reed moved to remand.

¶7 Rook timely removed Reed’s suit to this Court. The notice of removal

principally asserts that the Court has jurisdiction over the action under Section

25A.004(b)(2) of the Government Code, which applies to “an action regarding the

governance, governing documents, or internal affairs of an organization.” 12 Rook

8
2d Am. Pet. at 10–11; see also TEX. ADMIN. CODE § 401.304.
9
2d Am. Pet. at 12.
10
Id.
11
Id.
12
Notice of Rem’l at 1–3; TEX. GOV’T CODE § 25A.004(b)(2). Reed does not dispute that Section
25A.004(b)’s amount-in-controversy requirement is satisfied here.

4
argues that the Court must consider its certificate of formation and internal affairs

to determine whether Rook misrepresented its formation date or was created for the

purpose of hiding the identities of the lottery winners. 13

¶8 Reed moved to remand, arguing that the Court lacks jurisdiction. 14 Ac-

cording to Reed, this action is “about a fraudulent scheme to rig the Texas Lottery

and a subsequent misrepresentation made to the State of Texas,” but it does not per-

tain to Rook’s governance or governing documents because his claims “can be

proven through publicly available records—no reference to internal governance or

governing documents is required.” 15 He set the motion for written submission, and

it is now before the Court.

Analysis

A. Section 25A.004(b)(2) applies to actions that concern an organization’s gov-
ernance, governing documents, or internal affairs.

¶9 Section 25A.004(b)(2) grants this Court jurisdiction over “an action

regarding the governance, governing documents, or internal affairs of an

13
Notice of Rem’l at 2–3. Rook also alleges jurisdiction under part (b)(7), governing actions “aris-
ing out of the Business Organizations Code,” and supplemental jurisdiction under part (f). Id. at 3–
4; TEX. GOV’T CODE § 25A.004(b)(7), (f). Reed’s motion to remand does not address these grounds,
and the Court need not address them because it determines that jurisdiction exists under part (b)(2).
14
“Section 25A.006(d) of the Government Code and Rule 355 of the Texas Rules of Civil Procedure
dictate that if this Court lacks jurisdiction over a removed action, the Court must remand the action
to the court from which it was removed.” C Ten 31 LLC v. Tarbox, 2025 Tex. Bus. 1, ¶ 7, 708 S.W.3d
223, 229 (3d Div.) (citing TEX. GOV’T CODE § 25A.006(d) and TEX. R. CIV. P. 355(f)(1)).
15
Mot. to Remand at 2–3.

5
organization” when the amount in controversy exceeds $5 million. 16 The meaning

of this provision is a question of law, 17 which the Court determines from the text of

the statute, giving undefined words their ordinary meaning, as understood from

reading the statute as a whole and in context of the surrounding words and statutory

structure. 18 Absent ambiguity, the inquiry begins and ends with the statutory text—

“the alpha and the omega of the interpretive process.” 19

¶10 The undefined 20 term “action,” as used in Section 25A.004, refers to

the lawsuit or judicial proceeding generally, as opposed to only individual causes of

action or theories of liability. 21 Likewise, the term “regarding” is undefined in the

16
TEX. GOV’T CODE § 25A.004(b)(2).
17
C Ten, 2025 Tex. Bus. 1, ¶ 8, 708 S.W.3d at 229 & n.4 (citing Malouf v. State ex rels. Ellis, 694
S.W.3d 712, 718 (Tex. 2024); In re Mem'l Hermann Hosp. Sys., 464 S.W.3d 686, 700 (Tex. 2015)).
18
C Ten, 2025 Tex. Bus. 1, ¶ 8, 708 S.W.3d at 229 (citing Malouf, 694 S.W.3d at 718; Pub. Util.
Comm’n of Tex. v. Luminant Energy Co. LLC, 691 S.W.3d 448, 460–62 (Tex. 2024); City of Austin
v. Quinlan, 669 S.W.3d 813, 821 (Tex. 2023); U.S. Polyco, Inc. v. Tex. Cent. Bus. Lines Corp., 681
S.W.3d 383, 390 n.3 (Tex. 2023) (per curiam); LTTS Charter Sch., Inc. v. C2 Constr., Inc., 342
S.W.3d 73, 75 (Tex. 2011)).
19
C Ten, 2025 Tex. Bus. 1, ¶ 8, 708 S.W.3d at 230 (quoting BankDirect Cap. Fin., LLC v. Plasma
Fab, LLC, 519 S.W.3d 76, 86 (Tex. 2017); citing City of Denton v. Grim, 694 S.W.3d 210, 214
(Tex. 2024); Brown v. City of Houston, 660 S.W.3d 749, 752 (Tex. 2023); Alex Sheshunoff Mgmt.
Servs., L.P. v. Johnson, 209 S.W.3d 644, 652 (Tex. 2006)).
20
When the Legislature wants a word or phrase to have a specific meaning that differs from or is
narrower or broader than it ordinarily carries, the Legislature can (and frequently does) so define
the term in the statute. See, e.g., TEX. CIV. PRAC. & REM. CODE § 27.001(6) (defining “legal action”
broadly, then carving out specific exceptions).
21
C Ten, 2025 Tex. Bus. 1, ¶ 8, 708 S.W.3d at 235 (citing Off. of the Att’y Gen. of Tex. v. C.W.H.,
531 S.W.3d 178, 183 (Tex. 2017); Jaster v. Comet II Constr., Inc., 438 S.W.3d 556, 563–64 (Tex.
2014) (plurality opinion); In re Jorden, 249 S.W.3d 416, 421 (Tex. 2008); Thomas v. Oldham, 895
S.W.2d 352, 356 (Tex. 1995)); see also SafeLease Ins. Servs. LLC v. Storable, Inc., 2025 Tex. Bus.
6 ¶ 9, 707 S.W.3d 130, 132–33 (3d Div.); Osmose Utils. Servs., Inc. v. Navarro Cnty. Elec. Coop.,
2025 Tex. Bus. 3 ¶ 27, 707 S.W.3d 117, 123 (1st Div.).

6
statute and can be given its common, ordinary meaning, as understood in context. 22

“The ordinary meaning of ‘regarding’ is expansive and synonymous with terms like

‘respecting,’ ‘concerning,’ or ‘referring to.’” 23

¶11 Chapter 25A defines “governing documents” as “the instruments, doc-

uments, or agreements adopted under an organization’s governing law to govern the

organization’s formation and internal affairs” 24 and lists specific types of docu-

ments that fall within this definition, including a certificate of formation. 25 It

defines “internal affairs” as “the rights, powers, and duties of an organization’s

governing persons, officers, owners, and members and matters relating to the organ-

ization’s membership or ownership interests.” 26 It does not define “governance”

but defines a “governing person” as one who is entitled to “manage and direct an

organization’s affairs under the governing documents and governing law.” 27 This

22
See, e.g., Am. Pearl Grp., L.L.C. v. Nat’l Payment Sys., L.L.C., No. 24-0759, 2025 WL 1478179,
at *3 (Tex. May 23, 2025); Tex. Health & Hum. Servs., Comm’n v. Est. of Burt, 689 S.W.3d 274,
280 (Tex. 2024); Mosaic Baybrook One, L.P. v. Simien, 674 S.W.3d 234, 253–54 (Tex. 2023);
Jaster, 438 S.W.3d at 563.
23
Mosaic Baybrook One, 674 S.W.3d at 254 (citing definitions of “regarding” in WEBSTER’S NEW
UNIVERSAL UNABRIDGED DICTIONARY 1622 (1996), WEBSTER’S NEW COLLEGIATE DICTIONARY
965 (1980), and THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE (5th ed.)
(2011)); see also Integrity Mktg. Grp., LLC v. Smith, No. 05-23-00786-CV, 2024 WL 4533043, at
*5 (Tex. App.—Dallas Oct. 21, 2024, no pet.) (citing definitions of “regarding” in THE OXFORD
DESK DICTIONARY AND THESAURUS (2d Ed. 2007) and MERRIAM-WEBSTER.COM).
24
TEX. GOV’T CODE § 25A.001(3).
25
Id. § 25A.001(3)(A).
26
Id. § 25A.001(7).
27
Id. § 25A.001(5)

7
indicates that “governance” relates to the management and direction of the entity’s

affairs under its governing documents and applicable law.

¶12 Thus, when the amount-in-controversy requirement is met, Section

25A.004(b)(2) gives this Court jurisdiction over a lawsuit or judicial proceeding

(“action”) concerning or respecting (“regarding”) the management and direction of

an organization’s affairs (“governance”), the documents adopted to govern its for-

mation and internal affairs (“governing documents”), its ownership or membership

interests (“internal affairs”), or the rights, powers, and duties of its governing per-

sons, officers, owners, or members (“internal affairs”). 28

B. This action concerns Rook’s governance, governing documents, or internal
affairs.

¶13 Reed alleges that Rook violated Section 466.307 by intentionally and

knowingly influencing the selection of the winner of the April 2023 lottery and par-

ticipating in fraudulent conspiracy, including that Rook was created to claim the

lottery winnings while concealing the identities of those involved in the alleged

scheme. Whether Rook was created as part of a scheme to rig the lottery and for the

purpose of concealing the identities of those involved is a matter concerning Rook’s

management and direction, the validity of its formation, and the duties of its gov-

erning persons—all matters covered by 25A.004(b)(2). 29 These allegations go to the

28
Id. § 25A.001(3), (5), (7).
29
See id. §§ 25A.001(3), (5), (7); 25A.004(b)(2).

8
heart of Rook’s existence: is it a legitimate business or a shell created to effectuate

an illegal conspiracy.

¶14 Reed also alleges that Rook violated Section 466.308 because Rook TX

“claim[ed] a lottery prize … by means of fraud, deceit, or misrepresentation” 30 and

Rook GP “aided” Rook in doing so. 31 The “fraud, deceit, or misrepresentation” Reed

relies on is the misrepresentation of Rook’s date of formation and of the date Rook

received the winning ticket, both of which are false, according to Reed, because they

predate Rook’s actual, legal formation. This theory necessarily concerns the legal

documents adopted to govern Rook’s formation—specifically, its initial certificate

of limited partnership. As Rook points out, a certificate of formation is one of the

specific examples of a “governing document” listed in the statutory definition. 32

¶15 Reed argues that Rook’s date of formation can be determined from pub-

lic records, relying on Section 17-201(b) of the Delaware Code and printouts from a

public website listing the formation dates for Rook GP and Rook TX as June 14 and

15, 2023, respectively. 33 Rook responds that the fact that the certificate of for-

mation is a public record is irrelevant, and in fact, certificates of formation often are

30
2d Am. Pet. at 12; see TEX. GOV’T CODE § 466.308(a)(1).
31
2d Am. Pet. at 12–13; see TEX. GOV’T CODE § 466.308(a)(2).
32
TEX. GOV’T CODE § 25A.001(3)(A).
33
Mot. to Remand at 3 & Exhs. 2, 3.

9
public records. 34 Rook also objects that the website printouts Reed relies on are not

competent evidence and violate the best-evidence rule. 35

¶16 Setting aside Rook’s evidentiary objections, the Court agrees that the

fact that a governing document is a public record—as is often the case—does not

undermine the Court’s jurisdiction. Likewise, the fact that a public website posts an

entity’s formation date online does not divorce that date from the governing docu-

ment that effectuates the underlying formation and is the basis for the posted date. 36

¶17 Reed cites Section 17-201(b) for the proposition that Rook was

“formed at the time of the filing of the initial certificate of limited partnership in the

Office of the Secretary of State” but omits the rest of that sentence: “or at any later

date or time specified in the certificate of limited partnership if, in either case, there

has been substantial compliance with the requirements of this section.” 37 Thus,

even under this statute, the date of formation cannot be determined without review-

ing the certificate to determine the formation date specified in it and whether it

substantially complies with the statute. 38 Moreover,, merely filing a document

34
Resp. to Mot. to Remand at 4.
35
Id. at 4 n.2; see also TEX. R. EVID. 1002.
36
As Rook demonstrates, an effort to try to prove this date without the underlying documents may
result in an objection under the best-evidence rule. See TEX. R. EVID. 1002.
37
DEL. CODE tit. 6, § 17-201(b).
38
Id.; see also id. § 17-202–206 (additional certificate requirements); id. § 17-207 (liability for false
statements).

10
labelled as a certificate of limited partnership does not, alone, create a duly formed

limited partnership. The statute requires the certificate to meet certain specifica-

tions. 39 It also requires a partnership agreement 40—another “governing document”

under Chapter 25A. 41 Disputes over the validity and effectiveness of a limited part-

nership’s formation and certificate of formation necessarily revolve around the

partnership’s governing documents and internal affairs.

¶18 In short, Reed’s action concerns the date of Rook’s formation and

whether Rook was formed for improper purposes and in furtherance of the alleged

conspiracy to enable Rook to fraudulently claim the April 2023 lottery winnings.

The action necessarily concerns Rook’s governance, governing documents, or inter-

nal affairs, and therefore falls within this Court’s jurisdiction under Section

25A.004(b)(2). Importantly, these factual bases for liability are not limited to any

one of Reed’s causes of action: All of Reed’s causes of action rely on the alleged

scheme for Rook to illegally claim the April 2023 lottery, and Reed seeks to hold all

defendants liable for the alleged misdeeds of the others through his derivative

claims.

39
Id. § 17-201(a).
40
Id. § 17-201(d).
41
TEX. GOV’T CODE § 25A.001(3)(C).

11
C. The Court applies Section 25A.004(b)(2) as written and declines to inject an
unstated predominance test into the statute.

¶19 Reed argues that Section 25A.004(b) is intended to cover “internal”

business disputes, which he describes as disputes that “directly challenge or seek to

enforce specific rights or duties of shareholders, owners, and managers of Texas

businesses,” as opposed to “external” business disputes, which he describes as dis-

putes “between a third party and the defendants,” like those covered in Section

25A.004(d). 42 First, Reed’s description of “internal” disputes essentially tracks

part of the statute’s definition of “internal affairs,” 43 but (b)(2) is not limited to ac-

tions concerning “internal affairs.” 44 By using the disjunctive “or,” it extends to

actions concerning a business’s internal affairs or governance or governing docu-

ments. 45 Second, if the Legislature wanted to exclude actions brought by third

parties from (b)(2), it knew how to do so. 46 Some provisions of Section 25A.004(b)

do depend on “the nature of the parties to the action.” 47 Parts (b)(3) and (b)(4)

42
Reply to Mot. to Remand at 2–3 (emphases omitted).
43
TEX. GOV’T CODE § 25A.001(7)(A) (“the rights, powers, and duties of an organization’s govern-
ing persons, officers, owners, and members”).
44
Id. § 25A.004(b)(2).
45
Id. (using “or” rather than “and” when listing relevant subject matters)
46
See n.54, infra; Bexar Appraisal Dist. v. Johnson, 691 S.W.3d 844, 855–56 (Tex. 2024) (observ-
ing that the Legislature knows how to restrict the reach of a statute when it wishes to do so).
47
C Ten, 2025 Tex. Bus. 1, ¶ 28, 708 S.W.3d at 235.

12
expressly depend on what kind of party brings the action and/or what kind of party

the action is brought against. 48 Part (b)(2) contains no such language.

¶20 Reed encourages the Court to apply what he calls the “nature of the

controversy test” to determine its jurisdiction, but he does not identify any specific

elements or factors for such a test. 49 He argues that application of that test would

result in a lack of jurisdiction here because the six causes of action he asserts “are

not actions regarding Defendants’ governance, governing documents, or internal af-

fairs.” 50 Instead, he asserts that his claim for “money had and received” regards

“equitable relief for money rightfully belonging to [him],” his negligence per se

claim regards “whether Defendants violated laws intended to ensure the fairness of

the Texas lottery for lottery players like [him],” and his derivative claims regard

48
TEX. GOV’T CODE § 25A.004(b)(3), (4).
49
Reply to Mot. to Remand at 3–5. Reed argues that this “nature of the controversy test” is applied
to determine jurisdiction under the Uniform Declaratory Judgment Act, citing Allstate Insurance
Co. v. Irwin, 627 S.W.3d 263, 269 (Tex. 2021), and Texas Department of Public Safety v. Moore,
985 S.W.2d 149, 154 (Tex. App.—Austin 1998, no pet.). But Allstate does not address jurisdiction
and uses the phrase “nature of the controversy” only in a parenthetical quoting a case cited by an-
other opinion cited in Allstate, in the context of a discussion about when a declaratory-judgment
action is the proper vehicle for determining the contractual obligations in a certain kind of insurance
contract. 627 S.W.3d at 269. Moore does address jurisdiction and uses the phrase “nature of the
controversy” once, but only in connection with the determination of whether an issue arises to the
level of a justiciable controversy, rather than to a hypothetical or advisory issue not properly de-
cided by courts. 985 S.W.2d at 154.
50
Reply to Mot. to Remand at 4.

13
“hold[ing] Defendants liable for the collective action of the conspirators who rigged

the Lotto Texas drawing.” 51

¶21 While it is true that Reed’s claims concern the matters he describes, so

too do those claims concern the matters discussed above—matters covered by Sec-

tion 15A.004(b)(2). A lawsuit can concern more than one thing. And here, all of

these matters are interwoven into a single alleged conspiracy. “[W]hether Defend-

ants violated laws intended to ensure the fairness of the Texas lottery”—the subject

Reed attributes to his claim for negligence per se—includes the questions of whether

Rook violated sections 466.307 and 466.308. And the “money rightfully belonging

to [Reed]” that Reed references with respect to his “money had and received” is

Rook TX’s $95 million in proceeds from the April 2023 lottery. This is the same

relief Reed seeks to recover from all defendants under all of his causes of action.

Reed’s effort to collect Rook TX’s proceeds from its general and limited partners

necessarily implicates their rights and duties as partners. 52 Similarly, Reed’s con-

spiracy claims against these defendants raises related issues, such as whether and

when a conspiracy can exist among a limited partnership, its general partner, and/or

its limited partners. 53 These issues are not “tangential”; rather, they go to

51
Id.
52
See TEX. GOV’T CODE §§ 25A.001(7)(A); 25A.004(b)(2).
53
See 2d Am. Pet. at 14–15.

14
fundamental issues such as whether Reed can recover the damages he seeks and

from which defendants, if any, Reed can recover such damages. Thus, it is not clear

to the Court that this case would not satisfy any “nature of the controversy test.”

¶22 Regardless, the Court declines to superimpose any judicially crafted

predominance or centrality requirements onto the statute. If the Legislature had

wanted to include a predominance requirement in the statute, it could have done

so. 54 It is not this Court’s role to write additional requirements into the statute. 55

This does not mean that pleadings containing a tangential reference to a business’s

governing documents or internal affairs automatically trigger jurisdiction under

Section 25A.004(b)(2). Instead, the Court must determine whether the action is “an

action regarding the governance, governing documents, or internal affairs of an or-

ganization” under the plain language of the statute.

54
See, e.g., Image API, LLC v. Young, 691 S.W.3d 831, 839 (Tex. 2024) (“[I]f the Legislature had
meant to limit the definition of Medicaid contractor to one who takes a lead in managing Medicaid,
it would have said so expressly.”); In Interest of H.S., 550 S.W.3d 151, 157 (Tex. 2018) (“Had the
Legislature intended to require such authority, it would have said so.”); Lippincott v. Whisenhunt,
462 S.W.3d 507, 509 (Tex. 2015) (“The plain language of the statute imposes no requirement that
the form of the communication be public. Had the Legislature intended to limit the Act to publicly
communicated speech, it could have easily added language to that effect.”).
55
See, e.g., City of Austin v. Quinlan, 669 S.W.3d 813, 821 (Tex. 2023) (“We may not impose our
own judicial meaning on a statute by adding extra-textual words or requirements.”); Tex. Comm’n
on Env’t Quality v. Maverick Cnty., 642 S.W.3d 537, 541 (Tex. 2022) (“When a statute or rule
defines its terms, courts should not construct a restated definition using alternative verbiage that
adds or subtracts substantive requirements or limiting factors.”); Interest of G.X.H., 627 S.W.3d
288, 300 (Tex. 2021) (“There is no mention of a hearing requirement in section 263.401, and we
cannot rewrite the statute to create one when the Legislature chose not to.”).

15
D. The Court’s jurisdiction extends to the entire action, no portion of which falls
within the exclusions from the Court’s jurisdiction.

¶23 Pursuant to its independent duty to ascertain its jurisdiction, the Court

now considers the scope of its jurisdiction and determines that it extends to this pro-

ceeding in its entirety.

¶24 As discussed above, Reed has pleaded facts and theories of liability that

regard Rook’s “governance, governing documents or internal affairs” under Section

25A.004(b)(2), and these facts and theories purport to be a basis for Reed’s recovery

under each of his causes of action and, through his derivative claims, against each

defendant. Thus, this dispute does not present the question of whether or when the

Court’s jurisdiction over one cause of action or party gives it jurisdiction over other

causes of action or parties in the case. But Reed does plead other facts that purport

to be independent grounds for recovery under the same causes of action and against

all defendants. For example, Reed alleges that some defendants violated Sections

466.305 of the Government Code by selling lottery tickets through credit or loan, 56

and seeks to hold all parties liable through the derivative claims. 57 A party might

argue that the Court has jurisdiction over Reed’s negligence per se claim to the ex-

tent it is based on Sections 466.307 and 466.308 but not to the extent it is based on

Section 466.305.

56
2d Am. Pet. at 13; see TEX. GOV’T CODE § 466.305.
57
2d Am. Pet. at 14–16.

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¶25 The Court rejects such a reading of the statute. Section 25A.004 does

not compel the Court to granulate each of Reed’s causes of action into every individ-

ual factual basis for liability he alleges in support of that cause. The provisions of

Section 25A.004 that bestow original jurisdiction on the Court grant such jurisdic-

tion over the “action,” 58 which refers to the lawsuit or judicial proceeding

generally. 59 The Court thus construes its jurisdiction under Section 25A.004(b)(2)

as extending to the entire action absent some jurisdictional limitation or exception.

Several provisions of Section 25A.004 limit the Court’s jurisdiction, excluding cer-

tain types of claims from the Court’s jurisdiction entirely 60 and limiting the Court

to supplemental jurisdiction over others. 61 None of the claims alleged in this case

58
TEX. GOV’T CODE § 25A.004(b), (c), (d), (e). In addition to original jurisdiction over actions, the
statute grants supplemental jurisdiction over certain “claim[s].” TEX. GOV’T CODE § 25A.004(f).
59
C Ten, 2025 Tex. Bus. 1, ¶¶ 29–30, 708 S.W.3d at 236; see also n.21, supra.
60
TEX. GOV’T CODE § 25A.004(h) (no jurisdiction over claims for healthcare liability, bodily injury
or death, or legal malpractice).
61
TEX. GOV’T CODE § 25A.004(g) (allowing only supplemental jurisdiction over actions by or
against governmental entities or to foreclose on liens on real or personal property; claims arising
under Estates, Family, or Insurance Codes; and certain claims relating to deceptive trade practices;
covenants not to compete; mechanic’s, contractor’s or materialman’s liens; the production or sale
of farm products; consumer transactions, or the duties and obligations under an insurance policy).
In its current iteration, Section 25A.004(g) excludes a type of “claim” in every instance except one,
where it refers to a “civil action” by or against a governmental entity or seeking to foreclose on a
lien on real or personal property. The Legislature recently passed House Bill 40, which amends
Chapter 25A, including by revising this provision to say “a claim in a civil action,” making the use
of “claim” consistent throughout the exclusion. Tex. H.B. 40 § 45, 89th Leg., R.S. (2025) (sent to
the Governor on June 2, 2025). It will become law if the Governor signs it or if the Governor takes
no action by June 22, 2025.

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falls within any of these statutory carveouts. The Court thus has jurisdiction over

the action as a whole.

Conclusion

¶26 The Court has jurisdiction over this action under Section

25A.004(b)(2) and denies Reed’s motion to remand.

Date signed: June 18, 2025

Hon. Melissa Andrews
Judge of the Texas Business Court,
Third Division

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