A recent Delaware Court of Chancery decision involving Tesla adds to a broader trend Texas companies should be watching closely: Texas is no longer just a place where companies operate. Increasingly, it is becoming a place where major corporate disputes are expected to be litigated and decided.

In In re Tesla, Inc. Derivative Litigation, the Delaware Court of Chancery enforced a Texas forum-selection bylaw adopted in connection with Tesla’s redomestication from Delaware to Texas. The bylaw required derivative claims to be brought in the Texas Business Court; or, alternatively, in Texas federal court or Travis County courts. The Delaware court dismissed the derivative claims filed in Delaware, effectively sending the dispute to Texas. The plaintiffs have appealed the dismissal to the Delaware Supreme Court, so the enforceability of Tesla’s Texas forum bylaw under these circumstances remains subject to appellate review.

This decision fits squarely within a larger Texas-centered shift in corporate law.

Against the backdrop of the Texas Business Court’s emergence, HB 40’s expansion of the court’s jurisdiction, and SB 29’s sweeping reforms to the Texas Business Organizations Code, Texas is deliberately building both the judicial infrastructure and statutory framework to compete for, and retain, high-stakes corporate litigation. Together, those developments position Texas not just as a venue option, but as a jurisdiction increasingly capable of shaping its own body of corporate law.

Although now on appeal, the Tesla decision reinforces that effort from the outside, demonstrating that at least one Delaware court will respect those choices when companies take the appropriate steps to anchor disputes in Texas. The Court of Chancery emphasized timing and process: Tesla disclosed the forum bylaw before suit, obtained stockholder approval shortly after filing, and invoked the provision before the litigation meaningfully progressed. The decision should not be read as a license for late-stage forum shopping.

For Texas businesses, the practical lessons are straightforward. Companies should review forum-selection provisions now, not after litigation begins. They should consider whether stockholder approval or enhanced disclosure is appropriate. And when disputes arise, they should assert forum defenses early.

The bottom line is that Texas is gaining ground on the national corporate litigation stage. The Business Court is no longer theoretical—it is up and running, already issuing decisions and handling significant commercial disputes—while the Fifteenth Court is positioned to create statewide precedent and SB 29 continues to strengthen the underlying corporate law framework. At the same time, a steady stream of major companies—from Tesla and Oracle to Chevron, Charles Schwab, and more recent entrants like Apple, KFC, Realtor.com, and Public Storage—continue to relocate headquarters or expand their footprint in Texas, drawn by the same business-friendly environment now being reinforced in the courts.  The Tesla ruling underscores a clear message: companies that want Texas courts to decide their internal disputes now have both the legal tools and the institutional forum to make that choice stick.

Practical Takeaways:

1. Get the forum right early. The Court of Chancery’s decision indicates that well-crafted Texas forum-selection provisions can be enforced by Delaware courts—even against previously filed claims—although that decision is now on appeal.
2. Process drives enforceability. Stockholder approval, clear disclosure, and early assertion of the defense strengthen the likelihood that a Texas forum will control.
3. Texas has a growing role in business litigation, making forum strategy a front-end governance decision. Companies can increasingly anchor major corporate disputes in Texas, and should plan governance and litigation strategy accordingly.