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HB 872

Relating to the burden of proof in certain derivative proceedings.

89th Legislature (2025) Introduced by Brian Harrison

HB 872 would have altered evidentiary standards in Texas shareholder derivative lawsuits, but failed to advance from committee in May 2025.

Failed to receive affirmative vote in comm.
#business&commerce--general(i0050)
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Bill Summary · HB 872

Legislative bill overview

HB 872 modifies the burden of proof standard in derivative shareholder proceedings in Texas, which are lawsuits where shareholders sue on behalf of a corporation to address alleged wrongdoing by directors or officers. The bill would shift evidentiary standards for certain claims, changing how plaintiffs must prove their case in these corporate governance disputes.

Why is this important

Derivative suits are a key mechanism for shareholders to hold corporate leadership accountable and recover damages for corporate harm. Altering the burden of proof directly affects whether shareholders can successfully challenge potentially harmful corporate decisions, influencing corporate accountability and investor protections in Texas.

Potential points of contention

  • Business community vs. shareholder advocates: Corporations likely supported higher evidentiary burdens to reduce frivolous litigation exposure, while shareholder groups opposed making it harder to prove wrongdoing
  • Access to justice concerns: Stricter proof standards could prevent legitimate cases from succeeding, particularly against well-resourced defendants with superior access to evidence
  • Scope of changes: Unclear which specific derivative claim categories the burden shift applies to—broader application would have wider implications than narrower application

Compiled from official sources — confirm details with the bill’s official record.

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