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DFW RIMS External Affairs Committee | August Update
Tracking Policy, Courts & Advocacy Shaping the Risk Landscape

The External Affairs Committee continues to track legislative discussions in the run-up to the 90th legislative session. As more information is received, we will continue to report to members on any new headlines. Here is a recap of what is going on in the political environment down in Austin.

🏛️ Texas Legislative & Regulatory Updates

North Carolina recently made headlines by enacting HB 315 (the Prohibit Litigation Investments Act), becoming the first state in the nation to completely ban third-party litigation funding (TPLF) in civil cases. By prohibiting outside investors from bankrolling lawsuits in exchange for a cut of the settlement, the law prevents profit-driven non-parties from artificially prolonging disputes and driving up demands. For the Texas risk management community, pushing for similar legislation in future sessions could offer a critical tort reform tool. Banning hedge funds and private equity from speculating in Texas courtrooms would curb high claim frequencies, reduce inflated "phantom damage" claims, and help shield local businesses from runaway jury verdicts. If a full ban may be too bold of a move, a bare minimum goal can be the banning of foreign investments in litigation that not only lead to the issues outlined above but pose a national security risk for the entire country.

🏛️ Supreme Court Decisions

In In re ACE American Insurance Company, the Texas Supreme Court conditionally granted mandamus relief, holding that a trial court abused its discretion by refusing to compel an insurance appraisal following a multi-million-dollar water damage claim at a Dallas distribution warehouse. The policyholder attempted to sidestep the contractual appraisal process by asserting that the dispute primarily involved threshold issues of coverage, scope, and alleged bad-faith claims handling. Reaffirming long-standing state precedent, the Court held that an appraisal clause remains strictly enforceable whenever a disagreement over the amount of loss exists, regardless of overlapping coverage questions or bad-faith allegations. For commercial property insurers and risk managers, this ruling prevents policyholders from derailing contractual appraisal through strategic litigation pleading, preserving appraisal as an efficient mechanism to establish valuation independently of underlying coverage disputes.

💥 Nuclear Verdicts - Texas

In Lipe v. Lupus Superior, LLC, C.H. Robinson, et al., a Dallas County jury handed down a $604 million nuclear verdict following a catastrophic 2021 multi-vehicle crash caused by an independent motor carrier. The jury found freight broker C.H. Robinson vicariously liable under a "borrowed servant" theory, aligning with recent precedent like the Home Depot verdict that exposes shippers and third-party logistics providers to direct liability for the acts and negligent hiring of hired transporters. By allowing plaintiff attorneys to bypass small or underinsured motor carriers and target deep-pocketed logistics intermediaries, these cases exponentially expand corporate exposure across the entire supply chain. Ultimately, this expanding legal standard significantly accelerates social inflation, inflating loss costs, driving up commercial auto and excess casualty insurance premiums, and forcing businesses to absorb unprecedented operational liability.

In Asset Risk Management, LLC v. Comal Energy Services, LP, the Texas First Court of  Appeals completely reversed a $9.3 million trial court judgment against Asset Risk Management (ARM). The dispute arose after Comal Energy sued ARM for negligent misrepresentation over unpaid pipeline project invoices, claiming ARM's statements caused severe working capital depletion and lost business value. The appellate court ruled as a matter of law that Texas’s economic loss rule barred Comal’s tort claims because the alleged financial injuries stemmed directly from a contract-governed payment framework rather than an independent injury. For risk managers, this ruling reinforces critical liability boundaries under Texas law by preventing commercial entities from converting contractual payment disputes into high-dollar tort claims against third-party consultants and administrators.

⚡ Data Center Risk & Implications

The Dallas-Fort Worth Metroplex continues to lead North American data center growth through a mix of massive suburban hyperscale projects—such as Red Oak’s multi-billion-dollar developments—and strategic urban infill projects like the 245-megawatt Dallas Market Hall site. However, this rapid expansion has triggered a decisive public policy shift at the state level as lawmakers and regulators scramble to protect infrastructure and residential ratepayers. Texas will soon surpass Virginia as the top home for data centers driven by factors such as land area capacity, fast permitting, and a deregulated grid.

Following directives from Governor Greg Abbott, the Public Utility Commission of Texas (PUCT) and ERCOT are advancing strict new interconnection standards under Senate Bill 6 (passed June 2025), requiring large-load developers to pay upfront for utility grid upgrades and post significant financial security. Simultaneously, state leaders are scrutinizing historical tax abatements, evaluating mandatory water-efficiency standards, and addressing growing bipartisan voter opposition to local buildouts. For risk management and policy professionals, these developments mark a transition from a traditionally laissez-faire operational environment to a highly regulated landscape. Developers and underwriters must now navigate escalating regulatory compliance friction, substantial capital-at-risk requirements prior to grid connection, and heightened political reputational exposures across Texas.

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Interested in getting involved?

The External Affairs Committee welcomes insurance professionals and attorneys who want to stay engaged in legislative, regulatory, and legal developments impacting the industry. Join us as we continue to monitor key issues and help shape meaningful dialogue across Texas.

Cory Mangum  
DFW RIMS External Affairs Committee Chair
[email protected]