New Texas Laws on Proxy Firms, Protests Tested in Federal Courts

The Texas legislature passed more than 1,200 bills in 2025, then stepped aside while the judicial branch determined the legality of some.

Several politically charged challenges that moved quickly through the trial court are now being reviewed by an appeals court, a far slower process that could take some time to play out.

Challenges to legislation are “uniformly hard cases,” said Lee Yeakel, a former district court judge in the US District Court for the Western District of Texas, because both parties are generally well represented by counsel and the public is emotionally invested.

“You get a case like that and you want to get it handled as quickly as you can in your court because it’s going to be a bit of a process to get to the end of the line,” said Yeakel, now of King & Spalding LLP.

Here’s a look at where challenges to five new laws stand in 2026.

SB 10

Requires public schools to display a copy of the Ten Commandments in every classroom

After a 2022 ruling from the US Supreme Court changed the test for when a law is too religious, Republicans passed the statute on the hope that the justices will overturn longstanding precedent that bans the displays.

It hasn’t gone well so far, as federal judges in two lawsuits said the statute wrongly favors Christian denominations over other religions in granting injunctions. Those orders covered school districts involved in the specific litigation but no others. In turn, Attorney General Ken Paxton (R) sued districts he says must put up displays but are refusing.

On Dec. 2, another group of plaintiffs brought a class action to protect all districts from displaying the Commandments.

Meanwhile, Texas is preparing to argue that the religious displays carry historical significance to the US Court of Appeals for the Fifth Circuit. Arguments are scheduled for Jan. 20 and will be heard with a challenge to a Ten Commandments law in Louisiana.

SB 17

Limits ownership of real property by citizens of China, Russia, Iran, North Korea, and any other country the director of national intelligence may deem a threat

Texas has thwarted two challenges that say this law discriminates on race, ethnicity, and national origin.

On Dec. 11, the Fifth Circuit ruled that plaintiff Peng Wang lacked standing because he’s not domiciled in China, affirming a lower court. In the other case, a trial court dismissed two plaintiffs and spared a third for now pending review of the Fifth Circuit decision in the other case.

The trial court hasn’t ruled on whether the remaining plaintiff has standing.

SB 2337

Seeks to stop proxy advisory firms from pushing recommendations based on environmental, social, and governance issues

Texas recently abandoned an appeal after losing a preliminary injunction hearing to industry giants Glass Lewis & Co. and Institutional Shareholder Services Inc.

Continuing the appeal made little sense, the state said, with a fast-approaching bench trial Feb. 2 in the district court.

During the injunction hearing, US District Judge Alan Albright of the Western District of Texas slammed the law for compelling speech in disclosures the advisory firms don’t think are accurate.

“I don’t understand the purpose of the statute,” Albright said. “I understand the motivation of it. Who are you protecting?”

SB 2420

Requires proof of age to download a smartphone app and parental consent when the user is a minor

A judge signaled the law violates first amendment protections during a Dec. 16 hearing, adding an order will come before the statute takes effect in January.

The law is overly broad, Judge Robert Pitman said, because it requires age proof to download any app, including news sites, not just those that promote harmful or addictive content.

An injunction would be a win for the two parties that brought challenges: a trade organization whose members include app store operators Google, Apple, and Amazon, and a student group that says the law interferes with minors’ ability to create and publish content.

SB 2972

Requires universities to adopt policies banning expressive activities from 10 p.m. to 8 a.m., plus loud noises like drums and amplified sound in the final two weeks of a term

This law was passed after student protests favoring Palestine in its conflict with Israel embroiled campuses in Texas and beyond.

In October, a judge sided with student organizations at University of Texas campuses in Austin and Dallas in temporarily blocking the law.

“The First Amendment does not have a bedtime of 10 p.m.,” Judge David Ezra wrote in the order.

University officials who appealed are represented by the state’s top appellate lawyer, Solicitor General William Peterson. The case is pending at the Fifth Circuit.