Court Blocks SB 13: What It Means for Texas Cities
In February of this year, a U.S. District Court in the Western District of Texas struck down Texas Senate Bill 13 (SB 13) and enjoined its enforcement, marking a significant development for local governance across the state. SB 13, passed in 2021, was a state law designed to prohibit Texas municipalities from contracting with financial institutions who are deemed by the state to “boycott energy companies”. The law was based on efforts to prevent local governments from contracting with businesses who boycott or discriminate against companies based on their involvement in politically sensitive sectors.
Why did the court find SB 13 unconstitutional?
The district court concluded that SB 13 violated the First Amendment by restricting protected speech and expressive conduct. Specifically, the court reasoned that decisions by financial institutions or contractors to limit business with certain industries—such as fossil fuel companies—can constitute expressive activity reflecting political or policy views. By penalizing those decisions in public contracting, SB 13 effectively imposed viewpoint-based restrictions.
The court also found that the law was overbroad and vague in its definitions of what constitutes a “boycott” creating uncertainty for entities trying to comply. This ambiguity heightened the risk of chilling lawful speech, as companies might avoid certain positions or policies out of fear of losing government contracts.
What does the injunction mean?
When the district court found SB 13 unconstitutional, it issued an injunction which prevents the law from being enforced. In this case, the ruling effectively halted SB 13’s implementation statewide. This means that, for now, Texas municipalities are no longer bound by the restrictions or prevented from contracting with companies the Texas Comptroller has deemed to boycott energy companies.
After the court issued the injunction, the defendants in the case, Attorney General Ken Paxton and Texas Comptroller Kelly Hancock filed a motion to stay the injunction pending appeal. A stay would have paused the effect of the injunction while a higher court reviews the case. However, on April 14, 2026 the court denied that motion, allowing the injunction to remain in place.
In doing so, the court applied the traditional four-factor test for a stay. First, it found that the defendants had not made a strong showing that they were likely to succeed on the merits of the appeal, particularly given the First Amendment concerns identified in the original ruling. Second, the court determined that allowing enforcement of SB 13 during the appeal would risk ongoing constitutional harm to affected parties, which courts treat as a serious and often irreparable injury.
Third, the court weighed the balance of harms and concluded that maintaining the injunction would not significantly harm the State, while lifting it could impose immediate burdens on municipalities and contractors. Finally, the court found that the public interest favored protecting constitutional rights and avoiding the chilling of speech.
The immediate impact is that local governments across Texas can continue operating without SB 13’s constraints for the foreseeable future.
However, there still remains a degree of uncertainty. Since the case is on appeal, the legal status of SB 13 is not final. A higher court could eventually reverse the district court’s decision, which would reinstate the law.
Please do not take this article as legal advice. We can tell you what the law is, but until we know the facts of your given situation, we cannot provide legal guidance. This website is for informational purposes and not for the purposes of providing legal advice.
