Gusinsky v. Reynolds17, No. 3:25-cv-01816-K (N.D. Tex. Mar. 17, 2026) (Kinkeade, J.), is the first identified federal-court decision enforcing an SB 29 ownership-threshold bylaw. A 100-share derivative plaintiff sued Southwest Airlines’s board over the airline’s end-of-bag-fee policy decision. Southwest had adopted a 3%-threshold bylaw under TBOC § 21.552(a)(3); the court applied the bylaw and dismissed with prejudice. The theory-by-theory disposition matters: the order rejected the Texas retroactivity challenge and the contract theory on the merits; it treated the open-courts and unspecified federal theories as abandoned; and the dormant Commerce Clause and internal-affairs theories were not presented and not decided. Counsel advising plaintiff strategy in any Texas-incorporated covered corporation should treat Gusinsky as the baseline while noting which constitutional defenses remain unadjudicated.
What the court reached
- Dual-axis mechanism validated. The court accepted that the 3% number functions simultaneously as the ceiling on what Southwest could elect and the required holding that the shareholder must satisfy.
- Bylaw enforceability confirmed. Southwest’s bylaw was adopted two days after SB 29 took effect; the court treated the bylaw as validly adopted and operative against the filed derivative complaint.
- Pre-suit demand vs. derivative complaint distinguished. The court clarified that a pre-suit demand letter does not, by itself, “institute” a derivative proceeding for purposes of § 21.552 — only the filed complaint does.
- Aggregation question deferred. Whether a 100-share plaintiff may aggregate with other holders to reach the bylaw-adopted threshold was not squarely presented; aggregation mechanics remain open for future plaintiffs.
What the court did not reach — and what plaintiff strategy should preserve
The court declined to reach the plaintiff’s constitutional defenses. Three theories remain open for cohort-plaintiff litigation:
- Dormant Commerce Clause. Plaintiffs whose principal place of business is outside Texas can argue that SB 29’s effect on out-of-state derivative plaintiffs exceeds the constitutional limit articulated in Edgar v. MITE Corp. The argument is keyed to whether the burden on interstate commerce in derivative-litigation access is excessive relative to the local benefit.
- Internal-affairs scope. Under CTS Corp. v. Dynamics Corp. of America, a state may regulate the internal affairs of corporations it charters. The doctrinal question for out-of-state plaintiffs is whether § 21.552’s extraterritorial reach against an out-of-state plaintiff in a Texas-incorporated but headquartered-outside-Texas company is “internal” in the CTS sense.
- Texas Constitution Article I, § 16. The plaintiff’s state-constitutional retroactivity argument under Tex. Const. art. I, § 16 was not reached. The argument would be strongest where the plaintiff acquired shares before the bylaw was adopted.
Plaintiffs’ counsel structuring the next federal-court challenge to a 3%-threshold bylaw should brief all three early. Gusinsky did not foreclose any of them.