After a full week of intense and sometimes contentious negotiations at the Capitol between representatives of Tex-Abota, Texas Trial Lawyers Association, two tort reform groups, Lt. Governor Dewhurst and the Governor’s office, the senate state affairs committee significantly revised CSHB 274, the Governor’s tort reform package. The negotiations were presided over by State Affairs Chair, Senator Bob Duncan, and the bill’s senate sponsor, Senator Joan Huffman.
Chamberlain McHaney partner David E. Chamberlain represented Tex-Abota at the Capitol in the negotiations that produced the bill for the Senate committee’s approval. [Tex-Abota is the Texas Chapters of the American Board of Trial Advocates, an invitation-only association of defense and plaintiffs’ lawyers limited to less than 1% of the state’s lawyers].
Gone are provisions that would have restricted implied causes of action arising from statutes, that would have allowed losing defendants to recover defense costs from winning plaintiffs, and that would have awarded fees to prevailing parties in breach of contract actions. The bill was also changed to make it clear that only meritless claims are subject to early dismissal.
The bill directs the supreme court to write rules providing a mechanism for the early dismissal of groundless claims. Supporters believe this will result in a rule similar to federal rule of civil procedure 12b. The bill says the prevailing party on the motion “shall” recover fees, virtually assuring that the motion will only be used in slam dunk cases.
The bill also directs the supreme court to write rules for expediting trials and reducing discovery costs in cases involving less than $100,000.
The bill amends the civil practices and remedies code to allow a trial court to permit an interlocutory appeal of an order involving a controlling question of law. The appellate court may or may not agree to accept the appeal. Fees may not be assessed as an earlier version would have required.
The bill tweaks “offer of settlement” practice. The bill continues the current practice that allows only the defendant to trigger the offer of settlement procedure as well as the 80/20 formula for determining who the prevailing party is. But the senate version drops the controversial provision in the House bill that would have allowed a losing defendant to recover fees from a winning plaintiff in certain circumstances.
The senate bill partially accepts the house bill’s change to responsible third party practice. No longer can plaintiffs join a designated responsible third party if the statute of limitations has expired. However, in the senate version the defendant’s designation is subject to being refused by the trial court if the defendant has not promptly named the responsible third party in discovery.
At the senate committee hearing late Saturday afternoon, David Chamberlain on behalf of Tex Abota, as well as representatives the Texas Trial Lawyers Association, Texans for Lawsuit Reform, Texas Civil Justice League and the Governor’s Office all testified in favor of the bill and answered the committee’s questions. When Chairman Duncan asked if the Governor had approved the far reaching changes made to his package, the Governor’s General Counsel answered “yes.” Senator Lucio characterized the negotiated agreed bill as a “milestone” and said he hoped he would not see another tort reform bill next session.
Senator Rodney Ellis asked Senator Huffman on the record if she was committed to defending the senate version against any changes that might be attempted on the floor or by the House. Huffman assured Ellis and the committee that she would.
The committee approved the bill by a unanimous vote. The full Senate approved the bill by a 31-0 vote yesterday.
A copy of the committee-approved bill is attached.