In this issue...

The Best Of Times, The Worst Of Times

New Summary Judgment Rule

Tort Reform Outside Of Texas

TLR PAC Reception To Promote Pro Reform Legislators

Tort Opposition

Tort Support

Tort Reform Bills NOT On TLR™s Legislative Agenda

TLR Supporters Recommendations

THE BEST OF TIMES, THE WORST OF TIMES

For nearly two decades, Texans have been angry, frustrated, and at times even fearful of their own civil justice system. But the last three years have been a turning point of historic proportions for our state™s tort laws. No longer the Lawsuit Capital of the World, Texans can finally point to their civil justice system and know that their courts, and their laws, are no longer blatantly biased.

As one of several groups that played a significant role in advocating these successful reforms, Texans for Lawsuit Reform (TLR) has recently finished an evaluation of all that has occurred during the nearly four years of its existence. The record is unambiguous ” two successful election cycles and the stunning 1995 legislative successes have helped transform the face of Texas tort law.

Even with a disappointing 1997 legislative session, it has become clear that changes in the law, and in lawmakers, have resulted in exactly the sort of improvements TLR originally envisioned when the organization was founded.

TLR™s primary goal was to restore fairness and integrity to Texas tort law, and this has been the most significant achievement. But we have also known that a fair and balanced civil justice system would benefit Texans in a myriad of other ways as well.

Consumers of liability insurance in Texas have seen the most immediate, measurable pocketbook benefit. Since the 1995 reforms were passed, insurance companies have passed on to their customers nearly $900 million in savings directly attributable to tort reform. This year the total savings could reach nearly $1.5 billion.

At the request of the State of Texas, the LBJ School recently published the results of a study designed to identify the practical, œreal-world impacts of the changing Texas civil justice system. According to the Texas Department of Insurance, the LBJ school results œclearly show that tort reform has changed the liability insurance environment and losses are decreasing as a result.

From one end of Texas to the other, TLR is hearing from scores of citizens who are witnessing, firsthand, the ways an improving civil justice environment helps all Texans. The battle for the elimination of the worst abuses in tort reform is over, and the Texas consumer, the Texas employee, the Texas business owner, and the Texas family all won. The only losers are the lawsuit abusers.

This good news is a tangible reminder that the cause was right and that tort reformers™ hard work has paid off. But although the battle is over, the war has not been won. The tort reform movement cannot become complacent because the powerful and persistent forces opposing our objectives are trying to reverse the course.

In fact, our victories have angered and energized the opposition. They are organizing and counterattacking with a well planned, coordinated offensive designed to roll back the recently passed reforms, punish legislators who fought for reform, demonize businesses and tort reform advocates, and influence juries to be sympathetic to plaintiff claims and unsympathetic to defendants. There are no less than five distinct groups beating the anti-tort reform drum in the newspapers, radio and television news, and in paid advertising. This can be expected to continue at least through the 1998 election cycle, and into the 1999 legislative session.

Perhaps most worrisome is the concerted effort underway by some shrewd and aggressive plaintiffs lawyers to exploit brand new loopholes and gray areas of the existing law.

TLR will redouble its public education efforts to set the record straight whenever and wherever the other side attempts to diminish or distort the truth. We also will be working to identify emerging areas of opportunistic lawsuit abuse and propose appropriate remedies to counter this trend.

We also intend to be very active in the upcoming election cycle through our PAC. We are not going to let sham œconsumer groups or other organizations opposed to tort reform principles spread misinformation in hopes of defeating those whose courageous votes led to the historic 1995 reforms. We will stand shoulderto- shoulder with our legislative allies to stop any attempts to undermine popular support for our cause.

We are strengthened by the unwavering support of our friends across Texas and we are excited and invigorated by the challenge of completing the reform of Texas™ tort laws and defending the integrity of our improved civil justice system. We will continue to study ways that the system can be improved.

TLR applauds the efforts of the individuals and groups who have devoted time or financial resources to the fight to restore integrity to our civil justice system. The tort reform experience in Texas has not only repaired much of a badly broken system, it also demonstrated to every Texan that our laws, and ultimately our future, are still controlled by the people.

NEW SUMMARY JUDGMENT RULE

Meritless cases not supported by evidence will no longer be permitted to go to trial thanks to the Texas Supreme Court™s adoption of a new summary judgment rule. Reform of the rule had been urged in TLR™s 1995 and 1997 legislative agendas. TLR director Richard Trabulis cited the rule as œa pivotal change in Texas practice that brings Texas closer to the mainstream in restricting frivolous lawsuits.

Technically, this amendment of Rule 166a of the Texas Rules of Civil Procedure adopts the federal courts standard for œno-evidence summary judgment motions established in the 1986 case of Celotex Corp. v. Cartett. In that case, the U.S. Supreme Court held that after adequate time for discovery, a party is entitled to a summary judgment should his opponent fail to come forward with enough evidence to justify a trial. The 1986 case held that these œno-evidence summary judgments are appropriate because œIn such a situation, there can be ˜no genuine issue as to any material fact,™ since a complete failure of proof concerning an essential element of the non-moving party™s case necessarily renders all other facts immaterial.

Like most courts in earlier periods, Texas courts only reluctantly moved to the practice of throwing out spurious cases before trial. For example, in 1940 the Fifth Circuit warned against potential abuse of summary judgment as a œcatch penny contrivance to take unwary litigants into its toils and deprive them of a trial. Summary judgment was long seen as a œdrastic device that cuts off party™s right to present his case to the jury. But the litigation explosion of the seventies and eighties compelled a stricter focus on the evidence requirements required to allow a case to proceed to trial.

Although the U.S. Supreme court™s holding applied only federal cases, its logic was so compelling that a majority of state courts have adopted or confirmed the same rule in the decade since that time. Texas is the thirtieth state to adopt the rule.

The lawsuit industry, predictably, has already launched a major campaign attacking the Supreme Court and claiming dire consequences from adoption of the new rule. Included are claims that the courts will be clogged with frivolous no-evidences motions, that the new procedure will be used for purposes of harassment and abuse and that an appellate and mandamus œexplosion will follow in response to the predicted misuse of the new procedure. Since none of these results have occurred in the federal courts or the 29 state court systems, these claims have little credibility.

TORT REFORM OUTSIDE OF TEXAS

Two years ago, when the Texas Legislature adopted a package of historic tort reforms, lawmakers in other states were also passing major changes to their civil justice statutes. Besides Texas, the following other states also passed major changes to their tort laws in 1995: Connecticut, Illinois, Indiana, Montana, New Jersey, North Dakota, Oklahoma, Oregon, and Wisconsin.

Since then, tort reform efforts in state capitals across America have run into serious problems, particularly in populous states. In fact, despite the disappointments of the 1997 session, Texas was the only major state to have passed a notable piece of tort reform legislation as of September 30.

The following summary lists significant tort reform initiatives that have gone into effect in other states since January 1, 1996. The information is listed by tort reform topic.

• Limits on the award of œsoft or noneconomic damages: Alaska (1997), Michigan (1996, applicable only to products liability lawsuits), Ohio (1997).
• Joint and Several Liability Reform: Louisiana (1996), Michigan (1996, applicable only to products liability lawsuits).
• Limits on the Award of Punitive Damages: Ohio (1997).
• Sanctions for Frivolous Lawsuits: Montana (1997).
• Collateral Source Rule: Ohio (1997).
• Offer of Settlement: Alaska (1997).
• Prejudgment Interest Reform: Alaska (1997).
• Protection from liability for employers who provide employee references in good faith: Idaho (1996), Illinois (1996), Maryland (1996), Ohio (1996), South Carolina (1997), South Dakota (1996), Wisconsin (1996).
• Limits on the calculation of future damages: Iowa (1997)

TLR PAC RECEPTION TO PROMOTE PRO REFORM LEGISLATORS

TLR™s Political Action Committee (PAC) is holding a reception in Houston on Thursday, November 13th to increase our PAC™s capacity to support tort reform candidates in the current election cycle.

There is no question that TLR™s support of pro-reform candidates in the Texas Senate elections of 1994 was a key ingredient of tort reform™s success in the 1995 session. While the Senate had previously had a pro-reform majority, it had been frustrated by an anti-reform minority. The most motivated anti-reform Senators, however, lost their seats in the 1994 elections.

Now the plaintiffs™ bar wants to regain its strength in the Senate and has launched a massive campaign to defeat several pro-reform Senators. If it is successful, not only will further reform be impossible bur there will be real danger that past reforms will be diminished and new causes of action will be enacted.

Therefore, our PAC must be strong and active, and we need your support. For more information, please call Elizabeth Blakemore at (713) 526-3399.

TORT OPPOSITION

Alert Texas, a self - proclaimed œconsumers group that has consistently opposed all efforts at meaningful lawsuit reform has begun a radio advertising campaign that appears to be part of a cleverly conceived and intricately executed strategic plan by the plaintiffs™ bar to reverse the tort reforms of recent years. Their plan is aimed at denigrating the legislative reforms of recent years, demonizing business and business people, demoralizing the Supreme Court by a relentless attack on the Court™s competence and integrity, and prejudicially influencing citizens who are potential jurors. It is this last goal“ influencing the jury pool“at which Alert Texas™ radio campaign is directed. The transcript of the Alert Texas ad appears below.

TORT SUPPORT

As Texans have become more aware of the lawsuit abuses that have become rampant in Texas, they have become increasingly careful and wise in their judgements when sitting as jurors. The Alert Texas Campaign is intended to reverse that trend, and it simply cannot go unanswered. Therefore, TLR is running an ad (the transcript appears below) in selected media markets that we think will put the proper perspective on the role and responsibilities of jurors.

TORT REFORM BILLS NOT ON TLR™S LEGISLATIVE AGENDA

Limits damages for a person injured in an auto accident if the person was either intoxicated at the time of the accident or was driving without insurance. After being reported out of the Insurance Committee this bill by Rep. Corte died in the House Calendars Committee.

Provides immunity to an employer for the truthful disclosure of information about a current or past employee. The bill by Rep. McCall passed the House on April 18 and was then tagged May 14 and then was fatally tagged just prior to it being heard in the Jurisprudence Committee on May 18.

Adds chambers of commerce to the list of charitable organizations covered by the Charitable Immunity and Liability Act of 1987 (chapter 84, Civil Practice & Remedies Code.) This bill by Rep. Uher passed the House April 18 and it was referred to the Senate Economic Development Committee on April 22 where the bill died. Sen. Sibley reported out the Senate version of this bill late in the session (SB 189 by Sen. Haywood), and that bill subsequently died in the House Civil Practices Committee.

Implements an English-style œloser pay approach. After an April 29 hearing this bill by Rep. Swinford died in the House Civil Practices Committee.

Originally limited damages in a suit for retaliatory discharge due to a workers™ compensation claim only to economic damages. This bill by Rep. Junell passed the House April 30 and it then passed the Senate without opposition in amended form, the House concurred in the Senate amendments and the bill was sent to the governor. The final version, however, only modified the burden of proof in these cases. The bill was vetoed by the governor because the compromise version was viewed as being weaker than existing law.

Would allow the parties to a major contract to jointly agree on venue. This bill by Rep. Dutton was voted out of the Civil Practices Committee April 29 but then it died in the House Calendars Committee.

Provides for Supreme Court writs of error pertaining to certification of class action lawsuits. This bill by Sen. Haywood was approved by the Senate in early April but then died in the House Civil Practices Committee.

Gives volunteers of higher education institutions the same immunity from liability enjoyed by volunteers in public schools. This bill by Sen. Bivins was approved by the Senate on May 16, by the House on May 21 and was signed by the governor.

Limits damages for a person injured in an auto accident if the person was either intoxicated at the time of the accident or was driving without insurance (similar to HB 18). This bill by Sen. Bivins died in the Senate Economic Development Committee as pending business following a hearing on May 6.

Limits the liability of professionals who assist in the issuance of securities for small business. This bill by Rep. Durton passed the House in mid-May, was approved by the full Senate on May 21 and was signed by the governor on June 18.

Provides immunity from liability for health care professionals who dispense charity care if the professional was acting in good faith. This bill by Rep. Averitt was voted out of the Civil Practices Committee April 17 but the bill died in the House Calendars Committee.

TLR SUPPORTERS RECOMMENDATIONS

This past June and July, TLR conducted an extensive poll of many supporters from across Texas asking for their input, conclusions and recommendations from the 1997 Legislative Session.

We want to thank those individuals who participated in these debriefing for their time and thoughtful responses. There was generally unanimity of opinion on virtually every point in the survey.

First, most interviewees understood that the failure of the majority of the tort reform agenda lay at the doorstep of the Civil Practices Committee and that there was little that TLR could have done to have changed the outcome of the bills once they were assigned to this committee.

Most individuals stated that TLR had been well organized and professional. It was suggested by many, however, that TLR should narrow its focus and have a shorter and simplified agenda in the future. Most thought that the effects of the media on tort reform were mixed but were not a major factor, either pro or con.

The overwhelming majority thought that the TLR PAC should continue to strongly support candidates who have a philosophy or a record of supporting tort reform, regardless of party affiliation.

In conclusion, the strong recommendation was that TLR should œstay the course because there is still significant work to be done and gains to be protected to continue to develop a fair and equitable civil justice system in Texas.