Lawsuits threatening state maritime industry

William H. Hanson, MARITIME JOBS FOR TEXAS

Texas has no natural, deep water ports. Every port and waterway in the Lone Star State must be regularly dredged to keep them clear and open. Texas' maritime industry is critical to our state's economy, contributing $178 billion in business sales annually and nearly a million jobs. Texas ports pay $5 billion a year in state and local taxes and handle 20 percent of all marine traffic in the nation.

Unfortunately, the vitality and future of the state's maritime industry are threatened by an explosion of lawsuits against dredging companies that are threatening to put small dredgers out of business and force large dredgers to include large liability premiums in their bids on Texas projects or when they employ Texas workers anywhere.

Unlike other Texas workers, a loophole in Texas law allows maritime workers to file a state lawsuit in the county where he or she lives. This exception has touched off an explosion of lawsuits in just four South Texas counties - Starr, Hidalgo, Cameron and Zapata. In a single year, 98 of the 170 personal injury lawsuits filed against dredgers in the entire nation were filed in those four counties. These lawsuits are filed almost exclusively by two law firms that are aggressively using the loophole to file lawsuits in friendly courts.

As reported in the Wall Street Journal in February, Anthony Buzbee, an attorney from one of those firms, told a group of dredgers gathered for a conference in Las Vegas last May that he files cases in the Rio Grande Valley, rather than in traditional venues, because he can get a financial judgment that is 60 percent to 70 percent higher than he would get if he filed the same case in Houston or Galveston. Displaying a disturbingly patronizing attitude, Buzbee proclaimed that he has an advantage in South Texas because the juries and judges are predominantly Hispanic.

Such statements are reprehensible. So is the damage these lawsuits are doing to the Texas dredging industry, our economy and our job base. The increased cost of doing business in Texas must be factored into every bid submitted on dredging contracts.

With dredging prices inflated in Texas because of lawsuit abuse, dredging projects in Brownsville and Port Mansfield have been canceled. The Army Corps of Engineers funds most public dredging projects in Texas and can easily justify spending its money on projects in other states where no lawsuit liability premium is included in the price tag. Projects, including LNG Terminals in Corpus Christi, Freehold, Ingleside and Port Arthur - as well as the deepening and widening of our ports - are at risk.

Maritime commerce is extremely competitive. Every port in the country is actively pursuing dredging projects to continue expansion. Meanwhile, in Texas, dredging projects are being canceled.

A coalition of groups statewide is working in support of the legislation being considered by the Legislature to ensure that cases against dredgers in Texas courts are subject to the same sound principles embedded in most state and federal venue statutes. Our ports have made Texas a global market hub and they keep us on the cutting edge of international competitiveness. We cannot allow a critical economic engine to be endangered by lawsuit abuse.

Hanson heads Maritime Jobs for Texas.