Lawmakers Close Major Lawsuit Loophole & Blocks Rollback of Historic Tort Reforms

When the 2007 Session of the State Legislature gaveled to a close on Monday, May 28th, lawmakers once again demonstrated a strong commitment to preventing lawsuit abuse in Texas. Legislators in both houses closed a dangerous loophole in the state's venue law that was plaguing the state's maritime industry. They also rejected dozens of proposals by plaintiff lawyers that would have created new or dangerous grounds for lawsuits.

Closing A Loophole That Threatened The Texas Maritime Industry

A handful of unscrupulous attorneys in Houston and Galveston created an explosion of lawsuits against companies that dredge Texas ports and waterways in what TLR President and CEO Dick Weekley called “one of the most egregious examples of lawsuit abuse we have seen.” Dredging projects were being cancelled and dredgers were assessing whether they could continue to work in Texas or hire Texas workers. Any slowdown in dredging is a real threat to the entire Texas economy, since the maritime industry accounts for 10% of our State’s gross domestic product.

TLR worked with a broad coalition of business groups to advocate the reforms needed to end the lawsuit abuse in this vital sector of our economy.

TLR President Dick Trabulsi commended the leadership provided by HB 1602’s sponsors, Rep. Corbin Van Arsdale, R-Houston, and Senator Troy Fraser, R-Horseshoe Bay, as well as Rep. Byron Cook, R-Corsicana, Chairman of the House Civil Practices Committee, and Senator Bob Duncan, R-Lubbock, Chairman of the Senate State Affairs Committee. Governor Rick Perry, Lt. Governor David Dewhurst, and Speaker Tom Craddick also strongly supported the legislation.

Court Modernization Initiative

TLR also supported a package of reforms that would have streamlined the cumbersome Texas court system, which would make our courts more user-friendly and efficient – important components to a fair and balanced civil justice system. The Court Modernization initiative had the support of civil justice reform groups and the broad business community. Senator Bob Duncan and his experienced and able assistant, Lisa Kaufman, worked tirelessly on this effort, and their work paid off when SB 1204 passed the Senate 24 – 6. Unfortunately, the bill arrived in the House late in the session and was defeated on the House floor by a technical “point of order,” which was raised by legislators loyal to the trial judges of Cameron and Hidalgo counties. It is notable that the only serious opposition to this legislation came from the judges of those two counties, which have long been labeled as “judicial hellholes” by the American Tort Reform Association.

This bill passed the Senate overwhelmingly, and TLR believes that well over two-thirds of the Members of the House would have voted for this legislation had it not been taken down on a point of order. Our judiciary and all citizens who access our courts are the losers.

Defending Lawsuit Reforms And Opposing Dangerous New Legislation

TLR’s legal and lobby teams monitored nearly 400 bills that affected the civil justice system in Texas, many of which would have rolled back lawsuit reforms we have fought so hard to win or would have created new and unnecessary statutory causes of action.

As part of a strong coalition of business and professional groups that are committed to lawsuit reform, TLR opposed legislation that would have created significant new opportunities for the plaintiff’s bar to bring lawsuits that would undermine the vigorous Texas economy, which is one of the world’s strongest engines of job creation and innovation.

In our upcoming TLR Advocate, we will discuss many of the bills that TLR worked to defeat. Here, we will mention just two, to give you a flavor of the harm that might have been done if the Texas business and professional community was not alert to the dangers posed by the plaintiff’s bar in legislative sessions.

One proposal that the tort reform coalition opposed is known as a “qui tam” law, which empowers lawyers who represent private citizens “to stand in the place of the state’s attorney general” in lawsuits claiming fraud against the state. The Texas bill was similar to the much abused federal qui tam law, but it did not even contain many of the checks and balances that are in the federal law, to keep the worst abuses from occurring. Our state attorney general currently has sufficient authority to protect the state from fraud. The qui tam bill would have created a private bounty system, in which citizens and their lawyers could reap huge sums by bringing lawsuits “on behalf of the state.”

Another dangerous bill that was advanced this session was one designed to overturn decades of sound federal and Texas law concerning antitrust lawsuits. It is well established law that a lawsuit against a manufacturer for anti-competitive pricing of products should be bought by the initial purchasers of the products, such as distributors, and not by the ultimate consumers of the product. There are sound legal and public policy reasons for this doctrine, which the defeated bill would have overturned.

Correcting Previously Enacted Reforms

TLR believes it is important to correct legislation that it has advocated when problems with the legislation are manifested. For example, TLR was the lead proponent in the 2005 session for SB 15, the asbestos and silica litigation reform bill. The goals of that bill were to end the litigation abuse of suing on behalf of claimants who had no illness but assuring full access to court for those persons who are impaired.

In practice, the multi-district litigation judge who is ably handling pre-trial motions for asbestos claims found that sometimes the judges who were assigned the cases for trial were not setting those trials on a timely basis. A timely trial is especially important for claimants suffering from mesothelioma, since the disease is fatal.

TLR worked successfully with Lt. Governor Dewhurst and Senator Kyle Janek, R-Houston (who was the Senate sponsor of SB 15), and other interested parties, including Judge Davidson, the asbestos MDL judge, to correct this problem. In the future, the MDL judge will be able to seek mandamus relief against trial judges who do not timely set asbestos cases for trial.

A Victory for a Fair and Balanced Civil Justice System

The fight for a fair and balanced civil justice system in the 2007 Texas Legislative session included the major victory of maritime venue reform and continued success in preventing an erosion of the tort reforms of the last decade that have provided the people of Texas greater access to health care, a vigorous economy, and enhanced respect for the law.

We appreciate the help of TLR supporters and our tort reform allies. We all have reason to be proud of what we have accomplished together.