Friends,
It’s been a great week for tort reform, with a federal district court, for the first time, applying the corporate formation bill from the 2025 Texas Legislature, SB 29. This was a TLR priority bill last session. The court’s ruling dismisses a frivolous shareholder derivative lawsuit against Southwest Airlines. The National Law Review has a terrific summary.
Additionally, the data continues to shed light on the growing impact of nuclear verdicts on consumers in the Lone Star State. Here’s a more detailed look at what you may have missed this week in lawsuit reform.
The provisions in Senate Bill 29 protect corporations from harassing lawsuits challenging decisions made by businesses exercising their best judgment at the time of the decision. This is what happens when the courts apply the law as intended and prevent litigious interference in day-to-day business operations. This is a big win and sets an important precedent for other courts across Texas.
Texas is a leader in lawsuit reform, shaping proposals adopted nationwide. Despite this, the fight against billboard lawyers has landed Texas back on the Judicial Hellholes watchlist.
While Texas is only on the national watchlist (Los Angeles tops the worst rankings), the reasons are ones TLR has highlighted for two years: nuclear verdicts and phantom medical bills. Since the 2025 session, Third Party Litigation Finance has grown into a larger part of the conversation.
For over a decade, Texas lagged behind California and New York in nuclear verdicts—jury awards over $10 million. That changed in 2024, when Texas jumped to the top of the list, with juries awarding more than $3 billion in outsized judgments.
The Third Party Litigation Funding (TPLF) industry has grown to $15 billion in the U.S.—roughly $19 billion globally—as sovereign wealth funds and adversarial nations have invested in lawsuit funding. Since 2023, the Department of Justice’s Foreign Agents Registration Act Unit has highlighted concerns over foreign investment in lawsuits. Congress nearly imposed a heavy tax on the TPLF industry, and last month Senator Chuck Grassley introduced legislation to ban foreign influence in federal courts through TPLF.
Texas previously passed the Stopping Foreign Adversaries’ Land Grab Bill (SB 17) to bar adversarial foreign nations from owning land in Texas, a win for national security and Texas farmers and ranchers. Now, there are rumblings inside the Capitol that similar transparency bills targeting TPLF and banning foreign influence are being drafted.
Pre-filing for the 90th Texas Legislature begins on November 9.
New York Governor Kathy Hochul is taking incoming fire from trial lawyers across her state for a plan to curb lawsuit abuse and staged accident fraud. Reinforcements arrived this week in the form of support from New York Firefighters and Police organizations backing the policy plan. “Our members don’t just keep New Yorkers safe on the road. We deal with the same high costs of driving as every other New Yorker, including high insurance premiums,” said city Police Benevolent Association President Patrick Hendry in a statement, adding:
“We applaud the governor’s efforts to reduce these costs and make New York affordable for working-class families like ours.”
Staged accidents are becoming more common around the US and have become a growing problem in New York, highlighting this as a bipartisan issue. More recently, two lawyers in Louisiana are in federal court over a staged accident ring that included putting children in danger through planned automobile crashes with 18-wheelers. In Texas, staged crash rings have been busted a handful of times over the past two decades. The problem is so broad that Texas Congressman Brandon Gill filed a bill to crack down on these criminal enterprises.
More on the New York plan to curb runaway litigation costs through new policies:
A federal trial continued this week in New Orleans with a key witness testifying about his role in the staged accident ring that included two lawyers filing fraudulent lawsuits. The trial began earlier this month as two trial lawyers face criminal charges for orchestrating a decade-long scheme to intentionally cause automobile accidents with 18-wheelers.
For more than two hours, Ryan Harris testified about personal injury attorneys and the money involved in schemes to intentionally crash cars into 18-wheelers and then pursue fraudulent lawsuits. … “I just let her know in advance and that I’ll be back…and she said make sure to hit them right, and the policy is high,” Harris said. “… it was all fraud.”
Click here to read more on the trial and the federal witness’s testimony.
Lawsuit reform is the talk of the town in capitals across the country. Here’s a roundup of news about recent actions by lawmakers and how pro-reform policies are improving affordability in those states:
Letter to the Editor: Gov. DeSantis’ Lawsuit Reform is Working
A Florida resident brings receipts highlighting the insurance premium savings brought under lawsuit reform laws signed by Governor Ron DeSantis.
The Horror Continues: California’s Big “Nuclear Verdicts” Just Keep Coming!
This article highlights why Los Angeles and California top the nation’s Judicial Hellhole list.
Editorial: Two Kansas bills show how to stop ideological lawfare
Alliance for Consumers Action advocates for two bills that tamp down lawsuit abuse, including those tied to criminal enterprises like staged car accident rings.
Letter to the Editor: Rapacious legal system leads to higher insurance rates
A Louisiana resident points to frivolous lawsuits driving the rising costs of goods in the Pelican State.
