As my colleagues note throughout this edition of The Advocate, the 2019 Legislative Session was one of the most successful and impactful for our state’s civil justice system. Not only did the Legislature pass critical and necessary reforms to address lawsuit abuses, but it also took meaningful steps that will impact the quality of our judiciary now and into the future.

As they have over the past 25 years, common-sense measures advocated by TLR continue to unite Texas’ leadership. Gov. Greg Abbott has been an effective advocate for making our legal system more efficient and accessible. Lt. Gov. Dan Patrick has been a consistent champion of reforms to shut down lawsuit abuses, and he listed TLR’s priority bill on local government contracting with contingency fee attorneys in his top 30 legislative priorities. Speaker Dennis Bonnen, who has supported tort reform throughout his long career, helped move TLR’s bills through the House. Their leadership this session, and in years past, has helped Texas become a national model for improving the court system and correcting legal abuses as they arise.

Also critical to efforts to pass significant legislation is the support of key committee chairs, whose leadership encourages thoughtful debate and input into the process that helps shape and improve bills. Sen. Joan Huffman (R-Houston), a former judge, chaired the Senate State Affairs Committee, which heard many of the important reforms Texas passed this session. Rep. Jeff Leach (R-Plano), an accomplished attorney, chaired the House Judiciary and Civil Jurisprudence Committee, which was ground zero for reforms in the House. Both Sen. Huffman and Rep. Leach served as bill authors for major reform legislation, bringing an added layer of expertise and understanding to both the legislative negotiating process and to conversations about the bills in hearings.

The Texas Senate, which has strongly supported efforts to strengthen Texas’ economy by reforming our legal system, was again active this session. In the Texas House, bill authors were critical in building consensus among their colleagues—both Democrats and Republicans—which led to broad bipartisan support for TLR-advocated bills.

For the second session in a row, Rep. Greg Bonnen (R-Friendswood) authored TLR’s top priority bill. In 2017, it was House Bill 1774 to correct the lawsuit abuse conducted by storm-chasing plaintiff lawyers. This session it was House Bill 2826 concerning the hiring of contingency fee lawyers by local governments, which was co-authored by Rep. Barbara Gervin-Hawkins (D-San Antonio), Rep. Craig Goldman (R-Fort Worth), Rep. Oscar Longoria (D-Mission) and Rep. Leach. Sen. Huffman served as the Senate sponsor of the bill.

Texas is blessed to have such principled, dedicated men and women serving in the Legislature.

We are grateful for all the work they and their staffs have done to enact smart, common-sense reforms to Texas’ legal system. 

THE LEADERSHIP BEHIND TEXAS’ 2019 LEGAL REFORMS

SENATE BILL 1189
Attorney Advertising

Author:
Sen. Dawn Buckingham (R-Lakeway), Chair of Nominations

Co-Authors:
Sen. Brandon Creighton (R-Conroe), Chair of Higher Education
Sen. Pat Fallon (R-Prosper)
Sen. Eddie Lucio Jr. (D-Brownsville), Chair of Intergovernmental Relations

Sponsor:
Rep. Giovanni Capriglione (R-Southlake)

Co-Sponsors:
Rep. Jeff Leach (R-Plano), Chair of Judiciary and Civil Jurisprudence
Rep. Toni Rose (D-Dallas)
Rep. J.D. Sheffield (R-Gatesville)
Rep. John Zerwas (R-Richmond), Chair of Appropriations

SENATE BILL 2140
Attorney General Penalty Power

Author:
Sen. Bryan Hughes (R-Mineola), Chair of Administration

Sponsor:
Rep. Dustin Burrows (R-Lubbock), Chair of Ways and Means

SENATE BILL 2342
Access to Courts

 Author:
Sen. Brandon Creighton (R-Conroe), Chair of Higher Education

Sponsor:
Rep. Jeff Leach (R-Plano), Chair of the Judiciary and Civil Jurisprudence 

HOUSE BILL 3233
Judicial Campaign Fairness Act

Author:
Rep. Stephanie Klick (R-Fort Worth), Chair of Elections 

Sponsor:
Sen. Pat Fallon (R-Prosper)

HOUSE BILL 3300
Motion to Dismiss

Author:
Rep. Andy Murr ( R-Junction)

Co-Authors:
Rep. Morgan Meyer (R-Dallas), Chair of General Investigating
Rep. Tom Oliverson (R-Cypress)
Rep. Reggie Smith (R-Van Alstyne)
Rep. John Wray (R-Waxahachie)

Sponsor:
Sen Joan Huffman (R-Houston), Chair of State Affairs

HOUSE BILL 2730
SLAPP

Author:
Rep. Jeff Leach (R-Plano), Chair of Judiciary and Civil Jurisprudence

Co-Authors:
Rep. Dustin Burrows (R-Lubbock), Chair of Ways and Means
Rep. Morgan Meyer (R-Dallas), Chair of General Investigating
Rep. Joe Moody (D-El Paso), Speaker pro tempore
Rep. Four Price (R-Amarillo), Chair of Calendars

Sponsor:
Sen. Bryan Hughes (R-Mineola), Chair of Administration

2019’s Dynamic Civil Justice Agenda

TLR just completed one of our busiest and most successful legislative sessions, helping enact laws that, among other things, strengthen our legal system, protect consumers and ensure the right to speak freely. Gov. Abbott signed every TLR—supported bill that was passed this session, the majority of which will take effect on September 1.

We began the session with a list of priority bills we hoped to see passed, including disclosure requirements for attorney TV advertisements, increased access to courts, and rules for local government contingent fee contracting.

We also joined the debate on a number of issues that were not TLR priority matters, including the effort to amend Texas’ anti-SLAPP statute. And as we have done in prior sessions, we devoted significant resources to following thousands of bills as they moved through the legislative process to ensure the critical reforms implemented over the past 25 years were not eroded.

The following is a description of TLR’s priority bills and bills to Which the TLR team devoted substantial time during the 2019 legislative session:

HOUSE BILL 2826 (BONNEN/HUFFMAN)
Transparency in Local Government Contingency Fee Contracting

TLR’s top priority bill in 2019 was House Bill 2826, which amended existing statutes and used existing procedures to create transparency and consistency in local government contracting for contingent fee legal services. The bill was authored by Rep. Greg Bonnen and joint authored by Rep. Barbara Gervin-Hawkins, Rep. Craig Goldman, Rep. Jeff Leach and Rep. Oscar Longoria.

The problem we identified exists in multiple contexts in Texas today and throughout the U.S. For example, a small group of lawyers in Texas solicit local governments (particularly school districts) for construction defect lawsuits against general contractors. The law firms use their “experts” to evaluate the facilities. If any construction or design defect is found—and these hired guns always say they have found defects— a multimillion-dollar lawsuit is filed to recover the cost of repairs. The lawyers front the litigation costs and are paid on a contingent fee basis, creating a “no risk” opportunity for the local government. In these lawsuits, which are typically filed up to 10 years after construction was completed, the contractors seldom had any pre-suit indication that there was an issue with the facility.

The general contractors bring Virtually all subcontractors into the lawsuit, creating a massive lawsuit involving dozens of insured defendants. This creates a large pot of money from which the plaintiff lawyer can extract a settlement. The result of this lawyer-driven litigation strategy is that many contractors will no longer bid on government construction work, and when they do, they build a lawsuit premium into the cost.

Environmental litigation presents another opportunity for lawyer-driven government litigation. Texas law allows both the state of Texas and local governments to enforce environmental laws and seek remediation of contaminated property. Any time environmental damage is found, the state or local government can obtain an injunction to prevent further pollution, as well as damages for past pollution and penalties of up to $25,000 per day for the wrongful conduct that led to the pollution.

Some Texas attorneys file penalty-only lawsuits on behalf of local governments against property owners who already worked successfully with the Texas Commission on Environmental Quality (TCEQ) to remediate a polluted site. Again, the attorneys promise no-cost, contingent fee litigation to the governmental entity As a consequence, a property owner can fully cooperate with TCEQ and still face a lawyer-inspired lawsuit and substantial liability.

Opioid-related litigation is yet another example of lawyers driving local governments to file lawsuits. When the opioid crisis came to the forefront, plaintiff attorneys began contacting local officials in Texas, pitching “no risk” contingent fee litigation that would put revenue in the coffers of the local governments. Many cities and counties signed on, apparently agreeing to widely varying contingent fee rates.

While we believe local governments must have the freedom to contract with outside attorneys, the existing process invited enterprising lawyers to recruit government entities for lawsuits, some of which should have been avoided. Since 1999, there have been guidelines governing state-level contracts with contingent fee attorneys. The procedures help ensure that, when litigation is needed, the state keeps more of the money that is recovered. House Bill 2826 makes the longstanding rules governing state-level contingent fee contracting applicable to all local governments in Texas. It also requires local governments to conduct the attorney-retention process in open meetings (to prevent the all too common “brother-in-law” deals), and gives the Texas attorney general the right to review and approve contracts to ensure local governments are not duplicating the state’s efforts.

In addition to working for the passage of House Bill 2826, TLR also supported the general contractors, architects and engineers in their successful effort to pass two important bills related to construction litigation. House Bill 1734 requires school districts to make the repairs for which damages are awarded in a construction defect lawsuit instead of spending the money on unrelated items. House Bill 1999 requires a government entity to provide a pre-suit notice and time for repairs to be made before a construction defect lawsuit is filed. Both of these common-sense measures, coupled with House Bill 2826, should reduce the number of unneeded and meritless lawsuits while maintaining local governments’ ability to bring a lawsuit when a construction defect truly exists.

SENATE BILL 1189 (BUCKINGHAM/CAPRIGLIONE)
Common-Sense Disclosures in Legal Services Ads

Texans are inundated by television ads for legal services. Many ads use dramatic language and frightening images to catch people’s attention and compel them to call an 800 number to sign-up for legal services. Ads about prescription drugs often imply the drug has been recalled when it hasn’t, or is under investigation by the FDA when it isn’t. Evidence gathered by the FDA shows that drug ads frighten viewers (often elderly people), who sometimes discontinue use of critical medications without consulting their doctors, leading to serious injuries and death.

Many of the ads, whether for drugs or other products, are sponsored by client harvesters, who are attorneys and non-attorneys from inside and outside of Texas. Their ads generate clients, who they essentially sell in bulk to other attorneys for a share of the fees generated by the cases. Often, the clients have no idea the advertiser will not actually represent them, which is information any consumer of services is entitled to know.

Senate Bill 1189, another of TLR’s top priority bills in 2019, requires that TV ads for prescription drug claims state: “Do not stop taking prescribed medication without first consulting a physician.” No matter what the content, ads for legal services must identify the sponsor of the ad and state: “This is a paid advertisement for legal services.” Additionally, the ad must state the identity of the attorney or law firm primarily responsible for providing the legal services or the manner the client’s case is referred to an attorney if the advertiser is not a lawyer.

Senate Bill 1189 provides that ads for legal services cannot use “medical alert,” “health alert,” “drug alert,” or “public service announcement,” which suggest the advertiser is offering professional, medical or government agency advice about medications or medical devices. The ads also cannot display the logo of a federal or state government agency to suggest government sponsorship or use “recall” when referring to a product that has not been recalled by a government agency or by voluntary act.

SENATE BILL 2342 (CREIGHTON/LEACH)
Enhancing Texans’ Access to Courts

Another of TLR’s major priorities for this session was making litigation less expensive and time consuming so Texans can pursue legitimate claims in court. Texas has a three-tier, state-run trial court system. In the first tier are justice of the peace (JP) courts. Each Texas county has at least one of these courts, which currently handle civil cases with no more than $10,000 in controversy. Each of these courts handle thousands of cases every year. They are efficient and accessible, both procedurally and geographically.

In Texas’ second tier of trial courts are the 247 county courts at law. Most of these have civil jurisdiction beginning at $200 and capped at $200,000, but 61 county courts at law in 20 Texas counties have civil jurisdiction exceeding the standard $200,000 cap. Many of the extended-jurisdiction courts have unlimited civil jurisdiction, like a district court.

Without regard to the amount in controversy, civil cases filed in county courts at law are tried to six-person-juries. Consequently, a $100 million lawsuit pending in a county court at law in Dallas would be tried to six jurors. If the same case were filed in a district court in Dallas, it would be presented to 12 jurors. Studies indicate that smaller juries are more likely to reach anomalous decisions. When the stakes are high, 12 jurors are better than six, which is why the Texas Constitution requires 12-person juries in felony criminal cases.

In Texas’ third tier of trial courts are its 472 district courts, most of which have general criminal and civil jurisdiction, with civil jurisdiction starting at $200 and having no upper limit. At least one district court serves every Texas county.

Having a three-tier trial structure is logical only if the structure serves a meaningful purpose. A structure in which there are easily accessed courts for quick, fair and inexpensive resolution of the smallest civil cases (tier one), courts that provide a quick and reasonably priced resolution for modest sized cases (tier two), and courts capable of handling high-stakes or complex cases (tier three) is a rational system. However, having courts in the middle tier (county courts at law) that have the same jurisdiction as courts in the upper tier (district courts) is not rational, and neither is providing that the two upper tier courts can hear cases with as little as $200 in controversy.

Senate Bill 2342 did not seek to reshape the entire judicial system, but instead, to take important steps toward rationalizing Texas’ existing three—tier system. In Senate Bill 2342, JP court jurisdiction is increased from $10,000 to $20,000, making these efficient courts available for a larger number of small civil disputes. Standard county court at law jurisdiction is increased from $200,000 to $250,000 in Senate Bill 2342, making these tier two courts available for a larger universe of modest-sized civil disputes. Under this provision, 185 county courts at law see their jurisdiction increased, while the 61 county courts at law that now hear cases having more than $250,000 in controversy will retain their current jurisdiction.

Senate Bill 2342 also requires the Texas Supreme Court to adopt rules to promote the prompt, efficient and cost-effective resolution of any civil action with less than $250,000 in controversy that is filed in a county court at law. This change moves the county courts at law back toward their historic and logical role as tier two trial courts handling modest-sized civil cases quickly and at a lower cost.

Finally, Senate Bill 2342 requires the use of a 12-person jury in a county court at law if the amount in controversy in the case exceeds $250,000 unless all of the parties agree to a jury composed of fewer jurors. Under this provision, when the county court at law is effectively acting as a substitute district court, then the case is treated as if filed in a district court.

HOUSE BILL 3300 (MURR/HUFFMAN)
Making Texas’ Motion to Dismiss Statute More Useful

The existing motion to dismiss rule requires that attorney’s fees be assessed against the losing party when a motion to dismiss is filed. Because many judges are reluctant to grant a meritorious motion to dismiss if it will burden the losing party with paying the winning party’s legal fees, attorneys are reluctant to file legitimate motions to dismiss and expose their clients to the legal costs if the motion is denied. House Bill 3300 changes the word “shall” to “may,” allowing judicial discretion in shifting legal fees when granting or denying a motion to dismiss.

SENATE BILL 2140 (HUGHES/BURROWS)
Reining in a Potential Abuse of Government Power

Texas’ attorney general has tremendous authority to seek civil penalties under the Texas Deceptive Trade Practices Act. This authority could be subject to serious abuse, in part due to the very high per-violation penalty of $20,000. Senate Bill 2140 reduces the per-violation penalty by half, to $10,000.

HOUSE BILL 3233 (KLICK/FALLON)
Clarifying the Judicial Campaign Fairness Act

The Judicial Campaign Fairness Act was ambiguous in some places and probably unconstitutional in others. It was confusing to donors who were trying to comply with the law. House Bill 3233 amends the act to address some of the ambiguities and delete the parts that are unconstitutional, while preserving the protections that ensure judicial campaigns are conducted fairly and ethically.

HOUSE BILL 3040 (HUNTER/HUFFMAN)
Establishing the Judicial Selection Commission

This bill establishes a commission to study how the state selects its judges. The commission will have 15 members: four appointed by the governor, four appointed by the lieutenant governor, four appointed by the speaker, and one each appointed by the chief justice of the Texas Supreme Court, the presiding judge of the Texas Court of Criminal Appeals and the board of directors of the State Bar of Texas.

HOUSE BILL 2730 (LEACH/HUGHES)
Addressing Abuses in Texas’ Anti-SLAPP Statute

When the Legislature passed the Texas Citizens’ Participation Act in 2011, it wanted to ensure a powerful entity couldn’t use a frivolous lawsuit to bully Texans out of exercising their rights of free speech and association. However, the law has been used in ways the Legislature never intended— for example, to shield actions like extortion and theft of trade secrets— which wasted time and resources. House Bill 2730 is the product of feedback from key stakeholders, including media organizations, attorneys and judges who work with this law every day. It helps guarantee Texans can exercise their constitutional rights of speech and association, while making adjustments to prevent the statute’s overly broad application.

OTHER TLR ACTIVITY IN 2019

In some cases, the reason for TLR’s engagement on a bill may not always be apparent. For example, TLR supported Senate Bill 711, which allows the Texas Department of Motor Vehicles to include a notice that a vehicle is subject to a manufacturer’s recall on the report that is generated when the vehicle completes its yearly safety inspection.

Airbags manufactured by Takata are found in millions of vehicles sold in the U.S. Some of these airbags have been reported to spray dangerous metal shards through the passenger cabin when the airbag deploys in a crash. Cars with Takata airbags have been recalled by the National Highway Transportation Safety Administration. Unfortunately, many owners of vehicles equipped with these airbags have not returned to their dealerships for repairs. If Senate Bill 711 results in a greater percentage of these airbags being replaced, then the number of airbag—related injuries—and the lawsuits that follow—will be reduced. It is a win for the safety of consumers, but a sidebenefit is that fewer people will need to access Texas’ judicial system to address an injury that might have been prevented.