Winter Advocate, 2025
By Lee Parsley, TLR President and General Counsel
Texans for Lawsuit Reform enters its sixteenth legislative session with the same mission it has had since its inception: advocate for a fair, balanced and predictable justice system in our state. We do so in the face of a discouraging litigation environment fueled by lawyers who spend millions of advertising dollars trying to turn every vehicle collision into a lucrative lawsuit. These same lawyers have a web of healthcare providers who purposefully inflate plaintiffs’ medical bills so the lawyers can exaggerate the plaintiffs’ injuries and thereby inflate their claims for mental anguish and pain and suffering.
When TLR was formed in 1994, Texas was known as the Wild West of Litigation. Unfortunately, that environment has crept back into our civil justice system. Texas now leads the nation in outrageously large verdicts in injury cases, often handed down in cases in which the plaintiff was at fault or suffered little or no damage. Job creators are taking this unstable litigation environment into consideration before relocating to Texas. In this Advocate, you will read our recommendations for reasonable and focused reforms to correct the abuses that produce unnecessary lawsuits and unjustified verdicts. Refreshing and restoring the full efficacy of Texas’s tort reforms will help keep Texas’s position as the best place in our nation for innovators and job creators to live and work.
In addition, in this legislative session, we can build on the improvements made by the last Legislature to the efficiency and specialization of the Texas judiciary. The Texas Business Court, designed to address meaningful business disputes, is off to a robust start, as is the new Fifteenth Court of Appeals, which will hear appeals from the Business Court as well as appellate matters of statewide importance. By establishing an efficient dispute resolution system with coherent jurisprudence on corporate internal governance, these courts will greatly enhance Texas as the best place to incorporate, headquarter, and do business.
While the current abuses in personal injury litigation need to be deterred by legislative action, last year’s election brought significant improvements to our court system. A majority of positions on five critical appellate courts—two in Houston and one each in Dallas, San Antonio and Corpus Christi—were up for election. A vigorous campaign changed the composition of these courts. Texas jurisprudence will be much improved by the election of these competent and experienced lawyers to these very busy courts that decide a huge number of civil and criminal cases each year.
Finally, in this issue, our Chairman, Dick Weekley, recognizes the passing of Shad Rowe, who served on the TLR board since its inception and contributed mightily to TLR’s formation.
Ending Nuclear Verdicts in Texas
By Will Bashur, TLR Assistant General Counsel
Enormous personal injury verdicts have been catastrophic for Texas, and they are only getting worse. Verdicts greater than ten million dollars, dubbed “nuclear verdicts,” are becoming commonplace in the legal ecosystem—often exceeding hundreds of millions, sometimes billions, of dollars for injuries to only one person. The shadow cast by these verdicts puts pressure on insurance companies to settle claims more frequently and at far higher numbers than are justified by facts. This increases the cost of insurance premiums, which in turn causes higher prices for all consumers. These nuclear verdicts, which are often rooted in fraud, are arguably the greatest threat to economic progress in Texas.
It works like this: a plaintiff gets injured and their attorney sends them to one of their hand-selected medical care providers (chiropractors, pain management specialists, orthopedic surgeons, etc.). These medical providers are given a “letter of protection,” in which the lawyer guarantees that the medical providers will be paid from the proceeds of the litigation. Because these providers know they will be compensated by a settlement or judgment, they make up outrageous charges with no basis in reality. These exaggerated bills are then used by the attorney to demand an even bigger award for emotional damages (pain and suffering, mental or emotional pain or anguish, disfigurement, etc.) in settlement negotiations or at trial. The net result is a culture of braggadocious billboards, attorneys on private jets, and plaintiffs who think every sore back leads to a pot of gold. All Texans are stuck with the bill.
This is why we formed the Lone Star Economic Alliance (LSEA)—to bring attention to this issue. In the past we focused our efforts on lawsuits related to commercial vehicles, an area of particular abuse, but now the problem has spread to other sectors like funeral homes, foster care agencies, restaurants and bars, retail, and the trades. LSEA is a coalition of job creators, citizens, and organizations of all stripes that can communicate to the legislature the size and scope of the problem.
LSEA’s goal is to pass a bill this session that puts an end to the fraud and reduces the frequency of nuclear verdicts. Our bill contains the following elements:
- Require medical damages to be tied to real costs.
Medical damages would be limited to the amount actually paid or incurred by a health insurer for a plaintiff’s medical treatment, or if the plaintiff does not have insurance, the damages should not exceed 150% of the average cost of comparable care. - Make Letters of Protection Discoverable Evidence.
Juries should know that attorneys are referring plaintiffs to their favourite medical providers who are getting a cut of the settlement or judgment. - Have fewer blanks for the jury to complete—
namely, past and future pain and suffering and past and future mental anguish. Currently, juries are confused by having to consider too many categories of damages (pain & suffering, mental anguish, loss of consortium, disfigurement, physical impairment, loss of companionship & society, and loss of enjoyment of life). This leads to overlapping damages and grossly inflated awards. - Instruct juries that noneconomic damages are for compensating the plaintiff and not for punishing the defendant. End the practice of juries awarding massive damages to punish a perceived wrongdoer. Such punishment is for punitive damages, not non economic damages.
- Require judges to justify excessive awards. If an attorney makes a motion to reduce the size of a non-economic damages award, a trial judge should have to provide a legal and factual basis for the excessive award. This will facilitate the overturning of bad judgments on appeal.
Altogether, this legislation should rein in nuclear verdicts. If we work together, we can save Texas from the lawsuit abuse that is smothering it.
Reflections
By Richard W. Weekley, TLR Chairman
Way back in 1994 when we were forming TLR to combat the pervasive and perverse influence of the personal injury plaintiffs’ bar in the Texas courts and legislature, one of the first persons I turned to for help was my college roommate and great friend, Shad Rowe. Shad died recently, after an exceptionally successful life, most especially as son, father, husband and friend.
Shad was a brilliant writer, perhaps most recognized by his column in Forbes magazine. As a money manager, he had an extraordinary record of outsized returns for his investors. On a personal level, Shad had an impish sense of humor that brought laughter and joy to any gathering. And as a civic leader and philanthropist, he meaningfully impacted his community.
As we were building a statewide network of influential leaders around Texas, I looked to Shad to help Leo Linbeck, Jr. and me in taking our message to Dallas businessmen and professionals. Shad was already widely known and respected in Dallas (his stellar reputation only grew over time) and he opened many, many doors in Dallas, with the result that Dallas continues to this day to be a bastion of support for TLR’s mission. Shad served on the TLR board of directors from our inception to the time of his recent death. He helped in every aspect of TLR’s work—fundraising, communication, and advocacy. We benefitted by Shad’s wide knowledge, sound judgment, writing skills and quick wit. We miss him. I miss him.
Shad helped us build a robust organization that will continue to influence Texas politics and policy into the future. You will read elsewhere in this Advocate that we will be doing important work in the current session of the legislature. This will be the 16th session in which TLR has advocated for reasonable reforms to provide a fair and balanced civil justice system. Every governor, lieutenant governor, and House speaker of the last three decades has recognized TLR’s contribution to public policy and a sound judiciary as a pillar of the Texas Miracle, which has propelled Texas to being the 8th largest economy in the world—and might soon become the world’s 7th largest economy.
Shad always advised us not to “overreach.” We heeded his counsel by making sure that each of our legislative proposals addressed a real problem or abuse and was tailored to deal with the issue in as precise a manner as possible. We are always cognizant that any of us may need to access Texas courts for redress of a wrong and, therefore, we strive only for efficiency, fairness and reasonable predictability in our justice system. Never has a TLR reform been overturned by a court or reversed by the legislature. On rare occasions, TLR has worked with other stakeholders to amend a previously enacted reform when a court decision or legal practice has shown a modification to be necessary.
Because of the level of trust TLR has established over these many years, we find that much of our time and effort in a session is spent with legislators in crafting the remedy provisions in their bills, even when those bills re on topics outside of our main mission. We are diligent in making sure that remedies do not violate sound tort doctrines and do not open doors for clever plaintiff lawyers to create unnecessary, exploitive litigation.
So, we soldier on. We miss the presence of those who have passed and who were instrumental in the formation and development of TLR – Shad, Leo Linbeck, Jr., Louis Beecherl, Harold Simmons, Bob McNair, Michael Stevens, Bob Perry, Red McCombs, Bartel Zachry, Bud Shivers and many others—confident that the foundation they helped us build will enable TLR to remain a vibrant and constructive force in Texas politics and policy.
The Business Court is a Resounding Success, but Work Remains
By Mike Tankersley, Senior Counsel at Alston & Bird LLP, Director, Texas Business Law Foundation
TLR and the Texas Business Law Foundation (TBLF) began working together to bring a specialized business court to Texas in the 2015 Texas Legislature. Four sessions and four business court bills later, that work was rewarded when Governor Abbott, Lieutenant Governor Patrick, Speaker Phelan and Chief Justice Hecht all placed the creation of a Texas business court among their top priorities for the 2023 Texas Legislature. This resulted in the enactment of House Bill 19 creating the Texas Business Court that opened its doors this past September.
Hard work and skillful negotiation by the principal authors of House Bill 19, Rep. Andy Murr and Senator Bryan Hughes, and widespread support by individual legislators and the Texas business community, produced large majority votes for the business court in each house despite energetic opposition by certain trial bar organizations. Notably, the qualifications and reputations of the exceptional first group of ten business court judges appointed by Governor Abbott has converted many skeptics into believers that the business court will benefit the resolution of complex business disputes in Texas. Many of the state’s leading trial firms have been among the first to file cases in the business court.
Preserving the benefits of the business court for litigants at the appellate level relies upon the new Fifteenth Court of Appeals that was also created by the 2023 Texas Legislature as the exclusive destination for appeals of specified cases involving the State of Texas that are of statewide significance, and to serve as the exclusive recipient of appeals of business court decisions. The combi nation of a trial court specializing in complex business litigation, with judges directed to provide written opin ions explaining their decisions, and a specialized court of appeals, promises to support the creation and communication of a body of sound business jurisprudence that will benefit all Texas businesses and attract new businesses to the state.
The Texas business court received just under 60 case filings during its first four months of operation. We believe this is a promising rate of acceptance, especially in light of uncertainties that are naturally associated with a new institution. The business court judges are working hard to address procedures in this new court, from case filings through discovery and on to trial. We expect case filings to steadily increase as the business court and the quality of its work become widely known.
Experience in other states has proven that the development of specialized business courts within an existing court system is a multi-year task. In the 2025 Texas Legislature the TBLF and TLR will be working together and with other allies to make improvements to the business court as part of a broader effort to make Texas the best state in the nation in which to conduct business and create jobs. Key areas for focus in a 2025 Texas business court improvement bill will include:
- Expansion of the court’s jurisdiction to include areas of law and disputes that are consistent with the initial subject matter areas included in House Bill 19, including directors and officers liability insurance disputes, litigation arising out of mergers and other business transactions, including violations of non compete agreements, property insurance disputes involving business parties, disputes between business borrowers and banks, credit unions and savings and loans, actions to enforce arbitration agreements among business parties, litigation arising from or relating to intellectual property, including computer software, IT systems, biotech products and trade secrets, actions arising out of malpractice or professional misconduct by attorneys, CPAs and other licensed service providers where the client is an organization and business insurance coverage disputes.
- Reduction of the required amount in controversy for litigation arising from “qualified transactions,” contract actions where the parties agree to business court jurisdiction and actions arising out of violations of the Texas Finance Code or Business & Commerce Code from $10 million to $5 million, a level more consistent with business courts in other leading commercial states that should increase the number of these cases filed in the business court.
- Providing the opportunity to add divisions of the business court beyond the initial five divisions authorized in 2023 to include some or all of the six divisions located in less urbanized areas of Texas (two in East Texas, three in West Texas and one in South Texas), with one judge to be initially appointed in each. Also, amending the statute to allow any divisions not set for opening by the 2025 Texas Legislature to be activated by a future legislature.
- Amending the Texas Constitution to allow the Legislature to increase the terms of business court judges beyond the two years that are currently required and corresponding statutory changes to establish a system of staggered six-year terms for the business court judges.
- Making several tweaks to the Texas Government Code and the Texas Civil Practices and Remedies Code to include the business court in, or, where appropriate, exclude it from, statutes governing district courts. Examples include provisions relating to judicial enforcement of arbitration agreements, inclusion in the operation of the court system’s administrative divisions, including engagement of business court judges as visiting judges in other courts and as contributors to, or recipients of, complex cases managed as multi-district litigation, inclusion of the business court in the Judicial Council and access by business court litigants to interlocutory appeals, among others
We will also work to simplify the business court’s supplemental jurisdiction. Supplemental jurisdiction allows the business court to hear a case even if it includes claims that fall outside of the court’s expressly granted business dispute jurisdiction. There is no plan to change the short list of claims that the business court cannot hear under any circumstances, such as personal injury and medical malpractice claims.
A key element contributing to the success of House Bill 19 in the 2023 Texas Legislature was the willingness of the bill sponsors to open their doors to all elements of the legal community, trial bar and legislature to discuss the business court proposal and how to improve it. The enacted bill reflected dozens of changes to the initially filed bill. We expect this same collaborative process as the legislature considers the further development of the business court.
In addition to these changes, the business court judges need to be compensated at the level of their experience and talent. The court’s intended purpose is to adjudicate major commercial disputes between big businesses, which requires the expertise of seasoned lawyers. To attract highly competent lawyers to serve as business court judges, and to occupy other positions in the Texas judiciary, judicial compensation must be significantly enhanced from current levels. Texas ranks below most other states in compensation to judges, and judicial compensation has not nearly kept up with inflation.
Please join us in welcoming the newest members of the TLR team!
Will Bashur
Assistant General Counsel
Will joined TLR’s legal team in 2024, after working in the Texas House of Representatives and handling legal research and legislative analysis in the private sector. His work on legislative drafting, legal research and analysis play a key role in TLR’s advocacy efforts to improve Texas’ legal system. Will received a bachelor’s degree from Emory University and a law degree from the Texas Tech University School of Law.
Kevin Reddington
Assistant General Counsel
A former litigator and outside counsel for small businesses, Kevin brings firsthand courtroom experience to TLR’s legal team, which is critical to helping develop well crafted legislative solutions to complicated real-world legal issues. His background in legal research and writing is integral to the development and drafting of TLR’s common sense legislative proposals. Kevin received a bachelor’s degree from Liberty University and a law degree from Pepperdine University.
Kathleen Bashur
Communications Director
Kathleen recently joined TLR as communications director, managing media relations and communications strategy for all of TLR’s entities. Kathleen comes to TLR from Washington, DC, where she helped lead the media relations and policy communications strategy for a national health care trade association for nearly five years. Kathleen received a bachelor’s degree from Wake Forest University.
Kathleen follows in the footsteps of distinguished TLR communications directors of the past. Ken Hoagland was our first communications director and got us off to a roaring start. Sherry Sylvester was our communications lead for a decade before becoming a key staffer for Lt. Governor Dan Patrick; she now is a senior fellow at the Texas Public Policy Foundation and remains a close friend to TLR. Lucy Nashed Cafrelli has served outstandingly as our communications director in recent years and now serves as the director of government and public affairs at the Texas Public Utilities Commission. We are deeply grateful to each of them.
Texas Should Be the New Delaware of Business Formation
By Kevin Reddington, TLR Assistant General Counsel
For over a century, Delaware has been considered the premier place for businesses to make their legal home. This is because of Delaware’s favorable business code, their simple and efficient filing system, and their storied Court of Chancery. That court has produced a steady stream of stable and fair precedent which has attracted businesses across the nation. Currently, over sixty-eight percent of all Fortune Five Hundred companies are incorporated in Delaware, and nearly eighty percent of companies going public on the stock market in 2023 listed Delaware as their “corporate home.”
Recently, however, the Chancery Court has given many companies reasons for concern. Several activist decisions have interfered with internal corporate governance and frozen critical transactions. For example, in Sjunde AP-Fonden v. Activision Blizzard, Inc., the court invalidated a merger transaction that had already been closed between Microsoft and Activision Blizzard because one of Activision’s disgruntled shareholders complained that the terms were not sufficiently specific about dividends between signing and closing. Also, in West Palm Beach Firefighters’ Pension Fund v. Moelis & Company, the Chancery Court decided that a company board elected by the shareholders had too much power and invalidated several of its decisions. These and simi
lar decisions are causing corporate America to consider other forums for their legal disputes.
Enter, Texas. Texas has a reputation as the most business-friendly state in the country. Its gross domes tic product is the 8th largest in the world. By forming its own business court, Texas sent a strong signal to companies that they will be able to quickly and fairly resolve their disputes.
But while the major pieces are in place, there is still more to be done for Texas to become the new choice for resolving business disputes. Parts of Texas’s business code are antiquated and, in some ways, hostile to companies looking to incorporate here. Texas needs to improve and clarify certain aspects of its laws concerning
corporate governance. This is why TLR, in coordination with the Texas Business Law Foundation, is proposing a bill that addresses certain provisions in the Texas Business Organizations Code. The bill seeks to give companies greater flexibility to govern their internal affairs without undue interference. Rather than a court interjecting itself into a company’s business decisions, a company’s elected executives will be given greater deference under the law, especially when their actions are already approved by a board. The bill would also allow companies to easily and quickly form in Texas and engage in legal transactions without undue harassment or interference.
Texas should become the premier home for business in the United States, both legally and physically. Delaware was preferred for business incorporation because of its laws and chancery court. But, unlike Texas, there was no compelling reason for companies to physically locate in Delaware. Texas, on the other hand, is already home to many of the most productive industrial facilities in the world. It has the political environment, infrastructure, natural resources, space, workforce and culture to serve as both the legal and physical home for American businesses of all kinds.
Protecting Our Communities
By Kevin Reddington, TLR Assistant General Counsel
When criminal activity creates a blight on the community, law enforcement and local officials should use every tool at their disposal to address the issue. El Paso County’s recent common nuisance action against the Gateway Hotel—which has become a hotbed of crime in recent years—is the perfect case study
According to the county’s petition to abate the nuisance, law enforcement has been called to the Gateway Hotel 693 times in the last two years. Surveillance footage shows evidence of gunfire, assaults and disorderly conduct. A police report lists suspected prostitution and notes that “continuous criminal activity” has increased
with the presence at the hotel of members of a notoriously violent Venezuelan street gang.
The Texas Civil Practice and Remedies Code (CPRC) defines 28 specific actions as common nuisances, including many of the criminal activities occurring at the Gateway Hotel. El Paso’s petition specifically lists 53 violations of the CPRC, including delivery, possession, or use of a controlled substance; aggravated assault; criminal trespass; public intoxication and indecency with a child, among many others.
Texas law provides for common nuisance actions to abate the nuisance—in other words, shut down the criminal activity. Money damages aren’t recoverable unless an injunction prohibiting further harmful conduct is violated.
Texas law is clear about what constitutes a common nuisance by statutorily listing specific activities that constitute nuisances which a government agency can abate. It is important to distinguish a common nuisance from the legal doctrine of public nuisance. Public nuisance lawsuits are being pursued by plaintiff lawyers and progressive state and local governments against businesses that produce and provide legal products, such as automobiles and fossil fuels.
To deter such inappropriate lawsuits in Texas, TLR proposed HB 1372 in the last legislative session. The bill would have prevented entrepreneurial trial lawyers or progressive governmental entities from using law suits to establish public policies. Whether fossil fuels, for example, should be produced and distributed in Texas is a matter for the legislature to decide and state agencies to administer. The policy decision by the people’s representatives should not be cancelled by a lawsuit claiming that fossil fuels create a “public nuisance” because they con tribute to climate warming. To allow such lawsuits is to transfer policy making from the legislature to the courts, a consequential breach of the separation of powers.
This session, TLR is once again proposing legislation that would fix the problem—namely SB 779, filed by Senator Mayes Middleton. The Texas legislature should pass this legislation to disallow lawsuits that shut down legal products or activities by claiming that they constitute a “public nuisance.” This legislation would do nothing to impede government lawsuits to quickly stop criminal activities, such as El Paso’s lawsuit against the Gateway Hotel. But it would go a long way to preventing plaintiff lawyers and their progressive sponsors from tampering with public policy
The Lone Star Economic Alliance Hits the Ground Running
By Mary Tipps, TLR Executive Director
TLR is a founding member of the Lone Star Economic Alliance (LSEA), a coalition of job creators, citizens and business associations urging the Legislature to put a stop to abusive lawsuits that make it hard to do business in Texas and needlessly increase the cost of consumer goods and services.
With ads on TV, radio, billboards and social media, plaintiff’s lawyers have created a culture of litigation in Texas, where even the smallest vehicle accident can result in a big payout, without due regard to who was actually at fault and the true amount of damages that would adequately compensate a harmed party for her injuries.
Working with their own networks of healthcare providers, plaintiff’s attorneys are misleading juries with exaggerated injuries and inflated medical bills. This law suit ring of lawyers and their healthcare collaborators is increasing the cost of insurance for us all, businesses and individuals alike, and regardless of whether we have ourselves filed insurance claims.
Across the board, general liability insurance premiums are surging, with 26 consecutive quarters of increases, making insurance unaffordable for many businesses. A report from the National Federation of Independent Business found that over a quarter of Texas business owners view liability insurance costs as a “critical problem,” ranking it among their top challenges.
This lawsuit mill has also made Texas the leading state for verdicts exceeding $10 million in injury cases involving one or a few plaintiffs. Such verdicts have cost Texas job creators over $45 billion from 2009-2023.
LSEA envisions a Texas where businesses can thrive and continue to safely provide the goods and services we all need thanks to low operational costs, a fair legal environment, and a stable insurance market. The coalition is gearing up for the 2025 legislative session with a renewed emphasis on policies to help Texas employers focus on creating jobs and providing affordable goods and services to Texans—not on dealing with an abusive and inefficient litigation environment in personal injury lawsuits.
Hundreds of Texas employers are joining LSEA to protect their businesses from unfair courtroom tactics. Membership is free, but your voice is invaluable, just like these job creators.
“The litigation environment in Texas makes small businesses feel like they have targets on their backs. Any accident, no matter how minor, can lead to a law suit. When a fair verdict is reached, our community’s employers want to do the right thing. However, fairness is no longer a factor in today’s tactics. It’s time for a legislative intervention.”
—Luisa del Rosal, owner of 11820 Partners
“There’s no way to keep up. When insurance costs increase at the rate they’re increasing now, it limits our ability to invest in our communities and employees.”
—Adam Blanchard, co-owner of Double Diamond Transport
“Lawsuits in Texas are out of control, and all of us are paying the price. Small businesses are faced with high insurance premiums that threaten the viability of businesses, and the frequency of lawsuits adversely affect higher costs of everyday items such as food and medical care.”
—Imad Sarkis, Vice President of Exxpress Mart convenience stores
