The Week in the Rearview Mirror

Texans hate the idea of an unfair fight. Remember the Alamo? Perhaps that’s why it’s so surprising that our governor — a guy who brands himself as a fierce protector of our core constitutional rights — seems driven to further dilute one of our most enduring constitutional bulwarks in his attacks on the ability of Texas residents to go to the court and get a fair shake from 12 Texas residents and an impartial judge. Indeed, the failure of the Mexican government to protect the right to a jury trial was one of the reasons Texas revolutionaries fought in the Alamo in the first place. This history is lost on our governor and the special interests that have his ear. Backed by Gov. Rick Perry’s misguided rhetoric, lawmakers are now pushing another wave of assorted tort reform proposals that would bring the hammer down on everyday Texans who turn to the courts to resolve a range of business and civil disputes. If made law, many plaintiffs — particularly individuals and small-business owners — considering filing a lawsuit will have to balance the very real possibility of financial ruin as the downside to attempting to right a wrong by walking into a courtroom. We are concerned about the sentiment in the House and Senate concerning the right to a jury trial. With shockingly little debate, the House has broadened the so-called “loser pays” statutes, requiring plaintiffs to pay the legal tab for the teams of defense lawyers that corporate interests often bring to a court fight. With this as the law of the land in Texas, a small-business operator stiffed in a contract dispute with a large corporation will have to think seriously about turning to the legal system to address such an injustice. Meanwhile, a losing plaintiff in any type of case could be handed the opposing side’s legal bill in situations where a case is dismissed early. There's even a scenario in which a victorious plaintiff would be assessed a losing side's fees if it turns out that the plaintiff had rejected a settlement offer higher than the jury's subsequent verdict. A big concern right off the bat is that this “reform” doesn’t cut both ways because the power to invoke “loser pays” rests with defendants. What about the defense lawyers who are inclined to drag out and confuse a court fight with frivolous defenses in the hope of outspending individual plaintiffs? They face no such threat should the plaintiff prevail. The irony is that few frivolous lawsuits ever even make it to the trial stage in the first place, and there’s already a mechanism for parties in a range of cases to recover attorney fees and sanctions for bogus lawsuits. The funny thing about tort reform in 2011 is that Texans aren’t storming the steps of the Capitol asking to curtail their abilities to achieve justice in our courts. Even the largest association of defense lawyers in Texas — the Texas Association of Defense Counsel — is actively speaking out against these proposals. We applaud their integrity on this issue. This whole "reform" effort reminds us of the origins of Prohibition laws in the 1920s, when the only folks asking for the law were a relatively small and vocal group of zealots. We all know how that turned out — an ill-advised law that just about everyone immediately regretted. Texas courts are an easy target for misguided political rhetoric because they lack a built-in constituency who watch over and protect the institution. There is no lobbying group for jury service. Our judicial system is something that most folks would rather not think about, but they sure expect it to be there if they need it. Our own highly regarded attorney general was himself a plaintiff in a personal injury lawsuit nearly 30 years ago. The typical Texan is not following the rhetoric in Austin and the procedural screws turning inside committee rooms and House and Senate chambers, but these ideas under consideration by our state lawmakers stand to fundamentally change our civil justice system. Few, if anyone, wants to file a lawsuit, but sometimes there’s simply no other choice to correct unfair business practices breach of fiduciary duty, investment fraud, breach of contract and corporate negligence. Make no mistake — these proposals would provide a form of immunity to big businesses in this state. Rather than streamline the courts as proponents would have you believe, these proposals would clog dockets on multiple levels. Under the plan approved by the House, defendants would be able to seek an immediate do-over in the event that they fail to get a lawsuit thrown out early by filing a summary judgment motion. The House bill would make it easier for defendants to immediately appeal so-called interlocutory rulings to a higher court. Not only is this unfair, but it will delay litigation, increase court costs and clog up the already busy appellate courts. The special interests bankrolling the effort — one is Texans for Lawsuit Reform — are emboldened by past tort reform successes in Texas in 1995 and 2003, and they’re looking for a reason to justify their continued existence and hefty donations. The result is that they’re funneling significant campaign funds to virtually every member of the House and Senate committees considering these proposals. Partisan gamesmanship has won out so far, as Republicans in the House used their numbers to muzzle debate and steamroll this bill through. What can we expect if this version of tort reform becomes the law of the land in Texas? The little guys in Texas will simply lose access to the civil justice system. The cost of litigation will become an enormous barrier for many. Threat of financial ruin will loom over citizens courageous enough to come to court. Deterrents to corporate misconduct will be further eroded. Under "loser pays" tort reform, nearly everyone loses. Tom Melsheimer is the managing principal at Fish & Richardson in Dallas; his e-mail address is melsheimer@fr.com. Craig Smith is judge of the 192nd Civil District Court in Dallas County; his e-mail address is csmith@dallascourts.org.

Travis County would get two new out-of-town senators, and Sen. Wendy Davis, D-Fort Worth, would be squeezed into a district designed for a Republican, in political maps proposed by Senate Redistricting Chairman Kel Seliger, R-Amarillo.Seliger's map was shown to senators this morning and unveiled for the public this afternoon. He'll hold the first committee hearing on the plan on Thursday morning at the state Capitol. The map splits Taylor County between Republican Sens. Robert Duncan of Lubbock and Troy Fraser of Horseshoe Bay. Travis County's Kirk Watson, a Democrat, would lose some turf to Fraser, and to Democrat Judith Zaffirini of Laredo. Jeff Wentworth, R-San Antonio, has part of Travis County now and in the Seliger plan. The district represented by Bryan Birdwell, R-Granbury, would go into Tarrant County in the new plan, taking part of Davis' district and pushing her to the north, where there are more Republicans. The detailed map is available on the Texas Legislative Council's redistricting site. Here's the statewide version:

As often happens with measures working their way through the political cauldron of the Texas Legislature, the hyperbolic editorial rhetoric targeted at the Governor’s proposals (HB 274) for improving our civil justice system has managed to completely divorce itself from the reality of what the proposals actually do. No, the proposals do not grant “immunity” to big corporations. No, the proposals do not hurt the “little guy.” And no, the proposals do not harm anyone’s right to seek redress in our courts or their right to a jury trial. They do, however, offer six very specific improvements to our civil justice system that will help make lawsuits less expensive and less time consuming. Here is what the Governor’s proposals actually do. 1. HB 274 instructs the Texas Supreme Court to write new procedural rules modernizing our legal procedure for evaluating whether lawsuits have any legal basis early in the life of a lawsuit. Such a procedure is commonly called a “motion to dismiss” procedure. Federal courts and 42 states utilize such a procedure and have for decades. It is not new, it is well-tested, and it works just fine all across the country. It allows courts to dismiss cases early on that should not have been filed, and lets courts assess fees and costs as they think equitable and just against any party that misuses the procedure. Tell lawyers from other states that we don’t have a motion to dismiss procedure and they look at you like you just said you get around in a horse and buggy. “You don’t?” they’ll ask in disbelief. Well, we should. 2. HB 274 also instructs the Texas Supreme Court to write new procedural rules to expedite cases in which the amount in dispute is $100,000 or less. Our civil justice system is the finest in the world, but it can be expensive. When you have a relatively small claim — and in our civil justice system a $75,000 claim is a relatively small claim — it can sometimes be prohibitively expensive and time consuming to actually litigate the case through a trial. There are legitimate disputes and legitimate lawsuits that need to be able to take advantage of a fair and balanced civil justice process. We need ways to have our civil justice system work for smaller cases just as fairly and as well as it works for big cases. HB 274 takes a step in this regard by asking the Supreme Court to write new procedural rules that will address the expense and length of time that are imposed on smaller cases under our current rules. 3. HB 274 proposes that Texas adopt a common-sense rule that courts should not read a statute as creating a new cause of action unless the statute actually says it is creating a cause of action. This is sometimes called not “implying” a cause of action in a statute, which means courts should not “find” a cause of action in a statute unless the cause of action is really there. This is no more controversial than it sounds. It assures that the Legislature, the body writing the statute, has control over whether a law creates new causes of action. It is a recognized rule of statutory construction around the country and is endorsed by the American Legislative Exchange Council. 4. HB 274 proposes that Texas adopt a procedure for getting answers to certain types of difficult legal questions that will determine the outcome in a case without the need for or the expense of a trial. These types of legal questions are called controlling questions of law. They don’t come up in most cases, but when they do, it can save everyone including taxpayers a lot of money if the appellate courts can address the controlling question of law without the need for a trial. This kind of appeal won’t happen often because both the trial judge and the appellate court judges have to agree that it should be used. But, when it is appropriate, it will save time and money. Such a procedure has been available in federal courts for a long time and works just fine. We can use it in Texas. 5. HB 274 makes the current Texas law on recovering attorneys’ fees in contract cases work for both plaintiffs and defendants. Texas has for years allowed plaintiffs to recover attorneys’ fees when they win in a lawsuit that involves a contract. The problem has been that the defendant has not been able to recover attorneys’ fees if the defendant wins. When you are fighting over what a contract means and who breached it, there is no reason to just let the plaintiff get fees if the plaintiff is right. If the parties are arguing over a contract, whoever wins that argument ought to be able to recover their fees. This proposal in no way affects the parties’ right to contract however they want as to how and when fees can be recovered. It only applies when there is no contract provision that deals with fees and costs. 6. HB 274 also amends our current law on offer of settlement. The offer of settlement law is designed to encourage parties in a lawsuit to make reasonable settlement offers earlier in cases rather than later. Most cases, in fact, settle. If we can encourage this to happen earlier, it will save everyone time and money. The idea behind the offer of settlement law is that if you turn down a reasonable offer to settle a lawsuit you might have to pay the other side’s litigation costs after the offer because it is your fault that the lawsuit kept going and kept costing time and money. If a person is unreasonable in keeping a lawsuit going when it should have stopped, that person ought to have to pay for imposing those costs on the other side. Our current offer of settlement law does not get used very often because it does not impose equal risk on the parties. HB 274 corrects this and makes the risk of paying litigation costs for both sides equal. If you don’t see the sky falling here or some great injustice being done to the “little guy,” you’re looking at it correctly. Each proposal is a common sense step forward in improving our very good civil justice system. While very good, our civil justice system is not perfect and can be improved. HB 274 offers straightforward improvements that will help reduce the cost of lawsuits and the time spent resolving them. Trial lawyers are not looking to make our civil justice system less expensive and less time consuming. If you are a trial lawyer, it’s bad for business. If you are anybody else, it’s good for you and good for business. So, the next time you hear someone offering vague opinions about how bad the Governor’s proposals for our civil justice are, ask them if they are a trial lawyer. Chances are they will be. Leo Linbeck, Jr., is Senior Chairman of Texans for Lawsuit Reform.