Texas House passes ‘loser pays’ tort reform
The past couple of weeks, airwaves around the state capital in Austin have been saturated with TV ads decrying an “assault” on liberties. The “assault” was actually a strong tort reform bill that discourages frivolous lawsuits by making plaintiffs pay defendant’s expenses if they lose a lawsuit. The ads were paid for by the Mostyn law firm out of Houston. That name might be familiar to PJM readers and has certainly become familiar to everyone who watches Texas politics. Over the past couple of years, trial lawyer Steve Mostyn has reaped millions from lawsuits in the aftermath of hurricanes (and mold lawsuits prior to that), lawsuits that all but emptied the state’s windstorm insurance fund. Mostyn has used some of those millions to set himself up as a Texas version of George Soros, funding a “shadow party” on behalf of far left Democrats all over the state. His latest ad campaign defended the status quo, in which there is no early opt out for frivolous lawsuits in Texas, and which allows trial lawyers to sue on contingency knowing that the worst that can happen to them is they won’t collect; meanwhile, those they sue will be out expenses for defending themselves. That environment encourages frivolous lawsuits, and has made lawyers like Mostyn and fellow Democrat Jim Dunnam very wealthy men. And, it has made insurance more and more expensive for everyday Texans.
Well, the GOP controlled Texas House handed Mostyn and the trial lawyers a major defeat on Saturday. They moved forward on HB 274, which would create a “loser pays” tort system similar to the one already prevalent in Britain. The purpose is to choke off frivolous lawsuits by making contingency fee trial lawyers themselves subject to expense recovery if they lose a case, improving the legal and employment climate in the state according to Gov. Rick Perry. Given the importance of trial lawyers to the Texas Democratic Party, the House session was every bit as contentious as might be expected, but at least the Democrats didn’t run off to Oklahoma this time. Even if they had it wouldn’t have mattered much, since the GOP enjoys a massive majority in the House.
The bill will be up for final House passage on Monday. The Senate version, SB 13, is still in committee. Gov. Perry has made tort reform one of his priorities for the 2011 legislative session and specifically supports “loser pays”; if the bill passes the Senate and gets to his desk, he will sign it.
Just watch.
Somehow this will turn out to be “unconstitutional”.
Just like ever other measure that threatens the political interests and goals of the left.
Well I happen to be a fan of the state and federal Constitutions; don’t know about you. If it is unconstitutional, then the wisdom of the framers should probably prevail.
Of course it is unconstitutional. Treating Plaintiffs different than Defendants is a clear violation of the equal protection clause.
What do you mean treating them different? Legal expenses associated with suing the defendant are economic damages that are subject to being recovered in court.
He means that if the defendant loses, this doesn’t apply to him.
So very cool. Someone gets it, we need companies to work in if we are gonna have jobs.
I don’t think it will be unconstitutional, if its worded right (the key word is “frivolous”). Defendants routinely pay the plaintiff’s costs in cases lost by defendants, a more limited right for defendants to recover their costs for defending frivolous suits strikes me as well within bounds.
There is no mention in the bill of the word “frivilous.” It’s a short bill, you can read it here: http://www.legis.state.tx.us/billlookup/Text.aspx?LegSess=81R&Bill=HB274
*frivolous
OOPS!! That was a HB274 from a previous year.
Here’s the one at issue: http://www.legis.state.tx.us/BillLookup/Text.aspx?LegSess=82R&Bill=HB274
Apologies.
As far as I am concerned, this is the MOST important news story in the U.S. since at least 2008.
A common-sense (in other words “RAAAAACIST”) reform.
You people are idiots. This is going to screw over small businesses hard. Make a deal with a big company and they breach the contract in a goofy way? Well, suck an egg, ’cause the risk of a failed lawsuit piled on top of the breach could break you. Small businesses drive our economy (especially in places like Texas’ mix of small oil companies and parts suppliers), and are the lead indicator of economic recovery.
And no, there’s no limitation in the bill for “frivilous” versus “nonfrivilous” lawsuits. It’s just winner v. loser.
Not ignorant here. This is an effort to rein in our out-of-control courts. JUDGES are supposed to toss frivolous suits, but they don’t anymore. They used to. Now, every case gets heard.
“This government was designed for a moral people. It is wholly unsuited to any other.” – Founders
Too many of our people have become immoral, so we are inventing legal straight-jackets for these lawless people. It sucks, but there it is.
… It’s called “Motion for Summary Judgment,” and it totally still exists. See http://www.lorenzanalegal.com/blog/2009/02/texas-summary-judgment-in-nutshell.html
When you claim not to be ignorant on a subject you should probably not say things that are flat-out wrong.
“When you claim not to be ignorant on a subject you should probably not say things that are flat-out wrong.”
“JUDGES are supposed to toss frivolous suits, but they don’t anymore. They used to. Now, every case gets heard.”
I dunno, it seems like “Jimmy” is the ignorant one on a subject fully written directly above his statement. The poster had stated that it already existed, but that the immorality of even the judges has made that part of the law close to worthless, as they allow far too many lawsuits go to trial that are blatantly frivolous.
Egg on face really is unpleasant.
In my experience as an attorney for defendants and plaintiffs, judges in Texas are perfectly willing to toss lawsuits at an early stage, frivolous or not. While there are occasional exceptions to the rule, most Texas judges are quite willing to act decisively to avoid frivolous litigation.
This law is not “loser pays” unless the loser is the plaintiff. Defendants who lose will not be saddled with the costs of plaintiff’s legal fees.
This statute is clearly one-way, and probably in violation of the equal protection provisions of the Texas Constitution and the federal Constitution, not to the mention the “open courts” provision of the Texas Constitution. (Tex. Const. Art. 1, § 13: “All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law.”
yet another reason to move to Texas.
This is great news. It might even deserve to be placed on near the top of the national stories. Passing a “loser pays” law will encourage many businesses to move into Texas. I also strongly suspect that this it is the kiss of death for blue states like California and Illinois.
“First, we kill all the lawyers.” – Billy Whathisname.
… dude do you even know the context of that quote? Shakespeare was praising lawyers.
http://www.spectacle.org/797/finkel.html
Wouldn’t kill you to do a little reading.
Mandated “loser pays” is useless and unjust. That the loser should pay in whole or in part at the option of the jury is fine.
What would be more useful still is “losing attorney” pays.
Hey–what a great idea–make the losing attorney pay.
Then no attorneys will ever take clients, all litigation will stop, and we can finally return to the law of the jungle, where the strong eat the weak!!!
You’re a frickin’ genius, bub!
When are you going to accept your Nobel Prize for Smartyness?
Hey Bub! I guess you didn’t read the part about how such an imposition was at the discretion of the judge or the jury.
I see many people are worried about the little guy. The funny thing is that, that is exactly what has caused to whole problem to begin with. The judges decided to feel sorry for the little guy and start giving them trials they have no merit to be in. Then the lawyer make the jury feel sorry for the little guy and how much the big guy has, so taking from him, even if unjust is justifiable to help the little guy. Now, let us look at the solutions propagated by some of you. If the issue is that too many people are willing to screw over the big guy because they feel sorry for the little guy, does anyone think that a jury is going to find against the little guy making him pay? Of course not, because it becomes arbitrary like the current law that allows judges to decide which suits have merit and which should be thrown out of court, and will end up with the exact same problem as before.
So, the people cannot control their evils ways, the only remedy is to make a law that cannot be worked around with loopholes big enough to flow the flooded Mississippi through.
I do see problems with this law though. The question is, does anyone have a better way to deal with this?
I do not like the way the Supreme Court is set up. It allows a couple bad judges appointed for life to determine through penumbras what the constitution is all about. We have the power of the Senate to approve of their joining the Supreme Court, but after that the only option is one that is never used, impeachment. Because the House and Senate enjoys the ability of circumventing the constitution to empower itself more, it does not use the power to reign in the Supreme Court. I have a solution for this, every session the states get to vote up or down on each Supreme Court Justice and even Federal Justices in their Jurisdiction, failure to get 50% +1 of the states involved to vote for the justice causes that justice to lose their position. The Supreme Court’s true purpose is to ensure the validity of the government, and that means to be true to the Constitution, a large part of the constitution is limiting the President, the House and Senate from usurping power from the people and the states. This would go a long way to getting it back to where it belongs.
You cover a lot, so I’m going to use numbers to break up my response.
1. You say that juries never find against “the little guy.” That’s not true. There are jurisdictions that tend to be defendant-friendly, and there are those that are the opposite. It depends.
2. You raise an interesting point that I think Republicans haven’t considered: that fear about what happens to “the little guy” in close cases may cause them to favor him at the expense of impartial decision making. You’re probably right.
3. You mention that the law is an imperfect tool for dealing with human evil. I agree. Ever see “Man for All Seasons”? Great movie; they show it on TCM occasionally. This scene summarizes my beliefs, if imperfectly: http://www.youtube.com/watch?v=PDBiLT3LASk
4. Your point on the Supreme Court is well taken; there are a lot of commentators who disagree with its anti-democratic version of power. However, the rest of the government is elected democratically; the idea is to check that power, which can be swayed by the passions of the moment, with a more enduring, moderating hand. Anyway the current US Supreme Court is sort of anti-lawsuit anyway.
5. The TEXAS Supreme Court, on the other hand, IS democratically elected. There aren’t any term limits, but it’s only been recently that members have won re-election a lot, probably because the Republicans have done really well in Texas for a while now.
1) I may have over generalized. And it could just be the fact that these outrageous lawsuits get the publicity and tarnish what might be an acceptable court system. I do however think that a full 30% or more of the population is absolutely against company, they are the progressives. Progressives are also the group that is most likely to manipulate others into voting their way due to statements of racism and so forth. I am not a lawyer, so, my opinions are just what I make from the world I see.
5) I did not know that about the Texas Supreme Court. Good to know.
If I’m not mistaken, this ‘tort’ controversy came out of that demented old woman who tried, unsuccessfully, to hold scalding out coffee in a flimsy cup between her legs. She sued – and won!
That made the court system demented and this is a fight to undo that. In AZ a rancher was successfully sued by illegal aliens in another case of pure degeneracy by our courts. The judge was unfortunately murdered in the Gifford shooting.
Democracy Now recently did a piece on that women’s daughter and she was still all resentful and entitled like slamming your head in a window is someone else’s fault. People like her and her mother are nothing more than thieves and we have them to thank for what happened in Texas, whichever side you take. That old women only screwed the liberals who championed her insanity and disregard for the greater good.
http://www.cracked.com/article_19150_6-famous-frivolous-lawsuit-stories-that-are-total-b.s..html
Link within the link: These were the McDonalds-lawsuit woman’s injuries.
WARNING!! Not for the sqeamish:
http://pratlaw.wordpress.com/2010/02/24/an-old-posting-i-always-wanted-to-have-referenced/
What is the deal with the picture? Is it to indicate that the more stupid you are, the more money and sympathy you are entitled to? This is the whole problem with the tort system the way it is. There are way too many people in the world that are as despicably pathetically destructively caring. How many small towns have swimming pools with diving boards any more? Thanks to the fact that idiots ignore instructions and do stupid things and get horrible injuries because of of their own actions conflicting with reality. Merry-go-Rounds, Swing sets, teeter totters, playgrounds completely taken out of many peoples lives for what, some stupid retard that had no common sense, but was able to get a lawyer to sue to the equipment out of society.
As for McDs Coffee, anyone care to wonder why on earth the temperature was so hot? Because the customers asked for it to be that hot. It is called customer expectations, and when your customers say that the coffee was too cold (after they let it sit in the drink holder while they drove to a point where the traffic allowed them to take a drink, or maybe they liked smelling the coffee in the car for a while before drinking it, or perhaps, they were overly conscientious citizens who refused to drink the coffee until they arrived at work), McDonald’s did what a responsible company should do, serve the coffee hotter. All this woman accomplished was taking away the rights of every other citizen in the country, due to her incompetence and stupidity.
What else has been stolen from everyone due to the tort system the way it is now? Due to complete retards like you?
Also, there is an ANSI standard for the brewing temperature of coffee, it’s somewhere north of 185 degrees. That woman’s case should have been tossed, and her attorney should have paid McDonald’s for there costs.
Could you Texans just do the rest of us a favor and form your own damn country? National IQ will go up 14 points. Please, the rest of the United States…and yes you canb take your stinking oil with you,,
Way to win an argument, jackass. I’m not saying get the hell off my team, but if I were coach you’d be benched for quite a while.
@Jimmy: amen.
“name withheld” won’t give us his name, much less any facts to back up his ridiculous scare claim. As a practicing attorney, I can assure you that “pay offs” are very rarely made for claims that aren’t meritorious. What happens as a more usual rule is that “pay offs” are made to victims without deep pockets by big companies who can afford to wait forever and pay their lawyers. The “pay offs” are usually pennies on the dollar, and the victims take the pittance because they can’t afford the legal fees required to get real justice.
This is a bad bill for Texas families and consumers. Lets say your business or home burns down and you make a claim with your insurance company- they deny the claim- or offer you what you feel is not enough money- you go to court and win the case- but do not win enough- you now owe your insurance company money. You have to pay them. You are maimed by a drunk driver- sue and win but its less than the insurance company offered- you now are stuck with your medical bills, lost wages and you owe-the drunk 50k attorneys fees for having the gall to sue in such frivolous case as being rear ended by a drunk driver- he may be in jail but collects from you!
This bill stinks and the leaders who support it are selling Texas families down the river- in favor of criminals and insurance companies!
SOMETHING SMELLS BAD HERE!!
Have you read the bill?
He’s partially right. I have read the bill (have YOU?), and if you lose a borderline case, you owe the defendant money. YOU. The lawyer’s just a guy you hired, nothing more. He probably is not going to agree to pay your bills.
All this grousing about lawyers doesn’t make too much sense when you think about it: if you fine folks didn’t hire them (or, cough, have reason to hire them), this wouldn’t be an issue. Furthermore, lawsuits are a sublimation of the duels we used to fight in the streets. Do you really want to go back to that?
Duelling was never so widespread as people make out. Its ultimate penalty – death – made it uncommon.
As for the bill, I suppose you have a better idea to reform the system?
Well, first of all my argument is that it ain’t broke, so don’t fix it. There are already a ton of things making Texas a defendant-friendly jurisdiction.
Second, the British rule is arguably politically viable because in that country they have massive social welfare programs to internalize the costs of torts and so on. Litigation is, on the whole, cheaper than over-regulation by the government and the imposition of socialism. Deny the electorate relief for their woes by the given route and they’ll be more willing to get behind worse ideas.
Third, this isn’t even the British rule. It only adversely affects plaintiffs, not defendants who hide the ball when they’re guilty as sin in hopes of out-spending valid plaintiffs’ claims.
Fourth, as another commentator here noted, this is going to give defendants a perverse incentive to drive UP the costs of litigation once it starts.
Fifth, this is a radical change from our chosen system of government, and we’re on the brink of passing it with no amendments or debate. None. at. all. Anyone who claims to be a “conservative” needs to take a step back and consider what exactly they mean by that. Rapid, radical change is stupid, and setting a precedent that moves like this are OK is dangerous.
Lawsuits have been one successful tool by the left to destroy the energy sector, as evidenced in California; the rich environmental activists are now focused on Texas, which produces 25% of the nation’s energy. The radical environmentalists have lost a couple of the suits, but the high costs of defense ruined small companies. As Dr. Sowell points out, one of the costs is long delays in private companies’ projects, which often destroys the enterprises.
It is also widely used by the ‘have-nots’ to take from the ‘haves’. I once worked with a man who continually reviewed the field for potential lawsuits. He said he was the only one in his family who had not gotten rich from such lawsuits. He sued the local pizza parlor because his 12-year-old son stumbled; he claimed the boy’s future as a professional football player had been jeopardized. He lost, but the pizza parlor was penalized with the costs of defending itself against his greed.
The medical field is awash with such lawsuits; there are tons of lawyers pouncing on every opportunity to destroy the private sector. Since trial lawyers are one of the biggest lobby groups in Austin and Washington, they have tremendous power at the expense of freedom for people to start and run small businesses.
Tremendous POWERRR!! Please.
This bill just passed the Texas House (a chamber where the Republicans hold a 2-1 ratio of majority) via a suspension of the rules that prevents the bill from being debated. At all. Where’s TTLA’s “tremendous power” now?
Some trial lawyers are rich; most are not. TTLA has some cachet, but businesses have far more.
The analysis by Will Lutz of the decidely pro-business Lone Star Report: this bill is not British-style “loser pays.” This is plaintiff pays, defendant skates.
The bill provides that even WINNING plaintiffs pay the legal expenses of losing defendants if the defendant is ordered to pay even a single dollar less than the defendant offered to settle the case.
And if you’re suing a defendant (say, a large corporation like Enron) with enormously expensive lawyers, even a million-dollar verdict can be completely wiped out, especially if the corporate defendant appeals the case.
So, this law creates a perverse incentive to PROLONG litigation and protects deep-pocketed corporate (and government(!) defendants.
Which, of course, is how it should be. Because we all know that large corporations and government never do anything illegal, and should never have to pay.
“you know as well as we do that right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must.”
Thus the Athenians spoke to the Melians, and the Texas Legislature to its subjects.
Thucydides, The Peloponnesian War,
The Melian Dialogue (Book 5, Chapter 17)
Kudos on the Thucydides reference; one of my favorite books.
IMHO, the larger problem is when settlements are offered to avoid litigation costs. The system has become a high stakes game of “pay offs” with little risk for these lawyers. And how about the “little guy” who is the subject of frivolous tort? The cost to defend yourself is astronomical and if it’s your insurance company that will be on the hook for a potential settlement, whether you are in the right is not a factor in these decisions.
The real problem with tort issues is the theft of choice that the bad cases cause for society. The bad cases price products and services out of the marketplace and society completely. Just one location, public parks. Lawsuits have forced many communities to get rid of swimming pools completely, diving boards almost totally. Many communities do not have swings, Slides, merry-go-rounds, teeter-totters, jungle-gyms and many other play sets that, were it not for the lawsuits would be prevalent in every community park. This is just one tiny small slice of America, and it is completely ruled by tort suits.
Who gets to decide what is “frivolous”? The insurance companies control the politicians who are taking away our rights. No one will have to be accountable for their wrongdoing. It’s so wrong. Frivolous lawsuits get dismissed before they get very far in our judicial system and those who have valid claims will get turned away because of the risk associated with losing. Whatever happened to having your day in court to be judged by a jury of your peers?
“Who gets to decide what is “frivolous”?”
Since the system is broken–the judges won’t do it–then juries should have that power.
I think that this is a creative take on how to deal with the monetary situation in medical malpractice insurance claims. However, I am wondering why we spend so much time debating who pays, instead of addressing the much bigger piece of the puzzle – protecting doctors in the first place. It is a truth that doctors are constatly under attack for either increasing medical care costs by practicing defensively, or they are served with liability insurance claims for practicing too lax (see http://www.equotemd.com/blog ). If the current administration wants to increase medical availability, they will need to also look at the declining popularity of practicing medicine. Doctors have no advocates and medical malpractice insurance claims are preventing them. I wonder why this has not been addressed yet?
-Farah