More finagling by our lawmakers that will hurt us in the long run (Howe: lawyers)

[crbcrbrgv]

Just got this email from a relative who is an attorney. Absolutely unbelievable.

"In response to my earlier email, several people have written to advise me that TADC negotiated a compromise on HB 274, the "Loser Pays" bill, and only testified in support of the revised bill. Several people are under the MISTAKEN IMPRESSION that the "new and improved loser pays statute" only applies to contract cases. What happened is that exposure to attorney's fees was just MOVED TO A DIFFERENT PART OF THE BILL. Please take the time to read this email in full, as the worst news is toward the bottom. But, just in case you do not have time to read it all, the new bill modifies the Offer of Settlement rule to permit defendants to recover their litigation costs out of the plaintiff's pocket, and not just as a reduction or offset from the plaintiff's recovery. And the new rule applies to all lawsuits, not just those found to be "abusive civil actions."

So, TADC and the proponents of the new HB 274 negotiated against a Loser Pays bill that applied only to lawsuits found to be "abusive civil actions" and supported a loser pays law that apply to ALL LAWSUITS. TADC is bragging they made the bill better for litigants. They made it worse!

This sleight of hand was furthered by TADC, which in a recent Legislative Update, stated the bill as modified by the House Judiciary and Civil Jurisprudence Committee:

1. Requires the SCOT to adopt rules providing for the early dismissal ofclaims (similar to a FRCP 12(b)(6) motion) and for an expedited trial processfor claims of more than $10,000 but not to exceed $100,000; 2. Codifies theSCOT's holding that a statute may not be construed to create a cause of actionunless it creates one by clear and unambiguous language; 3. Allows a party onits own motion (if the trial court certifies) or a trial court on its own initiative to permit an interlocutory appeal from an order involving acontrolling question of law; 4. Provides that the prevailing party may recoverreasonable attorney's fees from an individual, corporation, or other legalentity if the claim is for breach of an oral or written contract (current lawallows a "person" to recover attorney's fees against an individual orcorporation if the claim is for an oral or written contract); and 5. Adds reasonable deposition costs to the litigation costs that may be recovered undera Ch. 42 offer of settlement, provides that once a defendant invokes the Ch. 42 process that the declaring defendant and any party with a claim against that defendant may make a settlement offer to settle all claims in an action betweenthe parties, and clarifies that recoverable litigation costs are limited to those incurred after the date the rejecting party rejected the earliest offerthat entitles the party to an award of costs.

I have attached the version of HB 274 reported out of the committee, as well as the original version. I urge you to read them for yourselves. Here are some of the highlights, with my comments:

1. Allows the Supreme Court of Texas (SCOT) to "adopt rules to provide for the dismissal of certain causes of action that the supreme court determines should be disposed of as a matter of law on motion and without evidence."

Comment: This is designed to turn our state courts into federal courts, impose a road block for every case that will make the old Plea of Privilege practice seem tame. No guidance is provided to the SCOT, meaning we will be at the mercy of the nine justices. Recent opinions of the court suggest the practice will not be favorable to claimants. We do not need a 12(b)(6) practice in our state courts.

2. Allows the court to "award costs and reasonable and necessary attorney's fees to the prevailing party" on motions to dismiss. This is "loser pays" on all cases, and it applies before the plaintiff is permitted to bring one scintilla of evidence.

3. Allows the SCOT to adopt rules for the "prompt, efficient, and cost-effective resolution of civil actions in which the amount in controversy...is more than $10,000 but does not exceed $100,000. The rules shall address the need for lowering discovery costs in these actions and the procedure for ensuring that these actions will be expedited in the civil justice system. The supreme court may not adopt rules under this subsection that conflict with a provision of (1) Chapter 74, Civil Practice and Remedies Code..."

Comment: In a perfect world, we would have the ability to streamline discovery rules in smaller cases. If the rules were established by a panel of lawyers from varying points of view, with consideration for the rights of plaintiffs and defendants, we may have an outcome that is palatable and fair. This law allows the SCOT to have broad discretion in limiting discovery and evidence. If the rules the Court adopts are not, in the view of one side or the other, fair, the appeal is to...the Supreme Court of Texas! This is lawmaking with no recourse.

4. Prohibits a court from construing a statute as creating a cause of action unless the statute by clear and unambiguous language creates a cause of action.

Comment: There is little lost here, at least for now. However, much of our state's jurisprudence has been developed by application of tort principles to facts, taking into account statutory law. We are on our way to becoming a civil law state. This is bad policy, and it will hamstring future courts.

5. Creates interlocutory appeals, on motion from any party or on the court's initiative, on any order not otherwise appealable that "(1) involves a controlling question of law..." where "(2) an immediate appeal from the order may materially advance the ultimate termination of the litigation."

Comment: This gives defendants - at least those with unlimited defensive resources - a tool to place a logjam in the middle of any lawsuit. Note that this right of interlocutory appeal only applies to circumstances where the case might be terminated. There is no right for plaintiffs to seek interlocutory appeals.

6. Awards costs on interlocutory appeals, including attorney's fees, to the prevailing party.

Comment: More "loser pays" that applies to all cases, not just contract cases.

7. Adds a "Recovery of Attorney's Fees" provision that deletes "oral or written contract" from CPRC Section 38.001 (the current statute authorizing recovery of attorney's fees in contract cases), and adds CPRC 38.0015 which allows the prevailing party to recover attorney's fees on any case involving "breach of an oral or written contract."

Comment: I do not know why TADC is all warm and fuzzy about throwing small businesses under the bus. If you represent a Mom and Pop company, or even a moderately large corporation, are you going to counsel your client to take on BP, Toyota, Microsoft or any other huge corporation with an unlimited defense budget, if your client will wind up with a huge bill for attorney's fees if they lose a breach of contract case? And how far of a stretch will it be for this provision to apply to cases against lawyers and other service providers?

Most importantly, while this revision takes tort claims out of the new "loser pays" portion of HB 274, IT PUTS IT RIGHT BACK IN ANOTHER PART OF THE BILL!

8. Revises the Offer of Settlement rule to ELIMINATE the restrictions on the ability of defendants to collect attorney's fees, deposition expenses and expert fees beyond the amount of the judgment in favor of the plaintiff. Here is where the rubber really meets the road. The current Offer of Settlement rule, which only may be invoked by a defendant, states:

"(g) If litigation costs are to be awarded against a claimant, those litigation costs shall be awarded to the defendant in the judgment as an offset against the claimant's recovery from that defendant."

There is also subsection (d) which restricts the amount of recovery of litigation costs to 50% of the economic damages + 100% of the noneconomic damages + 100% of the punitive damages awarded to the plaintiff.

THE NEW VERSION OF HB 274 REPEALS SUBSECTIONS (d) AND (g) OF CPRC 42.004. IT IS OPEN SEASON ON PLAINTIFFS!

IN OTHER WORDS, THE PLAINTIFF WILL GET STUCK WITH THE DEFENDANT'S ATTORNEY'S FEES IF HE LOSES THE LAWSUIT OR RECOVERS LESS THAN THE OFFER OF SETTLEMENT. THIS CAN TURN A WINNING LAWSUIT INTO AN ECONOMIC CATASTROPHE!

THIS IS NOT CONFINED TO LAWSUITS THAT ARE DETERMINED TO BE "ABUSIVE CIVIL ACTIONS," WHICH WAS REQUIRED IN THE INITIAL BILL. THIS VERSION APPLIES TO ALL LAWSUITS. ALL A PLAINTIFF HAS TO DO IS LOSE!

One little additional bone thrown to defendants: they no longer have to file their offers of settlement with the court. So, in addition to dealing with a law that punishes plaintiffs who want their day in court, we have been given a new issue to fight over - whether the offer of settlement was made at all. And best of all (once again for defendants only), they do not have to make a public record of their offer of settlement!

Please do not fall for TADC's deception. You - particularly our friends on the defense side - are being hoodwinked by your own leadership."

[loves2read]

so what is proper response since MY legislators are not likely to listen to my suggestion to vote against this bill

[crbcrbrgv]

Originally Posted by loves2read

so what is proper response since MY legislators are not likely to listen to my suggestion to vote against this bill

Well, my response to you is kudos for reading this. Obviously, you love 2 read. I didn't even realize how long this post was.