By J. Lyn Carl, GalleryWatch.com
Austin, TX – Senate State Affairs Chair Sen. Bill Ratliff (R-Mount Pleasant) today laid out his substitute for HB 4, which would provide for sweeping tort reform in Texas. The bill was merely laid out today and Ratliff indicated that testimony on the bill will begin Monday at an 8 a.m. State Affairs hearing. Testimony will be random and not article-by-article. He said the philosophy has already been discussed and he is hopeful the testimony Monday will be merely on language and wording.
Ratliff said his substitute has "some considerable differences" from the House version of the bill. He noted that two years ago the Texas Supreme Court appointed a committee to look into certain rules of the court. They talked to Ratliff about the possibility of crafting a rule on two-way offer of settlement.
Five new rules were recently crafted by the Supreme Court, said Ratliff, and three relate directly to HB 4. The proposals in the bill regarding those three rules is to authorize and instruct the Supreme Court to set up those rules and then set up in the bill the basic structure for what the bill will say.
Among some of the highlights outlined by Ratliff:
- Article One: Class action - Provides that the Supreme Court shall adopt rules governing class actions. Among matters of instruction to the court - the court will adopt rules for reasonable attorney fees and attorney fees awarded in a class action must be in cash and non-cash amount in the same proportion as the recovery for the class. If the recovery for the class is 50 percent coupons or other non-cash instruments, the attorney fee will be in the same proportion with the same instrument. Secondly, the section of the House bill that provided for mandatory dismissal or abatement for failure to exhaust administrative remedies is struck and replaced with a section that says before deciding a motion to certify a class action, a trial court must hear and rule on all pending pleas to the jurisdiction asserting that an agency of the state has exclusive or primary jurisdiction. Under interlocutory review of class certification questions, provided that all issues are related to the certification or refusal to certify are consolidated in one appeal.
- Article Two: Settlement - The Supreme Court shall adopt rules instituting a two-way offer of settlement. If an offer is made by either party and rejected by the offeree, and the judgment is significantly less favorable to the rejecting offeree, the party making the offer collects litigation costs from the offeree. The bill defines "significantly less favorable" as less than 80 percent of the rejected offer. Recovery of litigation costs to a defendant is limited. The least that could be recovered in a transfer of litigation costs is 50 percent of economic damages. Also provides that the defendant, early in the litigation, has the option of stipulation if the offer of settlement mechanism will be available to the parties in the cause of action.
- Article Three: The Supreme Court also was preparing to issue rules on "complex litigation." This instructs the Supreme Court to adopt rules involving multiple parties or multiple cases or both, pending in different courts in the state by providing for assignment of multiple cases through a single court for coordinated or consolidated pre-trial proceedings, including summary judgments but not for trial on the merits. Provides definition for "complex litigation." Transfers will be made by judicial panels for complex litigation, probably a five-judge panel of appellate judges, appointed by the Chief Justice.
- Article Four: On proportionate responsibility - responsible third party feature kept; John Doe or unknown defendant removed.
- Article Five: On products liability - under medicines - adds rebuttable presumptions to medicines warnings as approved by the FDA as it is in the government standards provisions; in the compliance with government standards provision, there is significant change in that House bill says the plaintiff may rebut the rebuttable presumption of no liability by establishing that, and secondly, manufacturers before or after marketing the product withheld information required by the federal government or agency's determination of adequacy of the safety standards or regulations at issue. This provision would change to if after marketing the product, the manufacturer withheld information or material relevant to the federal government's determination.
- Article Six: On interest - the current statute says post-judgment interest must be between 10-20 percent and then is adjusted This bill provides the rate is the prime rate as published by the Federal Reserve Bank of New York on the date of computation.
- Article Seven: On appeals bonds - provision added that in a case where reducing the amount of appeal bond so it is not an onerous amount - adds that the court may require in conjunction with a stay any measures the court considers necessary to prevent dissipation of judgment debtor's assets during the period the stay is in effect.
- Article Nine: Benevolent gestures is omitted.
- Article 10: Health care - The Medical Liability and Improvement Act of Texas is repealed. Those provisions will be found in Chapter 74 of the Civil Practice and Remedies Code. Limitations in civil liability for non-economic damages for each defendant health care provider other than a physician or registered nurse will not exceed $250,000 except if the award of non-economic damages is unanimous by the jury for that defendant. For non-economic damages for each defendant physician or nurse, the amount will not exceed $250,000. Civil liability limit for all physicians and nurses defendants in an action not to exceed $750,000.
- Article 11: Claims against employees or volunteers of a governmental unit - Definition of public servant redefined to include licensed physicians who offers emergency or post-emergency stabilization services in hospital owned or operated by government entities.
- Article 12: Juror qualifications is omitted.
- Article 13: Damages - provides exemplary damages allowed based on fraud, malice or gross negligence, with gross negligence redefined. Jury may award exemplary damages only if award is unanimous. Some collateral sources admissible.
- Article 14: Assignment of judges omitted.
- Article 15: School employees provision to be consistent with the No Child Left Behind federal legislation.
- Article 16: Admissibility of certain evidence in civil action restricted against certain not-for-profit nursing institutions.
- Article 17: Limitations of civil actions and liabilities related to certain mergers or consolidations - language that is an agreed arrangement between all parties in this matter.
- Article 18: Charitable immunity and liability - no significant changes.
- Article 19: Liability of volunteer fire departments or volunteer firefighters - no changes.
- Article 20: Contracts - A construction contract is void and unenforceable if indemnifies person against all or a portion of liability caused by the negligence of the indemnitee.
- Article 21: Effective date - Affects occurrences on or after effective date of the act.
"We will not restrict amendments either in committee or on the floor," said Ratliff. "Thank you for putting up with this long process. We will hear testimony on the bill beginning at 8 a.m. Monday morning."
To view the text of the substitute bill, click here.