House Bill 274 –called the “loser pays” tort reform bill – involves changing the Civil Practice and Remedies Code. The changes are ugly and run contrary to Texans’ longstanding belief that our court house doors should be open to everyone, no matter who they are or how much money they have. These changes will deprive Texans from accessing the court house. Let me explain one of the most important changes, why it is important, how it will affect people who have been wronged and have damages, and why these rule changes are simply not Texan.
First, the Civil Practice and Remedies Code is what controls judges and lawyers involved in lawsuits for money at the court house.
Right now, if you feel you have been wronged by a person or business, and you have lost money or been physically injured, you can file a lawsuit. There are many reasons we file lawsuits. You can file a lawsuit if a speeder/’texter’ rear-ends you on the road, you and your car are damaged, and the ‘texter’s’ insurance won’t pay for repairs or medical bills. You can file a lawsuit if a business sells you an expensive product that doesn’t do what the seller promised you it would do, and the seller won’t refund your money. You can file a lawsuit if you start a small business with your friend, and your friend steals all the business’s money. There are many reasons why we file lawsuits. At the end of the day, we file lawsuits when we’ve tried to work out our disagreements, but the person or business who has wronged us just won’t do the right thing. The person who files the lawsuit is called a plaintiff, and the person who has to defend against the lawsuit is called the defendant.
This “loser pays” bill is supposed to prevent frivolous lawsuits. Don’t believe the hype: frivolous lawsuits are not clogging our court houses. In 2007, a poll of Texas civil judges found that about 80% of those judges did not think that frivolous lawsuits were a problem.
Without this Bill, there are ways for a defendant to kill a meritless lawsuit without going to trial. First, of course, the defendant and plaintiff can negotiate. If they come to an agreement, the plaintiff can agree to dismiss a claim. But, if the plaintiff and defendant cannot come to an agreement, the case continues on in the court house. A defendant currently has a very powerful tool to kill a plaintiff’s case – a motion for summary judgment. A defendant can present evidence to the judge, and basically say “judge, the plaintiff is suing for x, but the law says you can’t sue for x – this case should be dismissed as a matter of law because the plaintiff has no legal right to sue for this.” If the judge agrees, the judge can dismiss the plaintiff’s case, or part of the plaintiff’s case.
Summary judgment is incredibly powerful, and sometimes, it is fairly simple. For example: let’s say you and I are trying to park in the same parking spot at the grocery store. I whip my 2003 Ford Focus into the spot you have been waiting to park your 2010 Acura in. You get out of your car and start yelling at me to be more considerate. As I get out of my car to yell back at you, I trip over a curb, skin my knees and elbows, and knock out one of my teeth. You get back in your car and find another parking space. I get your license plate number, track down your name, and file a lawsuit alleging that you assaulted me. I ask for the costs associated with my cuts and bruises and dental repair.
You can file a motion for summary judgment based on these facts. You can say: “Judge, Plaintiff Millie has failed to provide a legal reason why I should be responsible for her clumsiness – my yelling did not cause her to fall. I am not responsible for Plaintiff Millie’s damages because I did not cause them. Love, Defendant.” And, the judge would probably grant that motion. Sometimes – even though we may be mad or feel like we’ve been wronged – there’s nothing that can be done about it. We have the right to try – the court house doors are open to us. But summary judgment is how cases get weeded out so that meritless cases are killed before trial. Texas civil judges seem to be happy with summary judgment as the method of killing meritless lawsuits because most judges don’t think frivolous lawsuits are a problem.
The “loser pays” bill intends to fix that which isn’t broken. First, we already have a way of killing meritless lawsuits. Importantly, the new rules say that if the case is dismissed, the court can award attorney’s fees and court costs to the winner of the motion to dismiss. Instead of just getting the case dismissed, the defendant could now get court costs and attorney’s fees if the defendant gets a case dismissed. What’s wrong with that? Well, first of all it is not how we do things in Texas. We believe all of us should be able to walk into the court house. Awarding fees to the defendant who wins a dismissal will prevent people and small businesses from suing when they have a legitimate reason to file a lawsuit.
Let me explain why: let’s say you go out for drinks with your co-workers. You drink a little too much, and so you call a taxi to pick you up from the pub. The taxi comes, picks you up, and the driver drives away from where you told him to go. In fact, he drives to a deserted parking lot, where he pulls a gun on you, hits you a few times, and robs you. He then dumps you in the middle of nowhere without your cell phone. After a few hours of walking (and you are very sober at this point), someone stops their car and lets you use their cell phone to call the police. Ultimately, the driver is identified and arrested. You discover that this driver has a long criminal history, including violent offenses of assault – all committed before this guy was hired by the taxi company. You don’t have any money to file a lawsuit (in part because the taxi driver used your debit card and drained your bank account). You don’t know how lawsuits work, and the court house scares you.
So you call a lawyer. Currently, there are many lawyers who will take your case on contingency – meaning that they don’t ask you for any money up-front. Instead, you agree to let the lawyer take a percentage of any monetary award the lawyer helps you get. Lawyers take these cases even though there is always a chance that they will have expended hours and hours of work for nothing – the case might be dismissed after a motion for summary judgment, or a jury may decide that the defendant isn’t liable. Lawyers take that risk, in the hopes that they do win, and because it feels great to help someone who was hurt by someone else’s wrong-doing.
If this Bill is passed, that taxi company can try to get attorney’s fees from you if you file a lawsuit and it is dismissed. That taxi company will probably hire pretty expensive lawyers to defend them. Instead of just looking at losing the case, you are looking at paying the taxi company thousands of dollars in legal fees. Think about this – they hired a convict who robbed you, and you have to pay themthousands of dollars. Who would ever bring a lawsuit if there’s a chance that they would have to pay the person or business who wronged them? Wealthy people and big businesses will still have access to the legal system. There’s a saying: “Never bet the rent.” For normal people and small businesses, it is all“rent,” and we won’t be willing to gamble in court.
This new bill kills lawsuits before they are even filed. Reasonable people like you will look at the potential costs of filing a lawsuit, and decide that you are better off just letting the whole thing slide – even if the defendant has done something very wrong, and you have been severely hurt. For this reason, this Bill closes the court house doors to those of us who are not gamblers. Texas courts are open to everyone – rich or poor, small business or big company. This Bill will close court house doors to people and small businesses who just don’t have the money to gamble.
Call your Texas State Senator. Tell them that you value your right to walk into the court house, and you oppose the “loser pays” bill.