Overview Overview Proportionate Responsibility, Responsible Third - - PowerPoint PPT Presentation
Texas Omnibus Civil Justice Reform Bill Texas Omnibus Civil Justice Reform Bill HB 4 HB 4 Presented by Presented by Greg Curry and Rob Roby Greg Curry and Rob Roby Greg.Curry@tklaw.Com @tklaw.Com rroby@gwinnroby.com Greg.Curry
Presented by Presented by
Greg Curry and Rob Roby Greg Curry and Rob Roby
Greg.Curry Greg.Curry@tklaw.Com @tklaw.Com rroby@gwinnroby.com rroby@gwinnroby.com
Attorneys and Counselors
Proportionate Responsibility, Responsible Third Parties and Damages Parties and Damages
Venue and Forum Non Conveniens Non Conveniens
Texas Judicial Panel on Multidistrict Litigation
Products Liability
Medical Legislation
Offer of Settlement
Class Actions, I nterest and Appeal Bonds
Other Legislation
Application
Only to tort and DTPA cases
Applies to suits filed on or after July 1, 2003
Settlement Credits
Defendant’s election of dollar-
for-
dollar or sliding scale settlement credit eliminated settlement credit eliminated
Now only credit is reduction by settling person’s percentage of responsibility responsibility
Defendant will now have to prove responsibility on settling co-
defendant
I f co-
defendant settles after everyone rests, it is too late to prove co prove co-
defendant’s percentage
Will lead to collusion
Status of “one satisfaction” rule
Joint and Several Liability
Only if defendant’s percentage of responsibility greater than 50% than 50%
Defendant, with intent to do substantial harm to others, acted in concert with another to commit a felony, causing acted in concert with another to commit a felony, causing harm to plaintiff harm to plaintiff
Now will be designated rather than joined
By motion at least 60 days before trial
Leave will be granted unless objection filed within 15 days
Can request disclosure of responsible third parties to be designated ated
Permits designation of “Doe” responsible third parties within 60 days of filing original answer days of filing original answer
Designation of responsible third party extends statute of limitations tions for plaintiff for plaintiff
Can designate bankrupt parties and employer and obtain reduction for their percentage of responsibility for their percentage of responsibility
Applies to cases filed on or after September 1, 2003
Reintroduces gross negligence as basis for exemplary damages
Exemplary damages can be awarded only if jury is unanimous both as to liability and amount as to liability and amount
Mandatory jury instruction on unanimity of finding exemplary damages damages
Exemplary damages not available if only nominal damages awarded
Exemplary damages limited to the greater of:
Two times economic damage plus up to $750,000 in non-
economic damages damages
Or Or
$200,000 $200,000
Cap busting for certain criminal acts
Medical expenses paid by a collateral source not recoverable
Adds cap for liability for felony conduct causing injury to a child, ild, elderly individual, or disabled individual “if the conduct occur elderly individual, or disabled individual “if the conduct occurred red while providing health care as defined under CPRC § 74.001 while providing health care as defined under CPRC § 74.001
Recovery of medical expenses limited to costs actually paid
Recovery of lost earnings must be net of income taxes
Applies to cases filed on or after September 1, 2003
iled on or after September 1, 2003
Each plaintiff must establish venue independently of any
Mandatory dismissal or transfer of any plaintiff who cannot establish venue except under exceptional circumstances establish venue except under exceptional circumstances
Allows immediate appeal of trial court’s decision granting or denying transfer or dismissal, staying trial until resolution of denying transfer or dismissal, staying trial until resolution of appeal appeal
Appeal must be made to appellate court district in which the trial court is located trial court is located
Applies to cases filed on or after September 1, 2003
Creates single standard based on federal law for determining whether case should be dismissed so that it may be pursued whether case should be dismissed so that it may be pursued in more appropriate state or country in more appropriate state or country
No longer requires party seeking to dismiss claim to prove six factors by a preponderance of the evidence factors by a preponderance of the evidence
Does not address Subsection (f), which provides that court may not stay or dismiss claim if party opposing motion makes may not stay or dismiss claim if party opposing motion makes prima facie showing that act or omission that was proximate prima facie showing that act or omission that was proximate
Applies to cases filed on or after September 1, 2003
Standard: For convenience of parties and witnesses, and promotion of just and efficient conduct of actions and promotion of just and efficient conduct of actions
No funding available
Members of Panel Appointed by Chief Justice Phillips
Chair – – Judge David Peeples, Presiding Judge, Fourth Judge David Peeples, Presiding Judge, Fourth Administrative Region, San Antonio Administrative Region, San Antonio
Justice George Hanks, Jr., 14th District Court of Appeals, Houston Houston
Justice Errlinda Castillo, 13th District Court of Appeals, Corpus Christi and Edinburg Corpus Christi and Edinburg
Justice Mack Kidd, Third District Court of Appeals, Austin
Justice Douglas S. Lang, Fifth District Court of Appeals, Dallas Dallas
Panel may transfer actions involving one or more common questions of fact (not law) pending in common questions of fact (not law) pending in different courts to a single court different courts to a single court
May be assigned to retired or former judge
Transferee judge may rule on summary judgment, but may not conduct trial on the merits may not conduct trial on the merits
Amendments to TRCP 166 and TRJA 11 and 13
TRCP 166 provides pretrial proceedings in MDL litigation also governed by TRJA 11 and 13 litigation also governed by TRJA 11 and 13
Coordination between Rule 11 and Rule 13 proceedings
Post 9/ 1/ 03 appointment of Rule 11 judge requires consultation with Chair of MDL Panel consultation with Chair of MDL Panel
Rule 13 governs actions filed post 9/ 1/ 03
TRJA 13
Trial court – – court where case filed court where case filed
Pretrial court – – district court to which related cases are district court to which related cases are transferred transferred
Related -
cases involving one or more common questions
Tag-
along case – – case related to MDL cases, but not itself case related to MDL cases, but not itself subject of MDL order subject of MDL order
TRJA 13 (cont’d)
Transfer on request of trial court or presiding judge of administrative region, MDL Panel’s own initiative, or administrative region, MDL Panel’s own initiative, or motion of a party motion of a party
Motion, request, response, reply, etc., to be filed with MDL Panel Clerk Panel Clerk
$225.00 filing fee for motion to transfer
Other motions or filings – – $50.00 fee $50.00 fee
TRJA 13 (cont’d)
Evidence – –
MDL Panel will accept facts in pleadings as true unless contradicted contradicted
May file evidence only with leave of Panel
MDL Panel may decide matter on written submission or after oral hearing hearing
MDL Panel may order transfer if three members concur in writing
No automatic stay, but trial court or Panel may issue stay
TRJA 13 (cont’d)
Transfer effective when notice of transfer filed with trial and pretrial courts pretrial courts
Most orders of pretrial judge cannot be changed by trial judge
Exception: changed circumstances, to correct an error of law,
MDL Panel decisions reviewable only by SC
Orders of trial court and pretrial court reviewable only by appellate court with jurisdiction over court in which case is appellate court with jurisdiction over court in which case is pending at the time review is sought pending at the time review is sought
Applies to cases filed on or after September 1, 2003
Expanded definitions of health care liability claim and health care provider care provider
Notice and limitations
Authorization for release of protected health information must accompany notice of claim accompany notice of claim
Abatement if no authorization
Heath care providers given 45 days to provide a complete set of patient’s medical records patient’s medical records
Applies to cases filed on or after September 1, 2003
Expanded definitions of health care liability claim and health care provider care provider
Notice and limitations
Authorization for release of protected health information must accompany notice of claim accompany notice of claim
Abatement if no authorization
Heath care providers given 45 days to provide a complete set of patient’s medical records patient’s medical records
Establishes 10-
year statute of repose on all health care liability claims
Liability limits for each claimant:
Definition of claimant is very important
$250,000 on noneconomic damages (up to $500,000 for all health care are institutions) excluding exemplary damages institutions) excluding exemplary damages
$500,000 in wrongful death or survival actions, including exemplary damages, for ary damages, for each claimant each claimant
Does not apply to amount of damages for medicals received before judgment or for judgment or for future treatment future treatment
I f present value of future damages equals or exceeds $100,000, court must order
periodic payments if requested by plaintiff, physician or health periodic payments if requested by plaintiff, physician or health care provider care provider
Nonprofit Management Contractors
Governmental immunity extended to nonprofit municipal hospital management anagement contractors while performing services under the contract for the contractors while performing services under the contract for the benefit of the benefit of the hospital hospital
Establishes 10-
year statute of repose on all health care liability claims
Liability limits for each claimant:
Definition of claimant is very important
$250,000 on noneconomic damages (up to $500,000 for all health care are institutions) excluding exemplary damages institutions) excluding exemplary damages
$500,000 in wrongful death or survival actions, including exemplary damages, for ary damages, for each claimant each claimant
Does not apply to amount of damages for medicals received before judgment or for judgment or for future treatment future treatment
I f present value of future damages equals or exceeds $100,000, court must order
periodic payments if requested by plaintiff, physician or health periodic payments if requested by plaintiff, physician or health care provider care provider
Nonprofit Management Contractors
Governmental immunity extended to nonprofit municipal hospital management anagement contractors while performing services under the contract for the contractors while performing services under the contract for the benefit of the benefit of the hospital hospital
Establishes 10-
year statute of repose on all health care liability claims
Liability limits for each claimant:
Definition of claimant is very important
$250,000 on noneconomic damages (up to $500,000 for all health care are institutions) excluding exemplary damages institutions) excluding exemplary damages
$500,000 in wrongful death or survival actions, including exemplary damages, for ary damages, for each claimant each claimant
Does not apply to amount of damages for medicals received before judgment or for judgment or for future treatment future treatment
I f present value of future damages equals or exceeds $100,000, court must order
periodic payments if requested by plaintiff, physician or health periodic payments if requested by plaintiff, physician or health care provider care provider
Nonprofit Management Contractors
Governmental immunity extended to nonprofit municipal hospital management anagement contractors while performing services under the contract for the contractors while performing services under the contract for the benefit of the benefit of the hospital hospital
Expert witnesses
Claimant must serve an expert report on each party within 120 days of filing ys of filing
Defendant must challenge adequacy within 21 days of service
Court may grant claimant one 30-
day extension upon finding report is deficient
Court shall grant motion challenging adequacy of expert report only if after a nly if after a hearing it appears the report does not represent a good faith ef hearing it appears the report does not represent a good faith effort to comply fort to comply with the definition of an expert report with the definition of an expert report
Court may dismiss a claim with prejudice and award fees and costs if an expert s if an expert report is not filed within a specified period report is not filed within a specified period
Discovery limited until claimant serves adequate expert report
Restrictions on use of expert report waived if claimant uses report for purpose
Only physicians qualify as an expert witness on causation issue
Expert witnesses
Claimant must serve an expert report on each party within 120 days of filing ys of filing
Defendant must challenge adequacy within 21 days of service
Court may grant claimant one 30-
day extension upon finding report is deficient
Court shall grant motion challenging adequacy of expert report only if after a nly if after a hearing it appears the report does not represent a good faith ef hearing it appears the report does not represent a good faith effort to comply fort to comply with the definition of an expert report with the definition of an expert report
Court may dismiss a claim with prejudice and award fees and costs if an expert s if an expert report is not filed within a specified period report is not filed within a specified period
Discovery limited until claimant serves adequate expert report
Restrictions on use of expert report waived if claimant uses report for purpose
Only physicians qualify as an expert witness on causation issue
Expanded applicability
Location at which care is administered now irrelevant
Narrower exclusions
Entitlement to remuneration does not mean care was administered for for remuneration remuneration
Deletion of language excluding care provided in a hospital or care facility re facility by persons who regularly administer care by persons who regularly administer care
Emergency medical care
Applies to emergency care in hospital ERs, OB units or surgical suites suites immediately following evaluation or treatment in an ER immediately following evaluation or treatment in an ER
Claimant must show by preponderance of evidence that physician or healthcare r healthcare provider was with willful and wanton negligence and deviated fro provider was with willful and wanton negligence and deviated from the degree m the degree
dent physician or provider under like circumstances provider under like circumstances
New special jury instructions
Charitable care
Amended definitions
Limits liability of hospitals, hospital systems and their employees and agents to ees and agents to $500,000 under certain conditions $500,000 under certain conditions
Emergency medical care
Applies to emergency care in hospital ERs, OB units or surgical suites suites immediately following evaluation or treatment in an ER immediately following evaluation or treatment in an ER
Claimant must show by preponderance of evidence that physician or healthcare r healthcare provider was with willful and wanton negligence and deviated fro provider was with willful and wanton negligence and deviated from the degree m the degree
dent physician or provider under like circumstances provider under like circumstances
New special jury instructions
Charitable care
Amended definitions
Limits liability of hospitals, hospital systems and their employees and agents to ees and agents to $500,000 under certain conditions $500,000 under certain conditions
Emergency medical care
Applies to emergency care in hospital ERs, OB units or surgical suites suites immediately following evaluation or treatment in an ER immediately following evaluation or treatment in an ER
Claimant must show by preponderance of evidence that physician or healthcare r healthcare provider was with willful and wanton negligence and deviated fro provider was with willful and wanton negligence and deviated from the degree m the degree
dent physician or provider under like circumstances provider under like circumstances
New special jury instructions
Charitable care
Amended definitions
Limits liability of hospitals, hospital systems and their employees and agents to ees and agents to $500,000 under certain conditions $500,000 under certain conditions
Applies to cases filed on or after July 1, 2003
New Tex. R. Civ. Evid. 407
Eliminates admission of subsequent remedial measures in product liability cases based on strict liability product liability cases based on strict liability
Revised to conform to Federal Rules of Evidence in regard to admissibility of “subsequent remedial measures” in to admissibility of “subsequent remedial measures” in products liability action products liability action
Defenses
Government Standards Defense
Applies to formulation, labeling or design of products
Protection available only if standard was (i) mandatory, (ii) applicable to aspect of product that allegedly caused harm, applicable to aspect of product that allegedly caused harm, and (iii) adequate to protect public from risk and (iii) adequate to protect public from risk
Presumption does not apply to manufacturing flaws or defects even if manufacturer complied with federal standards defects even if manufacturer complied with federal standards
Plaintiff can rebut by showing material omission or misrepresentation to agency, or that standards were misrepresentation to agency, or that standards were inadequate to provide reasonable safety inadequate to provide reasonable safety
Defenses (cont’d)
I nnocent Retailer Defense
Retailer cannot be held liable for product defect unless retailer has some actual responsibility for defect retailer has some actual responsibility for defect
Numerous exceptions to defense are provided, including exception that prevents use of defense if responsible exception that prevents use of defense if responsible manufacturer is outside court’s jurisdiction or insolvent manufacturer is outside court’s jurisdiction or insolvent
Defenses (cont’d)
I nnocent Retailer Defense
Retailer cannot be held liable for product defect unless retailer has some actual responsibility for defect retailer has some actual responsibility for defect
Numerous exceptions to defense are provided, including exception that prevents use of defense if responsible exception that prevents use of defense if responsible manufacturer is outside court’s jurisdiction or insolvent manufacturer is outside court’s jurisdiction or insolvent
Defenses
15-
year statute of repose for all products liability claims, except in: in:
express warranty cases
“latent disease” cases, in which disease does not manifest for many any years after use of product years after use of product
leases of products
aviation claims
Pharmaceutical products
Rebuttable presumption that health care providers, manufacturers, , distributors, and prescribers are not liable for failure to warn distributors, and prescribers are not liable for failure to warn on
products if the warnings are approved by the FDA and product was products if the warnings are approved by the FDA and product was used according to FDA approval used according to FDA approval
Defenses
15-
year statute of repose for all products liability claims, except in: in:
express warranty cases
“latent disease” cases, in which disease does not manifest for many any years after use of product years after use of product
leases of products
aviation claims
Pharmaceutical products
Rebuttable presumption that health care providers, manufacturers, , distributors, and prescribers are not liable for failure to warn distributors, and prescribers are not liable for failure to warn on
products if the warnings are approved by the FDA and product was products if the warnings are approved by the FDA and product was used according to FDA approval used according to FDA approval
Defenses
15-
year statute of repose for all products liability claims, except in: in:
express warranty cases
“latent disease” cases, in which disease does not manifest for many any years after use of product years after use of product
leases of products
aviation claims
Pharmaceutical products
Rebuttable presumption that health care providers, manufacturers, , distributors, and prescribers are not liable for failure to warn distributors, and prescribers are not liable for failure to warn on
products if the warnings are approved by the FDA and product was products if the warnings are approved by the FDA and product was used according to FDA approval used according to FDA approval
Applies to cases filed on or after September 1, 2003
Requires trial court to rule on whether claim should be before an n agency rather than court prior to ruling on class certification agency rather than court prior to ruling on class certification
Gives jurisdiction to Texas Supreme Court to hear appeal from trial ial court order certifying or refusing to certify a class, staying a court order certifying or refusing to certify a class, staying all ll proceedings pending appeal proceedings pending appeal
Limits attorney fee awards
I f recovery portion of recovery in coupons, fees and class must be paid be paid proportionally in coupons proportionally in coupons
Trial court to use Lodestar method to calculate amount of fees
Applies to cases filed on or after September 1, 2003
Requires trial court to rule on whether claim should be before an n agency rather than court prior to ruling on class certification agency rather than court prior to ruling on class certification
Gives jurisdiction to Texas Supreme Court to hear appeal from trial ial court order certifying or refusing to certify a class, staying a court order certifying or refusing to certify a class, staying all ll proceedings pending appeal proceedings pending appeal
Limits attorney fee awards
I f recovery portion of recovery in coupons, fees and class must be paid be paid proportionally in coupons proportionally in coupons
Trial court to use Lodestar method to calculate amount of fees
Applies to final judgment signed or judgment subject to appeal on
nal judgment signed or judgment subject to appeal on
Prohibits assessment of pre-
judgment interest on award of future damages future damages
Establishes post-
judgment interest rate based on prime rate
Adjusts current floor and ceiling for post-
judgment interest rate from 10 rate from 10-
20% to 5-
15%
HB2415 enacted the same limits with the rate based on prime rate of Federal Reserve Bank of New York rate of Federal Reserve Bank of New York
Applies to final judgment signed or judgment subject to appeal on
nal judgment signed or judgment subject to appeal on
Prohibits assessment of pre-
judgment interest on award of future damages future damages
Establishes post-
judgment interest rate based on prime rate
Adjusts current floor and ceiling for post-
judgment interest rate from 10 rate from 10-
20% to 5-
15%
HB2415 enacted the same limits with the rate based on prime rate of Federal Reserve Bank of New York rate of Federal Reserve Bank of New York
Applies to final judgment signed on or after September 1, 2003
Modifies rules relating to appeal bonds so that cost of bond alone ne will not make appeal of judgment prohibitive will not make appeal of judgment prohibitive
Limits bond requirement to compensatory damages awarded to plaintiff and places reasonable limits on total amount of bond plaintiff and places reasonable limits on total amount of bond
Amount of security must not exceed lesser of 50% of defendant’s net net worth or $25 million worth or $25 million
Trial court required to reduce amount of security upon showing debtor is ebtor is “likely to suffer substantial economic harm if required to post “likely to suffer substantial economic harm if required to post security in security in the amount required... ” the amount required... ”
Applies to final judgment signed on or after September 1, 2003
Modifies rules relating to appeal bonds so that cost of bond alone ne will not make appeal of judgment prohibitive will not make appeal of judgment prohibitive
Limits bond requirement to compensatory damages awarded to plaintiff and places reasonable limits on total amount of bond plaintiff and places reasonable limits on total amount of bond
Amount of security must not exceed lesser of 50% of defendant’s net net worth or $25 million worth or $25 million
Trial court required to reduce amount of security upon showing debtor is ebtor is “likely to suffer substantial economic harm if required to post “likely to suffer substantial economic harm if required to post security in security in the amount required... ” the amount required... ”
TRAP 24 – – I f bond based on net worth, debtor must file I f bond based on net worth, debtor must file affidavit with detailed information concerning assets affidavit with detailed information concerning assets and liabilities from which net worth can be ascertained and liabilities from which net worth can be ascertained
Affidavit is prima facie prima facie evidence, but creditor may evidence, but creditor may contest it and conduct discovery contest it and conduct discovery
Debtor has burden of proof
Repealed Evidence Rules
Applies to suits filed on or after July 1, 2003
Prohibition of admission of violations of the child safety restraint and seat belt statutes repealed restraint and seat belt statutes repealed
Procedure
Only a “defendant” can invoke the procedure
Once a defendant invokes the procedure, the plaintiff can also make offer of settlement make offer of settlement
Only applicable as to the defendant who files a declaration, and any party that makes or receives offers as to that defendant any party that makes or receives offers as to that defendant
Offer must be in writing; state terms; including attorneys’ fees, , interest and costs; state that offer is made pursuant to TRCP 16 interest and costs; state that offer is made pursuant to TRCP 167 7 and Chapter 42 of the TCP&RC; identify the relevant parties; set and Chapter 42 of the TCP&RC; identify the relevant parties; set a deadline for acceptance; and be served on all parties to whom a deadline for acceptance; and be served on all parties to whom
Procedure
Only a “defendant” can invoke the procedure
Once a defendant invokes the procedure, the plaintiff can also make offer of settlement make offer of settlement
Only applicable as to the defendant who files a declaration, and any party that makes or receives offers as to that defendant any party that makes or receives offers as to that defendant
Offer must be in writing; state terms; including attorneys’ fees, , interest and costs; state that offer is made pursuant to TRCP 16 interest and costs; state that offer is made pursuant to TRCP 167 7 and Chapter 42 of the TCP&RC; identify the relevant parties; set and Chapter 42 of the TCP&RC; identify the relevant parties; set a deadline for acceptance; and be served on all parties to whom a deadline for acceptance; and be served on all parties to whom
Awarding Litigation Costs
Costs awarded if offer rejected and judgment is “significantly less favorable” to rejecting party than “significantly less favorable” to rejecting party than settlement offer settlement offer
Significantly less favorable means:
Plaintiff rejected offer and award is less than 80% of the Defendant’s offer the Defendant’s offer
Defendant rejected offer and award is more than 120%
Litigation costs that may be recovered:
Sum of:
50% of economic damages
100% of non-
economic damages
100% of exemplary damages
Subtract amount of any lien
Litigation costs include:
Court costs
Reasonable fees of two or fewer testifying experts
Reasonable attorneys’ fees
Subject to caps on amount recoverable
Litigation costs include:
Court costs
Reasonable fees of two or fewer testifying experts
Reasonable attorneys’ fees
Subject to caps on amount recoverable
I n calculating amount of judgment for purposes of determining whether it is significantly less favorable, determining whether it is significantly less favorable, attorneys’ fees recoverable under another law after attorneys’ fees recoverable under another law after date of rejection of offer not included date of rejection of offer not included
I f attorneys’ fees recoverable under another law, party cannot recover litigation costs in addition to those fees cannot recover litigation costs in addition to those fees
Party against whom costs are awarded cannot recover fees and costs under another law incurred after the fees and costs under another law incurred after the date the party rejected the settlement offer made the date the party rejected the settlement offer made the basis of the award basis of the award
I f claimant is responsible for fees, costs will be an
No fee-
shifting if take-
nothing judgment
Court must conduct hearing upon request for an award
TRCP 167
Allows cost shifting if settlement offer is made “substantially in in accordance with” Rule 167 accordance with” Rule 167
Defendant must invoke rule no later than 45 days before trial setting setting
Court can modify time limitation upon motion and showing of good cause good cause
Must offer to settle all monetary claims, including interest and costs costs
Time limitations upon making offers
TRCP 167 (cont’d)
Must state the offer per claimant and per defendant (except if alleged one defendant vicariously liable for another) alleged one defendant vicariously liable for another)
Deadline for acceptance – – must give at 14 least days after offer must give at 14 least days after offer served served
Offer can be subject to reasonable conditions
Offeree can object to a condition by written notice before stated deadline stated deadline
No objection presumes offer was reasonable
Rejection of an offer subject to a condition that a court finds unreasonable cannot shift costs unreasonable cannot shift costs
TRCP 167 (cont’d)
Successive offers allowed
Rejection subject to cost shifting only if offer is more favorable to offeree than any prior offer favorable to offeree than any prior offer
Withdrawal, Acceptance and Rejection of Offer
Can withdraw offer before acceptance by written notice served on the offeree served on the offeree
Acceptance only by written notice by deadline provided in
Once accepted, either party can file offer and acceptance and move for enforcement and move for enforcement
An offer that is not withdrawn or accepted is rejected
Offeree can also reject by written notice
Presented by Presented by
Greg Curry and Rob Roby Greg Curry and Rob Roby
Greg.Curry Greg.Curry@tklaw.Com @tklaw.Com rroby@gwinnroby.com rroby@gwinnroby.com
Attorneys and Counselors