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1 Texas Omnibus Civil Justice Reform Bill HB 4 Presented by Greg Curry and Rob Roby Greg.Curry@tklaw.Com rroby@gwinnroby.com Gwinn & Roby Attorneys and Counselors
2 Overview Proportionate Responsibility, Responsible Third Parties and Damages Venue and Forum Non Conveniens Texas Judicial Panel on Multidistrict Litigation Products Liability Medical Legislation Offer of Settlement Class Actions, Interest and Appeal Bonds Other Legislation
3 Proportionate Responsibility, Responsible Third Parties and Damages
4 Application Proportionate Responsibility Only to tort and DTPA cases Applies to suits filed on or after July 1, 2003
5 Proportionate Responsibility Settlement Credits Defendant s election of dollar-for for-dollar or sliding scale settlement credit eliminated Now only credit is reduction by settling person s percentage of responsibility Defendant will now have to prove responsibility on settling co- defendant If co-defendant settles after everyone rests, it is too late to prove co-defendant s percentage Will lead to collusion Status of one satisfaction rule
6 Proportionate Responsibility Joint and Several Liability Only if defendant s percentage of responsibility greater than 50% or Defendant, with intent to do substantial harm to others, acted in concert with another to commit a felony, causing harm to plaintiff
7 Responsible Third Parties 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 Permits designation of Doe responsible third parties within 60 days of filing original answer Designation of responsible third party extends statute of limitations tions for plaintiff Can designate bankrupt parties and employer and obtain reduction for their percentage of responsibility
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9 Damages
10 Damages 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 Mandatory jury instruction on unanimity of finding exemplary damages Exemplary damages not available if only nominal damages awarded
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12 Damages Exemplary damages limited to the greater of: Two times economic damage plus up to $750,000 in non-economic damages Or $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, elderly individual, or disabled individual if the conduct occurred red while providing health care as defined under CPRC
13 Damages Recovery of medical expenses limited to costs actually paid or incurred by the plaintiff Recovery of lost earnings must be net of income taxes
14 Venue and Forum Non Conveniens
15 Venue for Multiple Plaintiffs Applies to cases filed on or after September 1, 2003 Each plaintiff must establish venue independently of any other plaintiff Mandatory dismissal or transfer of any plaintiff who cannot 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 appeal Appeal must be made to appellate court district in which the trial court is located
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17 Forum Non Conveniens 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 in more appropriate state or country No longer requires party seeking to dismiss claim to prove six 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 prima facie showing that act or omission that was proximate or producing cause of injury or death occurred in Texas
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19 Texas Judicial Panel on Multidistrict Litigation
20 Judicial Panel on Multidistrict Litigation 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 No funding available
21 Judicial Panel on Multidistrict Litigation Members of Panel Appointed by Chief Justice Phillips Chair Judge David Peeples, Presiding Judge, Fourth Administrative Region, San Antonio Justice George Hanks, Jr., 14th District Court of Appeals, Houston Justice Errlinda Castillo, 13th District Court of Appeals, Corpus Christi and Edinburg Justice Mack Kidd, Third District Court of Appeals, Austin Justice Douglas S. Lang, Fifth District Court of Appeals, Dallas
22 Judicial Panel on Multidistrict Litigation Panel may transfer actions involving one or more common questions of fact (not law) pending in 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
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24 Multidistrict Litigation Amendments to TRCP 166 and TRJA 11 and 13 TRCP 166 provides pretrial proceedings in MDL 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 Rule 13 governs actions filed post 9/1/03
25 Multidistrict Litigation TRJA 13 Trial court court where case filed Pretrial court district court to which related cases are transferred Related - cases involving one or more common questions of fact Tag-along along case case related to MDL cases, but not itself subject of MDL order
26 TRJA 13 (cont d) Multidistrict Litigation Transfer on request of trial court or presiding judge of administrative region, MDL Panel s own initiative, or motion of a party Motion, request, response, reply, etc., to be filed with MDL Panel Clerk $ filing fee for motion to transfer Other motions or filings $50.00 fee
27 TRJA 13 (cont d) Evidence Multidistrict Litigation MDL Panel will accept facts in pleadings as true unless contradicted May file evidence only with leave of Panel MDL Panel may decide matter on written submission or after oral hearing MDL Panel may order transfer if three members concur in writing No automatic stay, but trial court or Panel may issue stay
28 TRJA 13 (cont d) Multidistrict Litigation Transfer effective when notice of transfer filed with trial and pretrial courts Most orders of pretrial judge cannot be changed by trial judge Exception: changed circumstances, to correct an error of law, or to prevent manifest injustice 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 pending at the time review is sought
29 Medical Legislation
30 Medical Malpractice Applies to cases filed on or after September 1, 2003 Expanded definitions of health care liability claim and health care provider Notice and limitations Authorization for release of protected health information must accompany notice of claim Abatement if no authorization Heath care providers given 45 days to provide a complete set of patient s medical records
31 Medical Malpractice Applies to cases filed on or after September 1, 2003 Expanded definitions of health care liability claim and health care provider Notice and limitations Authorization for release of protected health information must accompany notice of claim Abatement if no authorization Heath care providers given 45 days to provide a complete set of patient s medical records
32 Medical Malpractice 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 c institutions) excluding exemplary damages $500,000 in wrongful death or survival actions, including exemplary damages, for each claimant Does not apply to amount of damages for medicals received before judgment or for future treatment If present value of future damages equals or exceeds $100,000, court c must order periodic payments if requested by plaintiff, physician or health care provider Nonprofit Management Contractors Governmental immunity extended to nonprofit municipal hospital management m contractors while performing services under the contract for the benefit of the hospital
33 Medical Malpractice 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 c institutions) excluding exemplary damages $500,000 in wrongful death or survival actions, including exemplary damages, for each claimant Does not apply to amount of damages for medicals received before judgment or for future treatment If present value of future damages equals or exceeds $100,000, court c must order periodic payments if requested by plaintiff, physician or health care provider Nonprofit Management Contractors Governmental immunity extended to nonprofit municipal hospital management m contractors while performing services under the contract for the benefit of the hospital
34 Medical Malpractice 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 c institutions) excluding exemplary damages $500,000 in wrongful death or survival actions, including exemplary damages, for each claimant Does not apply to amount of damages for medicals received before judgment or for future treatment If present value of future damages equals or exceeds $100,000, court c must order periodic payments if requested by plaintiff, physician or health care provider Nonprofit Management Contractors Governmental immunity extended to nonprofit municipal hospital management m contractors while performing services under the contract for the benefit of the hospital
35 Medical Malpractice Expert witnesses Claimant must serve an expert report on each party within 120 days 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 o if after a hearing it appears the report does not represent a good faith effort fort to comply with the definition of an expert report Court may dismiss a claim with prejudice and award fees and costs s if an expert 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 other than to meet service requirement Only physicians qualify as an expert witness on causation issue
36 Medical Malpractice Expert witnesses Claimant must serve an expert report on each party within 120 days 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 o if after a hearing it appears the report does not represent a good faith effort fort to comply with the definition of an expert report Court may dismiss a claim with prejudice and award fees and costs s if an expert 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 other than to meet service requirement Only physicians qualify as an expert witness on causation issue
37 Expanded applicability Good Samaritan Statute Location at which care is administered now irrelevant Narrower exclusions Entitlement to remuneration does not mean care was administered for remuneration Deletion of language excluding care provided in a hospital or care facility by persons who regularly administer care
38 Emergency and Charitable Care Emergency medical care Applies to emergency care in hospital ERs, OB units or surgical suites immediately following evaluation or treatment in an ER Claimant must show by preponderance of evidence that physician or healthcare provider was with willful and wanton negligence and deviated from m the degree of care and skill that is reasonably expected of an ordinary prudent physician or provider under like circumstances New special jury instructions Charitable care Amended definitions Limits liability of hospitals, hospital systems and their employees ees and agents to $500,000 under certain conditions
39 Emergency and Charitable Care Emergency medical care Applies to emergency care in hospital ERs, OB units or surgical suites immediately following evaluation or treatment in an ER Claimant must show by preponderance of evidence that physician or healthcare provider was with willful and wanton negligence and deviated from m the degree of care and skill that is reasonably expected of an ordinary prudent physician or provider under like circumstances New special jury instructions Charitable care Amended definitions Limits liability of hospitals, hospital systems and their employees ees and agents to $500,000 under certain conditions
40 Emergency and Charitable Care Emergency medical care Applies to emergency care in hospital ERs, OB units or surgical suites immediately following evaluation or treatment in an ER Claimant must show by preponderance of evidence that physician or healthcare provider was with willful and wanton negligence and deviated from m the degree of care and skill that is reasonably expected of an ordinary prudent physician or provider under like circumstances New special jury instructions Charitable care Amended definitions Limits liability of hospitals, hospital systems and their employees ees and agents to $500,000 under certain conditions
41 Products Liability
42 Products Liability 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 Revised to conform to Federal Rules of Evidence in regard to admissibility of subsequent remedial measures in products liability action
43 Products Liability 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, and (iii) adequate to protect public from risk Presumption does not apply to manufacturing flaws or defects even if manufacturer complied with federal standards Plaintiff can rebut by showing material omission or misrepresentation to agency, or that standards were inadequate to provide reasonable safety
44 Products Liability Defenses (cont d) Innocent Retailer Defense Retailer cannot be held liable for product defect unless retailer has some actual responsibility for defect Numerous exceptions to defense are provided, including exception that prevents use of defense if responsible manufacturer is outside court s jurisdiction or insolvent
45 Products Liability Defenses (cont d) Innocent Retailer Defense Retailer cannot be held liable for product defect unless retailer has some actual responsibility for defect Numerous exceptions to defense are provided, including exception that prevents use of defense if responsible manufacturer is outside court s jurisdiction or insolvent
46 Products Liability Defenses 15-year statute of repose for all products liability claims, except in: express warranty cases latent disease cases, in which disease does not manifest for many m 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 on products if the warnings are approved by the FDA and product was used according to FDA approval
47 Products Liability Defenses 15-year statute of repose for all products liability claims, except in: express warranty cases latent disease cases, in which disease does not manifest for many m 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 on products if the warnings are approved by the FDA and product was used according to FDA approval
48 Products Liability Defenses 15-year statute of repose for all products liability claims, except in: express warranty cases latent disease cases, in which disease does not manifest for many m 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 on products if the warnings are approved by the FDA and product was used according to FDA approval
49 Class Actions, Interest and Appeal Bonds
50 Class Actions Applies to cases filed on or after September 1, 2003 Requires trial court to rule on whether claim should be before an a agency rather than court prior to ruling on class certification Gives jurisdiction to Texas Supreme Court to hear appeal from trial court order certifying or refusing to certify a class, staying all a proceedings pending appeal Limits attorney fee awards If recovery portion of recovery in coupons, fees and class must be paid proportionally in coupons Trial court to use Lodestar method to calculate amount of fees
51 Class Actions Applies to cases filed on or after September 1, 2003 Requires trial court to rule on whether claim should be before an a agency rather than court prior to ruling on class certification Gives jurisdiction to Texas Supreme Court to hear appeal from trial court order certifying or refusing to certify a class, staying all a proceedings pending appeal Limits attorney fee awards If recovery portion of recovery in coupons, fees and class must be paid proportionally in coupons Trial court to use Lodestar method to calculate amount of fees
52 Interest Applies to final nal judgment signed or judgment subject to appeal on or after September 1, 2003 Prohibits assessment of pre-judgment interest on award of future damages Establishes post-judgment interest rate based on prime rate Adjusts current floor and ceiling for post-judgment interest rate from 10-20% to 5-15% 5 HB2415 enacted the same limits with the rate based on prime rate of Federal Reserve Bank of New York
53 Interest Applies to final nal judgment signed or judgment subject to appeal on or after September 1, 2003 Prohibits assessment of pre-judgment interest on award of future damages Establishes post-judgment interest rate based on prime rate Adjusts current floor and ceiling for post-judgment interest rate from 10-20% to 5-15% 5 HB2415 enacted the same limits with the rate based on prime rate of Federal Reserve Bank of New York
54 Supersedeas Bonds Applies to final judgment signed on or after September 1, 2003 Modifies rules relating to appeal bonds so that cost of bond alone 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 Amount of security must not exceed lesser of 50% of defendant s net worth or $25 million Trial court required to reduce amount of security upon showing debtor d is likely to suffer substantial economic harm if required to post security in the amount required...
55 Supersedeas Bonds Applies to final judgment signed on or after September 1, 2003 Modifies rules relating to appeal bonds so that cost of bond alone 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 Amount of security must not exceed lesser of 50% of defendant s net worth or $25 million Trial court required to reduce amount of security upon showing debtor d is likely to suffer substantial economic harm if required to post security in the amount required...
56 Supersedeas Bonds TRAP 24 If bond based on net worth, debtor must file affidavit with detailed information concerning assets and liabilities from which net worth can be ascertained Affidavit is prima facie evidence, but creditor may contest it and conduct discovery Debtor has burden of proof
57 Repealed Evidence Rules Other legislation 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
58 Offer of Settlement
59 Offer of Settlement Procedure Only a defendant can invoke the procedure Once a defendant invokes the procedure, the plaintiff can also 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 Offer must be in writing; state terms; including attorneys fees, interest and costs; state that offer is made pursuant to TRCP 167 and Chapter 42 of the TCP&RC; identify the relevant parties; set a deadline for acceptance; and be served on all parties to whom offer is made
60 Offer of Settlement Procedure Only a defendant can invoke the procedure Once a defendant invokes the procedure, the plaintiff can also 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 Offer must be in writing; state terms; including attorneys fees, interest and costs; state that offer is made pursuant to TRCP 167 and Chapter 42 of the TCP&RC; identify the relevant parties; set a deadline for acceptance; and be served on all parties to whom offer is made
61 Offer of Settlement Awarding Litigation Costs Costs awarded if offer rejected and judgment is significantly less favorable to rejecting party than settlement offer Significantly less favorable means: Plaintiff rejected offer and award is less than 80% of the Defendant s offer Defendant rejected offer and award is more than 120% of Plaintiff s offer
62 Offer of Settlement 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
63 Offer of Settlement Litigation costs include: Court costs Reasonable fees of two or fewer testifying experts Reasonable attorneys fees Subject to caps on amount recoverable
64 Offer of Settlement Litigation costs include: Court costs Reasonable fees of two or fewer testifying experts Reasonable attorneys fees Subject to caps on amount recoverable
65 Offer of Settlement In calculating amount of judgment for purposes of determining whether it is significantly less favorable, attorneys fees recoverable under another law after date of rejection of offer not included If attorneys fees recoverable under another law, party 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 date the party rejected the settlement offer made the basis of the award
66 Offer of Settlement If claimant is responsible for fees, costs will be an offset against claimant s recovery No fee-shifting if take-nothing judgment Court must conduct hearing upon request for an award of costs
67 Offer of Settlement TRCP 167 Allows cost shifting if settlement offer is made substantially in accordance with Rule 167 Defendant must invoke rule no later than 45 days before trial setting Court can modify time limitation upon motion and showing of good cause Must offer to settle all monetary claims, including interest and costs Time limitations upon making offers
68 TRCP 167 (cont d) Offer of Settlement Must state the offer per claimant and per defendant (except if alleged one defendant vicariously liable for another) Deadline for acceptance must give at 14 least days after offer served Offer can be subject to reasonable conditions Offeree can object to a condition by written notice before stated deadline No objection presumes offer was reasonable Rejection of an offer subject to a condition that a court finds unreasonable cannot shift costs
69 TRCP 167 (cont d) Successive offers allowed Offer of Settlement Rejection subject to cost shifting only if offer is more favorable to offeree than any prior offer
70 Offer of Settlement Withdrawal, Acceptance and Rejection of Offer Can withdraw offer before acceptance by written notice served on the offeree Acceptance only by written notice by deadline provided in offer Once accepted, either party can file offer and acceptance and move for enforcement An offer that is not withdrawn or accepted is rejected Offeree can also reject by written notice
71 Texas Omnibus Civil Justice Reform Bill HB 4 Presented by Greg Curry and Rob Roby Greg.Curry@tklaw.Com rroby@gwinnroby.com Gwinn & Roby Attorneys and Counselors
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