Although the “loser pays” rule has been in effect for nearly two years now, defendants fingered in lawsuits brought in Jefferson County aren’t utilizing Texas’ most recent tort reform measure, according to judges at the Beaumont courthouse.
House Bill 274 passed in 2011, despite dozens of Democratic legislators storming out in protest.
And as a result, since March 2013, defendants have had the opportunity to file Rule 91a motions, which, if granted, dismiss claims lacking a basis in law or fact and stick the loser with footing the bill for attorney’s fees.
Upon the bill’s passage, critics deemed the law as a shield to protect big business.
For example, on May 15, 2011, the Houston Chronicle published an editorial calling the Texas House’s new tort reform measure “an all-out assault on the ability of consumers and small business owners to seek legal redress in civil courts against powerful business interests.”
However, in Jefferson County, a region once branded as a hotbed for frivolous litigation by tort reform groups, defendants, from corporate to small business owners, are apparently declining to file Rule 91a motions.
“I hadn’t ever had that come up,” said Judge Gary Sanderson, 60th District Court, when asked if any defendant has yet to capitalize on the loser pays component of HB 274.
Judge Sanderson said HB 274 has had “no impact” in his court and “it’s been business as usual” since the bill’s passage.
“You wonder what the need for it (HB 274) was if it’s not even being used,” he said, adding damage caps are what have played the biggest role in lawsuits, as far as tort reform measures go.
Across the hall, Judge Milton Shuffield, 136th District Court, said he's only had a handful of "loser pays" motions presented in his court.
"I think the reason Rule 91 is not used much is it's all or nothing," Shuffield said. "There are other ways for a defendant to attack without potentially subjecting themselves to having to pay the plaintiff's attorney's fees."
Nonetheless, Texans for Lawsuit Reform, a group that strongly supported the bill, believes it’s still too early to determine the law’s impact.
“Given that the law has been in effect for such a short period of time, we think it is too early to obtain reliable data about its effectiveness; but we believe it will be used to good effect,” said TLR spokesperson Sherry Sylvester.
Sylvester added that before passage of HB 274, Texas law did not have an efficient mechanism for courts to dispose of meritless claims.
“The motion to dismiss provision of HB 274 provides that mechanism,” Sylvester said. “Because it is a new procedure and because it is a true loser pays provision, it may take time for practitioners to embrace it, but we think it will become a cornerstone of Texas practice that is used whenever a claim is filed that is truly meritless."
Only time will determine the accuracy of TLR's prediction and the impact of HB 274 in Beaumont, but for now at least, one could perhaps argue “loser pays” is doing exactly what it was intended to do: discourage frivolous litigation in the first place.
“In my opinion, it (HB 274) will discourage plaintiffs who are justifiably injured for fear they might have to play the defendant’s attorney’s fees,” said Langston Adams, an attorney at law and former judge at the Beaumont courthouse.
“I’m aware of the other arguments. We want to discourage frivolous lawsuits that hurt consumers and businesses, but the poor shouldn’t be discouraged from filing justifiable lawsuits either.”