Lawsuit Explosion Threatens Texas Economy

The SE Texas Record Apr. 10, 2007, 8:00am

By William H. Hanson

The recent opening of the Berth of Bayport Container and Cruise Terminal � the most technologically advanced container terminal on the U.S. Gulf Coast --underscores the key role our ports play in fueling the Texas economy.

Nearly five hundred million tons of cargo passes through hundreds of ports located along a thousand miles of Texas channel, resulting in $178 billion in business sales annually and nearly a million jobs for Texans. Our Texas ports handle 20percent of all the marine traffic in the country.

Unfortunately, the strength of this vital part of our state's economy is currently threatened by an explosion of lawsuits against dredging companies in four South Texas counties.

Texas has no natural deep water ports, and therefore dredging of our ports and waterways is essential to maintaining and improving these intersections of global commerce.The huge increase in lawsuits against dredgers who hire Texas workers and operate in Texas waters is threatening to put small dredgers out of business and forcing large dredgers to include large liability premiums into their bids on Texas projects.

The Texas economy has benefited enormously from recent reforms that have helped restore balanced to our civil courts. One of those reforms requires lawsuits against businesses to be brought in the county where the alleged injury occurred or in the defendant's principal place of business.

But a dangerous loophole in Texas law allows maritime workers to file a state lawsuit in the county where he or she lives. This exception has touched off an explosion of lawsuits in just four South Texas counties � Starr, Hidalgo, Cameron, and Zapata.

In a single year, 98 of the 170 personal injury lawsuits filed against dredgers in the entire nation were filed in those four counties -- fully 58 percent of the country's total. These lawsuits are filed almost exclusively by a handful of lawyers from Houston and Galveston that are aggressively using the loophole to file lawsuits in friendly courts.

An attorney from one of those firms actually stated in a speech last year that he files cases in the Rio Grande Valley because he can get a financial judgment that is 60 to 70 percent higher than he would get if he filed the same case in Houston or Galveston.

He went onto to say that he didn't even have to prove that the company being sued had done anything wrong. He advised defense lawyers to "understand the situation, where you are in the venue and pay the case. Just pay the case."

These lawsuits are doing great damage to the Texas maritime industry, our economy and our job base in Texas. The increased cost of doing business in Texas must be factored into every bid submitted on dredging contracts.

Already, we are seeing the cancellation of needed dredging projects in Texas, creating potential logjams for maritime commerce. A coalition of groups statewide are working with the State Legislature this session to close the venue loophole and assure that cases against dredgers in Texas courts are subject to the same sound principles embedded in most state and federal venue statutes.Houston Representative Corbin Van Arsdale is sponsoring a bill, HB 1602 to accomplish this goal.

Our ports have made Texas a global market hub and they keep us on the cutting edge of international competitiveness. The Port of Houston is the largest in the nation and the 10th largest in the world and our rate of expansion has been tremendous. We cannot allow this critical economic engine to be endangered by lawsuit abuse.

William H. Hanson is Chairman of Maritime Jobs for Texas.

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