BILL ANALYSIS



H.B. 1565
By: Hunter
3-8-95
Committee Report (Unamended)


BACKGROUND

According to Rule 13 of the Texas State Rule of Court general
rules, attorneys or parties who shall bring a fictitious suit as an
experiment to get an opinion of the court, or who shall file any
fictitious pleading in a cause for such a purpose, or shall make
statements in pleading which they know to be groundless and false,
for the purpose of securing a delay of the trial of the cause,
shall be held guilty of a contempt. If a pleading, motion, or other
paper is signed in violation of this rule, the court, upon motion
or upon its own initiative, after notice and hearing, shall impose
an appropriate sanction.


PURPOSE:

     This bill would sanction and punish parties bringing frivolous
civil lawsuits in Texas state courts similar to those in Rule 11 of
the Federal Rule of Civil Procedure.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION-BY-SECTION:

     SECTION 1. Amends Subtitle A, Title 2, Civil Practices and
Remedies Code, is amended by adding Chapter 10 as follows:

     CHAPTER 10. SANCTIONS FOR FRIVOLOUS PLEADINGS AND MOTIONS.
     Sect. 10.001. SIGNING OF PLEADINGS AND MOTIONS. The signing of
a pleading or motion as required by the Texas Rules of Civil
Procedure constitute a certificate by the signatory (attorney or
unrepresented party) that to the signatory's best knowledge,
information, and belief, formed after reasonable inquiry:

     (1) the pleading or motion (civil suit) is not being presented
     for any improper purpose, including to harass or to cause
     unnecessary delay or needless increase in the cost of
     litigation;

     (2) each claim, defense, or other legal contention in the
     pleading or motion is warranted by existing law or by a
     nonfrivolous argument for the extension, modification, or
     reversal of existing law or the establishment of new law;

     (3) each allegation or other factual contention in the
     pleading or motion has evidentiary support or, for a
     specifically identified allegation or factual contention, is
     likely to have evidentiary support after a reasonable
     opportunity for further investigation or discovery; and

     (4) each denial in the pleading or motion of a factual
     contention is warranted on the evidence on the evidence or,
     for a specifically identified denial, is reasonably based on
     a lack of information or belief.

     Sect. 10.002. MOTION FOR SANCTIONS. 
     (a) A party may make a motion for sanctions describing the
specific conduct violating Sect. 10.001.

     (b) A judge on his or her own initiative may enter an order
describing the conduct that violates Sect. 10.001 and direct the
alleged violator to show cause why the conduct is not a violation.

     (c) The court may award to a party prevailing on a motion
under this section the reasonable expenses and attorney's fees
incurred in presenting or opposing the motion.

     Sect. 10.003. NOTICE AND OPPORTUNITY TO RESPOND. The court
must give a party who is the subject of a motion for sanctions
under Sect. 10.002 notice of the allegations and a reasonable
opportunity to respond to the allegations.

     (a) A court that determines that a person has signed a
pleading or motion in violation of Sect. 10.001 may impose a
sanction on the person, a party represented by the person, or both.

     (b) The sanction must be limited to what is sufficient to
deter repetition of the conduct or comparable conduct by others
similar situated.

     (c) A sanction may include:

     (1) a directive to the violator to perform, or refrain from
     performing, an act:
     (2) an order to pay a penalty into court;
     (3) an order to pay to other party the amount of the
     reasonable expenses incurred by the other party because of the
     filing of the pleading or motion, including reasonable
     attorney's fees.

     (d) The court may not award monetary sanctions against a
represented party for a violation of Sect. 10.001(2).

     (e) The court may not award monetary sanctions on its own
initiative unless the court issues its order to show cause before
a voluntary dismissal or settlement of the claims made by or
against the party or the party's attorney who is to be sanctioned.

     SECT. 10.005. ORDER. A court shall describe in an order
imposing a sanction under this chapter the conduct the court has
determined violated Sect. 10.001 and explain the basis for the
sanction imposed.

     SECT. 10.006. CONFLICT. Notwithstanding Sect. 22.004,
Government Code, the supreme court may not amend or adopt rules in
conflict with this chapter.

     SECTION 2. Effective Date - September 1, 1995. Applies only to
a pleading or motion in a suit commenced on or after that date.

     SECTION 3. Emergency Clause.

SUMMARY OF COMMITTEE ACTION

House Bill 1565 was considered by the House Committee on Civil
Practices in a public hearing on March 8, 1995. The following
people testified in support of the bill: Joseph V. "Joe" Crawford,
representing himself and the Texas Association of Defense Counsel
and George S. Christian, representing the Texas Civil Justice
League. No one testified in opposition to the bill. No one
testified neutrally on the bill. The bill was referred to a
subcommittee consisting of Representatives Hunter (Chair), Hilbert
and Hartnett. After being recalled from subcommittee, the bill was
considered by the committee in a public hearing on March 15, 1995.
The bill was reported favorably without amendment with the
recommendation that it do pass and be printed, by a record vote of
six ayes, zero nays and zero present not voting with three absent.