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.