BILL ANALYSIS S.B. 28 By: Sibley (Junell) 05-01-95 Committee Report (Amended) BACKGROUND Chapter 33, Civil Practice and Remedies Code, sets out the application of joint and several liability which governs how percentages of liability in a civil action are determined and attributed to defendants in a civil lawsuit. The doctrine of joint and several liability applies when more than one defendant tortiously contributed to a plaintiff's injuries. The joint and several doctrine allows plaintiffs to recover the full amount of the damages arising from injury from any one or any combination of the defendants who tortiously contributed to the injury. The plaintiff cannot recover in the aggregate more than the full amount of the damages, nor can a defendant be made part of any recovery unless that defendant is found fully liable by the judge or jury. A defendant is held liable for harm if the fact finder determines that defendant's wrongful conduct was an actual and proximate cause of the entire injury. That is, "but for" the defendant's action, the injury would not have occurred. After such a finding is made, an allocation may be made to each person who has similarly caused the plaintiff's entire injury. The plaintiff is entitled to one recovery for the single injury. A plaintiff is permitted to collect one judgment from either defendant. The culpable defendants are permitted to exert rights against one another for financial contribution to that recovery. Under current law, a business may be held responsible not only for its own conduct, but also for someone else's. PURPOSE S.B. 28 sets forth the procedure for recovering damages in certain civil actions and limits the conditions under which a court is authorized to find a defendant jointly and severally liable for a claimant's damages. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 33, Civil Practice and Remedies Code, as follows: CHAPTER 33. New heading: PROPORTIONATE RESPONSIBILITY SUBCHAPTER A. New heading: PROPORTIONATE RESPONSIBILITY Sec. 33.001. New heading: PROPORTIONATE RESPONSIBILITY. Created from existing Section 33.001. Prohibits a claimant from recovering damages if the claimant's percentage of responsibility is greater than 50 percent. Deletes Subsections (b) and (c) to eliminate the distinction between claimant's ability to recover damages for negligence, personal injury, and other forms of harm. Sec. 33.002. APPLICABILITY. (a) Provides that this chapter applies to any cause of action based on a tort in which a defendant, settling person, or responsible third party is found responsible for a percentage of the harm for which relief is sought, except as provided by Subsections (b) and (c). (b) Requires a defendant who, with specific intent to do harm to others, acts in concert with another person to engage in the conduct described in the following sections of the Penal Code, to be jointly and severally liable with such other person for the damages legally recoverable by the claimant that were proximately caused by such conduct: Sections 19.02 (murder), 19.03 (capital murder), 20.04 (aggravated kidnapping), 22.02 (aggravated assault), 22.011 (sexual assault), 22.021 (aggravated sexual assault), 22.04 (injury to child, elderly individual or disabled individual), 32.21 (forgery), 32.43 (commercial bribery), 32.45 (misapplication of fiduciary property or property of a financial institution), 32.46 (securing execution of a document by deception), 32.47 (fraudulent destruction, removal, or concealment of writing), or conduct described in Chapter 31 in terms of a third degree felony or higher. (c) Provides that this chapter does not apply to (1) an action to collect workers' compensation benefits under the workers' compensation laws of this state, or actions against an employer for exemplary damages arising out of the death of an employee or (2) a claim for exemplary damages included in an action to which this chapter otherwise applies. Deletes a provision providing that this Act does not apply to an action brought under Chapter 17E, Business and Commerce Code or an action brought under Chapter 21, Insurance Code. (d) Prohibits Subsection (b) from applying unless the claimant proves the defendant acted or omitted to act with intent to do harm, as defined in this section, unless otherwise provided for in certain sections of the Penal Code. (e) Provides that a person acts with intent to do harm with respect to the nature and result of the person's conduct when it is the person's conscious effort or desire to engage in such conduct for the purpose of doing substantial harm to others. (f) Prohibits anything herein from requiring a submission to the jury of a question regarding conduct by any party absent sufficient evidence to support such submission. (g) Prohibits making the jury aware through voir dire, introduction into evidence, instruction, or any other means, that the conduct to which Subsection (b) applies is defined by the Penal Code. Sec. 33.003. New heading: DETERMINATION OF PERCENTAGE OF RESPONSIBILITY. Adds each responsible third party who has been joined under Section 33.004 to the list of persons for whom the trier of fact is required to determine the percentage of responsibility, stated in whole numbers, for causing or contributing to cause the harm for which damages are sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, or by other conduct or activity that violates an applicable legal standard. Sec. 33.004. JOINDER OF RESPONSIBLE THIRD PARTIES. (a) Authorizes a defendant to seek to join a responsible third party who has not been sued by the claimant prior to the expiration of limitations on the claimant's claim for damages against the defendant. (b) Prohibits anything in this section from affecting the third party practice as previously recognized in the rules and statutes of this state with regard to the assertion by a defendant of rights to contribution or indemnity. (c) Prohibits the joinder of a seller eligible for indemnity under Section 82.002, Civil Practice and Remedies Code, as a responsible third party unless there is alleged against the seller a claim for relief based on the seller's negligence, intentional misconduct or other act or omission for which the seller is independently liable to the claimant. (d) Authorizes a third party claim by a defendant to be filed, even though the claimant's action against the third party would be barred by limitations, if the third party claim is filed on or before 30 days after the date the defendant's answer is required to be filed. This section shall not apply if the limitations period governing the claimant's action against the defendant joining the third party is longer than the limitations period governing the claimant's action against the responsible third party. (e) Authorizes a claimant to join a responsible third party, even though such a joinder would otherwise be barred by limitations, if the claimant seeks to join the responsible third party within 60 days after a third party claim is filed. SUBCHAPTER B. CONTRIBUTION Sec. 33.011. DEFINITIONS. Adds definitions of "responsible third party" and "toxic tort" and redefines "percentage of responsibility." Provides that the term "responsible third party" does not include an employer who maintained workers' compensation insurance coverage at the time of the occurrence made the basis of claimant's suit, a debtor in bankruptcy proceedings, or a person or entity against whom the claimant's claim has been discharged in bankruptcy. Sec. 33.012. AMOUNT OF RECOVERY. Prohibits this section from applying to benefits paid by or on behalf of an employer to an employee pursuant to workers' compensation insurance coverage in effect at the time of the occurrence made the basis of claimant's suit. Sec. 33.013. AMOUNT OF LIABILITY. (a) Makes no changes. (b) Provides that each liable defendant is jointly and severally liable for the damages recoverable by the claimant with respect to a cause of action if the percentage of responsibility attributed to the defendant is greater than 50, rather than 20 percent. Deletes a provision providing that a liable defendant is jointly and severally liable for the damages recoverable by the claimant if, only for a negligence action, the percentage of responsibility attributed to the defendant is greater than the percentage of responsibility attributed to the claimant. (c) Provides that each liable defendant is jointly and severally liable for the damages recoverable by the claimant under Section 33.012 with respect to a cause of action if the percentage of responsibility attributed to the defendant is greater than 20, rather than 10 percent and the claimant's personal injury, property damage, death, or other harm is caused by any hazardous or harmful substance as described in Subsection 33.011(7) or the claimant's personal injury property damage, death, or other harm resulted from a toxic tort. (d) Provides that this section does not create a cause of action. Sec. 33.014. ELECTION OF CREDIT FOR SETTLEMENTS. Makes no changes. Sec. 33.015. CONTRIBUTION. Makes no changes. Sec. 33.016. CLAIM AGAINST CONTRIBUTION DEFENDANT. Makes no changes. Sec. 33.017. PRESERVATION OF EXISTING RIGHTS OF INDEMNITY. Prohibits anything in this Act from being construed to affect any rights of indemnity granted to a seller eligible for indemnity by any statute or from affecting rights of indemnity granted by contract or at common law. Requires the rights of indemnification to prevail over the provisions of this chapter to the extent of any conflict between this chapter or any right to indemnification granted by any statute, contract, or common law. SECTION 2. Effective date: September 1, 1995. Makes application of this Act prospective. SECTION 3. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1 strikes Section 33.013(c), Civil Practice and Remedies Code, and replaces it with a new Section 33.013(c) which provides that, notwithstanding Subsections (a) and (b), each liable defendant is, in addition to his liability under Subsection (a), jointly and severally liable with respect to a cause of action if: the percentage of responsibility attributed to the defendant is greater than 20 percent; or the claimant's personal injury, property damage, death, or other harm is caused by discharging hazardous substances; or the claimant's personal injury, property damage, death, or other harm resulted from a toxic tort. SUMMARY OF COMMITTEE ACTION Pursuant to public notice posted on March 30, 1995, SB 28 was considered by the Committee on State Affairs in a public hearing on April 4, 1995. The Chair laid out SB 28 and recognized Rep. Junell to explain the bill. The following persons testified in favor of the bill: Larry York representing Texans for Lawsuit Reform; Shannon Ratliff representing the Texas Civil Justice League; Albert G. Brown representing himself; Ronnie Rudd representing the Texas Society of Certified Public Accountants; Mike Gallagher representing himself; W. David Bayless Sr. representing himself; Harry Robards representing himself; Reid Garrey representing Texans for Lawsuit Reform; Frank Cross representing himself; Bill Nunley representing Texas Agriculture Aviation Association; Ted B. Roberts representing Texas Association of Business and Chambers of Commerce; Richard L. Hardcastle representing Texas Agricultural Aviation Association; Kathleen M. Kerr, PhD. representing the Texas Chemical Council; Clint Murchison representing himself; Douglas N. Gordon representing Hoechst Celanese Corporation; Frederick E. Rowe, Jr. representing himself; Daniel D. Clinton Jr. representing the Consultant Engineers Council of Texas/Texas Society of Professional Engineers; and Paula T. Saizan representing the Texas Society of CPAs. The following persons testified against the bill: Tom Smitty Smith representing Public Citizen's Members; Bill Lewis representing Mothers Against Drunk Driving; Dwayne "Sparky" Anderson representing Clean Water Action; Bill Whitehurst representing Texas Trial Lawyers Association; Robert B. Kizer representing himself; Dan Lambe representing himself; and Rick Levy representing TX AFL-CIO. The Chair left SB 28 pending. SB 28 was considered by the Committee on State Affairs in a formal meeting on May 1, 1995. The Chair laid out SB 28. The committee considered one amendment to the bill. The amendment was adopted by a record vote of 9 ayes, 6 nays, 0 pnv, and 0 absent. The bill was reported favorably as amended with the recommendation that it do pass and be printed, by a record vote of 15 ayes, 0 nay, 0 pnv, and 0 absent.