BILL ANALYSIS



S.B. 31
By: Lucio (Seidlits)
April 17, 1995
Committee Report (Unamended)


BACKGROUND

The criteria and procedures for assessing sanctions against
frivolous lawsuits in Texas are contained in Rule 13 of the Texas
Rules of Civil Procedure. Some defendants argue that Rule 13 does
not effectively address the problem of lawsuits that are filed
without merit only to coerce the defendant into an early
settlement.

PURPOSE

As proposed, S.B. 31 provides for the assessment of attorney's
fees, costs, and damages for certain frivolous lawsuits and
defenses.

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 Title 2A, Civil Practice and Remedies Code, by
adding Chapter 10, as follows:

      CHAPTER 10. CERTAIN FRIVOLOUS LAWSUITS AND DEFENSES

     Sec. 10.001. DEFINITION. Defines "litigant."
     
     Sec. 10.002. APPLICABILITY. Provides that this chapter applies
     to any civil action unless applicable law provides for an
     assessment of attorney's fees, costs, and damages in a greater
     amount than would be assessed by this chapter.
     
     Sec. 10.003. ASSESSMENT OF ATTORNEY'S FEES, COSTS, AND DAMAGES
     FOR FRIVOLOUS SUIT OR DEFENSE. (a) Sets forth guidelines under
     which a court is required to assess attorney's fees and costs
     against a litigant.
     
     (b) Authorizes the court, upon making the finding required
       by Subsection (a), to award additional damages for
       inconvenience, harassment, and any out-of pocket expense
       incurred.
       
       (c) Authorizes a party to make a motion at any time while
       proceedings are pending.
       
       (d) Prohibits attorney's fees, costs, and damages from being
       awarded for the filing of a general denial under Rule 92,
       Texas Rules of Civil Procedure.
       
       (e) Prohibits attorney's fees, costs, and damages from being
       awarded if the court determines that a litigant has asserted
       a claim or defense to establish a new theory of law.
     Sec. 10.004. FACTORS IN ASSESSING ATTORNEY'S FEES, COSTS, AND
     DAMAGES. Sets forth considerations for the court in
     determining whether to assess attorney's fees, costs, and
     damages against a litigant and the amount to be assessed.
     
     Sec. 10.005. NOTICE AND HEARING; NOTICE REQUIREMENTS.
     Prohibits a court from assessing attorney's fees, costs, and
     damages to a litigant unless the court gives the litigant
     notice, an opportunity to respond, and a hearing. Requires
     notice to be given in accordance with the Texas Rules of Civil
     Procedure.
     
     Sec. 10.006. STATEMENT OF REASONS FOR AWARD. Requires a court
     that assesses attorney's fees, costs, and damages to state in
     writing the reasons for the assessment.
     
     Sec. 10.007. METHOD OF ASSESSMENT. Provides that attorney's
     fees, costs, or damages assessed are in addition to any other
     fees, costs, or damages assessed by the court. Authorizes a
     court to assess attorney's fees, costs, or damages directly
     against a litigant or to include the fees, costs, or damages
     as a part of its judgment. Authorizes a court to allocate
     attorney's fees, costs, or damages to more than one litigant.
     
     Sec. 10.008. EXCEPTION FOR PARTY APPEARING WITHOUT ATTORNEY. 
     Prohibits a court from assessing attorney's fees, costs, or
     damages against a party who is not represented by an attorney
     unless the court finds that the party knew that action brought
     or defended by the party was frivolous, groundless, or
     vexatious. Provides that this section does not apply to an
     attorney.
     
     Sec. 10.009. APPROVAL OF CERTAIN STIPULATIONS. Authorizes a
     court to approve filed or oral stipulations agreeing to an
     award, or no award, of attorney's fees, costs, or damages. 
     Provides that the stipulation may not be withdrawn and remains
     effective throughout the litigation, unless the court makes
     certain determinations about the stipulation.
     
     Sec. 10.010. MANDATORY APPELLATE REVIEW. Requires the court
     with appellate jurisdiction to review certain court
     determinations.
     
SECTION 2.     Effective date: September 1, 1995.
           Makes application of this Act prospective.

SECTION 3. Emergency clause.

SUMMARY OF COMMITTEE ACTION

Pursuant to public notice posted on February 27, 1995, SB 31 was
considered by the Committee on State Affairs in a public hearing on
March 6, 1995.  The Chair laid out SB 31 and explained the bill. 
The following persons testified in favor of the bill: Bill
Whitehurst representing Texas Trial Lawyers Association, Richard
Weekly representing Texans for Lawsuit Reform.  The following
persons provided neutral testimony on the bill: Rep. Joe Nixon
representing himself,  and Joseph V. Crawford representing the
Texas Association of Defense Council.  The Chair left SB 31
pending.  SB 31 was considered by the Committee on State Affairs in
a public hearing on March 13, 1995.  The Chair laid out SB 31.  The
bill was reported favorably without amendment with the
recommendation that it do pass and be printed, by a record vote of
14 ayes, 0 nay, 0 pnv, 1 absent.