S.B. No. 25
                                        AN ACT
    1-1  relating to exemplary damages in civil suits.
    1-3        SECTION 1.  Chapter 41, Civil Practice and Remedies Code, is
    1-4  amended to read as follows:
    1-5                    CHAPTER 41.  EXEMPLARY DAMAGES
    1-6        Sec. 41.001.  DEFINITIONS.  In this chapter:
    1-7              (1)  "Claimant" means a party, including a plaintiff,
    1-8  counterclaimant, cross-claimant, or third-party plaintiff, seeking
    1-9  recovery of exemplary damages.  In a cause of action in which a
   1-10  party seeks recovery of exemplary damages related to injury to
   1-11  another person, damage to the property of another person, death of
   1-12  another person, or other harm to another person, "claimant"
   1-13  includes both that other person and the party seeking recovery of
   1-14  exemplary damages.
   1-15              (2)  "Clear and convincing" means the measure or degree
   1-16  of proof that will produce in the mind of the trier of fact a firm
   1-17  belief or conviction as to the truth of the allegations sought to
   1-18  be established.
   1-19              (3)  "Defendant" means a party, including a
   1-20  counterdefendant, cross-defendant, or third-party defendant, from
   1-21  whom a claimant seeks relief with respect to exemplary damages.
   1-22              (4)  "Economic damages" means compensatory damages for
   1-23  pecuniary loss; the term does not include exemplary damages or
   1-24  damages for physical pain and mental anguish, loss of consortium,
    2-1  disfigurement, physical impairment, or loss of companionship and
    2-2  society.
    2-3              (5) <(3)>  "Exemplary damages" means any damages
    2-4  awarded as <an example to others, as> a penalty<,> or by way of
    2-5  punishment.  "Exemplary damages" includes punitive damages.
    2-6              (6) <(4)>  "Fraud" means fraud other than constructive
    2-7  fraud.
    2-8              (7) <(5)  "Gross negligence" means more than momentary
    2-9  thoughtlessness, inadvertence, or error of judgment.  It means such
   2-10  an entire want of care as to establish that the act or omission was
   2-11  the result of actual conscious indifference to the rights, safety,
   2-12  or welfare of the person affected.>
   2-13              <(6)>  "Malice" means:
   2-14                    (A)  a specific intent <conduct that is
   2-15  specifically intended> by the defendant to cause substantial injury
   2-16  to the claimant; or
   2-17                    (B)  an act or omission:
   2-18                          (i)  which when viewed objectively from the
   2-19  standpoint of the actor at the time of its occurrence involves an
   2-20  extreme degree of risk, considering the probability and magnitude
   2-21  of the potential harm to others; and
   2-22                          (ii)  of which the actor has actual,
   2-23  subjective awareness of the risk involved, but nevertheless
   2-24  proceeds with conscious indifference to the rights, safety, or
   2-25  welfare of others <that is carried out by the defendant with a
   2-26  flagrant disregard for the rights of others and with actual
   2-27  awareness on the part of the defendant that the act  will, in
    3-1  reasonable probability, result in human death, great bodily  harm,
    3-2  or property damage>.
    3-3        Sec. 41.002.  APPLICABILITY.  (a)  This chapter applies to
    3-4  any <an> action in which a claimant seeks exemplary damages
    3-5  relating to a cause of action <as defined by Section 33.001>.
    3-6        (b)  This chapter establishes the maximum exemplary damages
    3-7  that may be awarded in an action subject to this chapter, including
    3-8  an action for which exemplary damages are awarded under another law
    3-9  of this state.  This chapter does not apply to the extent another
   3-10  law establishes a lower maximum amount of exemplary damages for a
   3-11  particular claim<:>
   3-12              <(1)  an action brought under the Deceptive Trade
   3-13  Practices-Consumer Protection Act (Subchapter E, Chapter 17,
   3-14  Business & Commerce Code) except as specifically provided in
   3-15  Section 17.50 of that Act;>
   3-16              <(2)  an action brought under Chapter 21, Insurance
   3-17  Code;>
   3-18              <(3)  an action brought under the workers' compensation
   3-19  laws of this state (Article 8306 et seq., Revised Statutes);>
   3-20              <(4)  an action to recover exemplary damages against an
   3-21  employer by the employee's beneficiaries in a death action arising
   3-22  out of the course and scope of employment where the employer is a
   3-23  subscriber under the workers' compensation laws of this state
   3-24  (Article 8306 et seq., Revised Statutes);>
   3-25              <(5)  an action brought under Chapter 246, Acts of the
   3-26  63rd Legislature, Regular Session, 1973, Home Solicitation
   3-27  Transactions (Article 5069-13.01 et seq., Vernon's Texas Civil
    4-1  Statutes);>
    4-2              <(6)  an action brought under Chapter 547, Acts of the
    4-3  63rd Legislature, Regular Session, 1973, Debt Collection Practices
    4-4  (Article 5069-11.01 et seq., Vernon's Texas Civil Statutes);>
    4-5              <(7)  an action brought under Chapter 54, 91, or 92,
    4-6  Property Code;>
    4-7              <(8)  an action brought under the Texas Manufactured
    4-8  Housing Standards Act (Article 5221f, Vernon's Texas Civil
    4-9  Statutes);>
   4-10              <(9)  an action brought under the Texas Motor Vehicle
   4-11  Commission Code (Article 4413(36), Vernon's Texas Civil Statutes);>
   4-12              <(10)  an action brought under the Texas Proprietary
   4-13  School Act, Chapter 32, Education Code;>
   4-14              <(11)  an action brought under Section 9.507 or Section
   4-15  27.01, Business & Commerce Code;>
   4-16              <(12)  an action brought under Chapter 36, Family Code;>
   4-17              <(13)  an action brought under the Health Spa Act
   4-18  (Article 5221l, Vernon's Texas Civil Statutes);>
   4-19              <(14)  an action brought under the Business Opportunity
   4-20  Act (Article 5069-16.01 et seq., Vernon's Texas Civil Statutes); or>
   4-21              <(15)  an action brought under the Texas Timeshare Act
   4-22  (Article 6573c, Vernon's Texas Civil Statutes)>.
   4-23        (c)  Except as provided by Subsections (b) and (d), in <In>
   4-24  an action to which this chapter applies, the provisions of this
   4-25  chapter prevail over all other law to the extent of any conflict.
   4-26        (d)  Notwithstanding any provision to the contrary, this
   4-27  chapter does not apply to Section 15.21, Business & Commerce Code
    5-1  (Texas Free Enterprise and Antitrust Act of 1983), an action
    5-2  brought under the Deceptive Trade Practices-Consumer Protection Act
    5-3  (Subchapter E, Chapter 17, Business & Commerce Code) except as
    5-4  specifically provided in Section 17.50 of that Act, or an action
    5-5  brought under Chapter 21, Insurance Code.
    5-7  (a)  Except as provided by Subsection (c), exemplary <Exemplary>
    5-8  damages may be awarded only if the claimant proves by clear and
    5-9  convincing evidence that the <personal injury, property damage,
   5-10  death, or other> harm with respect to which the claimant seeks
   5-11  recovery of exemplary damages results from:
   5-12              (1)  fraud;
   5-13              (2)  malice; or
   5-14              (3)  wilful act or omission or gross neglect in
   5-15  wrongful death actions brought by or on behalf of a surviving
   5-16  spouse or heirs of the decedent's body, under a statute enacted
   5-17  pursuant to Section 26, Article XVI, Texas Constitution.  In such
   5-18  cases, the definition of "gross neglect" in the instruction
   5-19  submitted to the jury shall be the definition stated in Section
   5-20  41.001(7)(B) <gross negligence>.
   5-21        (b)  The claimant must prove by clear and convincing evidence
   5-22  the elements of exemplary damages as provided by this section
   5-23  <Subsection (a)(1), (a)(2), or (a)(3)>.  This burden of proof may
   5-24  not be shifted to the defendant or satisfied by evidence of
   5-25  ordinary negligence, bad faith, or a deceptive trade practice.
   5-26        (c)  If the claimant relies on a statute establishing a cause
   5-27  of action and authorizing exemplary damages in specified
    6-1  circumstances or in conjunction with a specified culpable mental
    6-2  state, exemplary damages may be awarded only if the claimant proves
    6-3  by clear and convincing evidence that the damages result from the
    6-4  specified circumstances or culpable mental state.
    6-5        Sec. 41.004.  FACTORS PRECLUDING RECOVERY.  (a)  Except as
    6-6  provided by Subsection (b), exemplary <Exemplary> damages may be
    6-7  awarded only if damages other than nominal damages are awarded.
    6-8        (b)  A claimant may recover exemplary damages, even if only
    6-9  nominal damages are awarded, if the claimant establishes by clear
   6-10  and convincing evidence that the harm with respect to which the
   6-11  claimant seeks recovery of exemplary damages results from malice as
   6-12  defined in Section 41.001(7)(A).  Exemplary damages may not be
   6-13  awarded to a claimant who elects to have his recovery multiplied
   6-14  under another statute.
   6-15        Sec. 41.005.  HARM RESULTING FROM CRIMINAL ACT.  (a)  In an
   6-16  action arising from harm resulting from an assault, theft, or other
   6-17  criminal act, a court may not award exemplary damages against a
   6-18  defendant because of the criminal act of another.
   6-19        (b)  The exemption provided by Subsection (a) does not apply
   6-20  if:
   6-21              (1)  the criminal act was committed by an employee of
   6-22  the defendant;
   6-23              (2)  the defendant is criminally responsible as a party
   6-24  to  the criminal act under the provisions of Chapter 7, Penal Code;
   6-25              (3)  the criminal act occurred at a location where, at
   6-26  the time of the criminal act, the defendant was maintaining a
   6-27  common nuisance under the provisions of Chapter 125, Civil Practice
    7-1  and Remedies Code, and had not made reasonable attempts to abate
    7-2  the nuisance; or
    7-3              (4)  the criminal act resulted from the defendant's
    7-4  intentional or knowing violation of a statutory duty under
    7-5  Subchapter D, Chapter 92, Property Code, and the criminal act
    7-6  occurred after the statutory deadline for compliance with that
    7-7  duty.
    7-8        (c)  In an action arising out of a criminal act committed by
    7-9  an employee, the employer may be liable for punitive damages but
   7-10  only if:
   7-11              (1)  the principal authorized the doing and the manner
   7-12  of the act;
   7-13              (2)  the agent was unfit and the principal acted with
   7-14  malice in employing or retaining him;
   7-15              (3)  the agent was employed in a managerial capacity
   7-16  and was acting in the scope of employment; or
   7-17              (4)  the employer or a manager of the employer ratified
   7-18  or approved the act.
   7-19        Sec. 41.006.  AWARD SPECIFIC TO DEFENDANT.  In any action in
   7-20  which there are two or more defendants, an award of exemplary
   7-21  damages must be specific as to a defendant, and each defendant is
   7-22  liable only for the amount of the award made against that
   7-23  defendant.
   7-24        Sec. 41.007 <41.006>.  PREJUDGMENT INTEREST.  Prejudgment
   7-25  interest may not be assessed or recovered on an award of exemplary
   7-26  damages.
   7-27        Sec. 41.008 <41.007>.  LIMITATION ON AMOUNT OF RECOVERY.
    8-1  (a)  In an action in which a claimant seeks recovery of exemplary
    8-2  damages, the trier of fact shall determine the amount of economic
    8-3  damages separately from the amount of other compensatory damages.
    8-4        (b)  Exemplary <Except as provided by Section 41.008,
    8-5  exemplary> damages awarded against a defendant may not exceed an
    8-6  amount equal to the greater of:
    8-7              (1)(A)  two <four> times the amount of economic
    8-8  <actual> damages; plus
    8-9                    (B)  an amount equal to any noneconomic damages
   8-10  found by the jury, not to exceed $750,000; or
   8-11              (2)  $200,000<, whichever is greater>.
   8-12        (c)  Subsection (b) does not apply to a cause of action
   8-13  against a defendant from whom a plaintiff seeks recovery of
   8-14  exemplary damages based on conduct described as a felony in the
   8-15  following sections of the Penal Code if, except for Sections 49.07
   8-16  and 49.08, the conduct was committed knowingly or intentionally:
   8-17              (1)  Section 19.02 (murder);
   8-18              (2)  Section 19.03 (capital murder);
   8-19              (3)  Section 20.04 (aggravated kidnapping);
   8-20              (4)  Section 22.02 (aggravated assault);
   8-21              (5)  Section 22.011 (sexual assault);
   8-22              (6)  Section 22.021 (aggravated sexual assault);
   8-23              (7)  Section 22.04 (injury to a child, elderly
   8-24  individual, or disabled individual);
   8-25              (8)  Section 32.21 (forgery);
   8-26              (9)  Section 32.43 (commercial bribery);
   8-27              (10)  Section 32.45 (misapplication of fiduciary
    9-1  property or property of financial institution);
    9-2              (11)  Section 32.46 (securing execution of document by
    9-3  deception);
    9-4              (12)  Section 32.47 (fraudulent destruction, removal,
    9-5  or concealment of writing);
    9-6              (13)  Chapter 31 (theft) the punishment level for which
    9-7  is a felony of the third degree or higher;
    9-8              (14)  Section 49.07 (intoxication assault); or
    9-9              (15)  Section 49.08 (intoxication manslaughter).
   9-10        (d)  In this section, "intentionally" and "knowingly" have
   9-11  the same meanings assigned those terms in Sections 6.03(a) and (b),
   9-12  Penal Code.
   9-13        (e)  The provisions of Subsections (a) and (b) may not be
   9-14  made known to a jury by any means, including voir dire,
   9-15  introduction into evidence, argument, or instruction.
   9-16        Sec. 41.009.  BIFURCATED TRIAL.  (a)  On motion by a
   9-17  defendant, the court shall provide for a bifurcated trial under
   9-18  this section.  A motion under this subsection shall be made prior
   9-19  to voir dire examination of the jury or at a time specified by a
   9-20  pretrial court order issued under Rule 166, Texas Rules of Civil
   9-21  Procedure.
   9-22        (b)  In an action with more than one defendant, the court
   9-23  shall provide for a bifurcated trial on motion of any defendant.
   9-24        (c)  In the first phase of a bifurcated trial, the trier of
   9-25  fact shall determine:
   9-26              (1)  liability for compensatory and exemplary damages;
   9-27  and
   10-1              (2)  the amount of compensatory damages.
   10-2        (d)  If liability for exemplary damages is established during
   10-3  the first phase of a bifurcated trial, the trier of fact shall, in
   10-4  the second phase of the trial, determine the amount of exemplary
   10-5  damages to be awarded, if any.
   10-6        Sec. 41.010.  CONSIDERATIONS IN MAKING AWARD.  (a)  Before
   10-7  making an award of exemplary damages, the trier of fact shall
   10-8  consider the definition and purposes of exemplary damages as
   10-9  provided by Section 41.001.
  10-10        (b)  The determination of whether to award exemplary damages
  10-11  and the amount of exemplary damages to be awarded is within the
  10-12  discretion of the trier of fact.
  10-14  DAMAGES.  (a)  In determining the amount of exemplary damages, the
  10-15  trier of fact shall consider evidence, if any, relating to:
  10-16              (1)  the nature of the wrong;
  10-17              (2)  the character of the conduct involved;
  10-18              (3)  the degree of culpability of the wrongdoer;
  10-19              (4)  the situation and sensibilities of the parties
  10-20  concerned;
  10-21              (5)  the extent to which such conduct offends a public
  10-22  sense of justice and propriety; and
  10-23              (6)  the net worth of the defendant.
  10-24        (b)  Evidence that is relevant only to the amount of
  10-25  exemplary damages that may be awarded is not admissible during the
  10-26  first phase of a bifurcated trial.
  10-27        Sec. 41.012.  JURY INSTRUCTIONS.  In a trial to a jury, the
   11-1  court shall instruct the jury with regard to Sections 41.001,
   11-2  41.003, 41.010, and 41.011.
   11-3        Sec. 41.013.  JUDICIAL REVIEW OF AWARD.  (a)  Except as
   11-4  provided for in Subsection (b), an appellate court that reviews the
   11-5  evidence with respect to a finding by a trier of fact concerning
   11-6  liability for exemplary damages or with respect to the amount of
   11-7  exemplary damages awarded shall state, in a written opinion, the
   11-8  court's reasons for upholding or disturbing the finding or award.
   11-9  The written opinion shall address the evidence or lack of evidence
  11-10  with specificity, as it relates to the liability for or amount of
  11-11  exemplary damages, in light of the requirements of this chapter.
  11-12        (b)  This section does not apply to the supreme court with
  11-13  respect to its consideration of an application for writ of error.
  11-14        <Sec. 41.008.  EXCEPTION.  Section 41.007 does not apply to
  11-15  exemplary damages resulting from malice as defined by Section
  11-16  41.001(6)(A) or to an intentional tort.>
  11-17        <Sec. 41.009.  PROVISIONS NOT TO BE MADE KNOWN TO JURY.  The
  11-18  provisions of Section 41.007 may not be made known to the jury
  11-19  through any means, including voir dire, introduction into evidence,
  11-20  or instruction.>
  11-21        SECTION 2.  This Act takes effect September 1, 1995, and
  11-22  applies only to a cause of action that accrues on or after that
  11-23  date.  A suit filed before the effective date of this Act is
  11-24  governed by the law applicable to the claim that existed
  11-25  immediately before the effective date of this Act, and that law is
  11-26  continued in effect for that purpose.
  11-27        SECTION 3.  The importance of this legislation and the
   12-1  crowded condition of the calendars in both houses create an
   12-2  emergency and an imperative public necessity that the
   12-3  constitutional rule requiring bills to be read on three several
   12-4  days in each house be suspended, and this rule is hereby suspended.