S.B. No. 31 AN ACT 1-1 relating to the assessment of attorney's fees, costs, and damages 1-2 for certain frivolous lawsuits and defenses. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subtitle A, Title 2, Civil Practice and Remedies 1-5 Code, is amended by adding Chapter 10 to read as follows: 1-6 CHAPTER 10. SANCTIONS FOR FRIVOLOUS PLEADINGS AND MOTIONS 1-7 Sec. 10.001. SIGNING OF PLEADINGS AND MOTIONS. The signing 1-8 of a pleading or motion as required by the Texas Rules of Civil 1-9 Procedure constitutes a certificate by the signatory that to the 1-10 signatory's best knowledge, information, and belief, formed after 1-11 reasonable inquiry: 1-12 (1) the pleading or motion is not being presented for 1-13 any improper purpose, including to harass or to cause unnecessary 1-14 delay or needless increase in the cost of litigation; 1-15 (2) each claim, defense, or other legal contention in 1-16 the pleading or motion is warranted by existing law or by a 1-17 nonfrivolous argument for the extension, modification, or reversal 1-18 of existing law or the establishment of new law; 1-19 (3) each allegation or other factual contention in the 1-20 pleading or motion has evidentiary support or, for a specifically 1-21 identified allegation or factual contention, is likely to have 1-22 evidentiary support after a reasonable opportunity for further 1-23 investigation or discovery; and 1-24 (4) each denial in the pleading or motion of a factual 2-1 contention is warranted on the evidence or, for a specifically 2-2 identified denial, is reasonably based on a lack of information or 2-3 belief. 2-4 Sec. 10.002. MOTION FOR SANCTIONS. (a) A party may make a 2-5 motion for sanctions, describing the specific conduct violating 2-6 Section 10.001. 2-7 (b) The court on its own initiative may enter an order 2-8 describing the specific conduct that appears to violate Section 2-9 10.001 and direct the alleged violator to show cause why the 2-10 conduct has not violated that section. 2-11 (c) The court may award to a party prevailing on a motion 2-12 under this section the reasonable expenses and attorney's fees 2-13 incurred in presenting or opposing the motion, and if no due 2-14 diligence is shown the court may award to the prevailing party all 2-15 costs for inconvenience, harassment, and out-of-pocket expenses 2-16 incurred or caused by the subject litigation. 2-17 Sec. 10.003. NOTICE AND OPPORTUNITY TO RESPOND. The court 2-18 shall provide a party who is the subject of a motion for sanctions 2-19 under Section 10.002 notice of the allegations and a reasonable 2-20 opportunity to respond to the allegations. 2-21 Sec. 10.004. VIOLATION; SANCTION. (a) A court that 2-22 determines that a person has signed a pleading or motion in 2-23 violation of Section 10.001 may impose a sanction on the person, a 2-24 party represented by the person, or both. 2-25 (b) The sanction must be limited to what is sufficient to 2-26 deter repetition of the conduct or comparable conduct by others 2-27 similarly situated. 3-1 (c) A sanction may include any of the following: 3-2 (1) a directive to the violator to perform, or refrain 3-3 from performing, an act; 3-4 (2) an order to pay a penalty into court; and 3-5 (3) an order to pay to the other party the amount of 3-6 the reasonable expenses incurred by the other party because of the 3-7 filing of the pleading or motion, including reasonable attorney's 3-8 fees. 3-9 (d) The court may not award monetary sanctions against a 3-10 represented party for a violation of Section 10.001(2). 3-11 (e) The court may not award monetary sanctions on its own 3-12 initiative unless the court issues its order to show cause before a 3-13 voluntary dismissal or settlement of the claims made by or against 3-14 the party or the party's attorney who is to be sanctioned. 3-15 (f) The filing of a general denial under Rule 92, Texas 3-16 Rules of Civil Procedure, shall not be deemed a violation of this 3-17 chapter. 3-18 Sec. 10.005. ORDER. A court shall describe in an order 3-19 imposing a sanction under this chapter the conduct the court has 3-20 determined violated Section 10.001 and explain the basis for the 3-21 sanction imposed. 3-22 Sec. 10.006. CONFLICT. Notwithstanding Section 22.004, 3-23 Government Code, the supreme court may not amend or adopt rules in 3-24 conflict with this chapter. 3-25 SECTION 2. This Act takes effect September 1, 1995, and 3-26 applies only to a pleading or motion in a suit commenced on or 3-27 after that date. A pleading or motion in a suit commenced before 4-1 the effective date of this Act is governed by the law applicable to 4-2 the pleading or motion immediately before the effective date of 4-3 this Act, and that law is continued in effect for that purpose. 4-4 SECTION 3. The importance of this legislation and the 4-5 crowded condition of the calendars in both houses create an 4-6 emergency and an imperative public necessity that the 4-7 constitutional rule requiring bills to be read on three several 4-8 days in each house be suspended, and this rule is hereby suspended.