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.
    1-4        SECTION 1.  Subtitle A, Title 2, Civil Practice and Remedies
    1-5  Code, is amended by adding Chapter 10 to read as follows:
    1-7        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.