By Haywood                                      S.B. No. 1816

      75R8168 DAK-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to class actions.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Subtitle B, Title 2, Civil Practice and Remedies

 1-5     Code, is amended by adding Chapter 24 to read as follows:

 1-6                         CHAPTER 24.  CLASS ACTIONS

 1-7           Sec. 24.001.  DEFINITIONS.  In this chapter:

 1-8                 (1)  "Claimant" means the representative of the persons

 1-9     seeking relief in a class action suit.

1-10                 (2)  "Defendant" means the representative of the

1-11     persons defending against a claim in a class action suit.

1-12           Sec. 24.002.  SCOPE OF CHAPTER.  This chapter applies to a

1-13     class action suit brought in any court in this state other than a

1-14     federal court.

1-15           Sec. 24.003.  ATTORNEY'S FEES.  (a)  The court shall

1-16     determine the method of payment for the attorney representing the

1-17     class on certification of the class action.

1-18           (b)  The court may determine as a method of payment:

1-19                 (1)  a flat fee;

1-20                 (2)  an hourly rate; or

1-21                 (3)  a percentage of a settlement or judgment amount.

1-22           Sec. 24.004.  OPT-IN CLASS.  (a)  A court may allow, on

1-23     petition from claimant or defendant, that:

1-24                 (1)  a person eligible to become a member of the class

 2-1     may become a member only if the person, after receiving proper

 2-2     notice, affirmatively requests that the person be included in the

 2-3     class; and

 2-4                 (2)  an eligible person who does not affirmatively

 2-5     request to be included in the class not become a member of the

 2-6     class.

 2-7           (b)  Notice under this section must include an explanation of

 2-8     the effect of the class action suit on the right of the person who

 2-9     does not affirmatively request to be included in the class to seek

2-10     redress in another manner.

2-11           Sec. 24.005.  FUTURE DAMAGES.  (a)  A court may not award

2-12     future damages in a class action suit unless it is shown to the

2-13     court that it is reasonably likely that the defendant will dissolve

2-14     or will otherwise be unable or unavailable to pay damages that may

2-15     be awarded in the future.

2-16           (b)  A court that awards future damages under Subsection (a)

2-17     shall require that all future damages be paid:

2-18                 (1)  under an insurance policy;

2-19                 (2)  in annual payments, as determined by the court,

2-20     made to an escrow account; or

2-21                 (3)  subject to Subsection (c), in a lump-sum payment.

2-22           (c)  The court may not allow future damages to be paid in a

2-23     lump-sum payment unless it is shown to the court that the damages

2-24     will be incurred before the first anniversary of the date the

2-25     lump-sum payment is made.

2-26           Sec. 24.006.  CONFLICT WITH RULES.  Notwithstanding Section

2-27     22.004, Government Code, the supreme court may not amend or adopt

 3-1     rules in conflict with this chapter.

 3-2           SECTION 2.  This Act takes effect September 1, 1997, and

 3-3     applies only to a class action suit certified on or after that

 3-4     date.  A class action suit certified before the effective date of

 3-5     this Act is governed by the law applicable to the suit immediately

 3-6     before the effective date of this Act, and that law is continued in

 3-7     effect for that purpose.

 3-8           SECTION 3.  The importance of this legislation and the

 3-9     crowded condition of the calendars in both houses create an

3-10     emergency and an imperative public necessity that the

3-11     constitutional rule requiring bills to be read on three several

3-12     days in each house be suspended, and this rule is hereby suspended.