By Raymond H.B. No. 2723 77R8298 YDB-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to civil actions involving persons who file complaints 1-3 with governmental agencies. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 6, Civil Practice and Remedies Code, is 1-6 amended by adding Chapter 138 to read as follows: 1-7 CHAPTER 138. CIVIL ACTIONS INVOLVING PERSONS MAKING 1-8 COMPLAINTS WITH GOVERNMENTAL AGENCIES 1-9 Sec. 138.001. DEFINITIONS. In this chapter: 1-10 (1) "Bad faith" with respect to a claim made the basis 1-11 of a suit governed by this chapter means a claim that is: 1-12 (A) groundless; or 1-13 (B) brought for the purpose of: 1-14 (i) harassing or intimidating a 1-15 complainant; or 1-16 (ii) obtaining the withdrawal of a 1-17 complaint. 1-18 (2) "Complainant" means a person who makes a complaint 1-19 or who communicates information relevant to a complaint. 1-20 (3) "Complaint" means a written or oral statement, 1-21 report, or other communication made to or kept by a governmental 1-22 agency or quasi-governmental entity. 1-23 (4) "Exemplary damages" has the meaning assigned by 1-24 Chapter 41. 2-1 (5) "Good faith" with respect to a claim made the 2-2 basis of a suit governed by this chapter means that at the time the 2-3 complaint was filed or intended to be filed the complainant had: 2-4 (A) any reasonable basis in fact for making the 2-5 complaint; and 2-6 (B) any reasonable basis to believe that the 2-7 governmental agency or quasi-governmental entity to which the 2-8 complaint was made had authority or jurisdiction to receive the 2-9 complaint. 2-10 (6) "Governmental agency" means: 2-11 (A) this state, another state of the United 2-12 States, or the United States; 2-13 (B) any court, institution, agency, political 2-14 subdivision, or organ of government established by the constitution 2-15 or laws of this state, of another state of the United States, or of 2-16 the United States, including a department, bureau, board, 2-17 commission, office, or council; or 2-18 (C) a law enforcement agency. 2-19 (7) "Groundless" means: 2-20 (A) without basis in fact; or 2-21 (B) not warranted by existing law or a good 2-22 faith argument for the extension, modification, or reversal of 2-23 existing law. 2-24 (8) "Harassing conduct" means conduct intended or 2-25 reasonably calculated to threaten, intimidate, coerce, or mislead a 2-26 complainant through the use or threat of: 2-27 (A) physical force against a person or property; 3-1 (B) injury or damage to a person's personal or 3-2 business reputation; 3-3 (C) invasion of a person's right to privacy; 3-4 (D) a tortious or injurious act intended or 3-5 likely to cause economic damage or severe emotional distress to a 3-6 person; 3-7 (E) communication of information relevant to a 3-8 complaint known by the person communicating the information to be 3-9 false at the time it was communicated; or 3-10 (F) an act in violation of the constitution or a 3-11 penal law of this state, another state of the United States, or the 3-12 United States. 3-13 (9) "Quasi-governmental entity" means a person who, 3-14 under law or under a formal or informal request by, agreement with, 3-15 delegation of authority by, or rule adopted by a governmental 3-16 agency: 3-17 (A) receives or reviews complaints for the 3-18 agency; or 3-19 (B) performs a function of the agency. 3-20 Sec. 138.002. APPLICABILITY; VENUE; REMOVAL. (a) This 3-21 chapter applies only to a claim made a basis of a suit filed: 3-22 (1) against a complainant that: 3-23 (A) is filed by or on behalf of a person who may 3-24 be adversely affected by the filing of the complaint; and 3-25 (B) alleges that the contents of or the filing 3-26 of the complaint constitutes a basis for relief, including a claim 3-27 alleging that the contents of the complaint constitute libel or 4-1 slander; or 4-2 (2) by or on behalf of a complainant alleging conduct 4-3 giving rise to liability under Section 138.004. 4-4 (b) Notwithstanding Subsection (a)(1), this chapter does not 4-5 apply to a claim if: 4-6 (1) the complaint is confidential by other law and not 4-7 a public record available to a member of the public who is not 4-8 affected by the complaint and the complainant communicated the 4-9 contents of the complaint to a person other than to the 4-10 governmental agency or quasi-governmental entity that initially 4-11 received or reviewed the complaint; or 4-12 (2) the complainant is an employee or former employee 4-13 of the person who is the subject of the complaint. 4-14 (c) This chapter does not create or authorize a cause of 4-15 action against a quasi-governmental entity, a governmental unit, or 4-16 their officers, agents, or employees acting in the course and scope 4-17 of their duties or employment. Notwithstanding Chapter 104, the 4-18 state is not liable for indemnification of a person for damages 4-19 arising under this chapter. 4-20 (d) A claim governed by this chapter shall be brought: 4-21 (1) in the county of the complainant's residence if 4-22 the complainant is a natural person; 4-23 (2) in the county in which the complainant's principal 4-24 office is located if the complainant is not a natural person; or 4-25 (3) in the county in which the complaint was made, if 4-26 the complainant: 4-27 (A) is a natural person who is not a resident of 5-1 this state; or 5-2 (B) is not a natural person and does not have an 5-3 office in this state. 5-4 (e) Notwithstanding any other law, on motion of the 5-5 complainant, a claim governed by this chapter that is brought in a 5-6 court other than a district court may be removed to a district 5-7 court in which venue is authorized under Subsection (d). 5-8 Sec. 138.003. NO LIABILITY FOR GOOD FAITH COMPLAINT. (a) A 5-9 complainant who makes a complaint in good faith is not: 5-10 (1) liable for monetary damages arising from the 5-11 complaint; or 5-12 (2) subject to injunctive or declaratory relief with 5-13 respect to the complaint. 5-14 (b) There is a rebuttable presumption that a complaint is 5-15 made in good faith. 5-16 (c) A complainant may establish the elements of good faith 5-17 by demonstrating that: 5-18 (1) a reasonably prudent person, under the same or 5-19 similar circumstances, could have believed that a reasonable basis 5-20 in fact existed for making the complaint; and 5-21 (2) a reasonably prudent person, under the same or 5-22 similar circumstances, could have believed that the governmental 5-23 agency or quasi-governmental entity to which the complaint was made 5-24 had authority or jurisdiction to receive or review the complaint. 5-25 (d) A person asserting a claim described by Section 5-26 138.002(a)(1) shall, as a condition precedent to stating a cause of 5-27 action for which relief may be granted, have the burden of pleading 6-1 with particularity all material facts that the person contends 6-2 establish the right to recovery, including all facts supporting the 6-3 contention that the complainant did not act in good faith. Each 6-4 fact asserted in the pleading must be verified by affidavit made on 6-5 personal knowledge unless the truth of the fact appears of record. 6-6 (e) The court shall, on motion by the complainant or on the 6-7 court's own motion, review the pleadings to determine compliance 6-8 with Subsection (d). 6-9 Sec. 138.004. LIABILITY FOR HARASSING CONDUCT; EXEMPLARY 6-10 DAMAGES AUTHORIZED. (a) A person is liable for damages to a 6-11 complainant and is subject to injunctive or declaratory relief if 6-12 the complainant demonstrates by a preponderance of the evidence 6-13 that: 6-14 (1) the complainant made or intended to make a 6-15 complaint in good faith; 6-16 (2) the person committed or caused to be committed 6-17 harassing conduct against the complainant; and 6-18 (3) the harassing conduct was committed to: 6-19 (A) obtain the withdrawal of the complaint; 6-20 (B) prevent or limit the complainant's 6-21 participation in a formal or informal investigation or proceeding 6-22 by a governmental agency or quasi-governmental entity arising from 6-23 or relating to the complaint; 6-24 (C) prevent the filing of the complaint; or 6-25 (D) retaliate for the complaint. 6-26 (b) If the trier of fact determines that a complainant has 6-27 demonstrated facts proving liability under Subsection (a), judgment 7-1 may be entered awarding the complainant: 7-2 (1) actual damages; 7-3 (2) attorney's fees and costs under Section 138.007; 7-4 and 7-5 (3) notwithstanding Chapter 41, exemplary damages in 7-6 an amount equal to five times the amount of attorney's fees and 7-7 costs awarded under Section 138.007. 7-8 Sec. 138.005. BAD FAITH CLAIMS; EXEMPLARY DAMAGES 7-9 AUTHORIZED. (a) If the trier of fact determines that a claim 7-10 described by Section 138.002(a)(1) was brought in bad faith, 7-11 judgment may be entered awarding the complainant: 7-12 (1) actual damages; 7-13 (2) attorney's fees and costs under Section 138.007; 7-14 and 7-15 (3) notwithstanding Chapter 41, exemplary damages in 7-16 an amount equal to five times the amount of attorney's fees and 7-17 costs awarded under Section 138.007. 7-18 (b) A person against whom judgment is entered under this 7-19 section and the person's attorney are jointly and severally liable 7-20 for damages awarded under this section. 7-21 Sec. 138.006. SUMMARY JUDGMENT; EXPEDITED HEARING TO 7-22 DETERMINE BAD FAITH CLAIM. (a) The court shall promptly grant 7-23 summary judgment with respect to a claim described by Section 7-24 138.002(a)(1) if: 7-25 (1) the complainant demonstrates that a complaint was 7-26 made in good faith under Section 138.003(c); or 7-27 (2) the pleadings fail to allege: 8-1 (A) a cause of action against the complainant 8-2 for which relief may be granted; or 8-3 (B) facts sufficient to rebut the presumption 8-4 that the complaint was filed in good faith. 8-5 (b) On motion of the complainant, a court that grants 8-6 summary judgment under Subsection (a) shall promptly hold a hearing 8-7 to determine whether the claim was brought in bad faith. 8-8 (c) A complainant must file the motion for an expedited 8-9 hearing under Subsection (b) not later than the 30th day after the 8-10 date on which the order granting summary judgment is signed. On 8-11 request of a party, the hearing shall be before a jury. The Texas 8-12 Rules of Civil Procedure apply to the selection of the jury, the 8-13 court's charge to the jury, and all other aspects of the 8-14 proceedings. 8-15 (d) On motion of the complainant in a case involving three 8-16 or more parties, the court shall sever the claims as necessary to 8-17 allow relief granted under Subsection (a) or Section 138.005 to 8-18 become immediately final and appealable. 8-19 Sec. 138.007. ATTORNEY'S FEES. A complainant is entitled to 8-20 recover costs of court and reasonable and necessary attorney's fees 8-21 if judgment is entered holding: 8-22 (1) a complaint made the basis of a suit under Section 8-23 138.002(a)(1) was filed in good faith; or 8-24 (2) a person is liable to the complainant under 8-25 Section 138.004. 8-26 Sec. 138.008. PROFESSIONAL DISCIPLINE. (a) If judgment is 8-27 entered against an attorney under Section 138.005(b), the attorney 9-1 is subject to professional discipline for professional misconduct 9-2 in accordance with Subchapter E, Chapter 81, Government Code, and 9-3 to suspension or disbarment for dishonorable conduct under Section 9-4 82.062, Government Code. 9-5 (b) The court shall promptly report a judgment described by 9-6 Subsection (a) to an appropriate grievance committee under Chapter 9-7 81, Government Code, or under a similar law in any jurisdiction in 9-8 which the attorney resides or is licensed. 9-9 (c) A report under Subsection (b) must contain: 9-10 (1) the name of the attorney against whom judgment was 9-11 entered; 9-12 (2) the jury verdict or findings of fact by the court; 9-13 and 9-14 (3) the judgment. 9-15 Sec. 138.009. CERTAIN ORDERS PROHIBITED. A court of this 9-16 state may not issue a temporary restraining order, temporary 9-17 injunction, permanent injunction, or other order prohibiting a 9-18 complainant from communicating with a governmental agency or 9-19 quasi-governmental entity concerning the subject matter of a 9-20 complaint or a claim governed by this chapter. 9-21 SECTION 2. This Act applies only to a claim described by 9-22 Section 138.002, Civil Practice and Remedies Code, as added by this 9-23 Act, filed on or after the effective date of this Act. A claim 9-24 filed before the effective date of this Act is governed by the law 9-25 applicable to the claim immediately before the effective date of 9-26 this Act, and that law is continued in effect for that purpose. 9-27 SECTION 3. This Act takes effect September 1, 2001.