1-1 By: Raymond (Senate Sponsor - Shapleigh) H.B. No. 2723 1-2 (In the Senate - Received from the House May 11, 2001; 1-3 May 11, 2001, read first time and referred to Committee on 1-4 Jurisprudence; May 11, 2001, reported favorably by the following 1-5 vote: Yeas 5, Nays 1; May 11, 2001, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to civil actions involving persons who file complaints 1-9 with governmental agencies. 1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-11 SECTION 1. Title 6, Civil Practice and Remedies Code, is 1-12 amended by adding Chapter 138 to read as follows: 1-13 CHAPTER 138. CIVIL ACTIONS INVOLVING PERSONS MAKING 1-14 COMPLAINTS WITH GOVERNMENTAL AGENCIES 1-15 Sec. 138.001. DEFINITIONS. In this chapter: 1-16 (1) "Bad faith" with respect to a claim made the basis 1-17 of a suit governed by this chapter means a claim that is: 1-18 (A) groundless; or 1-19 (B) brought for the purpose of: 1-20 (i) harassing or intimidating a 1-21 complainant; or 1-22 (ii) obtaining the withdrawal of a 1-23 complaint. 1-24 (2) "Complainant" means a person who makes a complaint 1-25 or who communicates information relevant to a complaint. 1-26 (3) "Complaint" means a written or oral statement, 1-27 report, or other communication made to or kept by a governmental 1-28 agency or quasi-governmental entity. 1-29 (4) "Exemplary damages" has the meaning assigned by 1-30 Chapter 41. 1-31 (5) "Good faith" with respect to a claim made the 1-32 basis of a suit governed by this chapter means that at the time the 1-33 complaint was filed or intended to be filed the complainant had: 1-34 (A) any reasonable basis in fact for making the 1-35 complaint; and 1-36 (B) any reasonable basis to believe that the 1-37 governmental agency or quasi-governmental entity to which the 1-38 complaint was made had authority or jurisdiction to receive the 1-39 complaint. 1-40 (6) "Governmental agency" means: 1-41 (A) this state, another state of the United 1-42 States, or the United States; 1-43 (B) any court, institution, agency, political 1-44 subdivision, or organ of government established by the constitution 1-45 or laws of this state, of another state of the United States, or of 1-46 the United States, including a department, bureau, board, 1-47 commission, office, or council; or 1-48 (C) a law enforcement agency. 1-49 (7) "Groundless" means: 1-50 (A) without basis in fact; or 1-51 (B) not warranted by existing law or a good 1-52 faith argument for the extension, modification, or reversal of 1-53 existing law. 1-54 (8) "Harassing conduct" means conduct intended or 1-55 reasonably calculated to threaten, intimidate, coerce, or mislead a 1-56 complainant through the use or threat of: 1-57 (A) physical force against a person or property; 1-58 (B) injury or damage to a person's personal or 1-59 business reputation; 1-60 (C) invasion of a person's right to privacy; 1-61 (D) a tortious or injurious act intended or 1-62 likely to cause economic damage or severe emotional distress to a 1-63 person; 1-64 (E) communication of information relevant to a 2-1 complaint known by the person communicating the information to be 2-2 false at the time it was communicated; or 2-3 (F) an act in violation of the constitution or a 2-4 penal law of this state, another state of the United States, or the 2-5 United States. 2-6 (9) "Quasi-governmental entity" means a person who, 2-7 under law or under a formal or informal request by, agreement with, 2-8 delegation of authority by, or rule adopted by a governmental 2-9 agency: 2-10 (A) receives or reviews complaints for the 2-11 agency; or 2-12 (B) performs a function of the agency. 2-13 Sec. 138.002. APPLICABILITY; VENUE; REMOVAL. (a) This 2-14 chapter applies only to a claim made a basis of a suit filed: 2-15 (1) against a complainant that: 2-16 (A) is filed by or on behalf of a person who may 2-17 be adversely affected by the filing of the complaint; and 2-18 (B) alleges that the contents of or the filing 2-19 of the complaint constitutes a basis for relief, including a claim 2-20 alleging that the contents of the complaint constitute libel or 2-21 slander; or 2-22 (2) by or on behalf of a complainant alleging conduct 2-23 giving rise to liability under Section 138.004. 2-24 (b) Notwithstanding Subsection (a)(1), this chapter does not 2-25 apply to a claim if: 2-26 (1) the complaint is confidential by other law and not 2-27 a public record available to a member of the public who is not 2-28 affected by the complaint and the complainant communicated the 2-29 contents of the complaint to a person other than to the 2-30 governmental agency or quasi-governmental entity that initially 2-31 received or reviewed the complaint; or 2-32 (2) the complainant is an employee or former employee 2-33 of the person who is the subject of the complaint. 2-34 (c) This chapter does not create or authorize a cause of 2-35 action against a quasi-governmental entity, a governmental unit, or 2-36 their officers, agents, or employees acting in the course and scope 2-37 of their duties or employment. Notwithstanding Chapter 104, the 2-38 state is not liable for indemnification of a person for damages 2-39 arising under this chapter. 2-40 (d) A claim governed by this chapter shall be brought: 2-41 (1) in the county of the complainant's residence if 2-42 the complainant is a natural person; 2-43 (2) in the county in which the complainant's principal 2-44 office is located if the complainant is not a natural person; or 2-45 (3) in the county in which the complaint was made, if 2-46 the complainant: 2-47 (A) is a natural person who is not a resident of 2-48 this state; or 2-49 (B) is not a natural person and does not have an 2-50 office in this state. 2-51 (e) Notwithstanding any other law, on motion of the 2-52 complainant, a claim governed by this chapter that is brought in a 2-53 court other than a district court may be removed to a district 2-54 court in which venue is authorized under Subsection (d). 2-55 Sec. 138.003. NO LIABILITY FOR GOOD FAITH COMPLAINT. (a) A 2-56 complainant who makes a complaint in good faith is not: 2-57 (1) liable for monetary damages arising from the 2-58 complaint; or 2-59 (2) subject to injunctive or declaratory relief with 2-60 respect to the complaint. 2-61 (b) There is a rebuttable presumption that a complaint is 2-62 made in good faith. 2-63 (c) A complainant may establish the elements of good faith 2-64 by demonstrating that: 2-65 (1) a reasonably prudent person, under the same or 2-66 similar circumstances, could have believed that a reasonable basis 2-67 in fact existed for making the complaint; and 2-68 (2) a reasonably prudent person, under the same or 2-69 similar circumstances, could have believed that the governmental 3-1 agency or quasi-governmental entity to which the complaint was made 3-2 had authority or jurisdiction to receive or review the complaint. 3-3 (d) A person asserting a claim described by Section 3-4 138.002(a)(1) shall, as a condition precedent to stating a cause of 3-5 action for which relief may be granted, have the burden of pleading 3-6 with particularity all material facts that the person contends 3-7 establish the right to recovery, including all facts supporting the 3-8 contention that the complainant did not act in good faith. Each 3-9 fact asserted in the pleading must be verified by affidavit made on 3-10 personal knowledge unless the truth of the fact appears of record. 3-11 (e) The court shall, on motion by the complainant or on the 3-12 court's own motion, review the pleadings to determine compliance 3-13 with Subsection (d). 3-14 Sec. 138.004. LIABILITY FOR HARASSING CONDUCT; EXEMPLARY 3-15 DAMAGES AUTHORIZED. (a) A person is liable for damages to a 3-16 complainant and is subject to injunctive or declaratory relief if 3-17 the complainant demonstrates by a preponderance of the evidence 3-18 that: 3-19 (1) the complainant made or intended to make a 3-20 complaint in good faith; 3-21 (2) the person committed or caused to be committed 3-22 harassing conduct against the complainant; and 3-23 (3) the harassing conduct was committed to: 3-24 (A) obtain the withdrawal of the complaint; 3-25 (B) prevent or limit the complainant's 3-26 participation in a formal or informal investigation or proceeding 3-27 by a governmental agency or quasi-governmental entity arising from 3-28 or relating to the complaint; 3-29 (C) prevent the filing of the complaint; or 3-30 (D) retaliate for the complaint. 3-31 (b) If the trier of fact determines that a complainant has 3-32 demonstrated facts proving liability under Subsection (a), judgment 3-33 may be entered awarding the complainant: 3-34 (1) actual damages; 3-35 (2) attorney's fees and costs under Section 138.007; 3-36 and 3-37 (3) notwithstanding Chapter 41, exemplary damages in 3-38 an amount equal to five times the amount of attorney's fees and 3-39 costs awarded under Section 138.007. 3-40 Sec. 138.005. BAD FAITH CLAIMS; EXEMPLARY DAMAGES 3-41 AUTHORIZED. (a) If the trier of fact determines that a claim 3-42 described by Section 138.002(a)(1) was brought in bad faith, 3-43 judgment may be entered awarding the complainant: 3-44 (1) actual damages; 3-45 (2) attorney's fees and costs under Section 138.007; 3-46 and 3-47 (3) notwithstanding Chapter 41, exemplary damages in 3-48 an amount equal to five times the amount of attorney's fees and 3-49 costs awarded under Section 138.007. 3-50 (b) A person against whom judgment is entered under this 3-51 section and the person's attorney are jointly and severally liable 3-52 for damages awarded under this section. 3-53 Sec. 138.006. SUMMARY JUDGMENT; EXPEDITED HEARING TO 3-54 DETERMINE BAD FAITH CLAIM. (a) The court shall promptly grant 3-55 summary judgment with respect to a claim described by Section 3-56 138.002(a)(1) if: 3-57 (1) the complainant demonstrates that a complaint was 3-58 made in good faith under Section 138.003(c); or 3-59 (2) the pleadings fail to allege: 3-60 (A) a cause of action against the complainant 3-61 for which relief may be granted; or 3-62 (B) facts sufficient to rebut the presumption 3-63 that the complaint was filed in good faith. 3-64 (b) On motion of the complainant, a court that grants 3-65 summary judgment under Subsection (a) shall promptly hold a hearing 3-66 to determine whether the claim was brought in bad faith. 3-67 (c) A complainant must file the motion for an expedited 3-68 hearing under Subsection (b) not later than the 30th day after the 3-69 date on which the order granting summary judgment is signed. On 4-1 request of a party, the hearing shall be before a jury. The Texas 4-2 Rules of Civil Procedure apply to the selection of the jury, the 4-3 court's charge to the jury, and all other aspects of the 4-4 proceedings. 4-5 (d) On motion of the complainant in a case involving three 4-6 or more parties, the court shall sever the claims as necessary to 4-7 allow relief granted under Subsection (a) or Section 138.005 to 4-8 become immediately final and appealable. 4-9 Sec. 138.007. ATTORNEY'S FEES. A complainant is entitled to 4-10 recover costs of court and reasonable and necessary attorney's fees 4-11 if judgment is entered holding: 4-12 (1) a complaint made the basis of a suit under Section 4-13 138.002(a)(1) was filed in good faith; or 4-14 (2) a person is liable to the complainant under 4-15 Section 138.004. 4-16 Sec. 138.008. PROFESSIONAL DISCIPLINE. (a) If judgment is 4-17 entered against an attorney under Section 138.005(b), the attorney 4-18 is subject to professional discipline for professional misconduct 4-19 in accordance with Subchapter E, Chapter 81, Government Code, and 4-20 to suspension or disbarment for dishonorable conduct under Section 4-21 82.062, Government Code. 4-22 (b) The court shall promptly report a judgment described by 4-23 Subsection (a) to an appropriate grievance committee under Chapter 4-24 81, Government Code, or under a similar law in any jurisdiction in 4-25 which the attorney resides or is licensed. 4-26 (c) A report under Subsection (b) must contain: 4-27 (1) the name of the attorney against whom judgment was 4-28 entered; 4-29 (2) the jury verdict or findings of fact by the court; 4-30 and 4-31 (3) the judgment. 4-32 Sec. 138.009. CERTAIN ORDERS PROHIBITED. A court of this 4-33 state may not issue a temporary restraining order, temporary 4-34 injunction, permanent injunction, or other order prohibiting a 4-35 complainant from communicating with a governmental agency or 4-36 quasi-governmental entity concerning the subject matter of a 4-37 complaint or a claim governed by this chapter. 4-38 SECTION 2. This Act applies only to a claim described by 4-39 Section 138.002, Civil Practice and Remedies Code, as added by this 4-40 Act, filed on or after the effective date of this Act. A claim 4-41 filed before the effective date of this Act is governed by the law 4-42 applicable to the claim immediately before the effective date of 4-43 this Act, and that law is continued in effect for that purpose. 4-44 SECTION 3. This Act takes effect September 1, 2001. 4-45 * * * * *