This website will be unavailable from Friday, April 26, 2024 at 6:00 p.m. through Monday, April 29, 2024 at 7:00 a.m. due to data center maintenance.
By: Nixon, Allen, Capelo, Woolley, H.B. No. 4
Cook of Colorado, et al.
A BILL TO BE ENTITLED
AN ACT
relating to reform of certain procedures and remedies in civil
actions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. CLASS ACTIONS
SECTION 1.01. Subtitle B, Title 2, Civil Practice and
Remedies Code, is amended by adding Chapter 26 to read as follows:
CHAPTER 26. CLASS ACTIONS INVOLVING JURISDICTION
OF STATE AGENCY
Sec. 26.001. DEFINITIONS. In this chapter:
(1) "Agency statute" means a statute of this state
administered or enforced by a state agency.
(2) "Claimant" means a party seeking recovery of
damages or other relief and includes a plaintiff, counterclaimant,
cross-claimant, or third-party claimant.
(3) "Contested case" has the meaning assigned by
Section 2001.003, Government Code.
(4) "Defendant" means a party from whom a claimant
seeks recovery of damages or other relief.
(5) "Rule" has the meaning assigned by Section
2001.003, Government Code.
(6) "State agency" means a board, commission,
department, office, or agency that:
(A) is in the executive branch of state
government;
(B) is created by the constitution or a statute
of this state;
(C) has statewide jurisdiction; and
(D) has rulemaking authority involving the
subject matter of the disputed claim.
Sec. 26.002. APPLICABILITY. This chapter applies only to
an action in which:
(1) a claimant seeks recovery of damages or other
relief on behalf of a class of claimants; and
(2) a disputed claim in the action involves the
interpretation, application, or violation of an agency statute or
rule with respect to one or more defendants.
Sec. 26.003. HEARING. (a) On motion of a party, a court
shall conduct a hearing to determine whether an action should be
dismissed or abated under this chapter.
(b) Notice of the hearing must be given to the named parties
to the action on or before the 21st day before the date of the
hearing.
Sec. 26.004. DISMISSAL FOR FAILURE TO EXHAUST
ADMINISTRATIVE REMEDIES. (a) A court shall dismiss an action
without prejudice if:
(1) a state agency has the exclusive jurisdiction to
determine an issue in dispute or grant an administrative remedy
before the claimant can seek a judicial remedy; and
(2) one or more class representatives failed to
exhaust the state agency's administrative remedy.
(b) The court's dismissal order must identify the state
agency having exclusive jurisdiction and state the administrative
remedy available to the claimant.
(c) The limitations period applicable to an action
dismissed under this section is suspended for members of the class
or putative class with respect to the defendants named in the class
action commenced in a court of this state for a period beginning on
the date the dismissal order is signed and continuing while the
class representatives diligently pursue the administrative remedy
identified in the dismissal order.
Sec. 26.005. ABATEMENT OR DISMISSAL. (a) On motion of a
party filed on or before the 30th day after the date the court
signed the order certifying the action as a class action, a court
shall abate or dismiss without prejudice an action if the court
determines that:
(1) an issue in dispute in the action involves a
question of fact within the jurisdiction of a state agency to
determine;
(2) an issue in dispute in the action involves the
application, interpretation, or violation of an agency statute or
rule;
(3) a state agency, if allowed to do so, could make
findings of fact and conclusions of law or issue orders that would
aid the court in resolving the action; or
(4) a state agency, through a contested case
proceeding, could order all or part of the relief a claimant seeks.
(b) The court's abatement or dismissal order must identify
the state agency and state the agency statute or rule on which the
order is based.
(c) A court that abates an action under this section shall:
(1) refer specific issues or claims within a state
agency's jurisdiction to the agency for action; and
(2) direct the state agency to report to the court
periodically concerning the disposition of the matters referred to
the agency.
(d) The limitations period applicable to an action
dismissed under this section is suspended for members of the class
or putative class with respect to the defendants named in the class
action commenced in a court of this state for a period beginning on
the date the dismissal order is signed and continuing while the
class representatives diligently pursue the administrative remedy
identified in the dismissal order.
Sec. 26.006. ABATEMENT PERIOD. (a) The order must provide
that the abatement period is at least six months from the date the
court signs the abatement order.
(b) The court may extend the abatement period if the court
determines that the state agency is proceeding diligently to
resolve the matters the court referred to the agency.
(c) The abatement period ends when:
(1) the state agency takes such final action as the
agency is authorized regarding the matters the court referred to
the agency; or
(2) the court determines that the state agency is not
proceeding diligently to resolve the matters the court referred to
the agency.
Sec. 26.007. PROCEEDING AFTER ABATEMENT; DISMISSAL. (a)
After the abatement period ends, the court shall decide whether to
dismiss the action, proceed with the action as an individual
action, or proceed with the action as a class action.
(b) A court shall dismiss an action if the court determines
that:
(1) the state agency granted all or a substantial part
of the relief sought by the claimant and the class; or
(2) the relief granted by the state agency is an
adequate substitute for the relief sought in the action by the
claimant and the class.
(c) If the court does not dismiss the action, it shall
determine whether to proceed with the action as a class action or as
an individual action by considering or reconsidering the case in
light of class certification criteria. In determining whether a
class action is superior to other available methods for the fair and
efficient adjudication of the controversy, the court shall consider
the availability of judicial review of the state agency's decision
and of declaratory relief under Section 2001.038, Government Code,
concerning the validity and applicability of agency rules.
(d) Relief awarded to a claimant may be adequate even if the
relief does not include exemplary damages, multiple damages,
attorney's fees, or costs of court.
(e) If a person seeks judicial review of a state agency's
decision on an issue referred to the agency by the court, the court
may transfer the action to a county of proper venue for the judicial
review if the court determines that:
(1) the transfer is necessary to avoid the likelihood
of conflicting or inconsistent judicial decisions affecting the
parties to the action;
(2) the transfer would promote judicial economy;
(3) the transfer would not work a substantial
injustice to the parties to the action; and
(4) the balance of interests of the parties to the
action predominates in favor of transferring the action.
(f) If a person seeks declaratory relief under Section
2001.038, Government Code, concerning the validity or
applicability of a state agency rule involved in a state agency's
decision on a matter referred to the agency by the court, the court
shall transfer the action to Travis County.
SECTION 1.02. Title 6, Civil Practice and Remedies Code, is
amended by adding Chapter 140 to read as follows:
CHAPTER 140. ATTORNEY'S FEES AWARDED IN CLASS ACTIONS
Sec. 140.001. APPLICABILITY. (a) Except as provided by
Subsection (b), this chapter applies to an award of attorney's fees
in a class action notwithstanding:
(1) any agreement between the attorney or attorneys
for the class and any member of the class; or
(2) any other law or rule of court.
(b) This chapter does not apply to fees payable to the
attorney or attorneys by a named plaintiff client out of that
client's funds, including the client's share of the common fund
recovered for the class, under an agreement between the attorney or
attorneys and the client.
Sec. 140.002. NO RIGHT TO FEES CREATED. This chapter does
not create a right to an award of attorney's fees.
Sec. 140.003. AWARD OF FEES. If a court awards a fee in a
class action to the attorney or attorneys for the class, the fee
must be awarded out of a common fund or as measured by a common
benefit recovered for the class, and the fee must be computed as
provided by this chapter.
Sec. 140.004. DETERMINATION OF BASE FEE. (a) In any class
action in which an award of attorney's fees is to be made, the court
shall first determine the base fee as provided by this section.
(b) The court shall find:
(1) the number of hours that it considers to have been
reasonably and necessarily expended by the attorney or attorneys
for the class; and
(2) the hourly rates it considers to be appropriate
for the services provided by the attorney or attorneys for the
class.
(c) The rates in Subsection (b)(2) must be based on and
cannot exceed the rates customarily charged in the locality for
similar legal services in nonclass litigation.
(d) To compute the base fee, the court shall multiply the
hours found in Subsection (b)(1) by the rates found in Subsection
(b)(2).
Sec. 140.005. INCREASE OR DECREASE OF BASE FEE. (a) Except
as provided by Subsection (b), the court may increase or decrease
the base fee determined under Section 140.004 by applying the
following factors:
(1) the novelty and difficulty of the issues involved
in the action;
(2) the skill required to properly perform the legal
services performed by the attorney or attorneys for the class;
(3) the amount of money involved in the action and the
results obtained;
(4) the time limitations imposed by the class or the
circumstances; and
(5) the experience, reputation, and ability of the
attorney or attorneys performing services for the class.
(b) The total fees awarded by the court may not exceed the
lesser of:
(1) 25 percent of the amounts collected by class
members out of the common fund or as measured by a common benefit
recovered for the class; or
(2) four times the base fee as determined under
Section 140.004.
Sec. 140.006. ACTUAL EXPENSES AND COSTS. In addition to the
fee determined by the court under this chapter, the court may award
the attorney or attorneys representing the class all reasonable
expenses and costs of litigation actually incurred by the attorney
or attorneys on behalf of the class.
SECTION 1.03. Section 22.225, Government Code, is amended
by amending Subsections (b) and (d) and adding Subsection (e) to
read as follows:
(b) Except as provided by Subsection (c) or (d), a judgment
of a court of appeals is conclusive on the law and facts, and a
petition for review [writ of error] is not allowed to [from] the
supreme court, in the following civil cases:
(1) a case appealed from a county court or from a
district court when, under the constitution, a county court would
have had original or appellate jurisdiction of the case, with the
exception of a probate matter or a case involving state revenue laws
or the validity or construction of a statute;
(2) a case of a contested election other than a
contested election for a state officer, with the exception of a case
where the validity of a statute is questioned by the decision;
(3) an appeal from an interlocutory order appointing a
receiver or trustee or from other interlocutory appeals that are
allowed by law;
(4) an appeal from an order or judgment in a suit in
which a temporary injunction has been granted or refused or when a
motion to dissolve has been granted or overruled; and
(5) all other cases except the cases where appellate
jurisdiction is given to the supreme court and is not made final in
the courts of appeals.
(d) A petition for review [writ of error] is allowed to
[from] the supreme court for an appeal from an interlocutory order
described by Section 51.014(a)(3) or (6) [51.014(6)], Civil
Practice and Remedies Code.
(e) For purposes of Subsection (c), one court holds
differently from another when there is inconsistency in their
respective decisions that should be clarified to remove unnecessary
uncertainty in the law and unfairness to litigants.
SECTION 1.04. Sections 51.014(a), (b), and (c), Civil
Practice and Remedies Code, are amended to read as follows:
(a) A person may appeal from an interlocutory order of a
district court, county court at law, or county court that:
(1) appoints a receiver or trustee;
(2) overrules a motion to vacate an order that
appoints a receiver or trustee;
(3) certifies or refuses to certify a class in a suit
brought under Rule 42 of the Texas Rules of Civil Procedure;
(4) grants or refuses a temporary injunction or grants
or overrules a motion to dissolve a temporary injunction as
provided by Chapter 65;
(5) denies a motion for summary judgment that is based
on an assertion of immunity by an individual who is an officer or
employee of the state or a political subdivision of the state;
(6) denies a motion for summary judgment that is based
in whole or in part upon a claim against or defense by a member of
the electronic or print media, acting in such capacity, or a person
whose communication appears in or is published by the electronic or
print media, arising under the free speech or free press clause of
the First Amendment to the United States Constitution, or Article I
[1], Section 8, of the Texas Constitution, or Chapter 73;
(7) grants or denies the special appearance of a
defendant under Rule 120a, Texas Rules of Civil Procedure, except
in a suit brought under the Family Code; [or]
(8) grants or denies a plea to the jurisdiction by a
governmental unit as that term is defined in Section 101.001;
(9) denies all or part of the relief sought by a motion
under Section 13.01(b), Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes); or
(10) grants relief sought by a motion under Section
13.01(l), Medical Liability and Insurance Improvement Act of Texas
(Article 4590i, Vernon's Texas Civil Statutes).
(b) An interlocutory appeal under Subsection (a), other
than an appeal under Subsection (a)(4), stays [shall have the
effect of staying] the commencement of a trial in the trial court
pending resolution of the appeal. An interlocutory appeal under
Subsection (a)(3), (5), or (8) also stays all other proceedings in
the trial court pending resolution of that appeal.
(c) A denial of a motion for summary judgment, special
appearance, or plea to the jurisdiction described by Subsection
(a)(5), (7), or (8) is not subject to the automatic stay [of the
commencement of trial] under Subsection (b) unless the motion,
special appearance, or plea to the jurisdiction is filed and
requested for submission or hearing before the trial court not
later than the later of:
(1) a date set by the trial court in a scheduling order
entered under the Texas Rules of Civil Procedure; or
(2) the 180th day after the date the defendant files:
(A) the original answer;
(B) the first other responsive pleading to the
plaintiff's petition; or
(C) if the plaintiff files an amended pleading
that alleges a new cause of action against the defendant and the
defendant is able to raise a defense to the new cause of action
under Subsection (a)(5), (7), or (8), the responsive pleading that
raises that defense.
SECTION 1.05. Section 22.001, Government Code, is amended
by adding Subsection (e) to read as follows:
(e) For purposes of Subsection (a)(2), one court holds
differently from another when there is inconsistency in their
respective decisions that should be clarified to remove unnecessary
uncertainty in the law and unfairness to litigants.
ARTICLE 2. SETTLEMENT
SECTION 2.01. Subtitle C, Title 2, Civil Practice and
Remedies Code, is amended by adding Chapter 42 to read as follows:
CHAPTER 42. SETTLEMENT AND RECOVERY OF LITIGATION COSTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 42.001. DEFINITIONS. In this chapter:
(1) "Claim" means a request, including a counterclaim,
cross-claim, or third-party claim, to recover monetary damages or
to obtain other relief. The term does not include a request for an
injunction or to recover litigation costs.
(2) "Claimant" means a person making a claim.
(3) "Defendant" means a person from whom a claimant
seeks recovery on a claim, including a counterdefendant,
cross-defendant, or third-party defendant.
(4) "Governmental unit" means the state, a unit of
state government, or a political subdivision of this state.
(5) "Litigation costs" means money actually spent and
obligations actually incurred that are directly related to an
action. "Litigation costs" include:
(A) reasonable and necessary attorney's fees;
(B) court costs;
(C) reasonable and necessary deposition costs;
and
(D) reasonable fees for not more than two expert
witnesses.
(6) "Settlement offer" means an offer to settle or
compromise a claim made in compliance with Section 42.051.
Sec. 42.002. APPLICABILITY AND EFFECT. (a) This chapter
does not apply to:
(1) an action in which a class has been certified; or
(2) an action by or against a governmental unit.
(b) Without regard to whether an action is brought by itself
or in conjunction with other actions, this chapter does not apply to
an action:
(1) brought under the Family Code;
(2) brought under Chapter 27, Property Code;
(3) brought under the Texas Probate Code or Chapter
115, Property Code;
(4) brought under the Tax Code;
(5) brought on behalf of a minor or person of unsound
mind;
(6) to collect workers' compensation benefits under
Subtitle A, Title 5, Labor Code;
(7) brought under the Longshore and Harbor Workers'
Compensation Act (33 U.S.C. Section 901 et seq.), as amended;
(8) brought under the Jones Act (46 U.S.C. Section
688), as amended;
(9) brought in small claims court or justice court;
(10) brought by a homeowners association to enforce
deed restrictions or to collect delinquent fees, dues, or
assessments;
(11) brought under the Federal Employers' Liability
Act (45 U.S.C. Section 51 et seq.), as amended;
(12) brought under the Safety Appliance Acts (49
U.S.C. Sections 20102, 20301, 20302, 20304, 21302, and 21304), as
amended; or
(13) brought under the Locomotive Inspection Act (49
U.S.C. Sections 20102, 20701-20703, 21302, and 21304), as amended.
(c) This chapter does not limit or affect the ability of any
person to:
(1) make an offer to settle or compromise a claim that
does not comply with this chapter; or
(2) offer to settle or compromise a claim to which this
chapter does not apply.
(d) An offer to settle or compromise that does not comply
with Section 42.051 or an offer to settle or compromise made in an
action to which this chapter does not apply does not entitle the
offering party to recover litigation costs under this chapter.
(e) This chapter does not apply to an action:
(1) on a contract that specifies remedies for breach,
including specific performance, liquidated damages, or attorney's
fees;
(2) on a negotiable instrument; or
(3) for a debt, including an action on a sworn account
or for services rendered.
Sec. 42.003. MODIFICATION OF TIME LIMITS. A court may
modify the time limits specified in this chapter by order resulting
from a pretrial conference conducted under Rule 166, Texas Rules of
Civil Procedure.
Sec. 42.004. SERVICE. When this chapter requires a writing
to be served on another party, service is adequate if it is
performed in a manner described in Rule 21a, Texas Rules of Civil
Procedure.
Sec. 42.005. APPLICABILITY OF CHAPTER IN RELATION TO
CERTAIN CRIMINAL BEHAVIOR. Without regard to whether an action is
brought by itself or in conjunction with other actions, this
chapter does not apply to an action arising from conduct of the
defendant described in any of the following sections of the Penal
Code:
(1) Section 49.04 (driving while intoxicated);
(2) Section 49.05 (flying while intoxicated);
(3) Section 49.06 (boating while intoxicated);
(4) Section 49.065 (assembling or operating an
amusement ride while intoxicated);
(5) Section 49.07 (intoxication assault); or
(6) Section 49.08 (intoxication manslaughter).
Sec. 42.006. ADDITIONAL APPLICABILITY PROVISION; CERTAIN
CRIMINAL BEHAVIOR. Without regard to whether an action is brought
by itself or in conjunction with other actions, this chapter does
not apply to an action in which the defendant is a person who has
engaged in conduct described as a felony in the following Penal Code
provisions if the conduct was committed knowingly or intentionally,
as defined by Sections 6.03(a) and (b), Penal Code:
(1) Section 19.02 (murder);
(2) Section 19.03 (capital murder);
(3) Section 20.03 (kidnapping);
(4) Section 20.04 (aggravated kidnapping);
(5) Section 22.02 (aggravated assault);
(6) Section 22.011 (sexual assault);
(7) Section 22.021 (aggravated sexual assault);
(8) Section 22.04 (injury to a child, elderly
individual, or disabled individual);
(9) Section 32.21 (forgery);
(10) Section 32.43 (commercial bribery);
(11) Section 32.45 (misapplication of fiduciary
property or property of financial institution);
(12) Section 32.46 (securing execution of a document
by deception);
(13) Section 32.47 (fraudulent destruction, removal,
or concealment of writing); or
(14) Chapter 31 (theft) the punishment level for which
is a felony of the third degree or higher.
Sec. 42.007. APPLICABILITY OF CHAPTER: NONMONETARY TERMS.
Notwithstanding any other provision of this chapter, if a monetary
settlement offer is made conditioned on terms other than monetary
relief pled by the party to whom the settlement offer was made and
recoverable by that party in law or in equity, other than the
requirement for a release and indemnity of claim by and through the
claimant, then this chapter does not apply unless the defendant
succeeds in obtaining those other terms in the judgment.
[Sections 42.008-42.050 reserved for expansion]
SUBCHAPTER B. AWARDING LITIGATION COSTS
Sec. 42.051. SETTLEMENT OFFER. (a) A defendant or a group
of defendants may serve on a claimant a settlement offer to settle
all claims in the action between that defendant or those defendants
and the claimant.
(b) The settlement offer must:
(1) be in writing;
(2) state that it is a settlement offer under this
chapter;
(3) state the terms by which the claims may be settled;
(4) state a deadline by which the settlement offer
must be accepted; and
(5) be served on the claimant to whom the settlement
offer is made.
(c) A defendant or group of defendants may not make a
settlement offer under this section before the 90th day after the
later of:
(1) the date any of the offering defendants filed a
responsive pleading; or
(2) the date any of the offering defendants otherwise
appeared in the action.
(d) A defendant or group of defendants may not make a
settlement offer under this section after the 30th day before the
date set for trial.
(e) The parties are not required to file a settlement offer
with the court.
Sec. 42.052. ACCEPTANCE OF SETTLEMENT OFFER. (a) A
claimant may accept a settlement offer made under this chapter on or
before 5 p.m. on the 30th day after the date the claimant received
the settlement offer or before the deadline stated in the
settlement offer, whichever is later.
(b) Acceptance of a settlement offer must be:
(1) in writing; and
(2) served on the defendant or defendants who made the
settlement offer.
Sec. 42.053. WITHDRAWING SETTLEMENT OFFER. (a) A
defendant or group of defendants may withdraw a settlement offer by
serving a written withdrawal on the claimant to whom the settlement
offer was made before the claimant accepts the settlement offer. A
claimant may not accept a settlement offer after it is withdrawn.
(b) If a settlement offer is withdrawn, the defendant or
group of defendants that made the settlement offer is not entitled
to recover litigation costs under this chapter.
Sec. 42.054. REJECTION OF SETTLEMENT OFFER. For purposes
of this chapter, a settlement offer is rejected if:
(1) the claimant to whom the settlement offer was made
rejects the settlement offer by serving a written rejection on any
defendant making the settlement offer; or
(2) the settlement offer is not withdrawn and is not
accepted before the deadline for accepting the offer.
Sec. 42.055. AWARD OF LITIGATION COSTS. (a) Any defendant
who makes a settlement offer under this chapter to a claimant
seeking monetary relief shall recover litigation costs from the
claimant if:
(1) the settlement offer is rejected;
(2) the amount of monetary relief to be awarded in the
judgment, exclusive of any litigation costs awarded under this
chapter and exclusive of any attorney's fees, expenses, and costs
incurred by the claimant after rejection of the offer, is more
favorable to the defendant or group of defendants who made the
settlement offer than the settlement offer; and
(3) the difference between the amount of monetary
relief to be awarded to the claimant in the judgment, exclusive of
any litigation costs awarded under this chapter and exclusive of
any attorney's fees, expenses, and costs incurred by the claimant
after rejection of the offer, and the amount of the settlement offer
is equal to or greater than 10 percent of the amount of the
settlement offer.
(b) Any defendant who makes a settlement offer to a claimant
seeking nonmonetary relief, other than injunctive relief, may
recover litigation costs from the claimant if:
(1) the settlement offer is rejected; and
(2) the judgment, exclusive of any litigation costs
awarded under this chapter and exclusive of any attorney's fees,
expenses, and costs incurred by the claimant after rejection of the
offer, is more favorable to the defendant or group of defendants who
made the settlement offer than the settlement offer.
(c) Litigation costs awarded to a defendant under this
section include only those litigation costs incurred by the
defendant who made a settlement offer after the rejection of the
earliest settlement offer that entitles the defendant to an award
of litigation costs under this section.
(d) Litigation costs awarded under this section shall:
(1) be awarded in the judgment; and
(2) offset the claimant's recovery against the
offering defendant.
(e) The court shall determine the amount of litigation costs
awarded based on written or oral evidence presented to the court.
In jury trials:
(1) the evidence must be presented outside the
presence of the jury; and
(2) the presentation of evidence may be made after the
jury has reached its verdict.
(f) The trial judge who presided over the trial of the case
shall act as the finder of fact in regard to the award of litigation
costs under this section. If that judge is unable to do so, the
local presiding judge shall appoint another judge to hear and
determine all issues related to the award.
(g) An award of litigation costs under this section may be
reviewed on appeal from a final judgment for abuse of discretion.
Sec. 42.056. LIMITATION ON LITIGATION COSTS. (a) The
amount of litigation costs awarded under this chapter shall not
exceed the claimant's total recovery, less any statutory liens, in
connection with the transactions or occurrences giving rise to the
claim.
(b) The claimant's total recovery under this section does
not include the proceeds of an insurance policy paid to the claimant
as a beneficiary of the policy, unless the proceeds are the subject
of the litigation.
(c) The claimant's total recovery under this section
includes:
(1) the amount of any monetary relief awarded to the
claimant in the judgment; and
(2) the amount of any money paid or to be paid to the
claimant by any person in consideration of actual or potential
liability in connection with the transactions or occurrences giving
rise to the claim.
(d) If litigation costs are awarded against a claimant under
this chapter, the claimant shall not be awarded any attorney's
fees, expenses, or costs to which the claimant would otherwise be
entitled under any other law that were incurred by the claimant
after the claimant's rejection of the earliest settlement offer
that entitles the defendant or group of defendants to an award of
litigation costs under this section.
Sec. 42.057. ADMISSIBILITY OF EVIDENCE. (a) This chapter
does not affect the admissibility or inadmissibility of evidence as
provided in the Texas Rules of Evidence.
(b) The provisions of this chapter may not be made known to
the jury through any means, including voir dire, introduction into
evidence, instruction, or argument.
ARTICLE 3. VENUE; FORUM NON CONVENIENS
SECTION 3.01. Chapter 15, Civil Practice and Remedies Code,
is amended by adding Subchapter F to read as follows:
SUBCHAPTER F. CONSOLIDATION OF MULTIDISTRICT LITIGATION FOR
PRETRIAL PROCEEDINGS
Sec. 15.151. PURPOSE. The purpose of this subchapter is to
facilitate the just and efficient resolution of litigation in the
courts of this state. To accomplish this purpose, this subchapter
shall be construed in harmony with federal judicial interpretation
of comparable federal multidistrict litigation statutes to the
extent consistent with this purpose.
Sec. 15.152. DEFINITIONS. In this subchapter:
(1) "Panel" means the judicial panel on multidistrict
litigation authorized by Subchapter H, Chapter 74, Government Code.
(2) "Related" means that cases involve common material
issues of fact.
Sec. 15.153. APPLICABILITY. (a) This subchapter applies
to any civil action, including any class action, that is one of
multiple related cases pending in the district courts of this
state.
(b) This subchapter does not apply to any action in which
this state is a complainant arising under the antitrust laws.
Sec. 15.154. TRANSFER FOR COORDINATED OR CONSOLIDATED
PRETRIAL PROCEEDINGS. The panel may transfer any case to which this
subchapter applies to any district court for the purpose of
allowing coordinated or consolidated pretrial proceedings in
related cases.
Sec. 15.155. INITIATION OF TRANSFER PROCEEDINGS. (a)
Proceedings to transfer a case under this subchapter may be
initiated by:
(1) the panel on its own initiative; or
(2) a motion filed with the panel by a party in a case
to which this subchapter applies.
(b) A motion filed under Subsection (a)(2) must state:
(1) the number and style of the case that is the
subject of the motion;
(2) the number and style of the related case or cases
with which coordinated or consolidated pretrial proceedings are
sought, and the court and county in which the related case or cases
are pending;
(3) the material questions of fact common to the
cases;
(4) the reasons why coordinated or consolidated
pretrial proceedings would promote the just and efficient conduct
of the cases; and
(5) whether the parties to the case that is the subject
of the motion agree to the motion.
(c) A copy of the motion shall be filed by the movant in each
case identified in Subsections (b)(1) and (2).
Sec. 15.156. DETERMINATION OF TRANSFER. (a) After notice
to all parties in all related cases that may be subject to
coordinated or consolidated pretrial proceedings, and a hearing,
the panel shall order the transfer of any or all related cases to
one or more district courts for coordinated or consolidated
pretrial proceedings if it determines that transfer:
(1) is for the convenience of parties and witnesses;
and
(2) will promote the just and efficient conduct of the
actions.
(b) Any party to any case that would be affected by the
proceedings under this subchapter may appear at the hearing and
offer evidence on the propriety of coordinated or consolidated
pretrial proceedings in the related cases.
(c) The panel's order directing or denying transfer must be
supported by findings of fact and conclusions of law.
Sec. 15.157. FILING OF PANEL ORDERS. (a) Any order of the
panel shall be filed by the panel in the district court in which the
transfer hearing is to be or has been held.
(b) A copy of an order directing or denying transfer of
related cases shall be sent by the panel to both the transferee and
transferor courts.
(c) An order directing the transfer of related cases for
coordinated or consolidated pretrial proceedings is effective when
filed in the district court in which the transfer hearing was held.
Sec. 15.158. REVIEW OF PANEL ORDERS. (a) Review of an
order of the panel is by extraordinary writ.
(b) A petition for an extraordinary writ to review an order
of the panel in regard to setting a transfer hearing, or to review
any other order of the panel made before the order either directing
or denying transfer is made, must be filed in the court of appeals
having jurisdiction over the district in which the transfer hearing
is to be or has been held.
(c) A petition for an extraordinary writ to review an order
directing the transfer of one or more related cases, or to review
any order made after the transfer order is made, must be filed in
the court of appeals having jurisdiction over the transferee
district.
(d) An order of the panel denying a motion to transfer for
coordinated or consolidated pretrial proceedings may not be
appealed or reviewed.
Sec. 15.159. ASSIGNMENT. (a) On request of the panel, a
district judge may be assigned to preside in the transferee
district over coordinated or consolidated pretrial proceedings
being conducted pursuant to this subchapter.
(b) The assignment may be made by the chief justice of the
supreme court or by the presiding judge of the administrative
judicial region in which the transferee court sits, in accordance
with Subchapter C, Chapter 74, Government Code.
Sec. 15.160. CONDUCT OF PROCEEDINGS. (a) The coordinated
or consolidated pretrial proceedings shall be conducted by the
judge or judges to whom the cases are assigned by the panel.
(b) When conducting pretrial proceedings in cases
coordinated or consolidated for pretrial proceedings, the judge or
judges to whom the cases are assigned, the members of the panel, and
other district judges designated when needed by the panel may
exercise the powers of a district judge in any district, including
deciding motions to transfer venue and motions for summary
judgment.
(c) The judge or judges to whom the cases are assigned shall
give priority to the pretrial proceedings in cases coordinated or
consolidated under this subchapter over all other matters pending
before them.
Sec. 15.161. REMAND. A court to which a case is transferred
under this subchapter shall remand the transferred case, at or
before the conclusion of pretrial proceedings, to the district
court from which it was transferred unless it has been terminated,
except that the court may separate any claim, cross-claim,
counterclaim, or third-party claim and remand the separated claim
before the remainder of the case is remanded.
SECTION 3.02. Chapter 74, Government Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. JUDICIAL PANEL ON MULTIDISTRICT LITIGATION
Sec. 74.161. JUDICIAL PANEL. (a) The judicial panel on
multidistrict litigation consists of seven justices of the courts
of appeals designated from time to time by the chief justice of the
supreme court. Two panel members may not be from the same court of
appeals district.
(b) The concurrence of four members shall be necessary to
any action by the panel.
Sec. 74.162. OPERATION; RULES. (a) The judicial panel on
multidistrict litigation shall operate subject to rules of
administration for multidistrict litigation practice and procedure
adopted by the supreme court under Section 74.024.
(b) The panel may prescribe additional rules for the conduct
of its business not inconsistent with Subchapter F, Chapter 15,
Civil Practice and Remedies Code, and the rules of administration
for multidistrict litigation practice and procedure, as adopted by
the supreme court.
SECTION 3.03. Section 15.003, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 15.003. MULTIPLE PLAINTIFFS AND INTERVENING
PLAINTIFFS. (a) In a suit in which there is [where] more than one
plaintiff, whether the plaintiffs are included by joinder, by
intervention, because the lawsuit was begun by more than one
plaintiff, or otherwise, [is joined] each plaintiff must,
independently of every [any] other plaintiff, establish proper
venue. If a plaintiff cannot independently [Any person who is
unable to] establish proper venue, that plaintiff's part of the
suit, including all of that plaintiff's claims and causes of
action, must be transferred to a county of proper venue or
dismissed, as is appropriate, [may not join or maintain venue for
the suit as a plaintiff] unless that plaintiff [the person],
independently of every [any] other plaintiff, establishes that:
(1) joinder of that plaintiff or intervention in the
suit by that plaintiff is proper under the Texas Rules of Civil
Procedure;
(2) maintaining venue as to that plaintiff in the
county of suit does not unfairly prejudice another party to the
suit;
(3) there is an essential need to have that plaintiff's
[the person's] claim tried in the county in which the suit is
pending; and
(4) the county in which the suit is pending is a fair
and convenient venue for that plaintiff [the person seeking to join
in or maintain venue for the suit] and all [the] persons against
whom the suit is brought.
(b) An interlocutory appeal may be taken of a trial court's
determination under Subsection (a) that:
(1) a plaintiff did or did not independently establish
proper venue; or
(2) a plaintiff that did not independently establish
proper venue did or did not establish the items prescribed by
Subsections (a)(1)-(4) [A person may not intervene or join in a
pending suit as a plaintiff unless the person, independently of any
other plaintiff:
[(1) establishes proper venue for the county in which
the suit is pending; or
[(2) satisfies the requirements of Subdivisions (1)
through (4) of Subsection (a)].
(c) An [Any person seeking intervention or joinder, who is
unable to independently establish proper venue, or a party opposing
intervention or joinder of such a person may contest the decision of
the trial court allowing or denying intervention or joinder by
taking an] interlocutory appeal permitted by Subsection (b) must be
taken to the court of appeals district in which the trial court is
located under the procedures established for interlocutory
appeals. The appeal may be taken by a party that is affected by the
trial court's determination under Subsection (a). [The appeal must
be perfected not later than the 20th day after the date the trial
court signs the order denying or allowing the intervention or
joinder.] The court of appeals shall:
(1) determine whether the trial court's order [joinder
or intervention] is proper based on an independent determination
from the record and not under either an abuse of discretion or
substantial evidence standard; and
(2) render judgment [its decision] not later than the
120th day after the date the appeal is perfected [by the complaining
party].
(d) An interlocutory appeal under Subsection (b) has the
effect of staying the commencement of trial in the trial court
pending resolution of the appeal.
SECTION 3.04. Section 71.051, Civil Practice and Remedies
Code, is amended by amending Subsection (a) and adding Subsection
(j) to read as follows:
(a) If [With respect to a plaintiff who is not a legal
resident of the United States, if] a court of this state, on written
motion of a party, finds that in the interest of justice a claim or
action to which this section applies would be more properly heard in
a forum outside this state, the court shall [may] decline to
exercise jurisdiction under the doctrine of forum non conveniens
and shall [may] stay or dismiss the claim or action [in whole or in
part] on any conditions that may be just.
(j) This section does not affect the application of the
common law doctrine of forum non conveniens to actions other than
actions for personal injury or wrongful death.
SECTION 3.05. Section 23.101(a), Government Code, is
amended to read as follows:
(a) The trial courts of this state shall regularly and
frequently set hearings and trials of pending matters, giving
preference to hearings and trials of the following:
(1) temporary injunctions;
(2) criminal actions, with the following actions given
preference over other criminal actions:
(A) criminal actions against defendants who are
detained in jail pending trial;
(B) criminal actions involving a charge that a
person committed an act of family violence, as defined by Section
71.01, Family Code; and
(C) an offense under:
(i) Section 21.11, Penal Code;
(ii) Chapter 22, Penal Code, if the victim
of the alleged offense is younger than 17 years of age;
(iii) Section 25.02, Penal Code, if the
victim of the alleged offense is younger than 17 years of age; or
(iv) Section 25.06, Penal Code;
(3) election contests and suits under the Election
Code;
(4) orders for the protection of the family under
Section 3.581, 71.11, or 71.12, Family Code;
(5) appeals of final rulings and decisions of the
Texas Workers' Compensation Commission and claims under the Federal
Employers' Liability Act and the Jones Act; [and]
(6) appeals of final orders of the commissioner of the
General Land Office under Section 51.3021, Natural Resources Code;
and
(7) multidistrict litigation.
SECTION 3.06. The following sections of the Civil Practice
and Remedies Code are repealed:
(1) 71.051(b), (c), (d), (e), (f), (g), and (h); and
(2) 71.052.
ARTICLE 4. PROPORTIONATE RESPONSIBILITY AND
DESIGNATION OF RESPONSIBLE PARTIES
SECTION 4.01. Section 33.002(a), Civil Practice and
Remedies Code, is amended to read as follows:
(a) This [Except as provided by Subsections (b) and (c),
this] chapter applies to:
(1) any cause of action based on tort in which a
defendant, settling person, or responsible third party is found
responsible for a percentage of the harm for which relief is sought;
or
(2) any action brought under the Deceptive Trade
Practices-Consumer Protection Act (Subchapter E, Chapter 17,
Business & Commerce Code) in which a defendant, settling person, or
responsible third party is found responsible for a percentage of
the harm for which relief is sought.
SECTION 4.02. Section 33.003, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 33.003. DETERMINATION OF PERCENTAGE OF
RESPONSIBILITY. (a) The trier of fact, as to each cause of action
asserted, shall determine the percentage of responsibility, stated
in whole numbers, for the following persons with respect to each
person's causing or contributing to cause in any way the harm for
which recovery of damages is sought, whether by negligent act or
omission, by any defective or unreasonably dangerous product, by
other conduct or activity that violates an applicable legal
standard, or by any combination of these:
(1) each claimant;
(2) each defendant;
(3) each settling person; and
(4) each responsible third party who has been
designated [joined] under Section 33.004.
(b) This section does not require a submission to the jury
of a question regarding conduct by any person without sufficient
evidence to support the submission.
SECTION 4.03. The heading to Section 33.004, Civil Practice
and Remedies Code, is amended to read as follows:
Sec. 33.004. DESIGNATION [JOINDER] OF RESPONSIBLE THIRD
PARTY [PARTIES].
SECTION 4.04. Section 33.004, Civil Practice and Remedies
Code, is amended by amending Subsections (a) and (b) and adding
Subsections (f)-(j) to read as follows:
(a) A [Except as provided in Subsections (d) and (e), prior
to the expiration of limitations on the claimant's claim for
damages against the defendant and on timely motion made for that
purpose, a] defendant may seek to designate a person as [join] a
responsible third party by filing a motion for leave to designate
that person as a responsible third party [who has not been sued by
the claimant]. The motion must be filed on or before the 60th day
before the trial date unless the court finds good cause to allow the
motion to be filed at a later date.
(b) Nothing in this section affects [shall affect] the
third-party practice as previously recognized in the rules and
statutes of this state with regard to the assertion by a defendant
of rights to contribution or indemnity. Nothing in this section
affects [shall affect] the filing of cross-claims or counterclaims.
(f) A court shall grant leave to designate the named person
as a responsible third party unless another party files an
objection to the motion for leave on or before the 15th day after
the date the motion is served.
(g) If an objection to the motion for leave is timely filed,
the court shall grant leave to designate the person as a responsible
third party unless the objecting party establishes:
(1) the defendant did not plead sufficient facts
concerning the alleged liability of the responsible person to
satisfy the pleading requirements of the Texas Rules of Civil
Procedure; and
(2) after having been granted leave to replead, the
defendant failed to plead sufficient facts concerning the alleged
liability of the responsible person to satisfy the pleading
requirements of the Texas Rules of Civil Procedure.
(h) By granting a motion for leave to designate a person as a
responsible third party, the person named in the motion is
designated as a responsible third party for purposes of this
chapter without further action by the court or any party.
(i) For a person whose identity is not known, the court
shall grant a motion for leave to designate that person as a
responsible third party if the court determines that the motion
otherwise should be granted under Subsection (f) or (g) and the
defendant has stated in the motion all known identifying
characteristics of the person. In that circumstance, the person
will be denominated as "Jane Doe" or "John Doe" until the person's
identity is known.
(j) The filing or granting of a motion for leave to
designate a person as a responsible third party or a finding of
fault against the person:
(1) does not by itself impose liability on the person;
and
(2) may not be used in any other proceeding, on the
basis of res judicata, collateral estoppel, or any other legal
theory, to impose liability on the person.
SECTION 4.05. Sections 33.011(1), (2), (5), and (6), Civil
Practice and Remedies Code, are amended to read as follows:
(1) "Claimant" means a person [party] seeking recovery
of damages [pursuant to the provisions of Section 33.001],
including a plaintiff, counterclaimant, cross-claimant, or
third-party plaintiff [seeking recovery of damages]. In an action
in which a party seeks recovery of damages for injury to another
person, damage to the property of another person, death of another
person, or other harm to another person, "claimant" includes:
(A) the person who was injured, was harmed, or
died or whose property was damaged; and
(B) any person who is [both that other person and
the party] seeking, has sought, or could seek recovery of damages
for the injury, harm, or death of that person or for the damage to
the property of that person [pursuant to the provisions of Section
33.001].
(2) "Defendant" includes any person [party] from whom,
at the time of the submission of the case to the trier of fact, a
claimant seeks recovery of damages [pursuant to the provisions of
Section 33.001 at the time of the submission of the case to the
trier of fact].
(5) "Settling person" means a person who [at the time
of submission] has, at any time, paid or promised to pay money or
anything of monetary value to a claimant [at any time] in
consideration of potential liability [pursuant to the provisions of
Section 33.001] with respect to the personal injury, property
damage, death, or other harm for which recovery of damages is
sought.
(6) [(A)] "Responsible third party" means any person
who is alleged to have caused or contributed to causing in any way
the harm for which recovery of damages is sought, whether by
negligent act or omission, by any defective or unreasonably
dangerous product, by other conduct or activity that violates an
applicable legal standard, or by any combination of these. [to whom
all of the following apply:
[(i) the court in which the action was filed
could exercise jurisdiction over the person;
[(ii) the person could have been, but was
not, sued by the claimant; and
[(iii) the person is or may be liable to the
plaintiff for all or a part of the damages claimed against the named
defendant or defendants.
[(B)] The term "responsible third party" does not
include a seller eligible for indemnity under Section 82.002[:
[(i) the claimant's employer, if the
employer maintained workers' compensation insurance coverage, as
defined by Section 401.011(44), Labor Code, at the time of the act,
event, or occurrence made the basis of the claimant's suit; or
[(ii) a person or entity that is a debtor in
bankruptcy proceedings or a person or entity against whom this
claimant's claim has been discharged in bankruptcy, except to the
extent that liability insurance or other source of third party
funding may be available to pay claims asserted against the
debtor].
SECTION 4.06. Section 33.013, Civil Practice and Remedies
Code, is amended by amending Subsections (a) and (b) and adding
Subsections (e) and (f) to read as follows:
(a) Except as provided in Subsection [Subsections] (b) [and
(c)], a liable defendant is liable to a claimant only for the
percentage of the damages found by the trier of fact equal to that
defendant's percentage of responsibility with respect to the
personal injury, property damage, death, or other harm for which
the damages are allowed.
(b) Notwithstanding Subsection (a), each liable defendant
is, in addition to his liability under Subsection (a), jointly and
severally liable for the damages recoverable by the claimant under
Section 33.012 with respect to a cause of action if:
(1) the percentage of responsibility attributed to the
defendant with respect to a cause of action is greater than 50
percent; or
(2) the defendant, with the specific intent to do harm
to others, acted in concert with another person to engage in the
conduct described in the following provisions of the Penal Code and
in so doing proximately caused the damages legally recoverable by
the claimant:
(A) Section 19.02 (murder);
(B) Section 19.03 (capital murder);
(C) Section 20.04 (aggravated kidnapping);
(D) Section 22.02 (aggravated assault);
(E) Section 22.011 (sexual assault);
(F) Section 22.021 (aggravated sexual assault);
(G) Section 22.04 (injury to a child, elderly
individual, or disabled individual);
(H) Section 32.21 (forgery);
(I) Section 32.43 (commercial bribery);
(J) Section 32.45 (misapplication of fiduciary
property or property of financial institution);
(K) Section 32.46 (securing execution of
document by deception);
(L) Section 32.47 (fraudulent destruction,
removal, or concealment of writing); or
(M) conduct described in Chapter 31 the
punishment level for which is a felony of the third degree or
higher.
(e) Notwithstanding anything to the contrary stated in the
provisions of the Penal Code listed in Subsection (b)(2), that
subsection applies only if the claimant proves the defendant acted
or failed to act with specific intent to do harm. A defendant acts
with specific intent to do harm with respect to the nature of the
defendant's conduct and the result of the person's conduct when it
is the person's conscious effort or desire to engage in the conduct
for the purpose of doing substantial harm to others.
(f) The jury may not be made aware through voir dire,
introduction into evidence, instruction, or any other means that
the conduct to which Subsection (b)(2) refers is defined by the
Penal Code.
SECTION 4.07. Section 33.017, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 33.017. PRESERVATION OF EXISTING RIGHTS OF INDEMNITY.
Nothing in this chapter shall be construed to affect any rights of
indemnity granted by [to a seller eligible for indemnity by Chapter
82, the Texas Motor Vehicle Commission Code (Article 4413(36),
Vernon's Texas Civil Statutes), or] any [other] statute, [nor shall
it affect rights of indemnity granted] by contract, or by [at]
common law. To the extent of any conflict between this chapter and
any right to indemnification granted by [Section 82.002, the Texas
Motor Vehicle Commission Code (Article 4413(36), Vernon's Texas
Civil Statutes), or any other] statute, contract, or common law,
those rights of indemnification shall prevail over the provisions
of this chapter.
SECTION 4.08. Section 417.001(b), Labor Code, is amended to
read as follows:
(b) If a benefit is claimed by an injured employee or a legal
beneficiary of the employee, the insurance carrier is subrogated to
the rights of the injured employee and may enforce the liability of
the third party in the name of the injured employee or the legal
beneficiary. The insurance carrier's subrogation interest is
limited to the amount of the total benefits paid or assumed by the
carrier to the employee or the legal beneficiary, less the amount by
which the court reduces the judgment based on the percentage of
responsibility determined by the trier of fact under Section
33.003, Civil Practice and Remedies Code, attributable to the
employer. If the recovery is for an amount greater than the amount
of the insurance carrier's subrogation interest [that paid or
assumed by the insurance carrier to the employee or the legal
beneficiary], the insurance carrier shall:
(1) reimburse itself and pay the costs from the amount
recovered; and
(2) pay the remainder of the amount recovered to the
injured employee or the legal beneficiary.
SECTION 4.09. The following sections of the Civil Practice
and Remedies Code are repealed:
(1) 33.002(b), (d), (e), (f), (g), and (h);
(2) 33.004(c), (d), and (e);
(3) 33.011(7);
(4) 33.012(c); and
(5) 33.013(c).
SECTION 4.10. It is not the intent or purpose of this
article to affect workers' compensation law.
ARTICLE 5. PRODUCTS LIABILITY
SECTION 5.01. Section 16.012, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 16.012. PRODUCTS LIABILITY[: MANUFACTURING
EQUIPMENT]. (a) In this section, "claimant,"[:
[(1) "Claimant,"] "products liability action,"
"seller," and "manufacturer" have the meanings assigned by Section
82.001.
[(2) "Manufacturing equipment" means equipment and
machinery used in the manufacturing, processing, or fabrication of
tangible personal property but does not include agricultural
equipment or machinery.]
(b) Except as provided by Subsections [Subsection] (c) and
(d), a claimant must commence a products liability action against a
manufacturer or seller of a product [manufacturing equipment]
before the end of 15 years after the date of the sale of the product
[equipment] by the defendant.
(c) If a manufacturer or seller expressly warrants in
writing [represents] that the product [manufacturing equipment]
has a useful safe life of longer than 15 years, a claimant must
commence a products liability action against that manufacturer or
seller of the product [equipment] before the end of the number of
years warranted [represented] after the date of the sale of the
product [equipment] by that seller.
(d) This section does not apply to a products liability
action in which the claimant alleges a product caused a disease the
symptoms of which did not, before the end of 15 years after the date
of the sale of the product by the defendant, manifest themselves to
a degree and for a duration that would put a reasonable person on
notice that the person suffers some injury. This section does not
reduce a limitations period for a cause of action described by this
subsection [that applies to a products liability action involving
manufacturing equipment] that accrues before the end of the
limitations period under this section.
(e) This section does not extend the limitations period
within which a products liability action involving the product
[manufacturing equipment] may be commenced under any other law.
(f) This section applies only to the sale and not to the
lease of a product [manufacturing equipment].
SECTION 5.02. Section 82.001(2), Civil Practice and
Remedies Code, is amended to read as follows:
(2) "Products liability action" means any action
against a manufacturer or seller for recovery of damages or other
relief for harm [arising out of personal injury, death, or property
damage] allegedly caused by a defective product, whether the action
is based in strict tort liability, strict products liability,
negligence, misrepresentation, breach of express or implied
warranty, or any other theory or combination of theories, and
whether the relief sought is recovery of damages or any other legal
or equitable relief, including a suit for:
(A) injury or damage to or loss of real or
personal property;
(B) personal injury;
(C) wrongful death;
(D) economic loss; or
(E) declaratory, injunctive, or other equitable
relief.
SECTION 5.03. Chapter 82, Civil Practice and Remedies Code,
is amended by adding Sections 82.003, 82.007, 82.008, and 82.009 to
read as follows:
Sec. 82.003. LIABILITY OF NONMANUFACTURING SELLERS. A
seller that did not manufacture a product is not liable for harm
caused to the claimant by that product unless the claimant proves:
(1) that the seller altered or modified the product
and the claimant's harm resulted from that alteration or
modification;
(2) that:
(A) the seller exercised substantial control
over the content of a warning or instruction that accompanied the
product;
(B) the warning or instruction was inadequate;
and
(C) the claimant's harm resulted from the
inadequacy of the warning or instruction;
(3) that:
(A) the seller made an express factual
representation about an aspect of the product;
(B) the representation was incorrect;
(C) the claimant relied on the representation in
obtaining or using the product; and
(D) if the aspect of the product had been as
represented, the claimant would not have been harmed by the product
or would not have suffered the same degree of harm;
(4) that:
(A) the seller actually knew of a defect to the
product at the time the seller supplied the product; and
(B) the claimant's harm resulted from the defect;
or
(5) that the manufacturer of the product is:
(A) insolvent; or
(B) not subject to the jurisdiction of the court.
Sec. 82.007. MEDICINES. (a) In a products liability action
alleging that an injury was caused by a failure to provide adequate
warnings or information with regard to a pharmaceutical product,
the defendant or defendants, including a health care provider,
manufacturer, distributor, and prescriber, are not liable with
respect to the allegations if:
(1) the warnings or information that accompanied the
product in its distribution were those approved by the United
States Food and Drug Administration for a product approved under
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Section 301 et
seq.), as amended, or Section 351, Public Health Service Act (42
U.S.C. Section 262), as amended; or
(2) the warnings provided were those stated in
monographs developed by the United States Food and Drug
Administration for pharmaceutical products that may be distributed
without an approved new drug application.
(b) This section does not apply if the manufacturer, before
or after pre-market approval or licensing of the product, withheld
from or misrepresented to the Food and Drug Administration required
information that was material and relevant to the performance of
the product and was causally related to the claimant's injury.
Sec. 82.008. EVIDENCE OF SUBSEQUENT IMPROVEMENTS AND
MEASURES. In a products liability action, a court may not admit,
except for purposes of impeachment, evidence of a subsequent
improvement made or measure taken with respect to the defect
alleged to have caused harm, or a similar product, that, if made or
taken before the product was supplied, would have made the
claimant's harm less likely.
Sec. 82.009. COMPLIANCE WITH GOVERNMENT STANDARDS. (a) In
a products liability action brought against a product manufacturer
or seller, there is a rebuttable presumption that the product
manufacturer or seller is not liable for any injury to a claimant
caused by some aspect of the formulation, labeling, or design of a
product if the product manufacturer or seller establishes that the
product's formula, labeling, or design complied with mandatory
safety standards or regulations adopted and promulgated by the
federal government, or an agency of the federal government, that
were applicable to the product at the time of manufacture, and that
governed the product risk that allegedly caused harm.
(a-1) The claimant may rebut the presumption in Subsection
(a) by establishing that:
(1) the mandatory federal safety standards or
regulations applicable to the product were inadequate to protect
the public from unreasonable risks of injury or damage;
(2) the manufacturer, before or after marketing the
product, withheld information required by or misrepresented
information provided to the federal government or agency that was:
(A) material and relevant to the federal
government's or agency's determination that the mandatory safety
standards or regulations at issue in the action were adequate; and
(B) causally related to the claimant's injury; or
(3) with respect to the manufacturer of a motor
vehicle, or a component thereof, after the product was sold and
before the alleged injury occurred, the manufacturer learned the
vehicle or component part contained a defect causally related to
the claimant's injury and to motor vehicle safety and failed to
either:
(A) give notice to the federal government, or
agency of the federal government, that adopted or promulgated the
applicable safety standards or regulations; or
(B) give notice by first class mail to each
person registered under Texas law as the owner and whose name and
address are reasonably ascertainable by the manufacturer through
state records or other available sources, or if the registered
owner is not notified, to the most recent purchaser known to the
manufacturer.
(b) In a products liability action brought against a product
manufacturer or seller, there is a rebuttable presumption that the
product manufacturer or seller is not liable for any injury to a
claimant allegedly caused by some aspect of the formulation,
labeling, or design of a product if the product manufacturer or
seller establishes that the product was subject to pre-market
licensing or approval by the federal government, or an agency of the
federal government, that the manufacturer complied with all of the
government's or agency's procedures and requirements with respect
to pre-market licensing or approval, and that after full
consideration of the product's risks and benefits the product was
approved or licensed for sale by the government or agency. The
claimant may rebut this presumption by establishing that:
(1) the standards or procedures used in the particular
pre-market approval or licensing process were inadequate to protect
the public from unreasonable risks of injury or damage; or
(2) the manufacturer, before or after pre-market
approval or licensing of the product, withheld from or
misrepresented to the government or agency information that was
material and relevant to the performance of the product and was
causally related to the claimant's injury.
(c) This section does not extend to manufacturing flaws or
defects even though the product manufacturer has complied with all
quality control and manufacturing practices mandated by the federal
government or an agency of the federal government.
ARTICLE 6. INTEREST
SECTION 6.01. Section 304.003(c), Finance Code, is amended
to read as follows:
(c) The postjudgment interest rate is:
(1) the weekly average one-year constant maturity
treasury yield [auction rate quoted on a discount basis for 52-week
treasury bills issued by the United States government] as most
recently published by the Board of Governors of the Federal Reserve
System [Federal Reserve Board] before the date of computation;
(2) five [10] percent a year if the weekly average
one-year constant maturity treasury yield [auction rate] described
by Subdivision (1) is less than five [10] percent; or
(3) 15 [20] percent a year if the weekly average
one-year constant maturity treasury yield [auction rate] described
by Subdivision (1) is more than 15 [20] percent.
SECTION 6.02. Subchapter B, Chapter 304, Finance Code, is
amended by adding Section 304.1045 to read as follows:
Sec. 304.1045. FUTURE DAMAGES. Prejudgment interest may
not be assessed or recovered on an award of future damages.
ARTICLE 7. APPEAL BONDS
SECTION 7.01. Section 35.006, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 35.006. STAY. (a) If the judgment debtor shows the
court that an appeal from the foreign judgment is pending or will be
taken, that the time for taking an appeal has not expired, or that a
stay of execution has been granted, has been requested, or will be
requested, and proves that the judgment debtor has furnished or
will furnish the security for the satisfaction of the judgment
required by the state in which it was rendered, the court shall stay
enforcement of the foreign judgment until the appeal is concluded,
the time for appeal expires, or the stay of execution expires or is
vacated.
(b) If the judgment debtor shows the court a ground on which
enforcement of a judgment of the court of this state would be
stayed, the court shall stay enforcement of the foreign judgment
for an appropriate period and require the same security for
suspending enforcement [satisfaction] of the judgment that is
required in this state in accordance with Section 52.006.
SECTION 7.02. Chapter 52, Civil Practice and Remedies Code,
is amended by adding Section 52.006 to read as follows:
Sec. 52.006. AMOUNT OF SECURITY FOR MONEY JUDGMENT. (a)
Subject to Subsection (b), when a judgment is for money, the amount
of security must equal the sum of:
(1) the amount of compensatory damages awarded in the
judgment;
(2) interest for the estimated duration of the appeal;
and
(3) costs awarded in the judgment.
(b) Notwithstanding any other law or rule of court, when a
judgment is for money, the amount of security must not exceed the
lesser of:
(1) 50 percent of the judgment debtor's net worth; or
(2) $25 million.
(c) On a showing by the judgment debtor that the judgment
debtor is likely to suffer substantial economic harm if required to
post security in an amount required under Subsection (a) or (b), the
trial court shall lower the amount of the security to an amount that
will not cause the judgment debtor substantial economic harm.
(d) An appellate court may review the amount of security as
allowed under Rule 24, Texas Rules of Appellate Procedure, except
that when a judgment is for money, the appellate court may not
modify the amount of security to exceed the amount allowed under
this section.
SECTION 7.03. The following sections of the Civil Practice
and Remedies Code are repealed:
(1) 52.002;
(2) 52.003; and
(3) 52.004.
ARTICLE 8. EVIDENCE RELATING TO SEAT BELTS
SECTION 8.01. Section 545.413(g), Transportation Code, is
repealed.
ARTICLE 9. BENEVOLENT GESTURES
SECTION 9.01. Section 18.061(c), Civil Practice and
Remedies Code, is repealed.
SECTION 9.02. This article applies only to the
admissibility of a communication in a proceeding that begins on or
after the effective date of this article. The admissibility of a
communication in a proceeding that began before the effective date
of the article is governed by the law applicable to the
admissibility of the communication immediately before the
effective date of this article, and that law is continued in effect
for that purpose.
ARTICLE 10. HEALTH CARE
SECTION 10.01. Section 1.03(a), Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by amending Subdivisions (3), (4), and
(8) and adding Subdivisions (10)-(22) to read as follows:
(3)(A) "Health care provider" means any person,
partnership, professional association, corporation, facility, or
institution duly licensed, certified, registered, or chartered by
the State of Texas to provide health care, including:
(i) [as] a registered nurse;
(ii) a [,] hospital;
(iii) a hospital system;
(iv) a [,] dentist;
(v) a hospice;
(vi) a [,] podiatrist;
(vii) a [,] pharmacist;
(viii) an emergency medical services
provider;
(ix) an assisted living facility;
(x) a home and community support services
agency;
(xi) an intermediate care facility for the
mentally retarded or a home and community-based services waiver
program for persons with mental retardation adopted in accordance
with Section 1915(c) of the federal Social Security Act (42 U.S.C.
Section 1396n(c)), as amended;
(xii) a[, or] nursing home; or
(xiii) a chiropractor.
(B) The term includes:
(i) [, or] an officer, director,
shareholder, member, partner, manager, owner, or affiliate of a
health care provider or physician; and
(ii) an employee, independent contractor,
or agent of a health care provider or physician [thereof] acting in
the course and scope of the [his] employment or contractual
relationship.
(4) "Health care liability claim" means a cause of
action against a health care provider or physician arising out of or
related to [for] treatment, lack of treatment, or other claimed
departure from accepted standards of medical care, [or] health
care, or safety or professional or administrative services which
proximately results in injury to or death of a claimant [the
patient], whether the claimant's [patient's] claim or cause of
action sounds in tort or contract.
(8) "Physician" means:
(A) an individual [a person] licensed to practice
medicine in this state;
(B) a professional association organized under
the Texas Professional Association Act (Article 1528f, Vernon's
Texas Civil Statutes) by an individual physician or group of
physicians;
(C) a partnership or limited liability
partnership formed by a group of physicians;
(D) a nonprofit health corporation certified
under Section 162.001, Occupations Code; or
(E) a company formed by a group of physicians
under the Texas Limited Liability Company Act (Article 1528n,
Vernon's Texas Civil Statutes).
(10) "Affiliate" means a person who directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with a specified person,
including any direct or indirect parent or subsidiary.
(11) "Claimant" means a person, including a decedent's
estate, seeking or who has sought recovery of damages in a health
care liability claim. All persons claiming to have sustained
damages as the result of the bodily injury or death of a single
person are considered a single claimant.
(12) "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of the person, whether through ownership of
equity or securities, by contract, or otherwise.
(13) "Economic damages" means compensatory damages
for any pecuniary loss or damage. The term does not include
noneconomic damages.
(14) "Emergency medical care" means bona fide
emergency services provided after the sudden onset of a medical or
traumatic condition manifesting itself by acute symptoms of
sufficient severity, including severe pain, such that the absence
of immediate medical attention could reasonably be expected to
result in:
(A) placing the patient's health in serious
jeopardy;
(B) serious impairment to bodily functions; or
(C) serious dysfunction of any bodily organ or
part.
(15) "Emergency medical services provider" means a
licensed public or private provider to which Chapter 773, Health
and Safety Code, applies.
(16) "Home and community support services agency"
means a licensed public or provider agency to which Chapter 142,
Health and Safety Code, applies.
(17) "Intermediate care facility for the mentally
retarded" means a licensed public or private institution to which
Chapter 252, Health and Safety Code, applies.
(18) "Noneconomic damages" means any loss or damage,
however characterized, for past, present, and future physical pain
and suffering, mental anguish and suffering, loss of consortium,
loss of companionship and society, disfigurement, physical
impairment, and any other nonpecuniary loss or damage or element of
loss or damage.
(19) "Nursing home" means a licensed public or private
institution to which Chapter 242, Health and Safety Code, applies.
(20) "Professional or administrative services" means
those duties or services that a physician or health care provider is
required to provide as a condition of maintaining the physician's
or health care provider's license, accreditation status, or
certification to participate in state or federal health care
programs.
(21) "Hospice" means a hospice facility or activity to
which Chapter 142, Health and Safety Code, applies.
(22) "Hospital system" means a system of hospitals
located in this state that are under the common governance or
control of a corporate parent.
SECTION 10.02. Subchapter A, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Sections 1.04 and 1.05 to read
as follows:
Sec. 1.04. CONFLICT WITH OTHER LAW AND RULES OF CIVIL
PROCEDURE. (a) In the event of a conflict between this Act and
another law, including a rule of procedure or evidence or court
rule, this Act controls to the extent of the conflict.
(b) Notwithstanding Subsection (a) of this section, in the
event of a conflict between this Act and Section 101.023, 102.003,
or 108.002, Civil Practice and Remedies Code, those sections of the
Civil Practice and Remedies Code control to the extent of the
conflict.
(c) Notwithstanding Section 22.004, Government Code, and
except as otherwise provided by this Act, the supreme court may not
amend or adopt rules in conflict with this Act.
(d) The district courts and statutory county courts in a
county may not adopt local rules in conflict with this Act.
Sec. 1.05. SOVEREIGN IMMUNITY NOT WAIVED. This Act does not
waive sovereign immunity from suit or from liability.
SECTION 10.03. Section 4.01, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Subsection (f) to read as
follows:
(f)(1) Notwithstanding the provisions of Rule 202, Texas
Rules of Civil Procedure, a deposition may not be taken of a
physician or health care provider for the purpose of investigating
a health care liability claim before the filing of a lawsuit unless:
(A) upon receipt of written notice as required
under this section from a patient, patient's family, or patient's
representative, the physician or health care provider has failed,
within the 10 days specified in this section, to provide complete,
unaltered records;
(B) upon providing the records as required under
this section, the records are incomplete, inaccurate, illegible,
show evidence of having been changed after the events that they
purport to record, or fail to comply with any applicable rules,
regulations, standards, policies, or guidelines for proper
completion of same; or
(C) upon providing the records as required under
this section, it cannot be reasonably determined from the records
provided what sequence of events occurred in the relevant treatment
or events, or cannot be reasonably determined who was present,
involved, participated in, or observed the events in question.
(2) If the physician or health care provider fails to
provide the records as required under this section, the patient,
the patient's family, or the patient's representative shall,
notwithstanding Section 13.01(u) of this Act, be entitled to one
deposition under Rule 202, Texas Rules of Civil Procedure, in
addition to the deposition allowed under Section 13.01(u) of this
Act, sufficient to provide the information needed for them to
appropriately evaluate any potential health care liability claim
and make decisions about inclusion or not of potential defendants.
SECTION 10.04. The heading to Subchapter G, Medical
Liability and Insurance Improvement Act of Texas (Article 4590i,
Vernon's Texas Civil Statutes), is amended to read as follows:
SUBCHAPTER G. EVIDENTIARY MATTERS [RES IPSA LOQUITUR]
SECTION 10.05. Subchapter G, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Sections 7.03 and 7.04 to read
as follows:
Sec. 7.03. FEDERAL OR STATE INCOME TAXES. (a)
Notwithstanding any other law, in a health care liability claim, if
any claimant seeks recovery for loss of earnings, loss of earning
capacity, loss of contributions of a pecuniary value, or loss of
inheritance, evidence to prove the loss must be presented in the
form of a net after-tax loss that either was or should have been
paid by the injured party or decedent through which the alleged loss
has occurred.
(b) In a health care liability claim, if any claimant seeks
recovery for loss of earnings, loss of earning capacity, loss of
contributions of a pecuniary value, or loss of inheritance, the
court shall instruct the jury whether any recovery for compensatory
damages sought by the claimant is subject to federal or state income
taxes.
Sec. 7.04. JURY INSTRUCTIONS IN CASES INVOLVING EMERGENCY
MEDICAL CARE. (a) In a health care liability claim that involves a
claim of negligence arising from the provision of emergency medical
care, the court shall instruct the jury to consider, together with
all other relevant matters:
(1) whether the person providing care did not have the
patient's medical history or was unable to obtain a full medical
history, including the knowledge of preexisting medical
conditions, allergies, and medications;
(2) the lack of a preexisting physician-patient
relationship or health care provider-patient relationship;
(3) the circumstances constituting the emergency; and
(4) the circumstances surrounding the delivery of the
emergency medical care.
(b) The provisions of Subsection (a) of this section do not
apply to medical care or treatment:
(1) that occurs after the patient is stabilized and is
capable of receiving medical treatment as a nonemergency patient;
or
(2) that is unrelated to the original medical
emergency.
SECTION 10.06. The heading to Subchapter I, Medical
Liability and Insurance Improvement Act of Texas (Article 4590i,
Vernon's Texas Civil Statutes), is amended to read as follows:
SUBCHAPTER I. PAYMENT OF MEDICAL OR HEALTH CARE EXPENSES [ADVANCE
PAYMENTS]
SECTION 10.07. Subchapter I, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Section 9.01 to read as
follows:
Sec. 9.01. RECOVERY OF PAST MEDICAL OR HEALTH CARE
EXPENSES. Recovery of past medical or health care expenses in a
health care liability claim shall be limited to the amount actually
paid or incurred by or on behalf of the claimant.
SECTION 10.08. Section 10.01, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 10.01. LIMITATION ON HEALTH CARE LIABILITY CLAIMS.
(a) Notwithstanding any other law and subject to Subsection (b) of
this section, no health care liability claim may be commenced
unless the action is filed within two years from the occurrence of
the breach or tort or from the date the medical or health care
treatment that is the subject of the claim or the hospitalization
for which the claim is made is completed; provided that, minors
under the age of 12 years shall have until their 14th birthday in
which to file, or have filed on their behalf, the claim. Except as
herein provided, this subchapter applies to all persons regardless
of minority or other legal disability.
(b) A claimant must bring a health care liability claim not
later than 10 years after the date of the act or omission that gives
rise to the claim. This subsection is intended as a statute of
repose so that all claims must be brought within 10 years or they
are time barred.
SECTION 10.09. Section 11.02, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Subsections (e) and (f) to
read as follows:
(e) The limitation on health care liability claims
contained in Subsection (a) of this section includes punitive
damages.
(f) The limitation on health care liability claims
contained in Subsection (a) of this section shall be applied on a
per-claimant basis.
SECTION 10.10. Section 11.03, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 11.03. LIMITATION ON NONECONOMIC DAMAGES [ALTERNATIVE
PARTIAL LIMIT ON CIVIL LIABILITY]. [In the event that Section
11.02(a) of this subchapter is stricken from this subchapter or is
otherwise invalidated by a method other than through legislative
means, the following shall become effective:]
In an action on a health care liability claim where final
judgment is rendered against a physician or health care provider,
the limit of civil liability for noneconomic damages of the
physician or health care provider shall be limited to an amount not
to exceed $250,000 for each claimant, regardless of the number of
defendant physicians or health care providers against whom the
claim is asserted or the number of separate causes of action on
which the claim is based. This section does not apply to a health
care liability claim based solely on intentional denial of medical
treatment that a patient is otherwise qualified to receive, against
the wishes of a patient, or, if the patient is incompetent, against
the wishes of the patient's guardian, on the basis of the patient's
present or predicted age, disability, degree of medical dependency,
or quality of life unless the medical treatment is denied under
Chapter 166, Health and Safety Code [of the physician or health care
provider for all past and future noneconomic losses recoverable by
or on behalf of any injured person and/or the estate of such person,
including without limitation as applicable past and future physical
pain and suffering, mental anguish and suffering, consortium,
disfigurement, and any other nonpecuniary damage, shall be limited
to an amount not to exceed $150,000].
SECTION 10.11. Subchapter K, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Section 11.031 to read as
follows:
Sec. 11.031. ALTERNATIVE LIMITATION ON NONECONOMIC
DAMAGES. (a) In the event that Section 11.03 of this subchapter is
stricken from this subchapter or is otherwise to any extent
invalidated by a method other than through legislative means, the
following, subject to the provisions of this section, shall become
effective:
In an action on a health care liability claim where final
judgment is rendered against a physician or health care provider,
the limit of civil liability for all damages and losses, other than
economic damages, shall be limited to an amount not to exceed
$250,000 for each claimant, regardless of the number of defendant
physicians or health care providers against whom the claim is
asserted or the number of separate causes of action on which the
claim is based.
(b) Effective before September 1, 2005, Subsection (a) of
this section applies to any physician or health care provider that
provides evidence of financial responsibility in the following
amounts in effect for any act or omission to which this subchapter
applies:
(1) at least $100,000 for each health care liability
claim and at least $300,000 in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician participating in an approved
residency program;
(2) at least $200,000 for each health care liability
claim and at least $600,000 in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician or health care provider, other
than a hospital; and
(3) at least $500,000 for each health care liability
claim and at least $1.5 million in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a hospital.
(c) Effective September 1, 2005, Subsection (a) of this
section applies to any physician or health care provider that
provides evidence of financial responsibility in the following
amounts in effect for any act or omission to which this subchapter
applies:
(1) at least $100,000 for each health care liability
claim and at least $300,000 in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician participating in an approved
residency program;
(2) at least $300,000 for each health care liability
claim and at least $900,000 in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician or health care provider, other
than a hospital; and
(3) at least $750,000 for each health care liability
claim and at least $2.25 million in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a hospital.
(d) Effective September 1, 2007, Subsection (a) of this
section applies to any physician or health care provider that
provides evidence of financial responsibility in the following
amounts in effect for any act or omission to which this subchapter
applies:
(1) at least $100,000 for each health care liability
claim and at least $300,000 in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician participating in an approved
residency program;
(2) at least $500,000 for each health care liability
claim and at least $1 million in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a physician or health care provider, other
than a hospital; and
(3) at least $1 million for each health care liability
claim and at least $3 million in aggregate for all health care
liability claims occurring in an insurance policy year, calendar
year, or fiscal year for a hospital.
(e) Evidence of financial responsibility may be established
at the time of judgment by providing proof of:
(1) the purchase of a contract of insurance or other
plan of insurance authorized by this state;
(2) the purchase of coverage from a trust organized
and operating under Article 21.49-4, Insurance Code;
(3) the purchase of coverage or another plan of
insurance provided by or through a risk retention group or
purchasing group authorized under applicable laws of this state or
under the Product Liability Risk Retention Act of 1981 (15 U.S.C.
Section 3901 et seq.), as amended, or the Liability Risk Retention
Act of 1986 (15 U.S.C. Section 3901 et seq.), as amended, or any
other contract or arrangement for transferring and distributing
risk relating to legal liability for damages, including cost or
defense, legal costs, fees, and other claims expenses; or
(4) the maintenance of financial reserves in or an
irrevocable letter of credit from a federally insured financial
institution that has its main office or a branch office in this
state.
(f) This section does not apply to a health care liability
claim based solely on intentional denial of medical treatment that
a patient is otherwise qualified to receive, against the wishes of a
patient, or, if the patient is incompetent, against the wishes of
the patient's guardian, on the basis of the patient's present or
predicted age, disability, degree of medical dependency, or quality
of life unless the medical treatment is denied under Chapter 166,
Health and Safety Code.
SECTION 10.12. Section 11.04, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 11.04. ADJUSTMENT OF LIABILITY LIMIT [LIMITS]. When
there is an increase or decrease in the consumer price index with
respect to the amount of that index on the effective date of this
subchapter, [each of] the liability limit [limits] prescribed in
Section 11.02(a) [or in Section 11.03] of this subchapter[, as
applicable,] shall be increased or decreased, as applicable, by a
sum equal to the amount of such limit multiplied by the percentage
increase or decrease in the consumer price index between the
effective date of this subchapter and the time at which damages
subject to such limit [limits] are awarded by final judgment or
settlement.
SECTION 10.13. Subchapter L, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Section 12.02 to read as
follows:
Sec. 12.02. STANDARD OF PROOF IN CASES INVOLVING EMERGENCY
MEDICAL CARE. In a suit involving a health care liability claim
against a physician or health care provider for injury to or death
of a patient arising out of the provision of emergency medical care,
the person bringing the suit may prove that the treatment or lack of
treatment by the physician or health care provider departed from
accepted standards of medical care or health care only if the person
shows by clear and convincing evidence that the physician or health
care provider did not use the degree of care and skill that is
reasonably expected of an ordinarily prudent physician or health
care provider in the same or similar circumstances.
SECTION 10.14. The heading to Section 13.01, Medical
Liability and Insurance Improvement Act of Texas (Article 4590i,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 13.01. [COST BOND, DEPOSIT, AND] EXPERT REPORT.
SECTION 10.15. Section 13.01, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by amending Subsections (a), (b), (i),
(j), (k), and (l) and adding Subsections (s), (t), and (u) to read
as follows:
(a) In a health care liability claim, a claimant shall, not
later than the 90th day after the date the claim was [is] filed,
serve on each party or the party's attorney one or more expert
reports, with a curriculum vitae of each expert listed in the[:
[(1) file a separate cost bond in the amount of $5,000
for each physician or health care provider named by the claimant in
the action;
[(2) place cash in an escrow account in the amount of
$5,000 for each physician or health care provider named in the
action; or
[(3) file an expert] report for each physician or
health care provider against whom a liability claim is asserted
[with respect to whom a cost bond has not been filed and cash in lieu
of the bond has not been deposited under Subdivision (1) or (2) of
this subsection].
(b) If, as to a defendant physician or health care provider,
an expert report[, cost bond, or cash in lieu of bond] has not been
served [filed or deposited] within the period specified by
Subsection (a) [or (h)] of this section, the court, on the motion of
the affected physician or health care provider, shall enter an
order that:
(1) awards to the affected physician or health care
provider reasonable attorney's fees and costs of court incurred by
the physician or health care provider [requires the filing of a
$7,500 cost bond with respect to the physician or health care
provider not later than the 21st day after the date of the order];
and
(2) dismisses the claim [provides that if the claimant
fails to comply with the order, the action shall be dismissed for
want of prosecution] with respect to the physician or health care
provider, with prejudice to the refiling of the claim [subject to
reinstatement in accordance with the applicable rules of civil
procedure and Subsection (c) of this section].
(i) Notwithstanding any other provision of this section, a
claimant may satisfy any requirement of this section for serving
[filing] an expert report by serving [filing] reports of separate
experts regarding different physicians or health care providers or
regarding different issues arising from the conduct of a physician
or health care provider, such as issues of liability and causation.
Nothing in this section shall be construed to mean that a single
expert must address all liability and causation issues with respect
to all physicians or health care providers or with respect to both
liability and causation issues for a physician or health care
provider.
(j) Nothing in this section shall be construed to require
the serving [filing] of an expert report regarding any issue other
than an issue relating to liability or causation.
(k) An [Notwithstanding any other law, an] expert report
served [filed] under this section:
(1) is not admissible in evidence by any party [a
defendant];
(2) shall not be used in a deposition, trial, or other
proceeding; and
(3) shall not be referred to by any party [a defendant]
during the course of the action for any purpose.
(l) A court shall grant a motion challenging the adequacy of
an expert report only if it appears to the court, after hearing,
that the report does not represent an objective [a] good faith
effort to comply with the definition of an expert report in
Subsection (r)(6) of this section.
(s) Until a claimant has served the expert report and
curriculum vitae, as required by Subsection (a) of this section,
all discovery in a health care liability claim is stayed except for
the acquisition of the patient's medical records, medical or
psychological studies, or tissue samples through:
(1) written discovery as defined in Rule 192.7, Texas
Rules of Civil Procedure;
(2) depositions on written questions under Rule 200,
Texas Rules of Civil Procedure; and
(3) discovery from nonparties under Rule 205, Texas
Rules of Civil Procedure.
(t) If an expert report is used by the claimant in the course
of the action for any purpose other than to meet the service
requirement of Subsection (a) of this section, the restrictions
imposed by Subsection (k) of this section on use of the expert
report by any party are waived.
(u) Notwithstanding any other provision of this section,
after a claim is filed all claimants, collectively, may take not
more than one deposition before the expert report is served as
required by Subsection (a) of this section.
SECTION 10.16. Section 13.01(r)(5), Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
(5) "Expert" means:
(A) with respect to a person giving opinion
testimony regarding whether a physician departed from accepted
standards of medical care, an expert qualified to testify under the
requirements of Section 14.01(a) of this Act; [or]
(B) with respect to a person giving opinion
testimony regarding whether [about] a [nonphysician] health care
provider departed from accepted standards of health care, an expert
qualified to testify under the requirements of Section 14.02 of
this Act;
(C) with respect to a person giving opinion
testimony about the causal relationship between the injury, harm,
or damages claimed and the alleged departure from the applicable
standard of care in any health care liability claim, a physician who
is otherwise qualified to render opinions on that causal
relationship under the Texas Rules of Evidence;
(D) with respect to a person giving opinion
testimony about the causal relationship between the injury, harm,
or damages claimed and the alleged departure from the applicable
standard of care for a dentist, a dentist who is otherwise qualified
to render opinions on that causal relationship under the Texas
Rules of Evidence; or
(E) with respect to a person giving opinion
testimony about the causal relationship between the injury, harm,
or damages claimed and the alleged departure from the applicable
standard of care for a podiatrist, a podiatrist who is otherwise
qualified to render opinions on that causal relationship under the
Texas Rules of Evidence [who has knowledge of accepted standards of
care for the diagnosis, care, or treatment of the illness, injury,
or condition involved in the claim].
SECTION 10.17. Sections 14.01(e) and (g), Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes), are amended to read as follows:
(e) A pretrial objection to the qualifications of a witness
under this section must be made not later than the later of the 21st
day after the date the objecting party receives a copy of the
witness's curriculum vitae or the 21st day after the date of the
witness's deposition. If circumstances arise after the date on
which the objection must be made that could not have been reasonably
anticipated by a party before that date and that the party believes
in good faith provide a basis for an objection to a witness's
qualifications, and if an objection was not made previously, this
subsection does not prevent the party from making an objection as
soon as practicable under the circumstances. The court shall
conduct a hearing to determine whether the witness is qualified as
soon as practicable after the filing of an objection and, if
possible, before trial. If the objecting party is unable to object
in time for the hearing to be conducted before the trial, the
hearing shall be conducted outside the presence of the jury. This
subsection does not prevent a party from examining or
cross-examining a witness at trial about the witness's
qualifications.
(g) In this subchapter [section], "physician" means a
person who is:
(1) licensed to practice medicine in one or more
states in the United States; or
(2) a graduate of a medical school accredited by the
Liaison Committee on Medical Education or the American Osteopathic
Association only if testifying as a defendant and that testimony
relates to that defendant's standard of care, the alleged departure
from that standard of care, or the causal relationship between the
alleged departure from that standard of care and the injury, harm,
or damages claimed.
SECTION 10.18. Subchapter N, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended by adding Sections 14.02 and 14.03 to
read as follows:
Sec. 14.02. QUALIFICATIONS OF EXPERT WITNESS IN SUIT
AGAINST HEALTH CARE PROVIDER. (a) For purposes of this section,
"practicing health care" includes:
(1) training health care providers in the same field
as the defendant health care provider at an accredited educational
institution; or
(2) serving as a consulting health care provider and
being licensed, certified, or registered in the same field as the
defendant health care provider.
(b) In a suit involving a health care liability claim
against a health care provider, a person may qualify as an expert
witness on the issue of whether the health care provider departed
from accepted standards of care only if the person:
(1) is practicing health care in the same field of
practice as the defendant health care provider at the time the
testimony is given or was practicing that type of health care at the
time the claim arose;
(2) has knowledge of accepted standards of care for
health care providers for the diagnosis, care, or treatment of the
illness, injury, or condition involved in the claim; and
(3) is qualified on the basis of training or
experience to offer an expert opinion regarding those accepted
standards of health care.
(c) In determining whether a witness is qualified on the
basis of training or experience, the court shall consider whether,
at the time the claim arose or at the time the testimony is given,
the witness:
(1) is certified by a Texas licensing agency or a
national professional certifying agency, or has other substantial
training or experience, in the area of health care relevant to the
claim; and
(2) is actively practicing health care in rendering
health care services relevant to the claim.
(d) The court shall apply the criteria specified in
Subsections (a), (b), and (c) of this section in determining
whether an expert is qualified to offer expert testimony on the
issue of whether the defendant health care provider departed from
accepted standards of health care but may depart from those
criteria if, under the circumstances, the court determines that
there is good reason to admit the expert's testimony. The court
shall state on the record the reason for admitting the testimony if
the court departs from the criteria.
(e) This section does not prevent a health care provider who
is a defendant, or an employee of the defendant health care
provider, from qualifying as an expert.
(f) A pretrial objection to the qualifications of a witness
under this section must be made not later than the later of the 21st
day after the date the objecting party receives a copy of the
witness's curriculum vitae or the 21st day after the date of the
witness's deposition. If circumstances arise after the date on
which the objection must be made that could not have been reasonably
anticipated by a party before that date and that the party believes
in good faith provide a basis for an objection to a witness's
qualifications, and if an objection was not made previously, this
subsection does not prevent the party from making an objection as
soon as practicable under the circumstances. The court shall
conduct a hearing to determine whether the witness is qualified as
soon as practicable after the filing of an objection and, if
possible, before trial. If the objecting party is unable to object
in time for the hearing to be conducted before the trial, the
hearing shall be conducted outside the presence of the jury. This
subsection does not prevent a party from examining or
cross-examining a witness at trial about the witness's
qualifications.
Sec. 14.03. QUALIFICATIONS OF EXPERT WITNESS ON CAUSATION
IN HEALTH CARE LIABILITY CLAIM. (a) Except as provided by
Subsections (b) and (c) of this section, in a suit involving a
health care liability claim against a physician or health care
provider, a person may qualify as an expert witness on the issue of
the causal relationship between the alleged departure from accepted
standards of care and the injury, harm, or damages claimed only if
the person is a physician and is otherwise qualified to render
opinions on that causal relationship under the Texas Rules of
Evidence.
(b) In a suit involving a health care liability claim
against a dentist, a person may qualify as an expert witness on the
issue of the causal relationship between the alleged departure from
accepted standards of care and the injury, harm, or damages claimed
if the person is a dentist and is otherwise qualified to render
opinions on that causal relationship under the Texas Rules of
Evidence.
(c) In a suit involving a health care liability claim
against a podiatrist, a person may qualify as an expert witness on
the issue of the causal relationship between the alleged departure
from accepted standards of care and the injury, harm, or damages
claimed if the person is a podiatrist and is otherwise qualified to
render opinions on that causal relationship under the Texas Rules
of Evidence.
(d) A pretrial objection to the qualifications of a witness
under this section must be made not later than the later of the 21st
day after the date the objecting party receives a copy of the
witness's curriculum vitae or the 21st day after the date of the
witness's deposition. If circumstances arise after the date on
which the objection must be made that could not have been reasonably
anticipated by a party before that date and that the party believes
in good faith provide a basis for an objection to a witness's
qualifications, and if an objection was not made previously, this
subsection does not prevent the party from making an objection as
soon as practicable under the circumstances. The court shall
conduct a hearing to determine whether the witness is qualified as
soon as practicable after the filing of an objection and, if
possible, before trial. If the objecting party is unable to object
in time for the hearing to be conducted before the trial, the
hearing shall be conducted outside the presence of the jury. This
subsection does not prevent a party from examining or
cross-examining a witness at trial about the witness's
qualifications.
SECTION 10.19. Section 16.01, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), is amended to read as follows:
Sec. 16.01. APPLICATION OF OTHER LAW. Notwithstanding
Chapter 304, Finance Code [Articles 1E.101, 1E.102, and
1E.104-1E.108, Title 79, Revised Statutes], prejudgment interest
in a judgment on a health care liability claim shall be awarded in
accordance with this subchapter.
SECTION 10.20. Sections 16.02(b) and (c), Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes), are amended to read as follows:
(b) Subject to Subchapter K of this Act [In a health care
liability claim that is not settled within the period specified by
Subsection (a) of this section], the judgment must include
prejudgment interest on past damages awarded in the judgment [found
by the trier of fact], but shall not include prejudgment interest on
future damages awarded in the judgment [found by the trier of fact].
(c) Prejudgment interest allowed under this subchapter
shall be computed in accordance with Section 304.003(c)(1), Finance
Code [Article 1E.103, Title 79, Revised Statutes], for a period
beginning on the date of injury and ending on the date before the
date the judgment is signed.
SECTION 10.21. The Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes) is amended by adding Subchapters R, S, and T to read as
follows:
SUBCHAPTER R. PAYMENT FOR FUTURE LOSSES
Sec. 18.01. DEFINITIONS. In this subchapter:
(1) "Future damages" means damages that are incurred
after the date of judgment for:
(A) medical, health care, or custodial care
services;
(B) physical pain and mental anguish,
disfigurement, or physical impairment;
(C) loss of consortium, companionship, or
society; or
(D) loss of earnings.
(2) "Future loss of earnings" means the following
losses incurred after the date of the judgment:
(A) loss of income, wages, or earning capacity
and other pecuniary losses; and
(B) loss of inheritance.
(3) "Periodic payments" means the payment of money or
its equivalent to the recipient of future damages at defined
intervals.
Sec. 18.02. SCOPE OF SUBCHAPTER. This subchapter applies
only to an action on a health care liability claim against a
physician or health care provider in which the present value of the
award of future damages, as determined by the court, equals or
exceeds $100,000.
Sec. 18.03. COURT ORDER FOR PERIODIC PAYMENTS. (a) At the
request of a defendant physician or health care provider or
claimant, the court shall order that future damages awarded in a
health care liability claim be paid in whole or in part in periodic
payments rather than by a lump-sum payment.
(b) The court shall make a specific finding of the dollar
amount of periodic payments that will compensate the claimant for
the future damages.
(c) The court shall specify in its judgment ordering the
payment of future damages by periodic payments the:
(1) recipient of the payments;
(2) dollar amount of the payments;
(3) interval between payments; and
(4) number of payments or the period of time over which
payments must be made.
Sec. 18.04. RELEASE. The entry of an order for the payment
of future damages by periodic payments constitutes a release of the
health care liability claim filed by the claimant.
Sec. 18.05. FINANCIAL RESPONSIBILITY. (a) As a condition
to authorizing periodic payments of future damages, the court shall
require a defendant who is not adequately insured to provide
evidence of financial responsibility in an amount adequate to
assure full payment of damages awarded by the judgment.
(b) The judgment must provide for payments to be funded by:
(1) an annuity contract issued by a company licensed
to do business as an insurance company;
(2) an obligation of the United States;
(3) applicable and collectible liability insurance
from one or more qualified insurers; or
(4) any other satisfactory form of funding approved by
the court.
(c) On termination of periodic payments of future damages,
the court shall order the return of the security, or as much as
remains, to the defendant.
Sec. 18.06. DEATH OF RECIPIENT. (a) On the death of the
recipient, money damages awarded for loss of future earnings
continue to be paid to the estate of the recipient of the award
without reduction.
(b) Periodic payments, other than future loss of earnings,
terminate on the death of the recipient.
(c) If the recipient of periodic payments dies before all
payments required by the judgment are paid, the court may modify the
judgment to award and apportion the unpaid damages for future loss
of earnings in an appropriate manner.
(d) Following the satisfaction or termination of any
obligations specified in the judgment for periodic payments, any
obligation of the defendant physician or health care provider to
make further payments ends and any security given reverts to the
defendant.
Sec. 18.07. AWARD OF ATTORNEY'S FEES. For purposes of
computing the award of attorney's fees when the claimant is awarded
a recovery that will be paid in periodic payments, the court shall:
(1) place a total value on the payments based on the
claimant's projected life expectancy; and
(2) reduce the amount in Subdivision (1) to present
value.
SUBCHAPTER S. ATTORNEY'S FEES
Sec. 19.01. DEFINITION. In this subchapter, "recovered"
means the net sum recovered after deducting any disbursements or
costs incurred in connection with prosecution or settlement of the
claim. Costs of medical or health care services incurred by the
claimant and the attorney's office overhead costs or charges are
not deductible disbursements or costs.
Sec. 19.02. APPLICABILITY. The limitations in this
subchapter apply without regard to whether:
(1) the recovery is by settlement, arbitration, or
judgment; or
(2) the person for whom the recovery is sought is an
adult, a minor, or an incapacitated person.
Sec. 19.03. PERIODIC PAYMENTS. If periodic payments are
recovered by the claimant, the court shall place a total value on
these payments based on the claimant's projected life expectancy
and then reduce this amount to present value for purposes of
computing the award of attorney's fees.
SUBCHAPTER T. DECLARATORY JUDGMENTS; INJUNCTIONS; APPEALS
Sec. 20.01. APPLICABILITY. This subchapter applies only to
an amendment to this Act that is effective on or after January 1,
2003.
Sec. 20.02. DECLARATORY JUDGMENT. The constitutionality
and other validity under the state or federal constitution of all or
any part of an amendment to this Act may be determined in an action
for declaratory judgment in a district court in Travis County under
Chapter 37, Civil Practice and Remedies Code, if it is alleged that
the amendment or a part of the amendment affects the rights, status,
or legal relation of a party in a civil action with respect to any
other party in the civil action.
Sec. 20.03. ACCELERATED APPEAL. (a) An appeal of a
declaratory judgment or order, however characterized, of a district
court, including an appeal of the judgment of an appellate court,
holding or otherwise determining, under Section 20.02 of this
subchapter, that all or any part of an amendment to this Act is
constitutional or unconstitutional, or otherwise valid or invalid,
under the state or federal constitution is an accelerated appeal.
(b) If the judgment or order is interlocutory, an
interlocutory appeal may be taken from the judgment or order and is
an accelerated appeal.
Sec. 20.04. INJUNCTIONS. A district court in Travis County
may grant or deny a temporary or otherwise interlocutory injunction
or a permanent injunction on the grounds of the constitutionality
or unconstitutionality, or other validity or invalidity, under the
state or federal constitution of all or any part of an amendment to
this Act.
Sec. 20.05. DIRECT APPEAL. (a) There is a direct appeal to
the supreme court from an order, however characterized, of a trial
court granting or denying a temporary or otherwise interlocutory
injunction or a permanent injunction on the grounds of the
constitutionality or unconstitutionality, or other validity or
invalidity, under the state or federal constitution of all or any
part of any amendment to this Act.
(b) The direct appeal is an accelerated appeal.
(c) This section exercises the authority granted by Section
3-b, Article V, Texas Constitution.
Sec. 20.06. STANDING OF AN ASSOCIATION OR ALLIANCE TO SUE.
(a) An association or alliance has standing to sue for and obtain
the relief described by Subsection (b) of this section if it is
alleged that:
(1) the association or alliance has more than one
member who has standing to sue in the member's own right;
(2) the interests the association or alliance seeks to
protect are germane to a purpose of the association or alliance; and
(3) the claim asserted and declaratory relief
requested by the association or alliance relate to all or a
specified part of the amendment involved in the action being found
constitutional or unconstitutional on its face, or otherwise found
valid or invalid on its face, under the state or federal
constitution.
(b) The association or alliance has standing:
(1) to sue for and obtain a declaratory judgment under
Section 20.02 of this subchapter in an action filed and maintained
by the association or alliance;
(2) to appeal or otherwise be a party to an appeal
under Section 20.03 of this subchapter;
(3) to sue for and obtain an order under Section 20.04
of this subchapter granting or denying a temporary or otherwise
interlocutory injunction or a permanent injunction in an action
filed and maintained by the association or alliance; and
(4) to appeal or otherwise be a party to an appeal
under Section 20.05 of this subchapter.
Sec. 20.07. RULES FOR APPEALS. An appeal under this
subchapter, including an interlocutory, accelerated, or direct
appeal, is governed, as applicable, by the Texas Rules of Appellate
Procedure, including Rules 25.1(d)(6), 26.1(b), 28.1, 28.3,
32.1(g), 37.3(a)(1), 38.6(a) and (b), 40.1(b), and 49.4.
SECTION 10.22. Section 84.003, Civil Practice and Remedies
Code, is amended by adding Subdivision (6) to read as follows:
(6) "Hospital system" means a system of hospitals
located in this state that are under the common governance or
control of a corporate parent.
SECTION 10.23. Section 84.003, Civil Practice and Remedies
Code, is amended by adding Subdivision (7) to read as follows:
(7) "Person responsible for the patient" means:
(A) the patient's parent, managing conservator,
or guardian;
(B) the patient's grandparent;
(C) the patient's adult brother or sister;
(D) another adult who has actual care, control,
and possession of the patient and has written authorization to
consent for the patient from the parent, managing conservator, or
guardian of the patient;
(E) an educational institution in which the
patient is enrolled that has written authorization to consent for
the patient from the parent, managing conservator, or guardian of
the patient; or
(F) any other person with legal responsibility
for the care of the patient.
SECTION 10.24. Section 84.004, Civil Practice and Remedies
Code, is amended by adding Subsection (f) to read as follows:
(f) Subsection (c) applies even if:
(1) the patient is incapacitated due to illness or
injury and cannot sign the acknowledgment statement required by
that subsection; or
(2) the patient is a minor or is otherwise legally
incompetent and the person responsible for the patient is not
reasonably available to sign the acknowledgment statement required
by that subsection.
SECTION 10.25. Chapter 84, Civil Practice and Remedies
Code, is amended by adding Section 84.0065 to read as follows:
Sec. 84.0065. ORGANIZATION LIABILITY OF HOSPITALS. (a)
Except as provided by Section 84.007, in any civil action brought
against a hospital or hospital system, or its employees, officers,
directors, or volunteers, for damages based on an act or omission by
the hospital or hospital system, or its employees, officers,
directors, or volunteers, the liability of the hospital or hospital
system is limited to money damages in a maximum amount of $500,000
for any act or omission resulting in death, damage, or injury to a
patient if the patient or, if the patient is a minor or is otherwise
legally incompetent, the person responsible for the patient, signs
a written statement that acknowledges:
(1) that the hospital is providing care that is not
administered for or in expectation of compensation; and
(2) the limitations on the recovery of damages from
the hospital in exchange for receiving the health care services.
(b) Subsection (a) applies even if:
(1) the patient is incapacitated due to illness or
injury and cannot sign the acknowledgment statement required by
that subsection; or
(2) the patient is a minor or is otherwise legally
incompetent and the person responsible for the patient is not
reasonably available to sign the acknowledgment statement required
by that subsection.
SECTION 10.26. Article 5.15-1, Insurance Code, is amended
by adding Section 11 to read as follows:
Sec. 11. VENDOR'S ENDORSEMENT. An insurer may not exclude
or otherwise limit coverage for physicians or health care providers
under a vendor's endorsement issued to a manufacturer, as that term
is defined by Section 82.001, Civil Practice and Remedies Code. A
physician or health care provider shall be considered a vendor for
purposes of coverage under a vendor's endorsement or a
manufacturer's general liability or products liability policy.
SECTION 10.27. The following provisions are repealed:
(1) Section 11.02(c), Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes);
(2) Sections 13.01(c), (d), (e), (f), (g), (h), (m),
(n), (o), and (r)(3), Medical Liability and Insurance Improvement
Act of Texas (Article 4590i, Vernon's Texas Civil Statutes);
(3) Section 16.02(a), Medical Liability and Insurance
Improvement Act of Texas (Article 4590i, Vernon's Texas Civil
Statutes); and
(4) Section 242.0372, Health and Safety Code.
SECTION 10.28. (a) The Legislature of the State of Texas
finds that:
(1) the number of health care liability claims
(frequency) has increased since 1995 inordinately;
(2) the filing of legitimate health care liability
claims in Texas is a contributing factor affecting medical
professional liability rates;
(3) the amounts being paid out by insurers in
judgments and settlements (severity) have likewise increased
inordinately in the same short period of time;
(4) the effect of the above has caused a serious public
problem in availability of and affordability of adequate medical
professional liability insurance;
(5) the situation has created a medical malpractice
insurance crisis in Texas;
(6) this crisis has had a material adverse effect on
the delivery of medical and health care in Texas, including
significant reductions of availability of medical and health care
services to the people of Texas and a likelihood of further
reductions in the future;
(7) the crisis has had a substantial impact on the
physicians and hospitals of Texas and the cost to physicians and
hospitals for adequate medical malpractice insurance has
dramatically risen in price, with cost impact on patients and the
public;
(8) the direct cost of medical care to the patient and
public of Texas has materially increased due to the rising cost of
malpractice insurance protection for physicians and hospitals in
Texas;
(9) the crisis has increased the cost of medical care
both directly through fees and indirectly through additional
services provided for protection against future suits or claims,
and defensive medicine has resulted in increasing cost to patients,
private insurers, and Texas and has contributed to the general
inflation that has marked health care in recent years;
(10) satisfactory insurance coverage for adequate
amounts of insurance in this area is often not available at any
price;
(11) the combined effect of the defects in the
medical, insurance, and legal systems has caused a serious public
problem both with respect to the availability of coverage and to the
high rates being charged by insurers for medical professional
liability insurance to some physicians, health care providers, and
hospitals; and
(12) the adoption of certain modifications in the
medical, insurance, and legal systems, the total effect of which is
currently undetermined, will have a positive effect on the rates
charged by insurers for medical professional liability insurance.
(b) Because of the conditions stated in Subsection (a) of
this section, it is the purpose of this article to improve and
modify the system by which health care liability claims are
determined in order to:
(1) reduce excessive frequency and severity of health
care liability claims through reasonable improvements and
modifications in the Texas insurance, tort, and medical practice
systems;
(2) decrease the cost of those claims and ensure that
awards are rationally related to actual damages;
(3) do so in a manner that will not unduly restrict a
claimant's rights any more than necessary to deal with the crisis;
(4) make available to physicians, hospitals, and other
health care providers protection against potential liability
through the insurance mechanism at reasonably affordable rates;
(5) make affordable medical and health care more
accessible and available to the citizens of Texas;
(6) make certain modifications in the medical,
insurance, and legal systems in order to determine whether or not
there will be an effect on rates charged by insurers for medical
professional liability insurance;
(7) make certain modifications to the liability laws
as they relate to health care liability claims only and with an
intention of the legislature to not extend or apply such
modifications of liability laws to any other area of the Texas legal
system or tort law;
(8) encourage offering services by physicians and
hospitals, particularly those involving high risk, that will
benefit, in particular, high-cost and low-income groups because
lower malpractice insurance rates increase the willingness of
physicians and hospitals to provide treatments that carry a
relatively high risk of failure but offer the only real prospect of
success for seriously ill patients;
(9) encourage quality of care and discourage defensive
medicine;
(10) decrease malpractice insurance premiums, which
are a significant part of overall health care cost, and, as the cost
savings are reflected in health insurance premiums, make health
insurance benefit programs more affordable to businesses,
particularly small businesses, and increase employee participation
in health insurance programs offered by their employers;
(11) discourage unnecessary services and encourage
fewer tests, procedures, and visits so that the direct financial
cost to the patient will be reduced as well as time, travel, and
other indirect costs;
(12) support health care insurance for employers and
employees because malpractice insurance is a component of the
overhead costs that providers must take into account in negotiating
reimbursement rates with commercial insurers and employers that pay
all or a portion of the premiums for their employees will save money
and may make the difference in whether an employer can afford to
maintain current health insurance benefits for its employees;
(13) reduce the time required for plaintiffs to obtain
awards;
(14) reduce malpractice pressure and, as a result,
increase the supply of physicians, especially obstetricians and
other impacted specialists;
(15) contribute to the viability of community
hospitals by lowering malpractice insurance premiums;
(16) free funds in the operating budgets of
self-insured hospitals, allowing the hospital to treat more
patients;
(17) reduce or eliminate the incentive for physicians
to go without insurance;
(18) lower costs for teaching and safety-net hospitals
as well as nonprofit community clinics;
(19) decrease the costs for health care facilities
that self-insure; and
(20) allow the Texas Medicaid program to save
resources that can be used to provide additional health care goods
and services.
SECTION 10.29. (a) Subchapter S, Medical Liability and
Insurance Improvement Act of Texas (Article 4590i, Vernon's Texas
Civil Statutes), as added by this article, applies only to an
attorney's fee agreement or contract that is entered into on or
after January 1, 2004. An attorney's fee agreement or contract
entered into before January 1, 2004, is governed by the law in
effect immediately before the effective date of this article, and
that law is continued in effect for that purpose.
(b) This article does not make any change in law with
respect to the adjustment under Section 11.04, Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes), of the liability limit prescribed in Section
11.02(a) of that Act, and that law is continued in effect only for
that liability limit.
ARTICLE 10A. RATES FOR PROFESSIONAL LIABILITY INSURANCE FOR
PHYSICIANS AND HEALTH CARE PROVIDERS
SECTION 10A.01. Chapter 5, Insurance Code, is amended by
adding Subchapter R to read as follows:
SUBCHAPTER R. RATES FOR PROFESSIONAL LIABILITY INSURANCE
FOR PHYSICIANS AND HEALTH CARE PROVIDERS
Art. 5.161. FINDINGS. The legislature finds that:
(1) the cost of professional liability insurance for
physicians and health care providers, as defined by Section
1.03(a), Medical Liability and Insurance Improvement Act of Texas
(Article 4590i, Vernon's Texas Civil Statutes), has been a
significant factor in the reduced availability of health care in
this state;
(2) legislation under consideration by the Regular
Session of the 78th Legislature should eliminate or significantly
reduce the cost of claims under policies of professional liability
insurance for physicians and health care providers, and legislation
by future legislatures may have the same effect;
(3) while the monetary effect of these legislative
changes can be actuarially determined within a reasonable degree of
certainty, insurers will delay implementation of rate reductions
until they have data evidencing actual loss experience;
(4) delay in implementation of rate reductions will
result in a windfall for the insurers benefited by the changes
described by this article, and this benefit should be passed on to
insureds; and
(5) legislative action in the public interest and
within the police power of the state is required to eliminate
unnecessary delays to pass these benefits on to the insured
physicians and health care providers of this state.
Art. 5.162. SCOPE OF SUBCHAPTER. (a) This subchapter
applies to any insurer that is authorized to engage in business in
this state and that is authorized to write professional liability
insurance for physicians and health care providers, including:
(1) a Lloyd's plan;
(2) a reciprocal or interinsurance exchange;
(3) the joint underwriting association established
under Article 21.49-3 of this code; and
(4) a self-insurance trust established under Article
21.49-4 of this code.
(b) It is the intent of the legislature that all insurers,
as defined by this article, pass through the savings that accrue
from the changes described by Article 5.161 of this code to their
policyholders on a prospective basis. To monitor compliance with
this legislative directive, the commissioner may require
information in rate filings, special data calls, informational
hearings, and any other means consistent with other provisions of
this code applicable to the affected insurers. Information
provided under this subsection is privileged and confidential to
the same extent as the information is privileged and confidential
under this code or other laws for other insurers described by this
article licensed and writing the same line of insurance in this
state.
(c) This subchapter applies only to professional liability
insurance for physicians and health care providers.
Art. 5.163. EQUITABLE RATE REDUCTION
Sec. 1. HEARING. (a) Not later than September 1 of each
year, the commissioner shall hold a rulemaking hearing under
Chapter 2001, Government Code, to determine the percentage of
equitable reductions in insurance rates required on an individual
basis of each insurer writing professional liability insurance for
physicians and health care providers.
(b) Not later than October 1 of each year, the commissioner
shall issue rules mandating the appropriate rate reductions to
rates for professional liability insurance for physicians and
health care providers and developed without consideration of the
effect of the changes described by Article 5.161 of this code.
(c) The commissioner shall set the percentage of the rate
reduction for professional liability insurance for physicians and
health care providers and may set different rate reductions for
different types of policies. The commissioner's order establishing
the rate reductions must be based on the evidence adduced at the
rulemaking hearing, including the adequacy of the rate at the time
of the hearing. Rates resulting from the rate reductions imposed by
this article must comply with Section 3(d), Article 5.15-1, of this
code.
(d) The rate reductions adopted under this section are
applicable to each policy or coverage delivered, issued for
delivery, or renewed on and after January 1, 2004, and to each
policy or coverage delivered, issued for delivery, or renewed on
and after the 90th day after the date of each subsequent rule
adopted under this section. An insurer, as defined by Article 5.162
of this code, shall apply the rate reduction to the rates used by
the insurer.
(e) Any rule or order of the commissioner that determines,
approves, or sets a rate reduction under this section and is
appealed or challenged remains in effect during the pendency of the
appeal or challenge. During the pendency of the appeal or
challenge, an insurer shall use rates that reflect the rate
reduction provided in the order being appealed or challenged. The
rate reduction is lawful and valid during the appeal or challenge.
Sec. 2. ADMINISTRATIVE RELIEF. (a) Except as provided by
Subsection (b) of this section, a rate filed under Articles 5.13-2
and 5.15-1 of this code for professional liability insurance for
physicians and health care providers on and after January 1, 2004,
and a rate filed under those articles on and after the 90th day
following the effective date of a subsequent rule adopted under
Section 1(b) of this article, shall reflect each rate reduction
imposed under Section 1 of this article.
(b) Notwithstanding Articles 5.13-2 and 5.15-1 of this
code, the commissioner shall, after notice and opportunity for
hearing, disapprove a filed rate, without regard to whether the
rate complies with Articles 5.13-2 and 5.15-1 of this code, if the
commissioner finds that the filed rate does not reflect the rate
reduction imposed under Section 1 of this article. A proceeding
under this section is a contested case under Chapter 2001,
Government Code.
(c) The commissioner may approve a filed rate that reflects
less than the full amount of the rate reduction imposed by Section 1
of this article if the commissioner determines based on a
preponderance of the evidence presented by an insurer that:
(1) the actual or anticipated loss experience for the
insurer's rating classifications is or will be different than the
presumptive rate reduction;
(2) the insurer will be financially unable to continue
writing in a particular line of insurance;
(3) the rate reduction required under this article
would likely result in placing the insurer in a hazardous financial
condition described by Section 2, Article 1.32, of this code; or
(4) the resulting rates for the insurer would be
unreasonable or confiscatory to the insurer.
Sec. 3. DURATION OF REDUCTION. Unless the commissioner
grants relief under Section 2 of this article, each rate reduction
required under Section 1 of this article remains in effect for the
period specified in the commissioner's rule or order.
Sec. 4. MODIFICATION. The commissioner may, by bulletin or
directive, based on the evidence accumulated by the commissioner
before the bulletin or directive is issued, modify a rate reduction
mandated by the commissioner under this article if a final,
unappealable judgment of a court with appropriate jurisdiction
stays the effect of, enjoins, or otherwise modifies or declares
unconstitutional any legislation described by Article 5.161 of this
code on which the commissioner based the rate reduction.
Sec. 5. HEARINGS AND ORDERS. Notwithstanding Chapter 40 of
this code, a rulemaking hearing under this article shall be held
before the commissioner or the commissioner's designee. The
rulemaking procedures established by this section do not apply to
any other rate promulgation proceeding.
Sec. 6. PENDING RATE MATTERS. A rate filed pursuant to a
commissioner's order issued before May 1, 2003, is not subject to
the rate reductions required by this article before January 1,
2004.
Sec. 7. RECOMMENDATIONS TO LEGISLATURE. The commissioner
shall assemble information, conduct hearings, and take other
appropriate measures to assess and evaluate changes in the
marketplace resulting from the implementation of this article and
to report findings and recommendations to the legislature.
Art. 5.164. CONTINGENT ROLLBACK. (a) If a $250,000 cap on
noneconomic damages in all health care liability claims, without
exception, becomes constitutional by voter approval of an amendment
to the Texas Constitution or is determined to be constitutional by
the supreme court, an insurer, as defined by Article 5.162 of this
code, that delivers, issues for delivery, or renews a policy of
professional liability insurance for physicians or health care
providers in this state on or after the 30th day after the effective
date of the constitutional amendment or the date the cap was
determined to be constitutional may not charge more for the policy
than 85 percent of the amount the insurer charged that insured for
the same coverage immediately before the effective date of the
constitutional amendment or the date that the cap was determined to
be constitutional, or, if the insurer did not insure that insured
immediately before that date, 85 percent of the amount the insurer
would have charged that insured, provided that the rate was
adequate and not artificially inflated prior to the determination
of constitutionality. An insurer may petition the commissioner for
an exception to the rate reduction. A proceeding under this article
is a contested case under Chapter 2001, Government Code. The
commissioner shall not grant the exception unless the insurer
proves by a preponderance of the evidence that the rate reduction is
confiscatory. If the insurer meets this evidentiary burden, the
commissioner may grant the exception only to the extent that the
reduction is confiscatory. The contingent rate rollback required
by this article does not apply to a policy or coverage delivered,
issued for delivery, or renewed for a public hospital in this state.
(b) If the commissioner makes no determination as to a rate
reduction in accordance with Section 1, Article 5.163, then an
insurer may not charge an insured for professional liability
insurance for physicians and health care providers issued or
renewed on or after the second anniversary of the 30th day after the
effective date of the constitutional amendment containing a
$250,000 cap on noneconomic damages in all health care liability
claims or the date the cap was determined to be constitutional and
before the third anniversary of the 30th day after the effective
date of the constitutional amendment or the date the cap was
determined to be constitutional an amount that exceeds 80 percent
of the amount the insurer charged or would have charged the insured
for the same coverage.
(c) If the commissioner makes no determination as to a rate
reduction in accordance with Section 1, Article 5.163, then an
insurer may not charge an insured for professional liability
insurance for physicians and health care providers issued or
renewed on or after the third anniversary of the 30th day after the
effective date of the constitutional amendment containing a
$250,000 cap on noneconomic damages in all health care liability
claims or the date the cap was determined to be constitutional and
before the fourth anniversary of the 30th day after the effective
date of the constitutional amendment or the date the cap was
determined to be constitutional an amount that exceeds 75 percent
of the amount the insurer charged or would have charged the insured
for the same coverage.
Art. 5.165. FILING OF RATE INFORMATION WITH DEPARTMENT;
REPORT TO LEGISLATURE
Sec. 1. PURPOSE. The purpose of this article is to require
insurers writing professional liability insurance for physicians
and health care providers in this state to annually file with the
commissioner of insurance rates and supporting data, including
current rates and estimated rates to be charged in the year
following the filing date for the purpose of the preparation of a
summary report for submission to each legislature and the
determination by the commissioner of equitable rate reductions
under Article 5.163 of this code. Information submitted under this
article must be sufficient for the commissioner to determine the
extent of equitable rate reductions under Article 5.163 of this
code. The commissioner's report shall contain a review of the
rates, presented in a manner that protects the identity of
individual insurers:
(1) to inform the legislature as to whether the rates
are just, adequate, and reasonable and not excessive or unfairly
discriminatory; and
(2) to assist in the determination of the most
effective and efficient regulatory system for professional
liability insurance for physicians and health care providers in
Texas.
Sec. 2. DEFINITIONS. In this article:
(1) "Insurer" means an insurer described by Article
5.162 of this code.
(2) "Supplementary rating information" means any
manual, rating schedule, plan of rules, rating rules,
classification systems, territory codes and descriptions, rating
plans, and other similar information used by the insurer to
determine the applicable premium for an insured. The term includes
factors and relativities, such as increased limits factors,
classification relativities, deductible relativities, premium
discount, and other similar factors and rating plans such as
experience, schedule, and retrospective rating.
(3) "Security" or "securities" has the meaning
assigned by Section 4, The Securities Act (Article 581-4, Vernon's
Texas Civil Statutes).
Sec. 3. RATE INFORMATION. (a) Insurers must file rates for
professional liability insurance for physicians and health care
providers and supporting information with the commissioner in
accordance with the requirements determined by the commissioner
under this article.
(b) Filings made by each insurer must be sufficient to
respond to the commissioner's request for information under this
article and must provide both current rates and estimated rates for
the year following the required filing date of this article based on
information reasonably known to the insurer at the time of filing.
(c) The insurer shall file, in a format specified by the
commissioner, including an electronic format:
(1) all rates for professional liability insurance for
physicians and health care providers, supplementary rating
information, underwriting guidelines, reasonable and pertinent
supporting information for risks written in the state, and all
applicable rating manuals;
(2) actuarial support, including all statistics,
data, or other information to support the rates, supplementary
rating information, and underwriting guidelines used by the
insurer;
(3) the policy fees, service fees, and other fees that
are charged under Article 21.35B of this code;
(4) information on the insurer's losses from
investments in securities, whether publicly or privately traded,
including investments in the securities of companies required by
any oversight agency to restate earnings within the 24 months
preceding the filing date, possessed and used by the insurer to
determine premiums or underwriting for professional liability
insurance for physicians and health care providers, as this
information relates to the rates described by Section 1 of this
article;
(5) information on the insurer's costs of reinsurance
possessed and used by the insurer to determine premiums or
underwriting for professional liability insurance for physicians
and health care providers, as this information relates to the rates
described by Section 1 of this article;
(6) a complete explanation, and an electronic copy, of
all computer models used by the insurer not protected by a contract
with a third party; and
(7) a complete explanation of any changes to
underwriting guidelines, rates, and supplementary rating
information since the last filing under this article.
(d) The commissioner shall determine the date on which the
filing is due.
(e) The commissioner may require additional information as
provided by Section 4 of this article.
(f) The commissioner shall issue an order specifying the
information that insurers must file to comply with this article and
the date on which the filing is due.
(g) The commissioner is not required to hold a hearing
before issuing the order required under Subsection (f) of this
section.
(h) The commissioner shall notify an affected insurer of the
order requiring the rate filing information under this section on
the day the order is issued.
Sec. 4. ADDITIONAL INFORMATION. After the initial rate
submission under Section 3 of this article, the commissioner may
require an insurer to provide additional, reasonable information
for purposes of the clarification or completeness of the initial
rate submission.
Sec. 5. USE OF FILED RATE INFORMATION. (a) Information
filed by an insurer with the department under this article that is
confidential under a law that applied to the insurer before the
effective date of this article remains confidential and is not
subject to disclosure under Chapter 552, Government Code, except
that the information may be disclosed as provided by Section
552.008, Government Code, relating to information for legislative
purposes. Information disclosed pursuant to Section 552.008,
Government Code, shall be provided in a commonly used electronic
format, including in spreadsheet or comma-delimited format, if so
requested. The information may not be released to the public except
in summary form in the report required under Section 6 of this
article.
(b) Subsection (a) of this section does not preclude the use
of information filed under this article as evidence in prosecuting
a violation of this code. Confidential information described by
Subsection (a) of this section that is used in prosecuting a
violation is subject to a protective order until all appeals of the
case have been exhausted. If an insurer is found, after the
exhaustion of all appeals, to have violated this code, a copy of the
confidential information used as evidence of the violation is no
longer presumed to be confidential.
Sec. 6. REPORT. (a) The commissioner shall, on a date
determined by the commissioner, submit a report to the governor,
the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature on the
information collected from the filings required under this article.
The report may be created based on a sample of the information
provided under Section 3 of this article.
(b) The report required under this section shall provide a
summary review of the rates currently charged and estimated to be
charged over the year following the date of the report, presented in
a manner that protects the identity of individual insurers:
(1) to inform the legislature as to whether the rates
are just, adequate, and reasonable and not excessive or unfairly
discriminatory; and
(2) to assist the legislature in the determination of
the most effective and efficient regulatory system for professional
liability insurance for physicians and health care providers in
this state.
Sec. 7. NOTIFICATION; NONCOMPLIANCE. The commissioner
shall notify the governor, the lieutenant governor, the speaker of
the house of representatives, and the members of the legislature of
the names of the insurers that the commissioner requested to make
the rate filings under this article and the names of the insurers
that did not respond in whole or in part to the commissioner's
request. This notification shall be made by separate letter on the
fourth day following the date on which the commissioner determines
the filing is due under Section 3(f) of this article.
Sec. 8. APPLICATION OF CERTAIN LAW. Chapter 40 of this code
does not apply to an action of the commissioner under Section 3(f)
of this article.
Sec. 9. FAILURE TO COMPLY. An insurer that fails to comply
with any request for information issued by the commissioner under
this article is subject, after notice and opportunity for hearing,
to sanctions as provided by Chapters 82 and 84 of this code.
SECTION 10A.02. The commissioner of insurance shall
commence a hearing under Section 1, Article 5.163, Insurance Code,
as added by this article, on September 1, 2003, and shall issue
rules mandating any appropriate rate reductions under Section 1,
Article 5.163, Insurance Code, not later than October 1, 2003.
ARTICLE 11. CLAIMS AGAINST EMPLOYEES OR VOLUNTEERS OF A
GOVERNMENTAL UNIT
SECTION 11.01. Sections 108.002(a) and (b), Civil Practice
and Remedies Code, are amended to read as follows:
(a) Except in an action arising under the constitution or
laws of the United States, a public servant[, other than a provider
of health care as that term is defined in Section 108.002(c),] is
not personally liable for damages in excess of $100,000 arising
from personal injury, death, or deprivation of a right, privilege,
or immunity if:
(1) the damages are the result of an act or omission by
the public servant in the course and scope of the public servant's
office, employment, or contractual performance for or service on
behalf of a state agency, institution, department, or local
government; and
(2) for the amount not in excess of $100,000, the
public servant is covered:
(A) by the state's obligation to indemnify under
Chapter 104;
(B) by a local government's authorization to
indemnify under Chapter 102;
(C) by liability or errors and omissions
insurance; or
(D) by liability or errors and omissions coverage
under an interlocal agreement.
(b) Except in an action arising under the constitution or
laws of the United States, a public servant [, other than a provider
of health care as that term is defined in Section 108.002(c),] is
not liable for damages in excess of $100,000 for property damage if:
(1) the damages are the result of an act or omission by
the public servant in the course and scope of the public servant's
office, employment, or contractual performance for or service on
behalf of a state agency, institution, department, or local
government; and
(2) for the amount not in excess of $100,000, the
public servant is covered:
(A) by the state's obligation to indemnify under
Chapter 104;
(B) by a local government's authorization to
indemnify under Chapter 102;
(C) by liability or errors and omissions
insurance; or
(D) by liability or errors and omissions coverage
under an interlocal agreement.
SECTION 11.02. Chapter 261, Health and Safety Code, is
amended by adding Subchapter C to read as follows:
SUBCHAPTER C. LIABILITY OF NONPROFIT MANAGEMENT CONTRACTOR
Sec. 261.051. DEFINITION. In this subchapter, "municipal
hospital management contractor" means a nonprofit corporation,
partnership, or sole proprietorship that manages or operates a
hospital or provides services under contract with a municipality.
Sec. 261.052. LIABILITY OF MUNICIPAL HOSPITAL MANAGEMENT
CONTRACTOR. A municipal hospital management contractor and any
employee of the contractor are, while performing services under the
contract for the benefit of the hospital, employees of the
municipality for the purposes of Chapters 101, 102, and 108, Civil
Practice and Remedies Code.
SECTION 11.03. Section 285.071, Health and Safety Code, is
amended to read as follows:
Sec. 285.071. DEFINITION. In this chapter, "hospital
district management contractor" means a nonprofit corporation,
partnership, or sole proprietorship that manages a hospital or
provides services [as a part of a rural health network as defined
under 42 U.S.C. Section 1395i-4(g)] under contract with a hospital
district that was created by general or special law [and that has a
population under 50,000].
SECTION 11.04. Section 108.002(c), Civil Practice and
Remedies Code, is repealed.
ARTICLE 12. JUROR QUALIFICATION
SECTION 12.01. Section 62.105, Government Code, is amended
to read as follows:
Sec. 62.105. DISQUALIFICATION FOR PARTICULAR JURY. (a) A
person is disqualified to serve as a petit juror in a particular
case if the person [he]:
(1) is a witness in the case;
(2) is interested, directly or indirectly, in the
subject matter of the case;
(3) is related by consanguinity or affinity within the
third degree, as determined under Chapter 573, to a party in the
case;
(4) has a bias or prejudice in favor of or against a
party in the case; or
(5) has served as a petit juror in a former trial of
the same case or in another case involving the same questions of
fact.
(b)(1) In an action seeking damages for personal injury or
death, a person's answer in voir dire that the person could not
award a certain sum of money damages based on a hypothetical set of
circumstances does not, in and of itself, establish a bias or
prejudice in favor of or against a party in the action that warrants
disqualification under Subsection (a)(4).
(2) In this section, "side" has the same meaning as in
Rule 233, Texas Rules of Civil Procedure, or its successor.
(A) In any civil action to be tried before a jury,
the trial court shall allow each side voir dire, as follows:
(i) in Level 1 cases, as defined by Rule
190.2, Texas Rules of Civil Procedure, at least one hour;
(ii) in Level 2 cases, as defined by Rule
190.3, Texas Rules of Civil Procedure, at least two hours; and
(iii) in Level 3 cases, as defined by Rule
190.4, Texas Rules of Civil Procedure, at least three hours.
(B) The time allocated in this subsection shall
not include time consumed in making preemptory challenges or
challenges for cause to jurors or in making or responding to
objections.
(C) The supreme court may adopt rules consistent
with the provisions of this section. To the extent that any rule
conflicts with the provisions of this section, this section
controls.
ARTICLE 13. EXEMPLARY DAMAGES
SECTION 13.01. Section 41.001(1), Civil Practice and
Remedies Code, is amended to read as follows:
(1) "Claimant" means a person [party], including a
plaintiff, counterclaimant, cross-claimant, or third-party
plaintiff, seeking or who has sought recovery of exemplary damages.
In a cause of action in which a party seeks recovery of exemplary
damages related to injury to another person, damage to the property
of another person, death of another person, or other harm to another
person, "claimant" includes both that other person and the party
seeking recovery of exemplary damages.
SECTION 13.02. Section 41.008(b), Civil Practice and
Remedies Code, is amended to read as follows:
(b) Exemplary damages awarded against a defendant to a
claimant may not exceed an amount equal to the greater of:
(1)(A) two times the amount of economic damages to be
awarded in the judgment; plus
(B) an amount equal to any noneconomic damages to
be awarded in the judgment [found by the jury], not to exceed
$750,000; or
(2) $200,000.
ARTICLE 14. ASSIGNMENT OF JUDGES
SECTION 14.01. Subchapter B, Chapter 74, Government Code,
is amended by adding Section 74.0241 to read as follows:
Sec. 74.0241. ASSIGNMENT OF JUDGES FOR HEALTH CARE
LIABILITY CLAIMS. (a) In this section, "health care liability
claim" has the meaning assigned by Section 1.03, Medical Liability
and Insurance Improvement Act of Texas (Article 4590i, Vernon's
Texas Civil Statutes).
(b) Notwithstanding any other law or rule, and on motion of
a party to a health care liability claim, the supreme court shall
assign a judge for the health care liability claim and any action or
suit that includes the claim. A motion to assign a judge must be
made:
(1) by a party asserting a claim not later than 30 days
following the appearance of any defendant; or
(2) by a party against whom the claim is asserted
concurrently with or before the filing of the movant's answer.
(b-1) Any judge assigned under this section may not have
been defeated in the general election immediately preceding the
assignment under this section.
(b-2) Any judge assigned under this section may not have
retired before the end of the applicable election term immediately
preceding the assignment under this section.
(c) The supreme court shall provide each party to the health
care liability claim and any action or suit that includes the claim
a list of the judges from whom the assigned judge will be selected.
(d) Within a period specified by the supreme court, each of
the following groups of parties may file with the supreme court a
written objection to one of the judges on the list provided under
Subsection (c) who is not a regular judge in the county in which the
suit is pending:
(1) all of the parties asserting the claim;
(2) all of the parties against whom the claim is
asserted; and
(3) all other parties in the case.
(e) After the period specified for filing an objection under
Subsection (d) has expired, no further objection may be made. The
supreme court shall assign one judge on the list who has not been
timely objected to under Subsection (d) to serve as the assigned
judge for the health care liability claim and any action or suit
that includes the claim.
(f) Notwithstanding any other law or rule, the supreme court
has authority to issue any rule necessary or appropriate to
implement this section.
ARTICLE 15. CLAIMS AGAINST SCHOOL DISTRICT TRUSTEES AND EMPLOYEES
OF ELEMENTARY AND SECONDARY SCHOOLS
SECTION 15.01. Subchapter C, Chapter 11, Education Code, is
amended by adding Section 11.064 to read as follows:
Sec. 11.064. CIVIL IMMUNITY. A member of the board of
trustees of a school district is considered to be a professional
employee of the district for purposes of Subchapter B, Chapter 22.
SECTION 15.02. Subchapter B, Chapter 22, Education Code, is
amended by amending Section 22.051 and adding Sections
22.0511-22.0516 to read as follows:
Sec. 22.051. DEFINITION. In this subchapter, "professional
employee of a school district" includes:
(1) a superintendent, principal, teacher, substitute
teacher, supervisor, social worker, counselor, nurse, and
teacher's aide employed by a school district;
(2) a teacher employed by a company that contracts
with a school district to provide the teacher's services to the
district;
(3) a student in an education preparation program
participating in a field experience or internship;
(4) a school bus driver certified in accordance with
standards and qualifications adopted by the Department of Public
Safety; and
(5) any other person employed by a school district
whose employment requires certification and the exercise of
discretion.
Sec. 22.0511. IMMUNITY FROM LIABILITY [FOR PROFESSIONAL
EMPLOYEES]. (a) A professional employee of a school district is
not personally liable for any act that is incident to or within the
scope of the duties of the employee's position of employment and
that involves the exercise of judgment or discretion on the part of
the employee, except in circumstances in which a professional
employee uses excessive force in the discipline of students or
negligence resulting in bodily injury to students.
(b) This section does not apply to the operation, use, or
maintenance of any motor vehicle[.
[(c) In this section, "professional employee" includes:
[(1) a superintendent, principal, teacher,
supervisor, social worker, counselor, nurse, and teacher's aide;
[(2) a student in an education preparation program
participating in a field experience or internship;
[(3) a school bus driver certified in accordance with
standards and qualifications adopted by the Department of Public
Safety; and
[(4) any other person whose employment requires
certification and the exercise of discretion].
Sec. 22.0512. PROTECTION UNDER FEDERAL LAW. (a) In this
section, "school" and "teacher" have the meanings assigned by 20
U.S.C. Section 6733 and its subsequent amendments.
(b) In addition to the immunity provided by Section 22.0511
and other state law, a teacher is entitled to any immunity and other
protections afforded under the Paul D. Coverdell Teacher Protection
Act of 2001 (20 U.S.C. Section 6731 et seq.) and its subsequent
amendments.
(c) This section may not be construed as limiting or
abridging any immunity or protection afforded a teacher under state
law.
Sec. 22.0513. NOTICE OF CLAIM. (a) Not later than the 90th
day before the date a person files an action against a professional
employee of a school district involving an act that is incident to
or within the scope of duties of the employee's position of
employment, the person must give written notice to the employee of
the claim, reasonably describing the act from which the claim
arises.
(b) A professional employee of a school district against
whom an action is pending who did not receive written notice as
required by Subsection (a) may file a plea in abatement not later
than the 30th day after the date the employee files an original
answer in the court in which the action is pending.
(c) The court shall abate the action if the court, after a
hearing, finds that the employee is entitled to an abatement
because notice was not provided as required by this section.
(d) An abatement under Subsection (c) continues until the
90th day after the date written notice is given to the employee as
provided by Subsection (a).
Sec. 22.0514. EXHAUSTION OF REMEDIES. A person may not file
an action against a professional employee of a school district
involving an act that is incident to or within the scope of duties
of the employee's position of employment unless the person has
exhausted any remedies provided by the school district for
resolving the complaint.
Sec. 22.0515. ALTERNATIVE DISPUTE RESOLUTION. A court in
which an action is brought against a professional employee of a
school district involving an act that is incident to or within the
scope of duties of the employee's position of employment may refer
the case to an alternative dispute resolution procedure as
described by Chapter 154, Civil Practice and Remedies Code.
Sec. 22.0516. RECOVERY OF ATTORNEY'S FEES IN ACTION AGAINST
PROFESSIONAL EMPLOYEE. In an action against a professional
employee of a school district involving an act that is incident to
or within the scope of duties of the employee's position of
employment and brought against the employee in the employee's
individual capacity, the employee is entitled to recover attorney's
fees and court costs from the plaintiff if the employee is immune
from liability under this subchapter.
SECTION 15.03. Section 22.053(a), Education Code, is
amended to read as follows:
(a) A volunteer who is serving as a direct service volunteer
of a school district is immune from civil liability to the same
extent as a professional employee of a school district under
Section 22.0511 [22.051].
SECTION 15.04. Section 30.024(c), Education Code, is
amended to read as follows:
(c) In addition to any other federal and state statutes
limiting the liability of employees at the school, Sections
22.0511, 22.0512 [22.051], 22.052, and 22.053, respectively, apply
to professional employees and volunteers of the school.
SECTION 15.05. Section 30.055(c), Education Code, is
amended to read as follows:
(c) In addition to any other federal and state statutes
limiting the liability of employees at the school, Sections
22.0511, 22.0512 [22.051], 22.052, and 22.053, respectively, apply
to professional employees and volunteers of the school.
SECTION 15.06. Section 105.301(e), Education Code, is
amended to read as follows:
(e) The academy is not subject to the provisions of this
code, or to the rules of the Texas Education Agency, regulating
public schools, except that:
(1) professional employees of the academy are entitled
to the limited liability of an employee under Sections 22.0511,
22.0512, and [Section 22.051 or] 22.052;
(2) a student's attendance at the academy satisfies
compulsory school attendance requirements; and
(3) for each student enrolled, the academy is entitled
to allotments from the foundation school program under Chapter 42
as if the academy were a school district, except that the academy
has a local share applied that is equivalent to the local fund
assignment of the Denton Independent School District.
SECTION 15.07. This article applies only to an action for
damages involving conduct that occurs on or after September 1,
2003. An action for damages involving conduct that occurs before
September 1, 2003, is governed by the law in effect on the date the
conduct occurs, and the former law is continued in effect for that
purpose.
ARTICLE 16. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTIONS
SECTION 16.01. Subchapter B, Chapter 32, Human Resources
Code, is amended by adding Section 32.060 to read as follows:
Sec. 32.060. ADMISSIBILITY OF CERTAIN EVIDENCE RELATING TO
NURSING INSTITUTIONS. (a) The following are not admissible as
evidence in a civil action:
(1) any finding by the department that an institution
licensed under Chapter 242, Health and Safety Code, has violated a
standard for participation in the medical assistance program under
this chapter; and
(2) the fact of the assessment of a monetary penalty
against an institution under Section 32.021 or the payment of the
penalty by an institution.
(b) This section does not apply in an enforcement action in
which the state or an agency or political subdivision of the state
is a party.
(c) Notwithstanding any other provision of this section,
evidence described by Subsection (a) is admissible as evidence in a
civil action only if:
(1) the evidence relates to a material violation of a
standard or assessment of a monetary penalty with respect to:
(A) the particular incident that is the basis of
the claim being brought;
(B) an incident comparable to the incident that
is the basis of the claim in the civil action; or
(C) the particular individual whose personal
injury is the basis of the claim being brought in the civil action;
and
(2) the violation of the standard or the violation
that resulted in the assessment of a monetary penalty is a proximate
cause of the injury that is the basis of the claim being brought in
the civil action.
SECTION 16.02. Subchapter A, Chapter 242, Health and Safety
Code, is amended by adding Section 242.017 to read as follows:
Sec. 242.017. ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL
ACTIONS. (a) The following are not admissible as evidence in a
civil action:
(1) any finding by the department that an institution
has violated this chapter or a rule adopted under this chapter; and
(2) the fact of the assessment of a penalty against an
institution under this chapter or the payment of the penalty by an
institution.
(b) This section does not apply in an enforcement action in
which the state or an agency or political subdivision of the state
is a party.
(c) Notwithstanding any other provision of this section,
evidence described by Subsection (a) is admissible as evidence in a
civil action only if:
(1) the evidence relates to a material violation of
this chapter or a rule adopted under this chapter or assessment of a
monetary penalty with respect to:
(A) the particular incident that is the basis of
the claim being brought in the civil action; or
(B) the particular individual whose personal
injury is the basis of the claim being brought in the civil action;
and
(2) the violation of the chapter or rule or the
violation that resulted in the assessment of a monetary penalty is a
proximate cause of the injury that is the basis of the claim being
brought in the civil action.
SECTION 16.03. The following laws are repealed:
(1) Sections 32.021(i) and (k), Human Resources Code;
and
(2) Section 242.050, Health and Safety Code, as added
by Chapter 1284, Acts of the 77th Legislature, Regular Session,
2001.
SECTION 16.04. (a) Except as provided by Subsection (b) of
this section, this article applies only to a suit commenced or
pending on or after the effective date of this article.
(b) This article does not apply to a suit in which the trial
on the merits commenced on or before the effective date of this
article; that suit is governed by the law in effect immediately
before the change in law made by this article, and that law is
continued in effect for that purpose.
ARTICLE 17. LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES
RELATING TO CERTAIN MERGERS OR CONSOLIDATIONS
SECTION 17.01. Title 6, Civil Practice and Remedies Code,
is amended by adding Chapter 149 to read as follows:
CHAPTER 149. LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES RELATING
TO CERTAIN MERGERS OR CONSOLIDATIONS
Sec. 149.001. DEFINITIONS. In this chapter:
(1) "Asbestos claim" means any claim, wherever or
whenever made, for damages, losses, indemnification, contribution,
or other relief arising out of, based on, or in any way related to
asbestos, including:
(A) property damage caused by the installation,
presence, or removal of asbestos;
(B) the health effects of exposure to asbestos,
including any claim for:
(i) personal injury or death;
(ii) mental or emotional injury;
(iii) risk of disease or other injury; or
(iv) the costs of medical monitoring or
surveillance; and
(C) any claim made by or on behalf of any person
exposed to asbestos, or a representative, spouse, parent, child, or
other relative of the person.
(2) "Corporation" means a corporation for profit,
including:
(A) a domestic business corporation organized
under the laws of this state; or
(B) a foreign corporation organized under laws
other than the laws of this state that has a certificate of
authority to transact business in this state or is doing business in
this state.
(3) "Successor asbestos-related liabilities" means
any liabilities, whether known or unknown, asserted or unasserted,
absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due, that are related in any way
to asbestos claims that were assumed or incurred by a corporation as
a result of or in connection with a merger or consolidation, or the
plan of merger or consolidation related to the merger or
consolidation, with or into another corporation or that are related
in any way to asbestos claims based on the exercise of control or
the ownership of stock of the corporation before the merger or
consolidation. The term includes liabilities that, after the time
of the merger or consolidation for which the fair market value of
total gross assets is determined under Section 149.004, were or are
paid or otherwise discharged, or committed to be paid or otherwise
discharged, by or on behalf of the corporation, or by or on behalf
of a transferor, in connection with settlements, judgments, or
other discharges in this state or another jurisdiction.
(4) "Transferor" means a corporation from which
successor asbestos-related liabilities are assumed or incurred.
Sec. 149.002. APPLICABILITY. (a) The limitation in
Section 149.003 applies to a merger or consolidation effected under
the laws of this state or another jurisdiction.
(b) The limitation in Section 149.003 does not apply to:
(1) workers' compensation benefits paid by or on
behalf of an employer to an employee under the Texas Workers'
Compensation Act, Subtitle A, Title 5, Labor Code, or comparable
workers' compensation law of another jurisdiction;
(2) any claim against a corporation that does not
constitute a successor asbestos-related liability;
(3) an insurance corporation, as that term is used in
the Insurance Code; or
(4) any obligations under the National Labor Relations
Act (29 U.S.C. Section 151 et seq.), as amended, or under any
collective bargaining agreement.
Sec. 149.003. LIMITATION ON SUCCESSOR ASBESTOS-RELATED
LIABILITIES. (a) Except as provided by Subsection (b), the
cumulative successor asbestos-related liabilities of a corporation
are limited to the fair market value of the total gross assets of
the transferor determined as of the time of the merger or
consolidation and any policies of insurance. The corporation does
not have any responsibility for successor asbestos-related
liabilities in excess of this limitation.
(b) If the transferor had assumed or incurred successor
asbestos-related liabilities in connection with a prior merger or
consolidation with a prior transferor, the cumulative successor
asbestos-related liabilities of a corporation are limited to the
fair market value of the total gross assets of the prior transferor,
determined as of the time of the earlier merger or consolidation.
Sec. 149.004. ESTABLISHING FAIR MARKET VALUE OF TOTAL GROSS
ASSETS. (a) A corporation may establish the fair market value of
total gross assets for the purpose of the limitation under Section
149.003 through any method reasonable under the circumstances,
including:
(1) by reference to the going concern value of the
assets or to the purchase price attributable to or paid for the
assets in an arm's-length transaction; or
(2) in the absence of other readily available
information from which fair market value can be determined, by
reference to the value of the assets recorded on a balance sheet.
(b) Total gross assets include intangible assets.
Sec. 149.005. ADJUSTMENT. (a) The fair market value of
total gross assets at the time of a merger or consolidation
increases annually at a rate equal to the sum of:
(1) the prime rate as listed in the first edition of
the Wall Street Journal published for each calendar year since the
merger or consolidation; and
(2) one percent.
(b) The rate in Subsection (a) is not compounded.
(c) The adjustment of fair market value of total gross
assets continues as provided under Subsection (a) until the date
the adjusted value is exceeded by the cumulative amounts of
successor asbestos-related liabilities paid or committed to be paid
by or on behalf of the corporation, or by or on behalf of a
transferor, after the time of the merger or consolidation for which
the fair market value of total gross assets is determined.
Sec. 149.006. SCOPE OF CHAPTER. The courts in this state
shall apply, to the fullest extent permissible under the United
States Constitution, this state's substantive law, including the
limitation under this chapter, to the issue of successor
asbestos-related liabilities.
SECTION 17.02. Chapter 149, Civil Practice and Remedies
Code, as added by this article, applies to all asbestos claims,
including existing asbestos claims, and all litigation, including
existing litigation, in the courts of this state, without regard to
whether a suit was commenced before, on, or after the effective date
of this article.
ARTICLE 18. CHARITABLE IMMUNITY AND LIABILITY
SECTION 18.01. Sections 84.004(a) and (c), Civil Practice
and Remedies Code, are amended to read as follows:
(a) Except as provided by Subsection (d) and Section 84.007,
a volunteer [who is serving as an officer, director, or trustee] of
a charitable organization is immune from civil liability for any
act or omission resulting in death, damage, or injury if the
volunteer was acting in the course and scope of the volunteer's
[his] duties or functions [as an officer, director, or trustee]
within the organization.
(c) Except as provided by Subsection (d) and Section 84.007,
a volunteer health care provider [who is serving as a direct service
volunteer of a charitable organization] is immune from civil
liability for any act or omission resulting in death, damage, or
injury to a patient if:
(1) [the volunteer was acting in good faith and in the
course and scope of the volunteer's duties or functions within the
organization;
[(2)] the volunteer commits the act or omission in the
course of providing health care services to the patient;
(2) [(3)] the services provided are within the scope
of the license of the volunteer; and
(3) [(4)] before the volunteer provides health care
services, the patient or, if the patient is a minor or is otherwise
legally incompetent, the person responsible for [patient's parent,
managing conservator, legal guardian, or other person with legal
responsibility for the care of] the patient signs a written
statement that acknowledges:
(A) that the volunteer is providing care that is
not administered for or in expectation of compensation; and
(B) the limitations on the recovery of damages
from the volunteer in exchange for receiving the health care
services.
SECTION 18.02. Section 84.007(a), Civil Practice and
Remedies Code, is amended to read as follows:
(a) This chapter does not apply to an act or omission that is
intentional, wilfully [or wantonly] negligent, or done with
conscious indifference or reckless disregard for the safety of
others.
SECTION 18.03. The following provisions of the Civil
Practice and Remedies Code are repealed:
(1) Section 84.003(4); and
(2) Section 84.004(b).
SECTION 18.04. This article applies only to a cause of
action that accrues on or after the effective date of this article.
An action that accrued before the effective date of this article is
governed by the law applicable to the action immediately before the
effective date of this article, and that law is continued in effect
for that purpose.
ARTICLE 19. LIABILITY OF VOLUNTEER FIRE DEPARTMENTS
AND VOLUNTEER FIRE FIGHTERS
SECTION 19.01. FINDINGS AND PURPOSE. (a) The legislature
finds that:
(1) 80 percent of the area of this state is currently
protected by volunteer fire departments;
(2) concern regarding personal liability arising out
of services rendered by volunteer fire fighters on behalf of
volunteer fire departments deters individuals from offering their
services as volunteer fire fighters;
(3) the diminishing number of volunteer fire fighters
leads to increased costs and less service to areas of this state
that are served by volunteer fire departments; and
(4) it is in the public interest of the citizens of
this state to encourage the continued level of service provided by
volunteer fire departments.
(b) The purpose of this article is to reduce the exposure to
liability of:
(1) a volunteer fire department while involved in or
providing an emergency response; and
(2) a volunteer fire fighter while acting as a member
of a volunteer fire department.
SECTION 19.02. AMENDMENT. Chapter 78, Civil Practice and
Remedies Code, is amended by adding Subchapter C to read as follows:
SUBCHAPTER C. FIRE-FIGHTING SERVICES
Sec. 78.101. DEFINITIONS. In this subchapter:
(1) "Emergency response" means a response involving
fire protection or prevention, rescue, emergency medical, or
hazardous material response services.
(2) "Volunteer fire department" means a nonprofit
organization that is:
(A) operated by its members;
(B) exempt from the state sales tax under Section
151.310, Tax Code, or the state franchise tax under Section
171.083, Tax Code; and
(C) organized to provide an emergency response.
(3) "Volunteer fire fighter" means a member of a
volunteer fire department.
Sec. 78.102. APPLICABILITY OF SUBCHAPTER: EMERGENCY
RESPONSE. This subchapter applies only to damages for personal
injury, death, or property damage, other than property damage to
which Subchapter A applies, arising from an error or omission of:
(1) a volunteer fire department while involved in or
providing an emergency response; or
(2) a volunteer fire fighter while involved in or
providing an emergency response as a member of a volunteer fire
department.
Sec. 78.103. LIABILITY OF VOLUNTEER FIRE DEPARTMENT. A
volunteer fire department is:
(1) liable for damages described by Section 78.102
only to the extent that a county providing the same or similar
services would be liable under Chapter 101; and
(2) entitled to the exclusions, exceptions, and
defenses applicable to a county under Chapter 101 and other
statutory or common law.
Sec. 78.104. LIABILITY OF VOLUNTEER FIRE FIGHTER. A
volunteer fire fighter is:
(1) liable for damages described by Section 78.102
only to the extent that an employee providing the same or similar
services for a county would be liable; and
(2) entitled to the exclusions, exceptions,
immunities, and defenses applicable to an employee of a county
under Chapter 101 and other statutory or common law.
SECTION 19.03. TRANSITION. Subchapter C, Chapter 78, Civil
Practice and Remedies Code, as added by this article, applies only
to a cause of action that accrues on or after the effective date of
this article. An action that accrues before the effective date of
this article is governed by the law applicable to the action
immediately before the effective date of this article, and that law
is continued in effect for that purpose.
ARTICLE 20. CERTAIN PROVISIONS IN CONTRACTS
SECTION 20.01. Title 6, Civil Practice and Remedies Code,
is amended by adding Chapter 145 to read as follows:
CHAPTER 145. CERTAIN PROVISIONS IN CONSTRUCTION CONTRACTS
Sec. 145.001. DEFINITION. In this chapter, "construction
contract" means a contract or agreement made and entered into by a
contractor, construction manager, subcontractor, supplier, or
equipment lessor, concerning construction, alteration, or repair.
Sec. 145.002. AGREEMENT VOID AND UNENFORCEABLE. (a)
Except as provided by Subsection (b), a covenant, promise, or
agreement contained in a construction contract, or in an agreement
collateral to or affecting a construction contract, is void and
unenforceable to the extent that it indemnifies a person against
all or any portion of loss or liability for damage that:
(1) is caused by or results from the sole, joint, or
concurrent negligence of the indemnitee, its agent, employee, or
another independent contractor directly responsible to the
indemnitee; and
(2) arises from:
(A) personal injury or death;
(B) property damage;
(C) a fine, penalty, administrative action, or
other action assessed by a governmental entity directly against the
indemnitee, its agent or employee, or an independent contractor
directly responsible to the indemnitee; or
(D) any other loss, damage, or expense that
arises from an occurrence described by Paragraph (A), (B), or (C).
(b) A covenant, promise, or agreement, contained in a
construction contract, or in an agreement collateral to or
affecting a construction contract, may provide for a person to
indemnify, hold harmless, or defend another person against loss or
liability for damage that is caused by or results from the sole,
joint, or concurrent negligence of the indemnitee or its agent or
employee and arises from the bodily injury or death of an employee
of:
(1) the indemnitor;
(2) the indemnitor's subcontractor, supplier, or
equipment lessor;
(3) any lower-tier subcontractor, supplier, or
equipment lessor of the indemnitor's subcontractor; or
(4) any independent contractor directly responsible
to a person described in Subdivisions (1)-(3).
Sec. 145.003. CERTAIN LAWS AND CONTRACTS UNAFFECTED. (a)
This chapter does not affect the validity and enforceability of:
(1) an insurance contract;
(2) benefits and protections under the workers'
compensation laws of this state; or
(3) any statutory right of contribution.
(b) This chapter does not affect a contract covered by
Section 2252.902, Government Code.
Sec. 145.004. WAIVER PROHIBITED. This chapter may not be
waived by contract or otherwise.
SECTION 20.02. (a) This article applies to:
(1) a contract entered into or renewed on or after the
effective date of this article; and
(2) any specific, terminable performance of a specific
job or activity begun under a contract after the effective date of
this article regardless of whether the contract was entered into or
renewed before the effective date of this article.
(b) A contract entered into or renewed before the effective
date of this article and any job or activity under the contract
begun before the effective date of this article is governed by the
law in effect immediately before the effective date of this
article, and that law is continued in effect for that purpose.
ARTICLE 21. EFFECTIVE DATE
SECTION 21.01. (a) All articles of this Act, other than
Article 10, take effect September 1, 2003.
(b) Article 10 of this Act takes effect immediately if this
Act receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, Article 10 of this Act takes effect September 1, 2003.
(c) Except as otherwise provided in Articles 10, 15, 18, 19,
and 20, this Act applies only to a civil action commenced on or
after the effective date of this Act. An action commenced before
the effective date of this Act is governed by the law in effect
immediately before the change in law made by this Act, and that law
is continued in effect for that purpose.