By: Hughes, Bettencourt S.B. No. 27
      Creighton
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to recovery of damages, attorney's fees, and costs related
  to frivolous claims and regulatory actions by state agencies.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Chapter 105, Civil Practice and
  Remedies Code, is amended to read as follows:
  CHAPTER 105. FRIVOLOUS CLAIM OR REGULATORY ACTION BY STATE AGENCY
         SECTION 2.  Section 105.002, Civil Practice and Remedies
  Code, is amended to read as follows:
         Sec. 105.002.  RECOVERY OF FEES, EXPENSES, AND ATTORNEY'S
  FEES FOR FRIVOLOUS CLAIM. A party to a civil suit in a court of this
  state brought by or against a state agency in which the agency
  asserts a cause of action against the party, either originally or as
  a counterclaim or cross claim, is entitled to recover, in addition
  to all other costs allowed by law or rule, a total amount not to
  exceed $1 million for fees, expenses, and reasonable attorney's
  fees incurred by the party in defending the agency's action if:
               (1)  the court finds that the action is frivolous[,
  unreasonable, or without foundation]; and
               (2)  the action is dismissed or judgment is awarded to
  the party.
         SECTION 3.  Section 105.003(a), Civil Practice and Remedies
  Code, is amended to read as follows:
         (a)  To recover under Section 105.002 [this chapter], the
  party must file a written motion alleging that the agency's claim is
  frivolous[, unreasonable, or without foundation]. The motion may
  be filed at any time after the filing of the pleadings in which the
  agency's cause of action is alleged.
         SECTION 4.  Chapter 105, Civil Practice and Remedies Code,
  is amended by adding Section 105.005 to read as follows:
         Sec. 105.005.  RECOVERY OF ATTORNEY'S FEES AND COSTS IN
  FRIVOLOUS REGULATORY ACTION. The court reviewing a decision in a
  contested case under Chapter 2001, Government Code, may award a
  person, in addition to all other costs allowed by law or rule, an
  amount not to exceed $1 million for reasonable attorney's fees and
  costs incurred in defending against a frivolous regulatory action
  during the contested case and judicial review of the decision in the
  contested case if:
               (1)  the person prevails on review; and
               (2)  there is a final determination that the regulatory
  action is frivolous.
         SECTION 5.  Chapter 105, Civil Practice and Remedies Code,
  is amended by adding Section 105.006 to read as follows:
         Sec. 105.006.  COURT FACTORS FOR FRIVOLOUS CLAIM OR ACTION.
  In determining whether a claim or regulatory action is frivolous
  under this chapter, the court may consider whether:
               (1)  the claim's or action's realistic chance of
  ultimate success is slight;
               (2)  the claim or action has no arguable basis in law or
  fact;
               (3)  it is clear that the state agency cannot prove
  facts in support of the claim or action; or
               (4)  the totality of the tendered evidence fails to
  demonstrate any arguable basis for the claim or action.
         SECTION 6.  Section 2001.058, Government Code, is amended by
  adding Subsection (e-1) to read as follows:
         (e-1)  Notwithstanding Subsection (e), a state agency may
  not vacate or modify an order of an administrative law judge that
  awards attorney's fees and costs under Section 2001.903.
         SECTION 7.  Subchapter Z, Chapter 2001, Government Code, is
  amended by adding Section 2001.903 to read as follows:
         Sec. 2001.903.  RECOVERY OF ATTORNEY'S FEES AND COSTS IN
  CONTESTED CASES INVOLVING FRIVOLOUS REGULATORY ACTION. (a)  The
  administrative law judge in a contested case may award a person, in
  addition to all other costs allowed by law or rule, an amount not to
  exceed $1 million for reasonable attorney's fees and costs incurred
  in defending against a frivolous regulatory action during the case
  if there is no judicial review of the decision in the case and:
               (1)  the person prevails in the case; and
               (2)  there is a final determination that the regulatory
  action is frivolous.
         (b)  In determining whether a regulatory action is frivolous
  under Subsection (a), the administrative law judge may consider
  whether:
               (1)  the action's realistic chance of ultimate success
  is slight;
               (2)  the action has no arguable basis in law or fact;
               (3)  it is clear that the state agency cannot prove
  facts in support of the action; or
               (4)  the totality of the tendered evidence fails to
  demonstrate any arguable basis for the action.
         SECTION 8.  The change in law made by this Act applies only
  to a claim filed or regulatory action taken on or after the
  effective date of this Act. A claim filed or regulatory action
  taken before the effective date of this Act is governed by the law
  applicable to the claim or regulatory action immediately before the
  effective date of this Act, and that law is continued in effect for
  that purpose.
         SECTION 9.  This Act takes effect September 1, 2019.