Tort reform bill spurs debate

Bayliss Wagner

Austin American-Statesman USA TODAY NETWORK

Texas Republican lawmakers are pushing to overhaul how juries award damages in personal injury and wrongful death cases, generating a flurry of spending on advertisements for and against the proposal by business and legal groups.

Senate Bill 30, by Sen. Charles Schwertner, R-Georgetown, aims to restrain a “rise in substantial verdicts” by limiting the medical costs that plaintiffs can claim to 300% of Medicare reimbursement rates and raising the standard of evidence for noneconomic damages for mental anguish and physical pain and suffering.

The tort reform bill would address “a fundamental unfairness in civil trials over torts” and “an unstable legal environment that is driving up costs for Texas families and businesses,” Schwertner, an orthopedic surgeon, told his colleagues on the Senate floor.

The Senate passed the measure by a 20-11 party-line vote Wednesday evening, advancing the bill to the House.

Introduced soon after the state’s new business courts began operating, SB 30 is part of a broader effort by Republican state leaders to make Texas more attractive to corporations by limiting avenues for costly litigation against businesses. Lt. Gov. Dan Patrick, the three-term Republican who presides over the Senate, has designated the bill a priority alongside SB 31, which would make it harder for shareholders to sue publicly-traded companies, and SB 39, which would change how and when trucking companies can be held liable for accidents involving their drivers.

All three bills are supported by Texans for Lawsuit Reform, an influential political action committee that received $1 million from Tesla and SpaceX CEO Elon Musk in October. Musk moved both companies’ headquarters to the Austin area last year.

Supporters of SB 30, such as the Lone

Star Economic Alliance, say the bill will “bring balance back to the courtroom, protect small businesses, and reduce inflated costs that ultimately burden all Texans.”

But the legislation has generated significant controversy, as was shown during seven hours of public testimony at a Senate State Affairs committee hearing and two hours of debate on the Senate floor. Democratic lawmakers and civil plaintiff attorneys say the bill would let defendants escape proportional punishment for wrongs they commit, particularly in sexual assault cases.

Sen. Roland Gutierrez, D-San Antonio, argued that SB 30 would decrease potential awards low enough to keep lawyers from taking some cases.

“Your constituents, from Brownsville down to El Paso, are going to have to face the reality that they’re not going to have access to the courthouse because lawyers are not going to do it,” Gutierrez said on the floor. “They’re not going to go through the expense of having to fund these things if these damages are going to be done in such a way that their clients are not going to be made whole in a real way.”

The Texas Trial Lawyers Association, a major donor to both Democrats as well as Republicans, is at the forefront of opposition to the measure. The organization’s president, Jack Walker, told the American-Statesman that he believes the bill is a “money grab” for insurance companies.

“The more severely injured or damaged a victim is, the more this bill prohibits their recovery,” Walker said in a phone interview.

Consumer watchdog group Texas Watch also testified in opposition to the bill.

SB 30 targets medical costs, damages for pain and suffering

Schwertner’s proposal limits the medical costs that plaintiffs can claim to 300% of the 2025 Medicare reimbursement rate with an adjustment for inflation. The provision is meant to prevent lawyers from “colluding with providers who overdiagnose, overbill and overtreat” victims to come up with inflated medical charges, the bill’s author said. It would also require lawyers to disclose their relationship to doctors involved in treatment in certain cases.

Opponents of the bill pointed out that doctors sometimes refuse to treat accident victims who can’t pay for their costs upfront.

Gutierrez – an attorney who founded a legal firm with offices in Austin, San Antonio and McAllen – said that in personal injury cases he has occasionally represented, “I’d send (victims) to the one doctor that I knew that would sign a letter of protection and not take any money, because these people didn’t have any money, they didn’t have insurance,” he said.

Noneconomic damages also are a point of contention in the proposed legislation. Currently, juries can look at each of six categories, including disfigurement, loss of companionship and loss of enjoyment, to determine noneconomic damages. SB 30 would combine those six into two – past and future “mental or emotional pain and anguish” and “physical pain and suffering” – and raise the standards of proof for each. Past and future reputation damage also is included in the law.

Plaintiffs would need to prove their injuries through medical records to back up claims of suffering, or, in the case of sexual assault victims, show they made a “prior consistent statement” or have documents proving their injuries. Schwertner added the additional language regarding sexual assault victims in a floor amendment after Sens. Judith Zaffirini, D-Laredo, and Angela Paxton, R-McKinney, raised concerns during the committee hearing.

Walker, the Texas Trial Lawyers Association president, argues that the added language isn’t enough to ensure fair compensation in such cases, in which decades may have passed between the assault and the litigation and thus medical evidence is difficult to obtain.

“In cases of grooming, most of the time, there is no consistent statement because the groomer requires silence,” Walker said.

“The victim, during childhood, often doesn’t realize what is happening to them.”

Business groups, trial lawyers spar over SB 30

Several pro-business interest groups are advocating for the bill, including Texans for Lawsuit Reform, a political action committee that is a top donor to Texas Republicans and contributed $25 million to lawmakers on both sides of the aisle in the 2024 elections.

Additionally, the Lone Star Economic Alliance and a national business group, Protecting American Consumers Together, each announced six-figure and seven-figure ad buys, respectively, this month.

“Informed juries are better juries,” reads a billboard sponsored by the Lone Star Economic Alliance.

Countering that, a new and littleknown group called Citizens for Integrity and Accountability ran a television ad opposing SB 30 on Fox News, Brad Johnson of The Texan reported April 3. The ad says the bill “limits damages that victims can get from Chinese corporations, drug companies and priests found guilty of child molestation.”

During floor debate, Schwertner and Sen. Lois Kolkhorst, R-Brenham, rejected claims that the bill would prevent Chinese-owned companies from facing accountability in the U.S.

A major concern of the bill’s supporters are so-called “nuclear verdicts,” which happen when juries award damages of more than $10 million in a single personal injury or death case. In his intent statement for SB 30, Schwertner wrote that “lack of clear guidance” in the law “makes juries susceptible to being misled by arbitrary figures or comparisons to unrelated cases that distort their perception of fair compensation.”

To address this, the bill directs that noneconomic damages are “prohibited from being used to penalize or punish a defendant, make an example to others, or serve a social good,” as distinct from punitive damages.

Opponents of the bill argue that it would limit their ability to force defendants to fix their behavior, whether through a major lawsuit or the threat of one.

“We can say, ‘You have got to make policy changes, or this is what you’re facing,’ ” Dallas-based attorney Charla Aldous said in the March 31 Senate hearing. “Then, after we get a nuclear verdict, we can use that verdict to effectuate the policy changes.”

Rep. Greg Bonnen, R-Angleton, is carrying SB 30’s companion, House Bill 4806, in the lower chamber. Bonnen is a close ally of House Speaker Dustin Burrows and chairs of the House Appropriations Committee. Like Schwertner, he is a physician.

The bill has not yet been referred to a House committee.