Bills relating to personal injury and/or wrongful death passed in Texas

Two bills, HB 1692 and SB 735 have recently been passed by the 84th Texas Legislature that would be helpful for companies dealing in personal injury or wrongful death litigation in the state. While the former intends to curb the practice of foreign plaintiffs involved in out-of-state incidents but filing claims in Texas courts, the latter focuses on limiting the circumstances in which net worth evidence is discoverable in personal injury and wrongful death cases.

HB 1692 came as a result of In re Ford Motor Company, 442 S.W.3d 265 (Tex. 2014). This involved wrongful death claims wherein the survivor of the crash, a Mexican citizen, sued the estate of a Mexican decedent in Texas state court. The Texas Supreme Court required Ford Motor Company to defend the wrongful death claims.

Now, HB 1692 would amend Tex. Civ. Prac. & Rem. Code section 71.051(e) to clarify that the legal residency exception to forum non conveniens applies only to plaintiffs who are legal residents of Texas or derivative claimants of legal residents of Texas and to provide that the analysis be made individually with respect to each plaintiff. “Plaintiff” has been redefined to exclude representatives, administrators, guardians and next friends—unless they are a derivative claimant of a Texas resident. See 71.051(h)(2).[1]

On the other hand SB 735 was an outcome of Lunsford v. Morris, 746 S.W.2d 471 (Tex. 1988), where the Texas Supreme Court permitted the discovery and use of net worth evidence to support a claim for punitive damages. SB 735 would amend Tex. Civ. Prac. & Rem. Code section 41.001 and sub section (a) codifies the ruling in this case.

However, Texas law does not define how net worth would be determined or what net worth materials are discoverable, thus leading to an inconsistent application of law across the state. SB 735 would add a statutory definition of net worth which it describes as “the total assets of a person minus the total liabilities of the person on a date determined appropriate by the trial court” to this section 41.001. [See addition of Subdivision (7-a)]. The bill would also add a new section 41.0115, according to which court may authorize discovery of evidence relating to defendant’s net worth on finding that the plaintiff “has demonstrated a substantial likelihood of success on the merits of a claim for exemplary damages.” It would also limit upon the trial court’s authority to only the least burdensome method available in obtaining the net worth evidence. [See addition of Sec. 41.0115(b)]. Rather, on an appeal, the reviewing court may consider only the evidence submitted by the parties to the trial court in support of or in opposition to the motion seeking the discovery. [See addition of Sec. 41.0115(c)]. It would further encourage defendants’ motions for summary judgment on punitive damages claims. [See addition of Sec. 41.0115(d)].[2]

HB 1692 and SB 735 were submitted to their governors on May 26, 2015 and May 30, 2015 respectively. Upon signatures, the former will take effect immediately upon signatures and the latter from September 1, 2015. Both will apply to new actions commenced on or after the effective date of the Act.[3]

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