During the 1980s and early 1990s, Texas was the epicenter of lawsuit abuse. The reputation was well known and justly deserved. Yet, it was a reputation that most Texans did not want.
The practice of court shopping and reaching into the wrong pockets for compensation was legendary. And the saying: “everything is bigger in Texas” certainly applied to jury awards, many of which were outrageous and bore no rational relationship to the injury suffered or the value of a dollar.
Criticism of Texas’ legal system was brutally frank. From the Christian Science Monitor came this blast: “Texas juries hand out high-dollar awards like windshield flyers on a mall parking lot.”
In a matter of 20 years beginning in the 1970s, a century and a half of Texas common law had been summarily dismantled by the state’s high court. First, a series of medical malpractice reforms were overturned. Next, prejudgment interest was imposed (in other words the meter was running long before a jury even considered the facts of the case). Then, the court stripped away common law defenses for contributory negligence, open and obvious risk, as well as charitable and family immunity. And those were just warm-ups.
The standard in proving punitive damages was effectively lowered. Litigants from as far away as Costa Rica were given open access to our courts and grounds for wrongful termination were broadly expanded. Not surprisingly, crisis ensued.
“…Texas is currently a leader in jaw-dropping punitive awards,” the Dallas Morning News reported in March 1994, noting that the state produced four $100-million-plus cases in 1992 compared with three for the entire country. At least five more of that size was delivered in 1993, the newspaper added.
In fact, from 1987-1994, Texas juries were two to four times as likely as their national counterparts to grant awards of punitive damages to successful plaintiffs, according to the Texas Civil Justice League.
And what of the impact on jobs? A survey of businesses by the Texas Public Policy Foundation in 1993 found nearly a third of the respondents reported the threat of punitive damage awards had impacted their plans to expand in the state. One-quarter of the respondents said it impacted product designs or introductions, and 12 percent said it forced them to lay off workers.
In 1994, the Texas Supreme Court changed the way punitive damage trials are conducted. The court divided punitive damage trials into two hearings. One to decide the merits of the case, and a second, if necessary, to determine the amount of any punitive award.
But the public’s call for fairness reached a crescendo in 1995. Under the leadership of Lt. Gov. Bob Bullock, Governor George W. Bush and House Speaker Pete Laney, seven lawsuit reforms were passed, including measures that capped punitive damages.
While punitive damage awards have been reined in, one might conclude that jumbo jury awards no longer occur in Texas. That is not so. According to Lawyers Weekly, Texas produced two of the nation’s top 10 jury verdicts in both 1998 and 1999.
Many naively believed eye-popping verdicts would no longer occur after the Legislature passed a cap on punitive damages. However, neither of the 1999 cases involved the awarding of punitive damages. The compensatories were so large as to have a punitive impact.
For the most part, personal injury lawyers are less apt to demand outrageous punitive damages and Texas juries are less likely to be swayed by emotional rhetoric. Oversized awards and lawsuit abuses have been reduced. But they haven’t been eliminated.
Many high dollar skirmishes have simply moved from personal injury to class action, mass action and business-to-business lawsuits. Further, personal injury lawyers are working to create new ways to sue.
After years of reform, it can finally be said jury awards aren’t necessarily bigger in Texas. However, in the Lone Star state, the entrepreneurial spirit of the plaintiff’s bar and the opportunities for abuse are still as big as ever.