LITIGATION ALERT: New Expedited Action Procedure Rules Go Into Effect in Texas

New Expedited Action Procedure and Dismissal Rules Go Into Effect in Texas

April, 2013

The Texas Supreme Court approved new rules that will dramatically change the practice of civil law in Texas. The new rules establish a mandatory "expedited action" procedure for certain cases with limited amounts in controversy. The rules also provide a dismissal mechanism that is available in all cases. This Litigation Alert will address the expedited action procedure first, followed by an overview of the motion to dismiss practice.

EXPEDITED ACTIONS[1]

Amount in Controversy Must be Pled

All petitions filed in Texas after March 1, 2013 must state the amount of monetary and non-monetary relief that is sought. The claimant must state it seeks: (1) only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorneys' fees; (2) monetary relief of $100,000 or less and non-monetary relief; (3) monetary relief over $100,000 but not more than $200,000; (4) monetary relief over $200,000 but not more than $1,000,000; or (5) monetary relief over $1,000,000.

Automatic Application

This expedited action procedure automatically applies to a lawsuit in which all claimants, other than counter-claimants, affirmatively plead that they seek only monetary relief totaling $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorneys' fees. The claimant's pleading is determinative of whether the expedited action procedure applies based on the type of claim and the alleged amount in controversy. The expedited actions process does not apply to medical liability claims or claims brought under the Family Code, Property Code, or Tax Code.

Maximum Recovery Cap

The maximum recovery in an expedited jury trial will be $100,000, including attorneys' fees and pre-judgment interest.

Discovery Limitations

A party may not conduct discovery until the party complies with the new pleading requirement of the amount of monetary relief and non-monetary relief sought. In an expedited trial, the parties are limited to 15 interrogatories, 15 requests for production, 15 requests for admission, and 6 hours of total deposition time per side (unless the parties agree to add up to an additional 4 hours). The discovery period ends 180 days after the first written discovery is served.  An additional disclosure has been added for the expedited trial procedure that requires the parties to disclose all documents and tangible things that may be used in support of the responding party's claims or defenses.

Alternative Dispute Resolution (ADR)

Parties are now allowed to opt out of the ADR process. Unless all parties agree not to mediate, a court may order a case to mediation once for a maximum of half a day. The mediation must be completed at least 60 days prior to the trial date and for a fee not to exceed twice the filing fee costs (for both sides).

Trial Setting

Upon a party's request, the court must set a trial date that is within 90 days of the conclusion of the discovery period in cases falling under the expedited trial procedure.  A court may issue only two continuances in a case. Those continuances may not exceed a total of 60 days combined. The continuance rule does not affect cases that are simply not reached by the court or bumped by a criminal case in counties that have blended dockets.

Length of Trial

The parties will be limited to a total of 8 hours of trial presentation per side (not per party). However, the court has discretion, upon a motion and showing of good cause, to extend the total time per side to 12 hours. The 8-hour trial time limitation includes voir dire, opening statements, presentation of evidence, examination of witnesses, cross examination of witnesses, closing arguments, and Robinson/Daubert challenges regarding the admissibility of expert opinions. Pre-trial Robinson/Daubert challenges are not permitted unless they are made as objections to summary judgment evidence. Time spent on objections, bench conferences, bills of exception, and challenges for cause to a juror are not included in the time limit.

Proof of Medical Expenses

Parties are now allowed to prove up medical expenses without live testimony through an affidavit which meets the "actually paid or incurred" standard addressed in Haygood v. Escabedo.

Removal from Expedited Action Procedure

A court must remove a case from the expedited action procedure (1) upon motion by any party with a showing of good cause or (2) if any claimant, other than a counter-claimant, files a pleading or an amended or supplemental pleading that seeks any relief other than monetary relief. The rules do not define good cause, but the Texas Supreme Court indicated that courts should consider various factors, including: (1) whether there are multiple plaintiffs against the same defendant; (2) whether compulsory counterclaims filed in good faith seek over $100,000; (3) the number of parties; (4) the number of witnesses; (5) the complexity of legal and factual issues; and (6) any need for interpreters.

Observations

The new rules generate as many new questions as they do answers. It is unclear how courts will prioritize cases on their dockets that fall under the $100,000 threshold. Moreover, even though these new rules are based on the claimant's alleged amount in controversy, there is no mechanism to contest that amount. Plaintiffs may be hesitant to plead into these new rules as verdicts will be limited to those damages that were pled. Potential malpractice suits may arise if a plaintiff’s attorney is “too successful” at trial and a jury awards more than the $100,000 which was pled. In such a case, the damages would be capped at $100,000—including attorneys' fees.

Attorneys must be diligent in time management at trial because the new rules provide absolute limits for trial time. Attorneys must be sure to efficiently present their cases, introduce all evidence, and conserve enough time for closing arguments. The rules encourage attorneys to work together and agree on admissibility of summaries of evidence when possible. For instance, attorneys should agree to a summary of medical records in order to avoid wasting time at trial proving up each medical record. Likewise, attorneys should expect some gamesmanship when attorneys force opposing counsel to "run the clock out" proving up records.

MOTIONS TO DISMISS[2]

Rule 91a of the Texas Rules of Civil Procedure, titled Dismissal of Baseless Causes of Action, permits parties to move to dismiss a cause of action on the grounds that it has "no basis in law or fact." The moving party must file the motion within 60 days of the first pleading that contains the challenged cause of action, and the court must grant or deny the motion within 45 days of its filing. In ruling on the motion, the only evidence a court may consider is the pleading containing the contested cause of action and any applicable exhibits.[3]  Importantly, the prevailing party is entitled to its attorneys’ fees—e.g., if the defendant loses his motion to dismiss, he must pay the plaintiff's attorneys' fees.

Movants may set the motion for hearing at least 21 days after filing. Parties may withdraw a challenged cause of action within three days of the hearing to prevent the court from ruling on the motion.

It remains to be seen how new Rule 91a will affect Texas civil trial practice. Commenters have been careful to point out that it is not an analog of Federal Rule 12(b), both because it includes a "loser pays" incentive and because of the rule limits the court's review to the four corners of the pleading. The rule may result in more careful pleading by plaintiffs' lawyers; however, the "loser pays" provision may discourage defendants from using the procedure except in limited circumstances.

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This Litigation Alert is a summary of recent developments in the law and is provided for informational purposes only.  It is not intended to constitute legal advice or to create an attorney-client relationship.  Readers should obtain legal advice specific to their situation in connection with topics discussed.

Copyright © 2013 Kane Russell Coleman & Logan PC.  All rights reserved.  Unless otherwise

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