Texas was once a favorite destination for plaintiffs’ lawyers looking to bring product liability suits. But tort reform legislation continues to change that picture. Most recently, two bills were passed by the Texas Legislature, HB 1692 and SB 735, that further protect against forum shopping and overbroad discovery of a defendant’s net worth.
First, HB 1692 limits out-of-state plaintiffs from filing personal injury or wrongful death claims in Texas state courts when the claims involve incidents that occurred outside of the state. Prior law in Texas prohibited the dismissal of personal injury and wrongful death claims filed by nonresidents on forum non conveniens grounds so long as just one plaintiff in the action resided in Texas. But HB 1692 amends the relevant statute, Texas Civil Practice and Remedies Code section 71.051(e), to provide that only plaintiffs who are residents of Texas or derivative claimants of legal residents of Texas have this immunity to forum non conveniens. Under the new provision, the forum non conveniens analysis must be made individually with respect to each plaintiff, and the out-of-state plaintiffs can no longer “piggyback” on the in-state residents’ claims to stay in Texas courts. The bill was signed into law on June 16, 2015, and applies to all state court actions commenced on or after that date.
Second, SB 735, which has not yet been signed into law by the governor, is intended to limit the circumstances in which facts relating to the net worth of a defendant are discoverable in personal injury or wrongful death cases. Under prior law, a plaintiff would typically cast a wide net seeking net worth discovery on the basis that it was relevant to exemplary damages. The bill, however, would add a new section 41.0115 of the Texas Civil Practice and Remedies Code, allowing discovery of net worth evidence only when a plaintiff has first “demonstrated a substantial likelihood of success on the merits of a claim for exemplary damages.” The new law also requires plaintiffs to make a threshold showing of good cause before such discovery is allowed. The bill would further limit discovery by authorizing only the least burdensome method available to obtain net worth evidence. Further, SB 735 would clarify the definition of net worth to “the total assets of a person minus the total liabilities of the person on a date determined appropriate by the trial court,” further helping to narrow the focus of discovery both temporally and substantively.
If signed into law, SB 735 will take effect September 1, 2015, and will apply to new actions commenced on or after that date.