In response to the Texas Legislature’s directive for rules that effectuate the “prompt, efficient, and cost-effective” resolution of claims in which the amount in controversy does not exceed $100,000, the Texas Supreme Court drafted a set of rules for expedited actions that drew national attention, in new Texas Rule of Civil Procedure 169 for Expedited Actions. These new rules could dramatically change the way cases governed by the expedited actions process are litigated.
Cases Subject to the Expedited Action Process
Under new Texas civil rules, any pleading containing a claim for relief must contain an affirmative statement of the amount of monetary relief sought as well as whether non-monetary relief is sought. The purpose of this requirement is for the claimant to establish the amount in controversy and, if the aggregate monetary relief sought by a claimant, other than a counter-claimant, is less than $100,000 (including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees) and does not seek non-monetary relief, then the claim is subject to the expedited actions procedure. The expedited actions process does not apply to claims brought under the Family Code, Property Code, Tax Code, or Chapter 74 of the Civil Practice and Remedies Code (medical liability claims). Consequently, a claimant’s (other than counter-claimants) pleading is determinative of whether the expedited actions procedure is utilized, based on the type of claim and on the allegation of the amount in controversy. If a claimant seeks only monetary relief in the aggregate amount of $100,000 or less, it is governed by the new rules. Interestingly, there is no mechanism in the new rules for an opposing party to contest the truthfulness or accuracy of the allegations with respect to the amount in controversy. If an amount in controversy is alleged, the allegations control for the purposes of the application of the expedited actions rule. If a claimant utilizes the expedited actions procedure, the claimant’s recovery is limited to no more than $100,000. If new information is discovered or comes to light that increases the value of a claim, a claimant may amend and if the amended pleading alleges an aggregated amount in controversy above $100,000 the suit is removed from the expedited actions procedure. If this happens discovery is reopened under Rule 190.2(c).
The rules require courts to remove cases from the expedited actions process (1) upon request, for good cause, and (2) if a claimant, other than a counter-claimant, files a pleading seeking any relief other than monetary relief. The Supreme Court did not define what constitutes “good cause” for removal from the process, but it did provide factors in the commentary to the rules for the trial court’s consideration including: the aggregate amount of damages sought against a defendant, whether compulsory counterclaims were filed in good faith that exceed the damage threshold, the number of parties and witnesses, the complexity of the legal and factual issues, and the necessity of an interpreter. Interestingly, the filing of a counterclaim in excess of $100,000 does not automatically remove a case from the expedited actions procedure. The Court was concerned that such an automatic rule would prevent plaintiffs who wanted to take advantage of the lower costs potentially associated with the procedure from getting the benefits of the process. Notably, this could create an incentive to “race to the courthouse” in certain cases. However, if a party to an expedited action has a counterclaim that exceeds $100,000, and that party does not want to be governed by the restricted procedures of the expedited actions rules, the party may seek to have the case removed from the process for good cause.
The Expedited Actions Process
The expedited actions process limits the amount of written discovery and deposition time in the case. For written discovery, each party may serve only 15 interrogatories, 15 requests for production, and 15 requests for admissions. For deposition time, each party may use only six total hours to question and cross-examine all witnesses. Absent a court order, the parties may only agree to extend this total to 10 hours. The discovery period, also limited by the new rules, ends 180 days after the first request for discovery is served in the case.
The trial setting requirement in expedited actions significantly limits judicial discretion with respect to the scheduling of the trial. Upon on a party’s request, the court must set a trial date that is within 90 days of the conclusion of the discovery period. The court may issue two continuances in a case. However, those continuances, combined, cannot exceed a total of 60 days. In an interesting departure from usual practice, the expedited actions rules allow parties to opt out of alternative dispute resolution (ADR) entirely, and if the parties have agreed to participate, the rule provides that the court can refer the parties to ADR only once, not to exceed one half-day in duration, and at a cost that does not exceed twice the amount of a civil filing fee.
Once the trial commences, trial practice is also limited for expedited actions. Each side receives only eight hours of trial time. Any time spent on jury selection, opening statements, closing arguments, presentation of evidence, and all examination of witnesses, including Robinson/Daubert challenges to the admissibility of expert testimony, count toward that total. These time limitations are per side, and not per party. If a party shows good cause, the trial court may extend the time limit to 12 hours per side, but it has no discretion to extend the limits beyond that point. Pretrial Robinson/Daubert motions challenging the qualifications or reliability of experts and their opinions are not allowed. Such challenges may be made, but only at trial or as an objection to summary judgment evidence.
The impact of the new rules for expedited actions is difficult to predict. The rules are certainly unique in that no other jurisdiction has tried anything like them. The Legislature’s as well as the Supreme Court’s stated goal with the rules is to reduce the cost of smaller litigation so that the cost of the litigation does not, by itself, prevent litigants from getting to trial and obtaining redress from a jury. There will, however, be a variety of questions and issues that will arise under the rules that will need to be resolved as they are used. Will the new rules result in more small-dollar litigation being pursued? How will trial courts and counties deal with the need to set expedited actions for trial on such a short time frame? Will trial courts in different parts of the state enforce the provisions allowing cases to be removed from the expedited actions process for good cause consistently? Will the time limits and discovery limits in the rules give litigants sufficient due process so that they believe the result, while less expensive, is just? Will the process result in more or fewer actual trials? Will defendants with substantial counterclaims in excess of $100,000 who lose the “race to the courthouse” find themselves in the expedited actions process without a remedy until the appeal after a judgment? Questions like these will be among the many issues that will need to be worked out as the process is used. The new rules are a bold stroke by the Texas Legislature and the Supreme Court. It will be very interesting to see their actual impact on our civil justice system.