Hot Topics for Trial Lawyers
A compilation of journalistic articles to keep you abreast of changing developments and current events in the litigation realm. If you are interested in writing for this Hot Topics segment, email tnuckols@texasbar.com
Business torts ain’t what they used to be
Posted 1/8/08 Barry Barnett, Susman Godfrey L.L.P.The Halcyon Days - In September 1985, the giddiness from the 1979-81 spikes in oil prices - the equivalent of almost $70 a barrel today! - hadn’t started wearing off. Popular culture reflected fascination with things Texan. People fondly remembered John Travolta and Debra Winger in Urban Cowboy (1980) - itself a celebration of the broad prosperity that the oil boom spread across the Lone Star State. And lots of folks still watched Dallas, a series about a rich oil family. It ranked as the second most popular show on television.
Then, on November 19, 1985, Pennzoil won a $10.53 billion verdict from a Harris County jury against Texaco for tortious interference with Pennzoil’s oral contract to buy Getty Oil. The largest verdict ever - in a business tort case! The high Texas sky seemed the limit for an aspiring business trial lawyer late out of law school, fresh from a Fifth Circuit clerkship, and starting at a firm that cut its teeth on commercial cases.
A Shadow Falls - Enter Mike Wallace, he of 60 Minutes fame, and a segment on the Supreme Court of Texas. Mr. Wallace titled the story “Justice for Sale”, the nub of which accused the Court of kowtowing to their personal injury lawyer backers. The broadcast aired on December 6, 1987.
We can now see the program as a watershed event - not only for torts of the personal injury genre but also for business torts (not to mention plain old breach of contract claims).
Can You Say Tort Reform? - Thanks in part to “Justice for Sale”, the movement in Texas for tort reform gathered steam in the late 1980s and 1990s. The year 1990 saw the founding of Citizens Against Lawsuit Abuse. Texans for Lawsuit Reform drew its first breath somewhere around 1995. And all three branches of government - the legislature, the executive, and the judiciary - started taking on a distinctly more conservative, business-friendly, and anti-lawsuit cast.
Let me pause here to mention that - rhetorically at least - the folks who still seek “reform” of tort law have moved on. Now they want to shut down the “litigation lottery”, end “jackpot justice”, and fill in ”judicial hellholes”. They have almost ceded the debate about “reform” to the againsters, who apparently enjoy whipping a dead horse and put quotation marks around phrases - “tort reform” - they mean to ridicule.
The new terminology taps into people’s ambivalence about civil lawsuits as a way to resolve disputes. Even SpongeBob Square Pants features a spurious personal injury lawsuit (by Plankton against Mr. Krabs) for a slip-and-fall in the Krusty Krab restaurant. (Episode 62). The piscatorial jury at first seems sympathetic to Plankton. But attorney SpongeBob shows that Plankton cooked up the lawsuit to get the secret formula for Krabby Patties, and - despite much jurorial grumbling about Mr. Krabs’s stinginess - the episode ends in a defense verdict. The result renews faith in Bikini Bottom civil justice and in juries everywhere.
Baby and Bath Water? - The Plankton v. Krabs case highlights the worry that appeals to emotion for personal injuries may, in the hands of a gullible jury, cause justice to miscarry. But what we once called tort reform nowadays goes way beyond personal injury and wrongful death cases. Presently it seeks across-the-board changes that would weaken tort law protections for businesses. A leading tort reform group, for example, touts Texas legal changes that disadvantage business litigants as much as or more than personal injury claimants.
Examples of the legislative innovations that affect business tort litigation include:
- limits on appeal bond requirements,
- procedural barriers to class actions,
- liberalization of forum non conveniens dismissals,
- expansion of trial-delaying interlocutory appeals,
- offsets for fraud and other intentional torts,
- caps on punitive damages, and
- curtailment of venue choices.
Whatever their merits in the context of personal injury lawsuits, these measures have made prosecuting business tort claims harder and defending them easier. I don’t know whether or not the legislature intended that to happen, but it certainly did.
The Courts Next Time - Tort reform in Texas has also involved efforts to elect and appoint judges and justices who share the reformers’ views. The next post will review the evolution of Texas Supreme Court decisions in business tort cases over the last two decades.