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Texas Leads the Way with ‘Loser Pays’ Reform; Blow to Trial Lobby

From Big Government:

Texas took yet another step this week that is certain to tighten its grip on the designation as the nation’s leading state for business. Governors in other states looking to improve their jobs situation should give serious consideration to mirroring the Lone Star State’s aggressive pro-jobs, pro-growth agenda.

On Tuesday the Texas Senate, under the leadership of Lt. Governor David Dewhurst and despite an aggressive lobbying effort by the Trial Lobby, voted unanimously in favor of “loser pays” tort reform legislation. On Wednesday, the House, which had passed a similar bill and was awaiting the Senate’s version, concurred with the Senate bill and passed it through. Gov. Rick Perry has said he will enthusiastically sign the bill into law.

‘Loser pays’ will require plaintiff’s to foot the bill of the winning party’s legal costs if a judge finds the case to be groundless. According to the Wall Street Journal, “This Texas upgrade would build on reforms in 2003 and 2005 that have vastly improved the legal climate in what has not coincidentally become the country’s best state for job creation.”

Negotiations on the bill were highly contentious in recent weeks, mostly due to a well-funded lobbying campaign by the Trial Lobby, which, in Texas, is virtually synonymous with the Democratic Party. Nevertheless, there was a breakthrough over the weekend.

From the Austin Statesman:

By a unanimous vote, the Texas Senate has just given final approval to a once-controversial “loser pays” bill designed to make it easier to get meritless lawsuits tossed out of court.


Passage of the measure had been one of the goals of Gov. Rick Perry and GOP conservative groups. But as recently as a week ago, approval of the new law remained in doubt, as various groups continued to battle over its provisions.

Then, after several days of closed-door talks, a surprise deal was announced Saturday on House Bill 274 that allowed for today’s vote.

Gov. Perry and Lt. Gov. Dewhurst deserve credit for shepherding the measure through negotiations. They serve as an example to Governors Nikki Haley of South Carolina and Tom Corbett of Pennsylvania, each of who was elected on a pledge to institute similar reforms in their respective states. Americans for Job Security also stood up to the Trial Lobby’s largess with radio ads and a public information campaign.

“Thanks to the principled leadership of Gov. Perry and Lt. Gov. Dewhurst, a strong tort reform bill has emerged from the Senate,” said Stephen DeMaura, president of Americans for Job Security. “This important legislation would be a boost to Texas’s economy, freeing small business owners from the threat of frivolous lawsuits and securing the Lone Star State’s status as a magnet to job creators.”

Properly understood, Gov. Perry’s aggressive reforms should be classified along with Wisconsin Gov. Scott Walker’s and New Jersey Governor Christ Christie’s union and budget reforms. In Texas, Perry is confronting a powerful pillar of the Democrat establishment – the Trial Lobby spent nearly $14 million to defeat Perry last year – just as Walker and Christie are attempting to do with Big Labor. It’s why these men have been successful to date, hold the promise of future success and remain exceedingly popular within the Republican Party. It is also terrific policy designed to create a pro-jobs, pro-growth economic environment. The nation’s other governors should take note.

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