Tredway, Lumsdaine and Doyle LLP

Tort reform has been a staple of many recent campaigns for elected officials. From local elections to national battles, many politicians are clamoring for a reform of the tort system in America, which is estimated to account for 2% of GDP or approximately $250 billion annually. One such politician is Texas Governor Rick Perry, who recently signed a tort reform bill designed to protect businesses from so-called frivolous lawsuits. Nonetheless, the bill signed into law in Texas does not contain the strict “loser pays” rule that Perry had initially called for. A loser pays rule means that no matter what type of lawsuit, the loser is responsible for the legal fees incurred by both sides—this type of system predominates in other countries, but it would have been an anomaly in the US.

Instead of the full-bore loser pays system, Texas enacted a modified loser pays system where if a case is decided on a motion to dismiss, the loser of the motion must pay the other side’s fees. This move was significant because prior to the statute, Texas was one of only 13 states that didn’t have any procedure in place for motions to dismiss prior to discovery. While this new procedure may allow for businesses to get rid of truly frivolous claims, if a claim has any merit whatsoever, the court will most likely overrule a motion to dismiss. This is important because if a business loses its motion to dismiss, it would have to pay the plaintiff’s fees incurred in fighting the motion. As a result, the new rule may prevent defendants from bringing motions to dismiss unless they are extremely confident in the success of the motion—this chilling effect may prove to be detrimental to businesses instead of the boon that Governor Perry is promising. In fact, pro-plaintiff organizations that had originally opposed the Texas law when it contained the full loser pays provision ultimately supported the bill in its final form.

Additional elements of the new Texas tort reform law include an expedited trial system for cases with under $100,000 in claimed damages and incentives for settlement. The “rocket docket” system for disputes with smaller damages amounts is designed to limit the scope and expense of discovery and bring cases to trial faster. On the settlement end, the law contains a procedure allowing for parties to a lawsuit to make a reasonable settlement offer. If a plaintiff then obtains a jury verdict of 80 percent or less of the settlement offer made by the defendant prior to trial, the defendant is entitled to its legal fees incurred after the date it made the settlement offer, up to the total amount of the verdict. On the other hand, if the plaintiff obtains a verdict of 120 percent or more than his settlement demand, the plaintiff is entitled to recover fees incurred after the demand was made. The statute also permits the prevailing party to recover costs associated with taking depositions, such as court reporter fees. California already has a similar provision under Code of Civil Procedure § 998.

Overall, Texas’ new law may or may not be beneficial to businesses, but any benefit is shared equally by plaintiffs. Moreover, the claims that tort reformers make in general are dubious at best. In states with caps on damages, insurance rates are no lower than in states without caps. Therefore, even if insurance companies are reaping savings based on these type of laws, they are not passing those savings on to businesses. However the cost of litigation is significant, especially for small businesses, and the new Texas law is most likely a sign of things to come.

Tredway, Lumsdaine & Doyle LLP Partner Shannon Marie Jenkins and Associate Ryan P. Murray obtained a unanimous jury verdict for the Firm’s client after a week long trial in Orange County Superior Court.  TL&D provided a defense for the defendant corporation accused of discrimination and wrongful termination on the basis of age and disability.  The plaintiff, a software engineer, was seeking punitive damages as well as damages for pain and suffering and hundreds of thousands of dollars in lost wages. 

The plaintiff had accused his former employer of refusing to accommodate his disabilities and for terminating him either because of his age or disabled status.  The defendant asserted that it had terminated the plaintiff because of his poor performance and multiple misrepresentations to his superiors regarding his completion of assignments. 

 During trial, Ms. Jenkins and Mr. Murray employed state of the art trial tactics including audiovisual demonstrations to narrow the jury’s focus to the most relevant issues.  Through this laser-like precision, Ms. Jenkins and Mr. Murray were able to reduce the plaintiff’s claims from seven causes of action to two.  Ultimately, the jury was asked two simple “yes” or “no” questions:  “Was the plaintiff terminated because of his disabilities” and “Was the plaintiff terminated because of his age.”  After having heard Ms. Jenkins’ closing arguments, which included a highly effective multimedia presentation developed by Mr. Murray, the jury knew the correct answer to both questions was “no.”  The jurors therefore found completely in favor of the defendant, awarding no damages to the plaintiff whatsoever.  

 Tredway, Lumsdaine & Doyle attorneys are experienced and capable of handling difficult trials and achieving success for the Firm’s clients.  If you need assistance in an Employment Law or other litigation matter, contact TL&D today.

Our lead attorney for the probate, probate litigation and trust litigation team, Joseph A. Lumsdaine, was honored as both a Super Lawyer 2009 and recently a Super Lawyer 2010  by Southern California Lawyers and as Lawyer of the Year by the Southeast District Bar Association.

Joe has tremendous experience in these areas and is lead counsel on all complex matters involving probates, probate litigation and trust litigation which has earned him this well deserved recognition.

Congratulations Joe! It is a great pleasure and honor to work with you every day.

This month, our firm was successful in a motion to strike and dismiss a lawsuit brought by a disgruntled parent against our client, a little league consisting of children and families. The parent filed a class action lawsuit against the little league, and was represented on a pro bono basis by a multi-national firm based out of downtown Los Angeles. We are pleased to have achieved a rare procedural victory for a deserving client. Our firm is committed to serving our communities; if you have suggestions on how we may further these efforts, we welcome them.