New Pleading Requirements, Expedited Actions, Dismissal of Baseless Claims, Oh My!

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In response to a legislative mandate to reduce the expense and delay of litigation in smaller cases, the Texas Supreme Court promulgated new Texas Rules of Civil Procedure. As of March 1, 2013, all new cases filed in Texas State Court must contain a specific pleading as to "Claims for Relief" including whether the relief sought is for less than $100,000. Compliance with this new pleading requirement will, at least initially, determine whether the case is subject to the new "Expedited Action Rule" which limits both discovery and trial for smaller cases. Additionally, the new rules provide for "Early Dismissal" of a meritless case that has no basis in law or fact. Finally, the "Self Authentication" rules were amended to include a medical expenses affidavit which should reduce the time and expense associated with proving medical damages.

"Claims For Relief"

Texas Rule of Civil Procedure 47, requires a petition that sets forth a claim for relief (this includes plaintiffs, cross claims, counterclaims, and third party claims) to specify a range of damages sought. Specifically, the pleading must include a statement that the party seeks:

As with all new rules, with them come questions about how they will be implemented by courts and strategically employed by litigants.

(1) Only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney's fee; or
(2) Monetary relief of $100,000 or less and non-monetary relief; or
(3) Monetary relief of $100,000 but not more than $500,000; or
(4) Monetary relief over $500,000 but not more than $1,000,000; or
(5) Monetary relief over $1,000,000

It is anticipated this Rule will be treated much like the statement regarding the applicable discovery level and be simply stated at the very beginning or end of a pleading. If a plaintiff fails to provide this required information, the responding party must file a special exception and ask the court to require the party to re-plead with the proper range of damages. This new requirement should help reduce any uncertainty about whether a lawsuit seeks more than $75,000 for federal removal purposes. The last sentence of the rule is perhaps the most important. A party that does not lead the range of damages may not conduct discovery until the party's pleading is amended to comply.

"Expedited Actions"

The Expedited Action Rule is intended to allow most small cases to move more quickly and efficiently to resolution by limiting the amount and time for discovery, the time period prior to the initial trial setting, and the actual trial of the case. Claims for less than $100,000 (including attorneys' fees, costs, penalties, and pre-judgment interest) are now automatically placed on an expedited timetable with the following limitations:

  • A party may serve only 15 interrogatories (as compared to 25 under the old rules) and only 15 requests for production and 15 requests for admission (both of which were not limited under the old rules);
  • A party may take a total of six hours of depositions for all witnesses (a court may approve an increase to 10 hours) whereas the former rule provided for multiple depositions at 6 hours per witness with no limitation to the number of witnesses;
  • The discovery period is limited to 180 days from the issuance of the first discovery request (as compared to 9 months);
  • Trial must be set within 90 days of the end of the discovery period (i.e. a trial must be set within 9 months of the first discovery request);
  • Unless the parties agree otherwise, mediation is limited to half day; and
  • A trial is limited to 8 hours per side (though judges may extend to 12 hours per side)

A case is only subject to these expedited rules if the plaintiff specifically designates it as a case in which only monetary damages of less than $100,000 are sought. There is no procedure by which a defendant may force a matter into the expedited track by complaining that a plaintiff is, in fact, seeking less than $100,000.

In addition, a case must be removed from the expedited track on a motion and showing of "good cause by any party." Courts are left with broad discretion as to what constitutes "good cause," however comments to the rules provide that the existence of multiple claimants, large counterclaims, a large number of parties or witnesses, or particularly complex legal and factual issues may constitute good cause. Because the courts have broad discretion in certain cases there may be a strategic advantage to file first and either avoid the rules for expedited cases or alternatively force the opposing party into the expedited process and its limitations.

Accordingly, parties are encouraged to carefully weigh time restrictions against the potential savings associated with prosecuting a matter on the expedited track before proceeding. If a party proceeds on the expedited track, the party should proceed into discovery deliberately and with an understanding of the deadlines triggered by issuing discovery responses. If suit on the expedited track is filed against a party, the party should immediately evaluate whether it would be advantageous to seek removal from the track and to determine whether "good cause" exists that would permit removal.

"Dismissal of Baseless Claims"

Texas Rule of Civil Procedure 91a provides for early dismissal of claims that have no basis in law or fact. According to the new rule, within 60 days of receiving a pleading that contains a baseless cause of action, a party may now move to dismiss it if it has no basis—that is, even if taken as true, it would not legally entitle the claimant to relief, or if no reasonable person could believe the facts pleaded.

  • The court must rule on the motion within 45 days after it is filed (an oral hearing is permitted by not required)
  • The court must award attorneys' fees to the prevailing party (though there is no indication of whether they must be paid immediately). There are no exceptions to this rule.

While a court must award attorneys' fees to a prevailing party, a movant may withdraw its motion more than three days before the motion is heard and avoid the risk of being assessed attorneys' fees. As a result, defendants may wish to consider use of a Motion to Dismiss under the new rules as an additional discovery tool. By filing the motion, a defendant forces a plaintiff to respond, yet the motion may be freely withdrawn if it appears that a defendant is unlikely to prevail.

"Self-Authentication of Medical Records"

Texas Rule of Evidence 902(10)(c) has been amended and now includes language that may be used in an affidavit establishing proof of medical expenses. The new rule is similar to Rule 902 (10)(b), the general business records affidavit. Through this new rule parties may avoid the expense of depositions and/or depositions by written questions to establish the authenticity of medical records, including the total medical costs incurred.

Development and Implementation

As with all new rules, with them come questions about how they will be implemented by courts and strategically employed by litigants. For example, the following questions have already arisen:

  • Can parties in expedited actions agree to extend time periods or the amount of discovery?
  • What happens when a court cannot accommodate a trial within the expedited time period (especially in rural counties where court is in session only a few days each month)?
  • How large must a counterclaim be, or how many parties must there be to warrant removal from the expedited procedures?
  • What type of discretion will judges use when determining the amount of attorneys' fees to award in relation to a motion to dismiss.

Given these and other questions, individuals involved in litigation are advised to consult with their attorneys about potential strategies and implications regarding the new rules.