Texas Loser Pay Bill Becomes Law


Effective September 1, 2011

On Monday, May 30, 2011, Texas Governor Rick Perry signed HB 274 into law. The passage of the bill comes after months of intense legislative debate and publicity. Although the bill originally proposed in the House contained a number of “loser-pay” provisions, the version that ultimately passed in both chambers contains only one true fee-shifting provision and implements instead a number of other procedural reforms.

- New Motion to Dismiss Practice, With Fees to the Winner

HB 274 directs the Texas Supreme Court to adopt new rules of civil procedure “to provide for the dismissal of causes of action that have no basis in law or fact on motion and without evidence,” and that require trial courts to grant or deny motions to dismiss within 45 days of filing. The bill also provides for mandatory attorneys’ fees and costs to the prevailing party, including a plaintiff who successfully avoids dismissal. Texas has not before had a motion to dismiss practice like that in other states or under the Federal Rules, so this will be an altogether new procedure in Texas.

- New Expedited Rules and Lower Discovery Costs for Cases Involving Less Than $100,000

Please see full Alert below for further information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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