- Proponents of SB 30 argue that the legislation is needed because abusive litigation practices by personal injury trial lawyers have driven up costs to Texas consumers and businesses
- Those testifying against SB 30 included a Houston personal injury lawyer whose firm teamed up with other trial lawyers and George Soros to bankroll a multimillion-dollar PAC that assisted Democrats in Harris County
- A study shows that Texas led the nation in “nuclear verdicts” of over $10 million between 2009-2023
Members of the Texas Senate State Affairs Committee heard seven hours of testimony on Monday regarding Senate Bill 30, a piece of legislation designed to rein in abusive litigation practices that the bill’s proponents say increase costs for all Texans, particularly in the insurance market, and jeopardize the state’s business environment.
Lt. Governor Dan Patrick has designated the bill, authored by State Senator Charles Schwertner, as one of his priorities for the current legislative session.
Those who testified against the bill included a former Democrat State Representative and a personal injury attorney whose law firm teamed up with other trial lawyers and George Soros to bankroll a multimillion-dollar effort to elect Democrats in Harris County last year.
In his opening remarks about the legislation, Schwertner described his bill’s four goals.
“The bill has four main goals. First, stop the manipulation and inflation of medical damages. Second, protect and encourage doctors who bill at rates within reason to treat accident victims. Third, provide jurors the clear definitions and instructions they need to award fair compensation for physical pain and suffering and mental or emotional pain and anguish. And fourth, create a process for a trial court to review and explain, in writing, higher awards of non-economic damages above thresholds,” said Schwertner.
A significant portion of the discussion on the bill centered around the practice of personal injury trial lawyers who refer accident and injury clients to a network of medical providers who then produce inflated medical bills to drive up the damages in the case. Under an arrangement known as a “letter of protection,” the medical provider provides treatment to the attorney’s client. The attorney promises to pay the medical provider for the treatment from funds obtained in a settlement or judgment in the client’s case.
Melissa Casey, an attorney who has represented both plaintiffs and defendants throughout her thirty-year legal career, described the practices of some personal injury trial lawyers as “nothing short of fraud.”
“I am here to testify in favor of SB 30 because what I see day in and day out is nothing short of fraud. I know that’s a very strong word, and I don’t use it lightly. But from someone who practiced for a very large plaintiff’s firm here in the State of Texas, I know exactly how this works,” said Casey
Casey also described how personal injury trial lawyers would advise their clients not to use their medical insurance but instead use medical providers that the lawyers control.
“One quote I would like you to really, really think about and have resonate with you is something that I was told by a former large plaintiff’s attorney’s office for whom I worked. And that is they will not let their clients use their own insurance, because “we can’t control those docs.” We can’t control those docs. I ask you, why should an attorney be controlling anybody’s medical treatment?” testified Casey, who also discussed instances where plaintiffs did not report any injuries at the scene of the accident and situations, that medical providers would provide treatment that was not needed, and instances where she would be presented with medical bills by plaintiff’s lawyers that were for “ten times the usual customary and reasonable rate.”
When State Senator Charles Perry asked Casey which plaintiff’s personal injury law firm she used to work for, Casey declined to name the firm, stating that she had received a “very threatening e-mail” from the firm when they became aware of her participation in the hearing.
Casey told Senator Perry, “Why am I being threatened to tell you what’s going on? If it isn’t fraud, if it isn’t something that they don’t want you to know about, and that they are just doing everything right to help these poor injured plaintiffs, then why am I being threatened to testify today?”
Jennifer Akre, an insurance defense attorney who testified in support of Senate Bill 30, shared her experiences with encountering medical providers in litigation who provide inflated invoices. In one example, Akre discussed sworn testimony provided by the former office manager for a medical provider who frequently had arrangements with personal injury lawyers.
“With sworn testimony, I have confirmed that the invoices were inflated and that the doctor never expected to receive full payment. The doctor never intended to seek full payment. The treating physician relationship ends when the lawsuit settles. That’s when the treatment is concluded, said Akre.
Akre also stated that the former office manager also testified that it was part of his job to negotiate medical bills with plaintiffs’ lawyers, that he was allowed to accept 40% of the medical bill without checking with anybody, and that there were instances where he received 0% when the lawyer lost the case, or there was not enough settlement money.
The most detailed testimony in opposition to the bill came from representatives of the Texas Trial Lawyers Association.
Houston personal injury attorney Jim Perdue, Jr., who formerly served as President of the Texas Trial Lawyers Association, testified against the bill and voiced concerns about provisions of the bill that clarify guidelines for how non-economic damages for things such as pain and suffering and mental anguish can be awarded.
Perdue is a Partner in the law firm Perdue & Kidd, which donated $100,000 to the First Tuesday PAC for the 2024 election cycle.
First Tuesday is a Political Action Committee that spent approximately $3.5 million on efforts to elect Democrats in Harris County last year. During the previous election cycle, First Tuesday was funded primarily by trial lawyers, George Soros, and other political committees funded by Soros. The Soros-funded Democracy PAC II gave $680,000 to First Tuesday during the 2024 election cycle and the Soros-funded Texas Majority PAC gave an additional $380,000. Soros personally chipped in $100,000 to First Tuesday.
Craig Eiland, who served as a Democrat State Representative from 1995-2015, also testified against the bill and discussed situations where he believed it was appropriate for an accident victim not to use their medical insurance when receiving treatment for their injuries. Eiland, a practicing trial lawyer, also currently works as a paid lobbyist for the Texas Trial Lawyers Association.
Some of the testimony at the hearing also touched on the litigation climate in Harris County.
Xavier Balderas, Associate General Counsel of CRH, told the committee that his company has had to pass up business opportunities in Harris County because the litigation risk was too high.
“Texas courts and current legislation have created a fertile ground for lawsuit abuse. Today, Texas is considered among the worst states in which to litigate, with Harris County being one of the worst counties in the nation when it comes to jury awards. In Harris County, a case with a jury verdict of $100,000 in 2020 could now easily reach a jury verdict in excess of $2 million by 2025,” said Balderas
“For Harris County alone, we’ve had to pass on what would otherwise be attractive acquisitions because those risks are far too high.”
Duke Austin, CEO of Houston-based Quanta Services, testified that trial lawyers from around the country see Harris County as a place where they can get “bigger payouts.”
“We invested to locate our corporate headquarters inside the Houston Loop. Now we have dozens of cases pending in Harris County, many of which have no nexus to Harris County or even Texas, solely because lawyers see it as a friendly jurisdiction. We have had minor incidents in places as far away as Cook County, Illinois, and Los Angeles County, California, and lawyers have chosen to try these cases here, where their clients can get bigger payouts,” said Austin
Samantha Sizemore, whose family owns and operates a logging company based in Liberty County, told lawmakers that the company’s insurance costs have nearly doubled in the last year- an increase that the company’s insurance agent attributed to its proximity to Harris County.
“We’re being told by our insurance agent that because we border Harris County, we should expect higher premiums simply due to our zip code and proximity to these high-verdict regions. That’s not based on our behavior or our track record. It’s based on fear of nuclear verdicts in neighboring counties,” said Sizemore.
According to a study by Marathon Strategies, Texas led the nation in “nuclear verdicts” of over $10 million between 2009-2023.
Schwertner, a practicing physician, said that the medical providers who testified against his bill were “opaque” in describing their billing practices.
“Every provider that’s come up here has been very opaque about how they bill and how their relationships are from a financial standpoint in these letters of protection and methodologies for which they utilize when they set their rates. And they’re very averse to setting it based upon a schedule, which is common practice for Medicare, for Medicaid, for workers comp, for health insurances,” said Schwertner.
