America's Queen of Torts: The Long Arm of Texas Law

Article excerpt

All across America people trying to do business are being victimized by frivolous lawsuits and civil judgments that have no relation to elementary principles of justice. President Bush has pledged to make reform of the legal system one of his principal objectives of his second term if he is re-elected. One need look no further than the president's own state of Texas to discover a tort crisis of epic proportions.

Texans have traditionally regarded their state as an entrepreneurial center. Today, however, litigation is the largest growth industry in the Lone Star State. Lawyers and courts have turned Texas from one of the nation's most attractive business climates into a litigation war zone from which major corporations are fleeing.

Texas has become America's "Queen of Torts" through a bizarre array of pro-plaintiff decisions handed down over the last 15 years by the Texas courts. The National Center for State Courts reports a 70 percent increase in the yearly number of Texas tort filings between 1981 and 1989. Home to 6.7 percent of the U.S. population, Texas now accounts for 10.3 percent of all major product liability suits, according to the American Insurance Association--some 50 percent more than the national average. The litigious environment takes a heavy toll on Texas employers and the workers who depend on them. A burgeoning injured-worker litigation industry has pushed workmen's compensation insurance to three times the national average. Meanwhile, thousands of manufacturers are considering pulling out of Texas because of the state's liability laws. Ray Perryman, an economist at Baylor University, recently estimated that "liability costs" have contributed to the layoffs of some 30,000 Texas workers. He also wrote that 3,300 manufacturers employing a total of 340,000 Texans were considering stopping all manufacturing operations in the state because of concern over legal liability.

Boys Named Sue

A horrible accident in September 1989 illustrates litigiousness run amok in Texas. A soft-drink truck in the town of Alton ran a stop sign and rammed a school bus broadside, sending it skidding into a gravel pit with 12 feet of water. Twenty-one of the 81 children on the bus were killed in the tragedy.

Even before all the bodies had been recovered, a barrage of lawyers descended on Alton and began to solicit business from grieving parents at the hospital, during wakes, and through the mail. Ambulance-chasing is not uncommon in America; what made the case unusual is that claims by the children's families represented only a fraction of the more than 100 suits filed. The plaintiffs included the truck driver, several rescuers, and at least one bystander who sued for the emotional distress he suffered from simply watching the 14-hour rescue. Seven volunteer firefighters filed a lawsuit related to the rescue in March 1992, citing mental anguish and physical injuries. Another plaintiff, a police officer, was persuaded to drop his case after his chief pointed out that his only duty had been serving Gatorade at the rescue site.

Alton is not alone. Two hours south of Houston lies Bay City, the unofficial litigation capital of the United States. The Matagorda County courthouse in Bay City offers lawyers the enviable combination of Texas's lenient liability statutes and an almost totally pro-plaintiff jury pool. Matagorda County juries have produced some of the largest jury-awarded settlements on record. In December 1984, one of these juries attracted national attention by awarding $8.5 million to a rancher for the loss of his prized Santa Gertrudis bull, "Superman." The animal died from a reaction to an insecticide applied in clear contradiction of the instructions. Unfortunately, the Mexican workers could not read the label's English-language warning against using the chemical undiluted. The jury ordered the insecticide's manufacturer to pay $1.5 million to cover the bull's value, and another $7 million in punitive damages. …