Texas juries are known for awarding “nuclear verdicts” and these awards are growing. Personal injuries —even relatively minor in nature—can result in jury awards creating generational wealth, whereas in the past reasonable damage awards were entered. Texas appellate courts have taken steps to reel in these runaway awards. In 2023, the Supreme Court of Texas took some needed steps in correcting the exponentially increasing verdicts. In Gregory v. Chohan, the Supreme Court sought to correct a jury award of $16.8 million in a wrongful death case, with $15 million of the total award accounting for noneconomic damages. The Supreme Court criticized the use of improper argument tactics unrelated to case facts. Further, the Court emphasized the need for evidence of mental anguish and a rational basis for awards. Its concurrences highlighted the challenges of quantifying noneconomic damage and suggested legislative guidance.
On April 16, Texas Senators Charles Schwertner and Brent Hagenbuch sponsored Senate Bill 30 in the Texas Senate to codify much of the Chohan Court’s ruling and to take further steps to curb the trend of “nuclear verdicts.” The bill, entitled “An Act Relating to Recovery of Health Care-Related Damages in Certain Civil Actions,” aimed to amend the Texas Civil Practice and Remedies Code to address the recovery of health care-related damages in personal injury and wrongful death actions. The bill was touted as an effort to address and potentially limit the factors contributing to substantial awards in civil litigation. The bill was ultimately unsuccessful and failed to advance in this legislative session. Unless called back for a special session, SB 30 can be reintroduced in the next legislative session, starting on January 12, 2027.
SB 30 had multiple provisions aimed at recalibrating jury verdicts back to reasonable levels. These included:
- Requiring that jury awards provide fair and reasonable compensation for the period when the plaintiff’s pain, suffering, or anguish persisted or could reasonably be expected to persist, basing an award on evidence of the nature, duration, and severity of the injury.
- Requiring that jury awards reflect a rational connection between the injury suffered and the dollar amount.
- Prohibiting jury awards from including amounts that are properly considered economic losses such as lost earnings or medical expenses incurred from emotional/psychological care.
- Prohibiting a lawyer from using unsubstantiated anchoring tactics and making it reversible error to do so (such as with professional athlete salaries).
- Prohibiting a lawyer from asking the jury to penalize, punish, make an example of, or serve a social good.
SB 30 was significantly gutted in both the Texas Senate and House of Representatives as a result of lobbying efforts from plaintiffs’ attorneys, former judges, and survivors of sexual assault. Extensive hearings included many proponents against the proposed legislation arguing that these limitations would result in injured parties not recovering proper damages from tortfeasors. These hearing witnesses also argued that the number of purported “nuclear verdicts” are miniscule when compared to the total number of lawsuits filed for personal injury cases such that the “problem” the legislation sought to fix did not exist. The final version left certain provisions impacting medical billing evidence but removed all of the other measures intended to curtail nuclear verdicts.
The key provisions of the modified bill included:
- Definitions: The bill introduces definitions for terms such as “health care expenses,” health care services,” “injured individual,” “letter of protection,” “physician,” “provider,” and “third-party payor.” These terms involve agreements or arrangements between plaintiff law firms and medical providers to facilitate medical care for plaintiffs, often in personal injury cases. These agreements or arrangements are designed to ensure that plaintiffs can access both necessary and, at times, unnecessary medical treatment while their legal claims are pending, with the plaintiff law firm covering the upfront costs. These type of arrangements are often utilized to artificially inflate recoverable damages, allowing plaintiffs’ counsel to present “medical costs” to a jury that often many multiples of what would normally be collected by medical providers.
- Admissible Evidence of Health Care Expenses (Section 41.015): The bill would limit evidence of economic damages for health care services to amounts paid by third-party payors, including coinsurance, deductibles, or copayments. If third-party payor evidence is not applicable, evidence of the reasonable value of services may be presented, including Medicare allowable amounts, maximum allowable reimbursements, and provider’s billed charges.
- Claimant Disclosure Requirements (Section 41.016): The bill would require claimants to disclose letters of protection, and any agreements related to refunds or rebates. Further, it will mandate disclosure of referral information to a specific health care provider, the identity of health care providers and authorizations to obtain medical records.
Despite the drastic revisions, the revised bill could have impacted how damages are presented and evaluated in court. By providing juries with more contextual information, such as Medicare allowable amounts, the revised bill aimed to enhance the understanding of damages. Additionally, it sought to introduce transparency regarding letters of protection and patterns of referrals to specific doctors by the same attorneys, which could have revealed potential biases or conflicts of interest. By providing juries with additional information and context, the bill could empower defendants to more effectively challenge inflated medical costs presented as damages.
Even this drastically revised bill did not pass the legislature due to a failure of the Senate and House of Representative to reach a compromise on the ultimate bill. Thus, it failed to advance in this legislative session and must await the next legislative session commencing on January 12, 2027.
As a result of the bill failing to pass, plaintiffs’ counsel are able to manipulate damage models, resulting in excessive verdicts. Defendants in Texas courts can anticipate continued exposure to significant financial risks, as nuclear verdicts in personal injury lawsuits remain a possibility.
Until then, individuals and corporations alike (especially trucking and oilfield companies) will rely on the Supreme Court of Texas to bring rationality and reasonableness back into jury awards.
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