Texas is known for its business/employer-friendly legal climate. In a bill passed by the Texas Legislature, the climate just got friendlier. HB 274, sent to the Governor for signature, requires the Supreme Court of Texas to adopt rules providing for the early dismissal of causes of action that have no basis in law or fact and provide for the shifting of litigation expenses to the losing party filing such cases.
The bill requires the Supreme Court to create procedural rules to create a state court motion to dismiss. The motion to dismiss is to be considered without the production of evidence. Presumably, this will be similar to Federal Rules of Civil Procedure 12(b)(6) (dismissal for failure to state a cause of action) and 12(c) (for judgment on the pleadings). Trial courts will be required to rule on the motions within 45 days of filing and to award to prevailing parties their costs and attorney’s fees. The bill does not define "prevailing party." The bill also provides that a trial court’s granting or denial, in whole or in part, of a motion to dismiss shall award a prevailing party its costs and reasonable attorney’s fees. Unanswered is the question of "who is a prevailing party?"; "who is a prevailing party when the motion is granted in part and denied in part (i.e., both parties prevail on parts of the motion)?" and "whether a plaintiff who prevails on the motion to dismiss (i.e., the defendant’s motion is denied) is a prevailing party entitled to fees and costs?"
The bill passed by the Legislature also creates appellate jurisdiction over certain appeals of controlling questions of law prior to a final judgment. This is similar to a federal statute that provides for interlocutory appeals of controlling questions of law where a substantial ground for difference of opinion exists and the immediate appeal of the trial court’s order may result in the termination of the litigation.
The bill is effective September 1, 2011 and applies to most civil actions filed on or after that date. You can access the text of the bill here.