Texas GOP rams Koch-backed “Loser Pays” bill through House, making it harder to sue corporations

Amazing what you can do with all the money in the world.

It’s a challenge even to keep track of what the Kochs are doing to America, much less mount a fight to stop it.


TX GOP Rams Koch-Backed “Loser Pays” Bill Through House, Making it Harder to Sue Corporations
By Travis Waldron, ThinkProgress
Posted on May 10, 2011, Printed on May 10, 2011

As ThinkProgress has reported, brothers Charles and David Koch and their corporate giant, Koch Industries, have played an extensive role in the corporate takeover of government, both at the state and federal level. This weekend, another of the Kochs’ projects surfaced in Texas, as the state’s Republican lawmakers rammed through a Koch-backed bill that would make it harder for consumers, workers, and small business owners to bring civil suits against corporations.

House Bill 274 — dubbed the “Loser Pays” bill — passed the state House Saturday with no amendments and no debate after Gov. Rick Perry (R) deemed it “emergency legislation,” rushing it to the top of the legislative agenda. Under the bill, those who sue corporations could be held responsible for the defendants’ legal fees if they lose the case — and in some instances, even if they win. If the court sides with the plaintiff, but awards a smaller amount than the defendant offered in a potential settlement, the plaintiff could be forced to pay the defendant’s court costs, even if those costs exceed the amount awarded to the plaintiff. For this reason, state Rep. Craig Eiland (D) wanted to rename the bill the “loser-pays-but-sometimes-the-winner pays-too” bill.

The law could intimidate potential plaintiffs into avoiding lawsuits against corporations, because they could be on the hook for massive legal fees if the court ultimately doesn’t side with them.

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One thought on “Texas GOP rams Koch-backed “Loser Pays” bill through House, making it harder to sue corporations”

  1. Texas Republicans Still Don’t Get It! “Loser Pays” Hurts Them More Than Democrats!
    Last week, I reported that the vast majority of Texas Republicans will be harmed – not helped – if Gov. Rick Perry’s “Loser Pays” law is passed. The conversation quickly turned to this fact in publications and on the Internet. Over the weekend, a compromise was reached in a Texas senate committee which then voted unanimously to turn out a bill for the Senate to consider. However, that BILL DOES NOTHING TO PROTECT REPUBLICANS FROM THEIR OWN PARTY!

    Whether or not frivolous lawsuits abound in Texas is a matter of debate. The senate bill gives judges the ability to dismiss cases sooner with the “loser,” one side or the other, paying the other side’s legal fees and costs. Despite the fact that frivolous defenses to lawsuits would not be handled the same way, arguments could perhaps be made on both sides of the early dismissal provision.

    Yet, the provision which will harm Republicans more than Democrats remains in the proposed senate bill.

    I repeat that the vast majority of Republicans are more conservative and save money which they DO NOT WANT TO GAMBLE! I will add that there are apparently more Republicans in Texas than there are Democrats. Republicans do not want Texans to file frivolous lawsuits, but absolutely must have the ability to file their own valid lawsuits if they are treated wrongly. If not, why would insurance companies, financial institutions and large corporations bother to treat them right? There would be no downside and they can simply walk all over Texans of all parties!

    Forced into Cheap Settlements (THE HUGE REMAINING PROBLEM WITH THIS BILL)

    ATTENTION Mr. AND Mrs. REPUBLICAN: If a billion dollar corporation cheats you out of $200,000, you need the ability to file a claim to recover your losses. You may agree to settle for less, but what if you were only offered $5,000? If you declined, went to trial and lost (*) you would not only get zero, but YOU WOULD HAVE TO PAY AN AMOUNT WHICH COULD EVEN BE HUNDREDS OF THOUSANDS OF DOLLARS! (* Ask any lawyer: The outcome of any lawsuit is unpredictable and for a variety of reasons many legitimate cases are lost.)

    Could you afford to gamble hundreds of thousands of dollars on a law suit? Likely not, so you would instead have to accept the $5,000 offer, a bitter pill to swallow. This is similar to being dealt a fantastic hand in a friendly “penny-ante” poker game only to have some rich stranger raise you $100,000. Your hand is an almost certain winner but you can’t afford the risk so, sadly, you must lay down the winning hand.

    “Loser Pays” is perhaps OK for billionaires and multi-millionaires but bad for everyone else!

    If your house burns down and the insurance company says “the policy doesn’t cover this,” could you risk your life savings seeking to collect the money denied by your insurance company? What if your bank is careless causing your account to be robbed? If your parents are gypped out of half their retirement savings, could they risk the other half to file a claim against Wall Street?

    Small business owners: Could you risk bankruptcy to sue a contractor who did not pay you or a supplier who delivers faulty inventory or equipment? Big companies can risk and having to pay the other side if they lose, but can you? If the answer is “no,” prepare to be at their mercy in court and to have to settle for peanuts.

    “Winners pay too!”

    The senate committee tweaked the house bill but included that under this “loser pays” legislation you could even win a legitimate law suit, but lose all you won by being ordered to pay this to the other side. In the example above, if an insurance company, financial institution or large corporation offered $100,000 but even if you won, but won less than $80,000, you would have to pay up to all that you won to cover the cost of their high priced lawyers!

    A world without law suits may sound good, but would it be? If “Loser Pay’s” passes, insurance companies, banks and large companies would be practically immune from law suits. So, how do you think will they treat us all then? REPUBLICANS: Contact your representative and senator in Austin today and say: “HEY, I VOTED FOR YOU! YOU NEED TO REPRESENT MEN AND NOT JUST INSURANCE COMPANIES, GIANT CORPORATIONS AND FINANCIAL INSTITUTIONS!

    Our law firm represents institutions and individuals in claims against financial institutions for securities fraud or other wrongful acts, and for mismanagement of retirement or other investment accounts.

    William S. Shepherd, JD LLM
    Founder of the Firm

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