This is the first post in a series discussing the new rules for Expedited Actions in Texas mandated by the 2011 Amendments to Texas Government Code § 22.004(h) and implemented through the Texas Rules of Civil Procedure, including amendments to Rules 47 and 190, and the addition of new Rule 169.
In May of 2011, the 82nd Legislature amended Texas Government Code § 22.004(h), to require the Texas Supreme Court to adopt rules “to promote the prompt, efficient, and cost effective resolution of civil actions” in which the amount in controversy, inclusive of all claims for damages of any kind (including actual and exemplary damages, penalties, attorney’s fees, expenses, costs or any other type of damage of any kind), does not exceed $100,000. Following this mandate, the Texas Supreme Court issued Miscellaneous Docket No. 12-9191 on November 13, 2012, amending Rules 47 and 190 of the Texas Rules of Civil Procedure, and adopting new Rule 169, in order to accommodate the legislature’s directive. This order was to be effective on March 1, 2013, but allowed for additional amendments to be made in response to comments received on or before February 1, 2013, by any interested party. Having received and considered comments, on February 12, 2013 the court issued Miscellaneous Docket No. 13-9022 entitled “Final Approval of Rules for Dismissals and Expedited Actions,” incorporating amendments based on those comments.
As would be expected, the new rules for expedited actions involving cases under $100,000 brought with them key changes in procedure. However, not all of these changes were limited to cases involving amounts in controversy under $100,000. Indeed the new rules have changed all civil litigation in Texas, in some significant respects. For example, in order to properly define for courts those cases which would proceed under the Expedited Action Rules, the Supreme Court amended Rule 47(c) to provide that each pleading setting forth an affirmative claim for relief in any case must contain a statement that the pleading party seeks:
(1) only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest and attorney’s fees; or
(2) monetary relief of $100,000 or less, and non-monetary relief; or
(3) monetary relief over $100,000 but not more than $200,000; or
(4) monetary relief of over $200,000 but not more than $1,000,000; or
(5) monetary relief over $1,000,000….
This change to Rule 47(c) is significant, not only to define those cases which will proceed under the Expedited Action Rules, but to all litigants in Texas courts, because the amendments to Rule 47 also made compliance with subsection (c) a pre-condition to a litigant conducting any discovery in the suit. As a practical matter, this means any Texas plaintiff (or counter-plaintiff or cross-plaintiff) who fails to comply with the requirements of Rule 47(c) in the petition can expect to be met with objections rather than responses from his opponents to any discovery which is due prior to the time that the plaintiff amends the petition to comply with the rule.
Although all cases will be affected by this change to Rule 47, the main features of the new Expedited Action Rules set forth in Rule 169 are directed at cases under the $100,000 threshold, with certain exceptions. New Rule 169(a)(2) provides that medical liability cases are excluded, as are cases brought under the Family Code, Property Code and Tax Code. One significant, and potentially problematic, aspect of Rule 169(a)(1) governing the application of the Expedited Action Rules is the fact that the value of a counterclaim is excluded from the calculation of the amount in controversy. This means that in a two-way dispute where one party has a claim it values over $100,000 and the other has an opposing claim it values at under $100,000, a literal race to the courthouse may be the determining factor in whether the party with the larger claim will be forced to litigate it under the significant limitations presented by the Expedited Action Rules. For cases proceeding under the new Expedited Action Rules, there are significant changes to discovery, deposition, trials and available recovery in these cases. In the next installment in this series we will examine changes in discovery procedure in expedited actions.