Texas’ state legislature is taking on personal injury lawyers whose cases skyrocket insurance premiums.
An alliance between personal injury lawyers and unscrupulous doctors has wreaked havoc on Texas small businesses by pinning them with massive lawsuits. The state Legislature is finally fighting back.
So-called nuclear verdicts of $10 million or more in cases involving one or a few plaintiffs reached a 15-year high in 2023. Some of these verdicts were for fender-benders, and many were inflated by questionable medical bills produced by doctors and lawyers. A 2018 fender-bender in Upshur County, Texas, ballooned to a $101 million verdict. The plaintiff’s personal injury lawyer had directed him to a chiropractor, pain specialist, and back surgeon who all happened to be frequent trial witnesses in the lawyer’s cases.
A recent study by the U.S. Chamber of Commerce Institute for Legal Reform shows that nearly 75% of all nuclear verdicts are in only 10 dissimilar states: Florida, New York, Washington, Georgia, New Mexico, Rhode Island, Wyoming, California, Illinois and Missouri. These verdicts aren’t abstract legal debates. They do real financial damage to businesses of every size and drive up insurance premiums for everyone.
I am a CEO who lives and works in one of these problem states. My team and I run one of Texas’ largest independent commercial bank holding companies. Headquartered in Laredo, my company controls 166 banks throughout Texas and Oklahoma. So many of our customers use their core capital to fight burdensome and often punitive personal-injury litigation. Venue-shopping lawyers bring suits to friendly jurisdictions, including Laredo.
The Texas legislature has come up with a solution, Senate Bill 30, which will stop plaintiff attorneys and their networks of medical providers from overdiagnosing, overbilling and overtreating victims. The language in the bill is designed to end empty lawsuits and prevent unjustified damage awards by arming juries with evidence about the true value of medical services. These claims are blatantly false, crafted to mislead and inflame the uninformed.
The bill passed the Senate in April and was voted favorably out of the Texas House on Wednesday. With only a few days remaining in the Texas Legislature’s regular session, the bill must be returned to the Senate for concurrence. Then the final product will have to be signed by Texas Governor Greg Abbott.
Other states should follow Texas’ lead. Nuclear verdicts contribute to skyrocketing insurance rates, which force businesses to downsize, sell or close. Where there are more nuclear verdicts, there is more cause to flee. Senate Bill 30 will keep business in Texas.
I can attest that the Texas Miracle is still alive—we are still the best state in which to live, work and prosper. But keeping it that way requires perpetual vigilance. Let the Texas solution to the nuclear verdict problem serve as a model for all other states to follow.
Mr. Nixon is president and CEO of International Bancshares.