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Texas Trucking Association targets tort reform with broad coalition

Photo: Jim Allen/FreightWaves

The Texas Trucking Association is launching an initiative aimed at bringing about tort reform in the Lone Star State, with a coalition of members that now numbers about 90 behind the effort.

The Keep Texas Trucking Coalition was formed in late September, according to John Esparza, the president and CEO of the TTA. But in the past two weeks, the group has taken further steps to make itself known in preparation for the start of the five-month Texas legislative session that begins in January. 

Membership in the group includes several business trade associations, such as the Texas Association of Business and the Southwest Movers Association, and specific companies, such as UPS and Cactus Express. The U.S. Chamber Institute for Legal Reform is also a member. 

Not surprisingly, the impetus behind the KTTC is the same as what has been driving tort reform in other states like Louisiana: rising insurance rates spurred on by an increasing number of verdicts that have gone against trucking companies. But while the nuclear verdicts in the tens of millions of dollars grab the spotlight, Esparza said it is the accumulation of smaller cases that don’t grab the headlines that is pushing the coalition. 

“As we started to see the rise in nuclear verdicts, we were absolutely seeing that while that’s getting the attention, that’s a problem of what is happening on the surface,” Esparaza said in an interview with FreightWaves.

The bigger issue are the smaller verdicts. With that in mind, the coalition expects to recommend several pieces of legislation that are not written yet but would be targeted at practices that the group’s members see as damaging. 

One is what the KTTC described as “fix-paid or incurred.” “Liable defendants should only be responsible for reasonable medical bills that are actually paid or owed by the claimant, not for unnecessary treatments and exorbitant charges by cooperative healthcare providers that are used as a mechanism to inflate damages in a lawsuit,” the coalition’s website said in describing what it is pushing back against. 

Esparza described the issue as one in which a victim in an accident has insurance but is instructed by trial attorneys to not use the coverage. The goal is to get a diagnosis from a doctor who might be tied to the trial attorney recommending more extensive and expensive treatments than the insurance company would pay for. 

Esparza described the issue of non-use of insurance as “the main problem” in rising insurance costs today. Plaintiffs in lawsuits are being persuaded to not file for a payout from their insurance carrier, preferring to go into court and hope for an inflated number there, possibly backed by a doctor working alongside the trial attorney, he said. 

Under the type of scenario that the coalition envisions, Esparza said a person who uses their insurance to be compensated would have that insurer set a rate, “and the jury will see that and say OK.” What he said the coalition is pushing back against is a situation in which a victim of an accident, even if he or she is insured, is instructed to keep the insurer out of the process. That opens the door for a judgment in which the cost and compensation for that injury might be in the range of $100,000 for something that an insurer would estimate to cost a fraction of that. 

In a similar vein, the coalition is focusing on “letters of protection.” The KTTC described them as putting “unwitting claimants at risk of being responsible for enormous medical bills or allow[ing] healthcare providers to provide services on an unethical contingency fee basis.”

A legal website described letters of protection as a tool that is sent by a medical professional to a personal injury lawyer. The letter “guarantees payment for medical treatment from a future lawsuit settlement or verdict award.”

But the definition also notes that sometimes, medical personnel or institutions won’t accept health insurance because they are concerned that the health insurance provider will refuse to pay for treatment, operating on the assumption that a victim’s auto insurance will foot the bill. 

A problem that the trucking industry sees — and it was a key concern behind the push for Louisiana tort reform — is that the insurance status of a victim is often not allowed to be heard in court. The Texas coalition wants that changed.

Outside of the coalition’s website, the first concrete outreach for the group was released earlier this week through a video. It opens with an interview with Lincoln Thomspon, general manager of Duncan Thompson Transportation, describing insurance costs and litigation as “something that is outside my control.”

The Texas Trucking Association has partnered with Texans for Lawsuit Reform, which Esparza described as the “800-pound gorilla” in this and similar efforts at tort reform. Esparza also said that Republicans retaining control of the Texas legislature gives him more encouragement that there can be success in their efforts at reform. 

There have been previous efforts, he said, including one in the last session — the Texas legislature meets every two years — that “scratched the surface,” Esparza said. 

The reform involved what Esparza called “medical affidavits, and was very successful.”

Putting together the list of priorities this time, he said, involved bringing in defense attorneys and asking them, “‘What do we need to do, what do we need to be focused on?’ They sharpened their pencils and said, ‘Here’s what we need to go after.’”

The challenge will be significant, Esparza said. He expects the coalition to be outspent 10-1.

Attempts to reach the Texas Trial Lawyers Association through its website had not been responded to by publication time. 

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John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.