Rep. Kenneth Sheets

Rep. Kenneth Sheets

Rep. Kenneth Sheets (R-Dallas) has introduced legislation aimed to address a recent wave of litigation seeking to bring non-resident lawsuits involving occurrences outside of Texas into state courts.

Since the Texas resident exception was placed in the forum non conveniens statute in 2003, there has been little problem with its application. In a recent case, however, In re Ford Motor Company (No.12-0957), the Texas Supreme Court was faced with a lawsuit that arose from an automobile accident involving legal residents of Mexico that occurred in Mexico. Under ordinary circumstances, the proper application of the doctrine of forum non conveniens would probably dictate that the lawsuit be dismissed because a Mexican court would be a more appropriate forum to hear the case, since the plaintiffs were from Mexico, the accident occurred in Mexico, the witnesses and evidence were all located in Mexico, and Mexican law applied to the accident.

Despite these factors, a lawsuit was filed in a Hidalgo County district court because letters of administration for the estate of the passenger in the vehicle happened to be filed in Hidalgo County. The (non-resident’s) estate then filed a lawsuit against Ford, in which some of the passenger’s relatives intervened as wrongful death beneficiaries. The injured driver next sued Ford in Hidalgo County as well. The trial court denied Ford’s motion to dismiss under the doctrine of forum non conveniens. The Corpus Christ Court of Appeals likewise denied Ford’s appeal for mandamus relief, and the Texas Supreme Court accepted the case for review. The majority in the Court’s 5-4 opinion focused on the meaning of the term “plaintiff.” The majority concluded that the relatives who intervened in the suit brought by the non-resident’s estate were “plaintiffs,” and that at least one of the intervenors was a Texas resident. Because the statute allows non-resident “plaintiffs” to join the lawsuits of residents, the whole case could be imported from Mexico to Hidalgo County.

This problem is not isolated to a single lawsuit. One automobile manufacturer currently faces 64 similar cases in Hidalgo County involving non-resident plaintiffs and accidents that occurred in Mexico, and others are now seeking to follow the roadmap for avoiding forum non conveniens that the current statute, as interpreted by the Supreme Court, has inadvertently created. There is no question that a Texas forum for these cases is in many instances a more attractive than a forum in Mexico, given the significant differences in the civil justice systems of each country. But that does not mean that Texas courts should be wide open to lawsuits arising out of occurrences in other countries, just because a person who happens to be tangentially related to the non-resident’s claim can be found residing in Texas. When the Legislature first passed forum non conveniens reform in 1993, it did so to prevent Texas from becoming, as the Wall Street Journal put it, “the courthouse for the world.” It appears that Texas is once again at risk of becoming just that.

HB 1692 seeks to preserve Texas courts for cases with a significant connection to the state. The legislation amends the Texas forum non conveniens statute, §71.051, Civil Practice & Remedies Code, to:

  • require a court to give substantial deference to a plaintiff’s choice of a Texas court, provided that the plaintiff is a legal resident and the lawsuit has a significant connection to the state;
  • allows the court in its sound discretion to determine the legal residency of a plaintiff;
  • clarify that the definition of “plaintiff” applies to the person with the underlying claim, not to derivative plaintiffs, such as beneficiaries, intervenors, next friends, or a non-resident decedent’s estate.

These straightforward reforms will retain the open access of legal residents of this state to their own courts, while requiring non-residents to establish that claims arising in another state or country have a significant connection to the state before availing themselves of our taxpayer-supported court system. The legislation will also bring Texas law closer into line with the law of every other state and the federal courts. Finally, it will close inadvertent loopholes in Texas law that could once again make Texas “the courthouse for the world.”

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