As we began reporting even before the 88th Legislature convened in January, the onslaught of proposed legislation upending more than three decades of progress in improving the Texas tort liability system has been unprecedented this session. While many of these have fallen by the wayside, some continue to have life as we approach key legislative deadlines.
Three of these bills (HB 888, HB 3357, HB 3570) appear on tomorrow’s final House Calendar for second reading House bills. These bills have been prominent in our reporting and tracking since they were filed, and we are grateful for the hard work many of our friends and allies have done in trying to reduce the liability exposure to Texas businesses that these proposals create. Nevertheless, they have reached the Calendar and may well be voted on tomorrow, so here is where they stand right now.
HB 888 creates an exception to the two-year statute of limitations for a health care liability claim involving a minor. Under current law, minors under the age of 12 have until their 14th birthday to file a claim. This provision was carried over into Chapter 74, CPRC, from the former law, Art. 4590i, § 10.01, Vernon’s Revised Civil Statutes, as § 74.251. HB 4 imposed an additional 10-year statute of repose on health care liability claims. The purpose of this provision was to reduce the adverse effects of “long-tail” claims on the ability of health care providers, particularly pediatricians, obstetricians, anesthesiologists, hospitals, and nurses practicing in those fields, to obtain insurance against claims that may be up to 14 years old—seven times the ordinary two-year limitations period.
HB 888, however, extends the limitations period and the statute of repose for certain claims to the minor’s 25thbirthday. The exception applies to “malpractice in the provision of puberty suppression subscription drug or cross-sex hormone to or the performance of surgery or another medical procedure on the minor for the purpose of gender transitioning or gender reassignment.” Although we understand the purpose of the bill is to supplement other legislation banning certain treatments for gender dysphoria, HB 888 conceivably goes a lot further than that and will very likely have unforeseen consequences for both health care providers and their patients. First, the types of treatment subject to the bill are at best poorly defined and at worst incredibly expansive. Second, what does “for the purpose of gender transitioning or gender reassignment” actually mean? The bill does not define these terms, either. When faced with one of these claims, which may have arisen two decades in the past, alleging that a physician or provider provided a treatment “for the purpose of …,” what possible defense will the provider be able to mount?
We presume that any defenses will revolve around an argument that the alleged treatment was: (1) not provided at all; (2) was provided but was not proscribed by HB 888; (3) was provided but not “for the purpose of”; or (4) was provided “for the purpose of” but at a time when the treatment was entirely lawful. As you can see, these cases will be difficult and expensive to defend, involve a battery of experts on both sides, and grapple with fading memories and stale evidence. This is not a recipe for either an efficient civil justice system nor one that promotes due process. Simply put, what the bill covers will have to be litigated on a case-by-case basis for decades, at immense cost to the health care system and the insurance policies that underwrite it. But how will the medical liability insurance market possibly price coverage for these claims? This was the whole basis for cutting back on long-tail claims in the first place.
Another problem here is retroactivity. HB 888 purports to apply only to a cause of action that “accrues” on or after September 1, 2023. Fair enough, we use that language all the time. But in the context of the bill, does the cause of action accrue when the treatment occurred? Maybe, but remember that the bill deals with minors who do not have the capacity to consent to medical treatment. This issue may create a basis for arguing that their legal injury did not occur until much later, for example when they became adults or, even later, when they came to some kind of realization that a prior treatment was “for the purpose of,” even though they might not have been aware of it at the time. HB 888 extends limitations for so long that we should not be surprised to see lawsuits filed on or after September 1 alleging causes of action that accrued on or after that date based on treatments delivered a long time ago.
Finally, HB 888 refers to a claim for “malpractice” based on those vague and undefined on terms we discussed above. Is the act of “malpractice” the performance of the treatment itself? Does HB 888 surreptitiously reinstate the doctrine of res ipsa loquitor in health care liability claims, which the Legislature essentially abolished in the late 1970s (Art. 4590i, § 7.01)? Liability for medical negligence requires a standard of care. Yet HB 888 refers to no standard. We should consider that the real possibility that the bill intends this to be so. It does not define anything or establish a standard because it aims to stop anything and everything that may be “for the purpose of,” even treatments that are not “for the purpose of” but can still form the basis of a future “malpractice” action simply by virtue of the fact that they happened. If that is the case, HB 888 may well deprive Texans of medically necessary treatments if there is any chance that those treatments may later be characterized as “for the purpose of gender transitioning or gender reassignment.” And that would be a travesty.
HB 3357 follows the SB 8 (2021) template but on steroids. The bill creates not one, but three distinct no-injury causes of action:
- The first cause lies against a defendant who either “engages in” obscenity (as that term is defined by Chapter 43, Penal Code) or “knowingly or intentionally benefits from participating in an entity that engages in the obscenity.”
- The second imposes liability on a “commercial entity” for damages “arising from the distribution, transmission, or display of harmful material to a minor” if the entity “knowingly or intentionally benefits from participating” in those activities by “facilitating, aiding, encouraging, or contributing” to them “in a way that: (1) is readily accessible to minors; or (2) includes a minor’s visual image, audio voice, or participation in any manner.”
- The third makes shareholders or members of a legal entity jointly and severally liable with the entity if the plaintiff “demonstrates that the shareholder or member caused the entity to be used for the purpose of engaging in obscenity and that the conduct was for the direct personal benefit of the shareholder or member.”
The bill directs a court of award a prevailing claimant actual damages, including mental anguish damages without showing of any other injury, court costs, attorney’s fees, and punitive damages. The bill imposes joint and several liability on defendants in each type of action, strips defendants of defenses based on the constitutionality of the statute or federal or state case authority, allows a civil action even if the defendant has been acquitted or not prosecuted or convicted of a Penal Code violation, and permits an unlimited number of claims against the same defendant based on the same conduct. While the bill contains limited exclusions for news-gathering organizations and Internet service providers that are not responsible for creation of content, the sheer breadth of the bill, particularly the “facilitating, aiding, encouraging, or contributing” language probably vitiates what little protection the exclusions provide.
The bill further seeks to constrain the courts from declaring the statute unconstitutional, including a novel approach that directs the attorney general to promulgate rules enforcing the act “to the maximum possible extent while avoiding the constitutional problems or other problems identified by the federal or state court.” This strange provision may unconstitutionally delegate legislative authority and almost certainly unconstitutionally usurps the independent jurisdiction of the courts.
In any event, HB 3357 has the same problem that SB 8 has: a plaintiff bringing an action does not have to show a concrete, individualized injury that may be redressed by the courts. The only required showing for the first cause of action is “harm . . . arising from” obscenity. What harm? Hurt feelings? Being offended? Bad taste? And what damages? Annoyance? Righteous indignation? The imagination beckons.
As to the second cause of action against a commercial entity, the lawsuit may be brought by any person for damages based on “the distribution, transmission, or display of harmful material to a minor.” There is no required nexus in this section between the claimant and the minor. A minor? Which minor? Any minor? That’s what the bill says. It should be noted that a minor need never have seen the material in order for liability to trigger. And what does it mean that the material include the image or voice of a minor? Is any representation of a minor actionable? Does the minor have to be named or individually identified? Would a computer-generated image of a “minor” trigger liability? We could go on. Finally, this section has “facilitating” and “aiding” very similar to the “aiding or abetting” language in SB 8. If the entity “knowingly or intentionally” benefits from the distribution of the material, the entity is liable. But one may “know” or “intentionally benefit” from distributing material without having the foggiest notion that the material is “harmful.” The bill doesn’t require that. The upshot is that a commercial entity, as well as its members and shareholders, could be held strictly liable in one of these lawsuits simply by virtue of the fact that the business distributes “material” and that everyone involved knows that if distributes “material.”
HB 3357 dispenses with the most basic protections built into our civil justice system. It seeks to punish individuals and entities for undefined conduct. It permits recovery of damages without a showing of an actual injury or how the alleged conduct caused the injury. It imposes strict liability based on a knowledge requirement that is not tethered to whatever conduct the bill seeks to punish. It contemplates the award of punitive damages based on the unspecified conduct. It strips defendants of good faith and constitutional defenses. It attempts to prevent courts from reviewing the constitutionality of a bill that clearly has grave due process problems and implicates the First Amendment. And it purports to give the attorney general enforcement power even if the courts strike it down.
Finally, HB 3570 holds a commercial entity liable for knowingly or intentionally publishing or distributing on an Internet website, including a social media platform, “sexual material harmful to minors,” unless the website or platform uses “reasonable age verification methods … to verify that an individual attempting to access the material is 18 years of age or older.” If the entity doesn’t do that, a parent or guardian of a minor may sue “for damages resulting from a minor’s access to the material, including court costs and reasonable attorney’s fees.” There is further liability for a commercial entity that “knowingly and intentionally publishes or distributes material on an Internet website, or by a third that performs the age verification” required by the bill if the entity knowingly retains identifying information of an individual after access has been granted. The bill has the same narrow exclusions for news-gathering organizations and ISPs that do not control content.
Though narrower than HB 3375, HB 3570 still has some of the same problems. Chief among these is the assumption of harm arising from “a minor’s access to the material.” Again, what harm? And assuming that harm exists, how can it be quantified? We do not profess to any knowledge about how entities with websites and social media platforms would actually implement the age verification requirements of this bill, but even supposing that they can, will it work and how easy will it be to evade? If it does not work or is successfully evaded, moreover, does that render the method “unreasonable” on its face? If we think about this problem as one of products liability, the question likely to be litigated is whether the entity could have used a different age verification method that was technically feasible but failed to do so. The case would then proceed to a cost-benefit analysis to determine whether that alternative method was also economically feasible under the circumstances. Here we are again floundering about in expensive satellite litigation over discovery and “junk science,” just as we have faced in the products liability context. But at least products liability actions are tort actions that require proof of injury and substantial causation. That structure does not exist in HB 3570.
We will see what happens by midnight tomorrow. Wherever the chips fall, bills like these should remind us that the collective efforts of the business and health care communities to strengthen the civil justice system over the past 35 years could be compromised away in the blink of an eye—and will be if we do not remain vigilant.
