Office of the Governor Rick Perry

Perry: Crown Cork and Seal is a Great Example of How Lawsuit Reform is Working

Says Texas Lawsuit Reforms Were Right Prescription for Ailing Legal System

Thursday, September 16, 2004  •  Press Release

ABILENE – Today Gov. Rick Perry joined with Crown Cork and Seal in announcing the expansion of its manufacturing plant in Abilene in addition to the preservation of 147 jobs. The announcement was made possible, in part, by the lawsuit reforms passed by the Texas legislature in 2003.

"The story of Crown Cork and Seal could have been tragic for its 147 employees here in Abilene, but because of the major lawsuit abuse reforms passed by the Texas legislature in 2003, there is a happy ending," said Perry. "Because of our reforms and an aggressive incentive program offered by the Development Corporation of Abilene, Crown Cork is preserving 147 jobs for local families and upgrading its Abilene manufacturing plant."

In the early 1960's, Crown paid $7 million to buy rival a bottle cap manufacturer which also owned a small insulation division. 93 days after the purchase, Crown divested itself of the insulation division and merged the remaining bottle cap business into its existing operations. Because of its three-month association with an insulation company some 40 years ago, thousands of asbestos lawsuits had been filed against Crown by 2003 and a $7 million investment ended up costing the company more than $350 million in asbestos related payments.

"A year ago, many Texas employers and healthcare providers were facing a catastrophe in the making brought on in large part by a predatory legal climate that provided incentives for the filing of frivolous lawsuits aimed at striking it rich," said Perry. "Stories like that of Crown Cork and Seal are one of the reasons why I worked with the Texas Legislature to enact major lawsuit abuse reforms that capped asbestos related liability for employers who had been over-penalized because of another company’s mistakes."

"Crown Cork is a great example of what is happening all across Texas in various industries that have been plagued by an abundance of frivolous lawsuits."

Perry noted that today Texas patients have better access to healthcare, communities are recruiting new physicians, insurance costs are down significantly for many hospitals and some doctors, and healthcare lawsuits have declined dramatically.

"In the medical field, the lawsuit abuse reforms we passed last year are healing healthcare and protecting patients," Perry said. "Simply put, our lawsuit reforms are having a tremendous, positive impact on the lives of millions of Texans."

One respected economist estimated that the Texas lawsuit reform measures will eventually lead to the creation of more than 240,000 permanent jobs and add $36 billion to the Texas economy. Perry noted that Texas is on the leading edge of the national economic recovery and in the past 11 months, Texas has gained over 122,000 net new jobs and has welcomed dozens of employers that have relocated or expanded their operations in Texas, adding thousands of jobs to our state and billions of dollars to our economy.

"The Texas reforms were the right prescription for an ailing legal system and jobs are being preserved and created because of it," said Perry. "When employers can create jobs, families can achieve their dreams."

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