Good morning, and thank you for taking an hour out of your busy schedules to join me this morning.
Let me say a word of thanks to a friend of many years…a mentor to me in Texas politics…and that is Senator Phil Gramm. Thank you for hosting this reception senator.
I’m here today for a simple reason: and that is to declare that Texas is wide-open for business.
In these tough economic times, many states are raising taxes instead of cutting spending…
selling off their tobacco revenue bonds at less than fifty cents on the dollar…
tapping pension funds and other one-time sources of money to fund ongoing obligations…
and borrowing hundreds of millions…if not billions of dollars…mortgaging their future on a mountain of debt.
We faced the same tough economic times in Texas that most states did, but our response was different.
We didn’t raise taxes, we cut spending.
We are the only large state in the nation to spend less in general state revenue than the previous legislature.
We made the hard decisions like many of you must do as the leaders of our nation’s most prominent corporations…and because of it, we are ideally situated to grow our economy and create new wealth.
In fact, if I could leave you with one thought today, it would be this…in Texas, we have taken on taxes and torts, and because of it our state is ripe for job creation.
On the tort reform side, we just passed the most sweeping lawsuit reforms in the nation.
Lawsuit abuse is one of the greatest job killers in America today. Personal injury trial lawyers have turned a legal system designed to resolve disputes into their own personal investment vehicles to strike it rich.
Nothing illustrates this phenomenon more than the outstanding report recently prepared by the Manhattan Institute…“Trial Lawyers Inc.”
The predatory practices of the trial bar are so pervasive that it should now be distinguished as its own industry…an industry that costs businesses and our economy more than $200 billion each year.
First, we passed caps on arbitrary non-economic damages in medical malpractice cases.
Individual health care providers are no longer subject to non-economic damages above $250,000 per case. Health care institutions are subject to a separate $250,000 cap with an entire claim not to exceed a total of $750,000 in non-economic damages.
We took our reforms one step further than any other state. To prevent the legal delays that would have ensued for years as trial lawyers challenged the constitutionality of caps in court, we asked voters to clarify the Legislature’s authority to do so in the Texas Constitution.
And despite a misleading $12 million advertising blitz by the trial bar, last month Texas voters protected their health care…
saved their doctors…
and restored balance to our system of civil justice by passing Proposition 12.
This constitutional amendment not only provides relief to medical providers, but will allow future legislatures to cap non-economic damages in other kinds of civil action, with a 3/5 vote of the House and Senate.
That means that our entire system of civil justice can be cleaned up of the arbitrary awards that drive companies out of business and jobs out of the market.
We passed two reforms to our class action laws.
First, we now allow defendants to appeal class certification decisions to the Texas Supreme Court to decide up front…not after years of litigation…if the plaintiff really has a legitimate class action.
This can save defendants years of headache, and thousands if not millions of dollars in legal costs, because they will receive a quick determination as to whether they are part of a class.
Second, we took on this scam where the lawyers receive a monetary payment while the clients receive payment in coupons. From now on in Texas, if the clients get paid in coupons, so do the lawyers!
We passed a new offer-of-settlement law.
If a party refuses a settlement offer…
and receives significantly less from a jury than what was offered at settlement…
they will pay the other side’s legal fees and costs from the date of their refusal.
I am convinced that this landmark reform…what many are calling a modified loser-pay law…will significantly reduce legal costs for businesses in Texas because it will create a huge disincentive for trial lawyers to hold businesses hostage.
In Texas we also created a new standard for proportionate responsibility to ensure everyone pays their fair share.
Sometimes the individual or entity that causes the damage isn’t in the lawsuit. Under our new law, you don’t get blamed for what you didn’t do.
And if you’re a retailer, you will be protected from a manufacturer’s mistake. Just because you have the deepest pockets, or possibly the only pockets left, doesn’t mean you should pay for someone else’s mistake.
We created a way for Texas courts to more efficiently and fairly handle large-scale litigation with a multi-district litigation rule. And we made sure that parties will not be denied the right to appeal simple because they could not afford the required appeal bond.
In the past, defendants were forced to post bond for an amount equal to the jury verdict. If a corporation was hit for a multi-millions dollar verdict, they would often have to liquidate their assets just to get their day in an appeals court.
That’s unfair, and detrimental to the preservation of jobs in Texas…so now we have instituted fair limits tied to the defendant’s net worth.
We closed a loophole that allow trial lawyers to venue shop, and we did something else that makes abundant sense:
if it can be shown that failing to wear a seat belt contributed to a person’s injuries, it can now be admitted as evidence in a court of law.
These comprehensive reforms restore balance to the Texas system of justice while maintaining proper protections and compensation for Texans who are truly harmed.
As a leading Wall Street CEO told me earlier this year, there is no better way to create jobs than to pass tort reform.
Texas economist Ray Perryman estimates that our sweeping lawsuit reforms will create more than 240,000 permanent jobs and add $36 billion to the Texas economy.
Of course, economic predictions don’t mean anything until jobs and companies start coming to Texas.
That is why I am here. Not only have we tackled tort reform…
we are building better schools…
aggressively cultivating new jobs and companies…
and we are one of a handful of states with no personal income tax.
Our economy has diversified since the bust years of the 80’s…
we are now the number one exporting state in the nation…
and our cost-of-living and cost-of-labor is lower than the national average.
I simply ask that you think of Texas when you think about future opportunities. If there is something you need, just pick up the phone and ask for me directly.
We’re now performing economic development functions directly out of my office. We have a new $295 million enterprise fund to provide incentives for re-locations and expansions. And that fund is not a bond fund, it’s something better: cold cash.
We believe that any company that invests in Texas over the next few years will reap real dividends. You won’t look back once you plant your roots in Texas.
Thank you. I would be happy to open this up for a free-flowing discussion.
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