News

By Courtney Bacalso
Midland Reporter-Telegram

Since 1995, the state of Texas has been at the forefront of lawsuit reform aimed at preventing abusive tort cases. And its successes have benefited Midland by the creation of 1,624 jobs and $340 million in annual spending, according to a report released Wednesday.

Waco-based company The Perryman Group states in its report the legislative changes to tort cases resulted in about 8.5 percent of the economic growth of Texas.

"For a decade, the integrity of hundreds were threatened by the culture of corruption and meritless lawsuits perpetrated by injury lawsuit attorneys," said the group's president and founder Ray Perryman, a nationally recognized economic and financial analyst. "This discouraged people from making investments and it led to so many harms in so many places."

One of the first tort cases to put Texas under the spectrum happened in the 1980s. Pennzoil wanted to purchase three-sevenths of the Getty Oil Co. stocks for $3.9 billion. While the board of directors approved the purchase, solicitation for higher offers continued by Getty investment bankers and attorneys. Soon after, Texaco announced it had bought all of Getty stock for $10 billion - prompting Pennzoil to file a tort lawsuit against Texaco for interfering with the previous contract.

A Texas jury decided Texaco owed Pennzoil $10.5 billion in punitive and real damages -- forcing the company to file bankruptcy.

"It may be necessary to file a suit," said Joe Feagan, a Midland lawsuit reform advocate. "But it's not right to sue businesses for amounts that would put them out of business or file bankruptcy. At that point, it doesn't become fair."

Legislation enacted since 1995 include limiting punitive damages, reforming joint and several liability, and restricted venue shopping -- where groups seek out a decision setting where grievances about policy or policy proposals can be aired.

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