Texas Struggles to Rein in 'Nuclear Verdicts' as Senate Bill 30 Fails

SB 30 had multiple provisions aimed at recalibrating jury verdicts back to reasonable levels. These included:

• Requiring that jury awards provide fair and reasonable compensation for the period when the plaintiff’s pain, suffering, or anguish persisted or could reasonably be expected to persist, basing an award on evidence of the nature, duration, and severity of the injury.
• Requiring that jury awards reflect a rational connection between the injury suffered and the dollar amount.
• Prohibiting jury awards from including amounts that are properly considered economic losses such as lost earnings or medical expenses incurred from emotional/psychological care.
• Prohibiting a lawyer from using unsubstantiated anchoring tactics and making it reversible error to do so (such as with professional athlete salaries).
• Prohibiting a lawyer from asking the jury to penalize, punish, make an example of, or serve a social good.

SB 30 was significantly gutted in both the Texas Senate and House of Representatives as a result of lobbying efforts from plaintiffs’ attorneys, former judges, and survivors of sexual assault. Extensive hearings included many proponents against the proposed legislation arguing that these limitations would result in injured parties not recovering proper damages from tortfeasors. These hearing witnesses also argued that the number of purported “nuclear verdicts” are miniscule when compared to the total number of lawsuits filed for personal injury cases such that the “problem” the legislation sought to fix did not exist. The final version left certain provisions impacting medical billing evidence but removed all of the other measures intended to curtail nuclear verdicts.

The key provisions of the modified bill included:

• Definitions: The bill introduces definitions for terms such as “health care expenses,” health care services,” “injured individual,” “letter of protection,” “physician,” “provider,” and “third-party payor.” These terms involve agreements or arrangements between plaintiff law firms and medical providers to facilitate medical care for plaintiffs, often in personal injury cases. These agreements or arrangements are designed to ensure that plaintiffs can access both necessary and, at times, unnecessary medical treatment while their legal claims are pending, with the plaintiff law firm covering the upfront costs. These type of arrangements are often utilized to artificially inflate recoverable damages, allowing plaintiffs’ counsel to present “medical costs” to a jury that often many multiples of what would normally be collected by medical providers.
• Admissible Evidence of Health Care Expenses (Section 41.015): The bill would limit evidence of economic damages for health care services to amounts paid by third-party payors, including coinsurance, deductibles, or copayments. If third-party payor evidence is not applicable, evidence of the reasonable value of services may be presented, including Medicare allowable amounts, maximum allowable reimbursements, and provider’s billed charges.
• Claimant Disclosure Requirements (Section 41.016):  The bill would require claimants to disclose letters of protection, and any agreements related to refunds or rebates. Further, it will mandate disclosure of referral information to a specific health care provider, the identity of health care providers and authorizations to obtain medical records.

Despite the drastic revisions, the revised bill could have impacted how damages are presented and evaluated in court. By providing juries with more contextual information, such as Medicare allowable amounts, the revised bill aimed to enhance the understanding of damages. Additionally, it sought to introduce transparency regarding letters of protection and patterns of referrals to specific doctors by the same attorneys, which could have revealed potential biases or conflicts of interest. By providing juries with additional information and context, the bill could empower defendants to more effectively challenge inflated medical costs presented as damages.

Even this drastically revised bill did not pass the legislature due to a failure of the Senate and House of Representative to reach a compromise on the ultimate bill. Thus, it failed to advance in this legislative session and must await the next legislative session commencing on January 12, 2027.

As a result of the bill failing to pass, plaintiffs’ counsel are able to manipulate damage models, resulting in excessive verdicts. Defendants in Texas courts can anticipate continued exposure to significant financial risks, as nuclear verdicts in personal injury lawsuits remain a possibility.

Until then, individuals and corporations alike (especially trucking and oilfield companies) will rely on the Supreme Court of Texas to bring rationality and reasonableness back into jury awards.

Please contact Harrison Cass, Michael Carrer, or any member of the Phelps Insurance and Litigation teams if you have questions or need advice or guidance.