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Banking/Corporate/Commercial Law After securing a big victory in 2003 with passage of a massive bill that rewrites and reorganizes the state’s business laws, the Texas Business Law Foundation will likely enjoy an easier time of it during the 79th session of the Texas Legislature, which convenes on Jan. 11. Dallas lawyer Daryl Robertson, a member of the foundation’s executive board, says the group hopes to persuade legislators to introduce a number of bills during the session, but Robertson, a partner in Jenkens & Gilchrist in Dallas, doesn’t expect much controversy over any of the proposals. The Texas Legislature passed the new business code � the Business Organizations Code � which reorganizes, simplifies and modernizes the state’s business laws, in 2003 after unsuccessful attempts in 1999 and 2001. But this session, Robertson says, the foundation wants the Legislature to pass a bill containing some amendments to the new business code, which won’t go into effect until Jan. 1, 2006. Arthur “Val” Perkins, a lobbyist for the foundation, says the amendments are for the most part technical changes or changes requested by the Secretary of State’s Office to ensure the new business code is consistent with other laws. Perkins, a director at Houston’s Coats Rose Yale Ryman Lee, says the foundation also hopes to persuade a legislator to introduce a bill that would make some “short and fairly nonsubstantive” amendments to the Limited Liability Partnerships Act and the Limited Liability Company Act, and some changes to the Texas Business Corporation Act. The foundation also supports some technical amendments to Article 3 of the Uniform Commercial Code, which covers negotiable instruments; Article 4, which applies to bank deposits and collections; and Article 7, which deals with documents and titles. Perkins, who will lead lobbying for the group along with John Kuhl, of Houston’s Sanford & Kuhl, says members of the Texas Business Law Foundation will closely monitor efforts by the Legislature to find a way to finance public schools, which is universally expected to be the big issue of the 79th session. The foundation’s members include in-house lawyers and outside counsel. On the banking side, John Heasley says the Texas Bankers Association hopes to introduce legislation that would allow the issuance of agricultural bonds to assist first-time farmers. The group also is interested in financial privacy issues, and would oppose any changes to the current requirements banks must follow to require them to give customers an annual opportunity to opt out of the use of their information. “We like the status quo. It offers protections for consumers,” notes Heasley, executive vice president and general counsel of the Texas Bankers Association. The TBA supports efforts to increase the criminal and civil penalties for identity theft, he says. Heasley says the TBA also supports SJR 7, filed in November 2004 by state Sen. John Carona, R-Dallas, which would put a constitutional amendment on the ballot to allow Texans to obtain a line of credit through a reverse mortgage and to authorize jumbo reverse mortgages. Jumbo mortgages are in excess of $353,000, says Scott Norman, president of the Texas Association of Reverse Mortgage Lenders. Under current law, Norman says, homeowners getting a reverse mortgage can only get a lump-sum payment, and the line of credit is a consumer-friendly provision. It could save borrowers thousands of dollars in interest charges, he says. “This is a product that really takes the reverse mortgage to a new level,” Norman says. � Brenda Sapino Jeffreys Criminal Law Prosecutors and criminal-defense lawyers agree that the Texas Legislature needs to fix the state’s insanity defense laws in the 2005 session; they don’t agree what that fix should entail. However, a report that the Senate Committee on Jurisprudence released in December 2004 leans toward changes supported by prosecutors. The committee recommends tightening the release standards for persons acquitted on the basis of insanity. However, the committee recommends no change in the “not guilty by reason of insanity” (NGRI) defense. Under Texas Penal Code 8.01, defendants seeking acquittal based on insanity must convince a jury that they suffered from a severe mental disease or defect and did not know their actions were wrong. Williamson County District Attorney John Bradley, a member of the Texas Department of Criminal Justice Advisory Committee on Offenders With Medical or Mental Impairments, says he doesn’t see any need for the Legislature to make changes to the definition of insanity and the affirmative defense. The flaws in the system involve the post-acquittal release of individuals after they receive treatment for mental illnesses, Bradley says. “The current system creates a tremendous procedural burden on the state to keep an insane person confined and creates too many opportunities for that insane person to be released without any supervision,” Bradley says. The Senate committee also recommends that the Legislature enact legislation to require that the Department of State Health Services improve the collection of commitment records of individuals acquitted because of insanity. In addition, the committee recommends amending Texas Code of Criminal Procedure 46.03 to require that experts who examine individuals using the insanity defense meet the qualifications required of experts used in competency hearings under 46B.022 of the code. According to the report, an expert determining a defendant’s competency must be a state-licensed physician or psychologist with a doctoral degree and have experience or certification in forensic psychiatry or psychology. “I’d like to have seen them go a lot further than this,” says Keith Hampton, legislative liaison for the Texas Criminal Defense Lawyers Association. Hampton, principal in the Law Offices of Keith Hampton in Austin, says defense lawyers favor inclusion of a “volitional” prong in the standard for determining insanity, requiring acquittal if a defendant can prove that he or she committed an offense because of an irresistible impulse caused by mental impairment. “What the defense lawyers would like is to make it easier to get the severely mentally ill out of the criminal justice system and into the mental health system,” Hampton says. George Dix, a University of Texas School of Law professor who teaches criminal law, has worked with Dr. Victor Scarano, an attorney and the chief of forensic psychiatry services at Baylor College of Medicine, and Mary Alice Conroy, associate professor of psychology at Sam Houston State University, to draft a proposal for amending Penal Code 8.01(a). Under the proposal, the statute would read: “It is an affirmative defense to prosecution that, at the time of the conduct charged, the actor, as a result of severe mental disease or defect did not appreciate that his conduct was legally or morally wrong.” Dix says the proposed changes would not guarantee that cases like those of Andrea Yates and Deanna Laney would come out differently than they did under current law. But Dix says such changes would make it clear to juries that they could not regard the insanity issue as settled by defendants’ acknowledgement that they were intellectually aware that legal authorities and the community would regard their acts as legally wrong. The statute’s current language permits the state to argue that a jury can find a seriously impaired person guilty if the state shows that the person understood that his or her action was against the law, Dix says. However, the cases of State v. Yates and State v. Laney show that juries don’t always react the same to such arguments. In 2002, a 230th District Court jury in Houston rejected Yates’ insanity defense and convicted her of capital murder for the deaths of three of her five children she was accused of drowning in the bathtub of her Clear Lake home. The jury sentenced Yates to life in prison. On Jan. 6, a three-justice panel of Houston’s 1st Court of Appeals reversed Yates’ capital murder conviction. The 1st Court held that the trial court erred by not granting Yates’ motion for a mistrial after it was learned that the testimony of the state’s mental health expert, Dr. Park Dietz, was false. According to the 1st Court’s opinion, written by Justice Sam Nuchia, Dietz erroneously testified that the television show “Law and Order” aired an episode about a woman with postpartum depression who had drowned her children in a bathtub. The opinion quoted Dietz’s testimony that the program showed shortly before the drowning of the five Yates children. In 2004, a Smith County jury in Tyler found Laney not guilty by reason of insanity for stoning to death two of her sons and severely injuring a third son. Judge Cynthia Stevens Kent, of Tyler’s 114th District Court, sent Laney to the Vernon State Hospital. Kevin Keating, a Harris County assistant district attorney who handles cases involving the recommitment of individuals acquitted on the basis of insanity, says Yates and Laney are different cases that involved substantially different evidence. “We don’t think there’s a big problem with the definition” of insanity, Keating says. Keating says he sees problems in trying to talk to a jury about what’s morally wrong. “You run into the problem of whose morals,” he says. Like Bradley, Keating sees a need for the post-acquittal supervision of individuals after they are released from treatment. Keating says the Code of Criminal Procedure refers to the state’s Health & Safety Code with regard to procedures for involuntary commitment. Those procedures are “designed for everyday garden variety commitments,” not situations involving dangerous individuals who need monitoring, he says. Concerns about the lack of monitoring for persons found not guilty by reason of insanity heightened in April 2004, after police arrested Kenneth Pierott of Beaumont and charged him with the asphyxiation murder of a 6-year-old boy whom Pierott allegedly placed in an oven. In 1996, a judge acquitted Pierott by reason of insanity in connection with the beating death of his sister. Pierott was committed to a state mental hospital but released four months later after he was stabilized with medications. [ See "Guilty But Insane in the Legislature," Texas Lawyer , May 24, 2004, page 1.] Dix says that it’s unclear under the current law whether a judge can order a person who is acquitted for insanity to take medications after the person is placed in outpatient treatment. Under Health & Safety Code 574.034, a judge may advise but not compel an individual to take medications, Dix says. He is working with advocacy groups that are proposing changes in the procedures for processing individuals acquitted because of insanity. Dix says the advocacy groups also are urging the Legislature to change the law with regard to what a jury can be told about the procedural consequences of an acquittal on insanity grounds. Code of Criminal Procedure 46.03(1)(e) prohibits the judge and attorneys for the state and defense from providing juries that information. That’s “just insane,” says F.R. “Buck” Files, the Tyler attorney who represented Laney. “What this does is just encourage jurors to speculate about what is going to happen if they turn a defendant loose,” says Files, a partner in Bain, Files, Jarrett & Bain. Files says that in insanity cases, the facts always are horrific, and jurors worry whether a defendant is going to walk out the door with them if acquitted. “It just makes sense to take the blinders off the jurors,” he says. In its report, the Senate committee says it believes the Legislature should examine the pros and cons of revealing to juries the consequences and procedures following a not guilty by reason of insanity verdict. However, the committee did not recommend that the Legislature amend that provision of the code. The Legislature also is expected to address a number of other bills that could affect criminal law � including some that are retreads from previous sessions. State Sen. Eddie Lucio Jr., D-Brownsville, filed S.B. 60 � a life-without-parole measure � in November 2004. The bill would amend Penal Code 12.31 to give Texas juries in capital cases a third sentencing option. Juries currently can sentence an offender to death or to life in prison, which means the offender will be eligible for parole after serving 40 years. “Oftentimes, jurors are conflicted about whether to sentence dangerous offenders with mental retardation or a mental illness to death; yet they must do so because there is no assurance that the defendant will remain behind bars,” Lucio says. The Legislature also is expected to revisit the issue of releasing criminal history information in records that have been expunged. Shannon Edmonds, a staff attorney for the Texas District and County Attorneys Association, says a provision in S.B. 1477, passed by the Legislature in 2003, amended Code of Criminal Procedures 55.03. Edmonds says the provision conflicts with other sections of the code but has allowed the Texas Department of Public Safety to release certain information that a court has ordered to be expunged to criminal justice agencies. “It makes no sense,” Edmonds says. “Basically, we have told our people [prosecutors] that if something gets expunged, destroy the records.” State Sen. Royce West, D-Dallas, sponsored S.B. 1477 to create an order of nondisclosure for defendants who receive deferred adjudication, says Kelvin Bass, a legislative aide to West. The provision affecting expunctions was passed by mistake, he says. “Everybody knows there was a drafting error,” Bass says. “Everybody is anticipating a fix for it, and we’ve got a fix ready.” � Mary Alice Robbins Environmental Law In the best of years it is difficult for the pro-business, anti-regulation Texas Legislature to take a hard look at environmental law reform. And with solid Republican majorities in the state House and Senate, with social conservatives wanting to push their anti-gay marriage, anti-abortion rights agenda, with school finance reform in dire need of long overdue repair, this may not be the best of years for new environmental legislation. That said, there are compelling environmental issues facing the state that may not be able to wait. Aside from funding issues regarding the Texas Emissions Reduction Program, “clean air is not going to be the hot topic in the session,” says Mary Mendoza, a partner in the Austin office of Haynes and Boone who represents the “regulated industry” and chairwoman-elect of the Environmental and Natural Resource Section of the State Bar of Texas. Water rights and water marketing, however, may draw considerable legislative focus. “I think there should be some legislative movement on how we’re going to deal with state water rights,” Mendoza says. “Different interested parties want different standards.” The state may lease its water rights to private industry, some of whom see the pumping and marketing of the natural resource as the next big oil boom. Environmentalists believe the state has been far too liberal in handing out water rights. “We shouldn’t let the person with the biggest straw get all the water,” says Rick Lowerre, a plaintiffs environmental lawyer and partner in Austin’s Lowerre & Kelly. “The environmental community feels a good legislative fix would be to implement a reasonable use system that would limit the amount of ground water pumped to a sustainable amount so a spring doesn’t dry up,” says Lowerre. Part of this debate over water concerns the issue of environmental flow protection. “Legislation could look at how to deal with the quantity of water flow you need in stream segments, bays and estuaries to preserve their environmental quality and what steps might be taken to protect the environment in the future,” Mendoza says. “The question is, “Are we just going to let everyone suck as much water out of the rivers as they want?’ ” Lowerre asks rhetorically. “ Or “do we need to leave enough water in a river for all the traditional uses?’ ” Entire industries are built around fishing, oystering and shrimping, he says. “ If the water gets too low, it gets too hot and can ruin the quality of the environment.” For the past four years, the Legislature has been studying environmental flow protection, and Lowerre feels confident that this session it will reach a compromise on the issue. “All sides have gotten together and attempted to set up a system to determine how much water is needed and how do we assure that it stays there.” Both sides anticipate reform in the controversial enforcement process employed by the Texas Commission on Environmental Quality (TCEQ). “The agency rates companies from excellent to poor according to the number of times they are cited for environmental violations,” Lowerre says. “But a company can pay a penalty without admitting fault and then the agency doesn’t treat it as a violation. Companies who have agreed to thousands of dollars worth of fines have excellent records. No one ever gets a poor one.” While environmental groups will push for more accountability, some of the regulated industries, Mendoza says, believe the system is being unfairly and inconsistently administered. “A violation in the air program can be extremely similar to a violation in the water program yet their penalties can vary greatly,” Mendoza says. “There is some talk about linking the amount of the penalty to the economic benefit that was achieved by the offending party because of its noncompliance.” The TCEQ has held public hearings on the enforcement process and has been working toward revising it. But it will be up to the Legislature to implement the agency’s findings. There is some movement to strengthen the laws regulating the environmental practices of the rock mining industry, but the Legislature will need substantial chutzpah to do so. According to the Waco-Herald Tribune, this industry’s compliance history has been the subject of a recent TCEQ audit, which found that more than one-third of rock quarries in Central Texas were operating without permits. Environmental groups such as the Brazos River Conservation Coalition allege that runoffs from rock mining operations including rock crushers are harming rivers and polluting groundwater. “We don’t have good mining laws in Texas,” Lowerre says. “But to change that means going against one of the strongest lobbies in Texas � the road-building industry � and that’s why I don’t anticipate much reform in this area.” Lowerre believes that meaningful reform is complicated by the Legislature’s pro-business attitude, which views environmental regulation as a deterrent to attracting industry to Texas. “None of the leadership in the state has publicly said that enforcement is important or we need to strengthen this program or that,” Lowerre says. “Yet things get passed because there is still a need to protect the public health.” � Mark Donald Family Law Messy, emotional and contentious � it’s always the same with family law. And it’s no different with the main family law bill the Texas Legislature will consider during its 79th session. This time lawmakers will examine the rights grandparents have to visit their grandchildren. “The grandparent access bill, that’s going to be the most contentious,” says state Rep. Toby Goodman, R-Arlington, the House’s resident family law guru and sponsor of H.B. 261. Texas courts have been grappling with the grandparent access issue ever since the U.S. Supreme Court issued Troxel v. Granville in 2000. In that decision, the high court ruled that a parent has the right to make decisions about his or her children’s care, custody and control. The high court also ruled in Troxel that there is a presumption that a fit parent’s decisions about his or her child are in the children’s best interests, and a court cannot substitute its opinion for the parent’s judgment about what’s in the children’s best interests. Troxel was predicted to have a big impact on grandparent access laws and it has. Some Texas courts have found that Texas’ grandparent access statute could have an unconstitutional application under Troxel. H.B. 261 attempts to square Texas’ grandparent access statute, 153.432 of the Family Code, with the Troxel decision. The proposal would require a grandparent to overcome the presumption that a fit parent is acting in the best interest of a child to win court-ordered access. “The way the bill is drafted now . . . you’ve got to find a parent unfit” to win court-ordered access, says Goodman, a family lawyer and partner in Arlington’s Goodman, Clark & Beckman. “You get into all of these arguments into whether or not courts should grant grandparent access where you have divorced families or intact families and the dispute exists between the grandparent and his or her own child,” Goodman says. It can get ugly, Goodman says, when access to grandchildren is used as a weapon between grandparents and their own children. A common threat, he says, is “if you don’t pay my debts off, you’re never going to see your grandchildren again.” Another interesting bill is H.B. 201, which allows waivers of spousal maintenance (known as alimony in other states) to be voided if they’re included in prenuptial agreements � especially if a spouse becomes disabled. “The thought behind the spousal maintenance bill is it’s meant for people in dire straits,” says Stewart W. Gagnon, a family lawyer and partner in Houston’s Fulbright & Jaworski. If a waiver of spousal maintenance is included in a prenuptial agreement, and the spouse can’t support him or herself because of physical limitations, “you shouldn’t have to be bound by that,” Gagnon says. � John Council First Amendment With three high-profile journalists � Judith Miller of The New York Times, Matt Cooper of Time magazine and Jim Taricani of NBC-affiliate WJAR in Providence, R.I. � facing prison for protecting confidential sources, the necessity of shield laws has again become a front-burner issue in some legislative circles, including Texas. All three cases stem from federal investigations, which is why U.S. Sen. Christopher Dodd, D-Conn., in November 2004 proposed a federal shield law for journalists. Texas journalists have had their own share of showdowns with prosecutors as a reporter’s First Amendment right to gather news came in conflict with the public’s right to gather evidence. Remember the Dallas producer of “60 Minutes II” who in 1999 was forced to surrender the unaired portions of an interview she did with a capital murder defendant in the dragging death of James Byrd Jr.? Then-Jasper County District Attorney Guy James Gray insisted a complete transcript of the interview was essential to his case preparation, and neither the First Amendment nor Texas law stood in his way. Media lawyer Chip Babcock, a partner in Dallas’ Jackson Walker, says that there exists a qualified First Amendment privilege for journalists in Texas (based on the 5th U.S. Circuit Court of Appeals’ 1980 opinion in Miller v. TransAmerican Press), but that is not the case in a criminal context. “When the Texas Court of Criminal Appeals has First Amendment jurisdiction, there is no First Amendment privilege,” Babcock says. Stepping into this void is state Rep. Aaron Pena, D-Edinburg, who has pre-filed H.B. 188, which seeks to codify the qualified journalist privilege. According to the bill, a reporter may not be compelled to disclose in an official proceeding “any confidential or nonconfidential information, document, or an item obtained or prepared while acting as a journalist.” The journalist however, can be compelled to testify if “by a preponderance of the evidence” the person seeking the testimony establishes that it is “relevant and material” to an official proceeding, essential to making “a claim or defense” and cannot be “obtained from alternative sources” � much like the test in Miller. Even if Pena can generate some legislative interest by finding a Senate sponsor for his bill, he will still have his work cut out for him. The Texas Legislature has grappled with shield laws for nearly 20 years, Babcock says, and the bills have always faced the same obstacle. There has been a historic split over the issue in the journalistic community. The Texas Association of Broadcasters (TV and radio) generally favor shield law legislation while the Texas Daily Newspaper Association (print media) has opposed it. “I don’t completely understand why the print association is so resistant,” says Babcock, general counsel for the broadcast association. “But there is some concern that if the Legislature gets involved, it will define who is and who is not a journalist and that might lead to some kind of licensing regulation for journalists. Because Belo Corp. finds itself in both camps, owning interests in newspapers ( The Dallas Morning News, among others) and broadcast (WFAA Channel 8, among others), it has a unique perspective. “There are some organizations in the newspaper industry who feel that the Legislature will restrict the reporter’s privilege and that the current scheme at least allows for some interpretation,” says Guy Kerr, chief legal officer for Belo. “On principle, however, we [Belo] are in favor of a shield law. Obviously the details can be critical.” Unless the state’s two largest news associations can “get on the same page,” says Kerr, legislators will say what they have in the past: Why should we get involved? But even if both news associations endorse Pena’s legislation, there could be some backwash to the bill from the law enforcement community, which might feel the proposed legislation compromises its ability to protect public safety. The Texas District and County Attorneys Association is tracking the legislation but will take no formal position regarding the bill � as is its policy. “Prosecutors in Texas may have concerns that the bill will have unintended consequences,” says Shannon Edmonds, TDCAA’s director of governmental relations. “They wouldn’t want a shield law to prevent them from doing their jobs.” Coincidentally, another piece of First Amendment-oriented legislation may be the result of prosecutors who say they were just doing their jobs. Travis County District Attorney Ronnie Earle has spent the past two years investigating whether Texans for a Republican Majority (TRMPAC), a fund-raising political action committee founded by U.S. House Majority Leader Tom DeLay, R-Sugar Land, violated Texas campaign finance laws in the 2002 election cycle. The investigation has resulted in indictments of three TRMPAC associates and eight corporations for allegedly violating the Texas ban on corporate contributions. Earle also is conducting a parallel investigation into the activities of the Texas Association of Business (TAB), a trade association that spent $1.9 million on a Republican-centric advertising blitz in 2002. If a court ultimately rules TAB’s direct-mail campaigns were issue ads, the First Amendment might trump state law that requires the ads to be financed with noncorporate dollars. The state can, however, regulate the ads if they are considered express advocacy � speech that expressly calls for the election or defeat of a particular candidate � and not run afoul of the First Amendment. In the aftermath of the scandal, nascent reform movements are building to either strengthen or alter Texas campaign finance laws. There is strong sentiment among Republicans led by Andy Taylor � the founder of Houston’s Taylor & Associates who represents the TAB � to eliminate the corporate ban, which he believes is antiquated and unconstitutionally vague. On the other side, state Rep. Craig Eiland, D-Galveston, says he will sponsor legislation modeled after the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold). Eiland’s bill, among other things, will seek to ban the use of corporate and union money for issue ads that are distributed within 60 days of an election, refer to a candidate or his opponent, and reach a substantial number of voters in that candidate’s district. This proposed legislation, Eiland says, will prohibit so-called issue ads that don’t use words such as “elect” or “defeat” or “vote for” a particular candidate, but, in reality, are express advocacy masquerading as issue ads. “I hope this bill will strengthen the wall between corporate money and political campaigns,” Eiland says. � Mark Donald Labor and Employment Injured and laid-off workers, and the costs of caring for them, likely will spark some of the major battles between employers and employees in the 79th Texas Legislature. The fight over workers’ compensation is already in full swing. Bill Hammond, president of the Texas Association of Business (TAB), says workers’ comp reform is one of his organization’s top three priorities. TAB wants “employers and insurance companies to be able to create a network to provide medical services to injured workers.” He blames “out of control” medical costs in Texas on over-utilization by certain providers within the system. Rick Levy, legal director of the Texas AFL-CIO and a partner in Austin’s Deats and Levy, frames the issue as pitting employees’ freedom to choose their own physicians against employers’ ability to make workers see a company-chosen doctor. But the fight will go beyond the role of managed care in workers’ comp; he says it likely will include examination of the structure and role of the Texas Workers’ Compensation Commission (TWCC), reconsideration of whether institutional representation of workers and employers will continue on the TWCC, a look at dispute resolution processes, and an analysis of the growing number of employers who choose not to carry workers’ comp. If the reports issued by some of the legislative committees considering the issue are any indication, he’s right. The Senate Select Interim Committee on Workers’ Compensation issued its report Dec. 1, 2004. Some of its recommendations include defining “medical necessity” in a way that encourages treatment based on evidence and focuses on an employee’s return to work; adopting treatment guidelines; allowing workers’ compensation networks, certified by the state, which issue report cards based on treatment outcomes; creating a treatment planning process; enhancing income benefits; creating a single commissioner to run the workers’ comp agency (three committee members wrote letters opposing this); amending the Insurance Code’s definition of “rate “; and requiring workers’ comp insurance carriers to file their underwriting guidelines with the Texas Department of Insurance. The Sunset Commission issued its report in September 2004. It recommends eliminating the TWCC, re-assigning its responsibilities to the Texas Department of Insurance and the Texas Workforce Commission, and creating an Office of Employee Assistance. It also recommends aligning workers’ comp as closely as possible with group health insurance regulation (for example, requiring that a primary care provider order all services, allowing functional capacity assessments for non-injured workers, and authorizing carriers to obtain a physical exam for lost-time cases). Finally, it issued miscellaneous recommendations such as increasing the cap on income benefits and reducing the waiting period for receiving payment for the first week of benefits. On Nov. 23, 2004, the TWCC issued its own legislative recommendations, which include items of particular interest to lawyers: prohibiting courts from reversing a TWCC administrative decision (for example, in favor of an injured worker) based on a party’s failure to timely respond to a request for admissions in the court proceeding; switching from modified de novo review to a substantial-evidence standard when courts review a workers’ comp administrative decision; and requiring that courts admit the evidence and record from TWCC contested case hearings and TWCC appeals’ panel decisions unless the previous decision-makers erred in admitting such evidence. In addition to taking on workers’ comp, employers also are looking for ways to control their other health-care costs. Another TAB legislative priority is health insurance, and Hammond says the organization has proposed five pieces of legislation: 1.disclosing treatment costs coupled with assessing only reasonable charges; 2.implementing mandatory reporting of medical errors combined with freedom from liability; 3.allowing insurers to offer plans with limited out-of-network coverage and to limit time and cost of services; 4.banning health-care providers from billing patients for services in excess of negotiated charges and from waiving co-payment; and 5.disallowing health-care providers from referring a patient to a facility in which the provider has a financial stake. Unemployment insurance will be another area of contention. Hammond says TAB wants to reduce fraud and overpayment, while Levy says the AFL-CIO’s action items include: 1.changing the time frame used to calculate eligibility for unemployment insurance; and 2. making those with a history of part-time work who say they’re available for such in the future eligible for unemployment insurance. Levy also believes there will be a bill to raise the minimum wage, but that his organization will have to take defensive measures � on issues ranging from unions’ communications with members to altering burdens of proof in discrimination cases to efforts to repeal prevailing wage laws in public contracting � “as I’m sure some will feel that the political stars are aligned to cut back on workers’ protections.” Kenneth H. Molberg, president of the Texas Employment Lawyers Association, hopes to see bills banning pre-dispute waivers of the right to a jury trial and on employers including mandatory arbitration clauses as a condition of employment. He says some employers are drifting away from arbitration, because they’re finding it more costly than court proceedings, so then they attempt to get employees to waive jury trials. “There are some people out there who don’t want peers deciding cases.” Meanwhile, the State Bar of Texas Labor and Employment Law Section will be sitting out these legislative battles. John V. Jansonius, chairman of the Bar section and a labor and employment partner in Akin Gump Strauss Hauer & Feld in Dallas, says that, because the section has lawyers on both the plaintiff/union and defense/management sides of the docket, they “don’t take a position on legislative issues. We try to get along with each other.” � Anne K. McMillan Municipal Law Wary would be the best word to describe the attitude of Frank Sturzl, executive director of the Texas Municipal League, about the outlook for city governments during the upcoming legislative session. “The number of bills we have to oppose grows each year,” says Sturzl. “Cities do a lot of things people want to stop. When people can’t win their way with city councils, the tendency is growing for them to go to the state Legislature.” When lawmakers convene the 79th legislative session in Austin on Jan. 11, Sturzl � who as head of TML, a nonprofit member agency, supervises five lawyers � says the highest priority for the 1,000 cities he represents will be to defeat the legislation touted by Gov. Rick Perry’s office to cap local property tax appraisals and revenues. “I’ve never seen more city officials energized to combat something,” says Sturzl. “Our real strength is grassroots. We’ll bring in as many mayors as possible.” The legislation, which has not yet been filed, is expected to be added to a school finance bill, Sturzl says. At the governor’s office, spokesman Robert Black makes no bones about his boss’ support for appraisal caps. “It’s the only way we are going to have meaningful property tax relief in this state.” Walt says the governor encourages organizations such as the Texas Municipal League to “stop thumping their chest,” and come down and talk to his office. Where will the governor garner support for the bill, and more specifically, who will be the lobbying representatives for those interests? “It’s premature to start talking who’s carrying water in what chamber at this point,” says Walt, “but the governor is willing to work with all interested parties. If we are going to have a debate about school finance, then it has to be tied up in property tax relief.” � Miriam Rozen Real Estate, Probate and Trust Law The proposed legislation submitted by the Real Estate, Probate and Trust Law Section (REPTL) to the Legislative Policy Subcommittee of the State Bar of Texas did not include any pure real estate statutory changes. However, that doesn’t mean real estate lawyers can sit this session out, especially with school finance reform on the agenda. Ron Walker, director of legal affairs for the Texas Association of Realtors, says that, with the Legislature trying to lower property taxes while maintaining or even increasing funding for schools, both property and business owners could be affected: “So, here I am as an attorney. I own a house. [They] lower my property tax � great. But as a sole proprietor, business owner, do my taxes go up?” Texas Land Title Association general counsel Tom Rutledge, an administrative law shareholder in Austin’s Sneed, Vine & Perry, says that, while his organization hasn’t taken any hard and fast positions yet, it is interested in any tax bills that might affect real estate. Richard L. Spencer, chairman of the Texas College of Real Estate Attorneys (TCREA), which he describes as an independent group of real estate lawyers that provides input on pending real estate legislation, adds that his group is “concerned about some of the changes that may be made in, say, franchise taxes on limited partnerships, because part of [the] practice is determining what sorts of entities are best for holding real property.” Other than dealing with any school finance bills that arise, Walker expects some “tweaking” of bills on property insurance: the use of credit scoring and claims history by property insurers, rate structure issues, and management fees. He also predicts that legislators will continue to wrestle with the issue of water rights. Spencer also wants to see a number of “technical corrections” to state statutes. TCREA supports a move to allow parties to contract for a different statute of limitations on earnest-money contracts than currently allowed and to repeal 11.008 of the Texas Property Code � passed as House Bill 2930 in the 78th legislative session � which allows people to strike their Social Security or driver’s license number from deeds. Spencer says varying interpretations of 11.008 by county clerks around the state are causing headaches: “We don’t think it serves any useful purpose, and we’re going to be lobbying for its repeal.” Additionally, his group opposes a move to amend the definition of the “practice of law,” which he says would allow mortgage companies to prepare their own deeds and loan documents for residential mortgage closing transactions. TCREA is monitoring a bill that would assess a transfer tax on all sales of real property in the state and another that would require those seeking to file a deed to provide a certification from the chief property appraiser that would-be filers had disclosed the purchase price to the appraiser. Spencer says the TCREA would like to see legislators adopt a Texas version of the Uniform Planned Community Act governing condo and homeowners’ associations. (The National Conference of Commissioners on Uniform State Laws promulgated the act.) Changes to guardianship, probate and trust law made up the entirety of REPTL’s proposals to the State Bar’s Legislative Subcommittee. Barbara McComas Anderson, immediate past chairwoman of REPTL and a Dallas solo, says a big portion of REPTL’s routine package of legislation is an attempt to incorporate worthwhile provisions from the Uniform Trust Code into the Texas Trust Code, to clarify the rights and responsibilities of all parties, as well as the role of the courts. She says REPTL’s suggestions are a form of “cherry picking,” because Texas trust law has been a national leader. In terms of guardianship and probate, she says REPTL did a lot of work during the 2003 legislative session and now are simply looking to tighten up those changes. � Anne K. McMillan Tort Reform Still reeling from the effects of a major tort reform bill that passed the Texas Legislature in 2003, the Texas Trial Lawyers Association would love a non-eventful session this time around. “We would hope that nothing would come up. I don’t know what else they [tort reformers] can do after last session,” says Guy Choate, the new TTLA president. But for the 79th session, tort reformers are eying asbestos litigation. State Sen. Kyle Janek, R-Houston, says he plans to file a bill that would slim the docket of asbestos suits in state court in Texas by setting up a system to separate plaintiffs who show impairment following asbestos exposure from those who have been exposed to asbestos but show no impairment. Janek says the bill he plans to file differs in several ways from the asbestos litigation bill he filed in 2003 that did not win approval in the Texas Senate. Specifically, Janek says, his plan for handling asbestos suits in Texas would waive the statute of limitations for plaintiffs who have been exposed to asbestos but show no impairment, and also mandate that the plaintiffs would not lose their health insurance simply because they have been exposed to asbestos. It also would allow people with cancer stemming from asbestos exposure to seek a speedy trial, he says. Janek says he made the changes in the bill after hearing complaints from plaintiffs lawyers about the bill that wasn’t approved by the Senate in 2003. Those changes may not be enough for the TTLA. Choate, a partner in Webb, Stokes & Sparks in San Angelo, says he isn’t privy to all the details of the bill Janek intends to file, but Choate says it’s fair to say the TTLA opposes it based on what he and others have heard about the proposal. “We are interested and willing to sit down and negotiate what they perceive as any problems in the practice, but we can’t do it unless they are willing to tell us what they want to do,” says Choate. Janek says the plaintiffs bar can either work with him to come up with a bill they can live with or “suffer the consequences.” Asbestos litigation reform is the top issue this session for Texans for Lawsuit Reform, the group that was a prime mover behind H.B. 4, last session’s tort reform measure that set caps on non-economic damages in medical malpractice suits. [ See "Power & the Prize," Texas Lawyer , June 16, 2003, page 1.] Asbestos litigation “is the mother of all lawsuit abuse,” says Ken Hoagland, communications director for Texans for Lawsuit Reform. “We hope to enact legislation that requires objective medical criteria to be met before lawsuits go forward, which we believe will dramatically reduce the incidence of unimpaired claimants in the system,” he says. “In other words, if you are sick � if you are truly ill � you can sue. If you are truly healthy, you cannot sue but your right to sue would be preserved.” Asbestos litigation reform also is the top issue for the Texas Civil Justice League, says George Christian, the group’s general counsel. Christian says the group is geared up for a fight over asbestos litigation reform. “We’re ready,” Christian says. Even though the U.S. Senate Judiciary Committee also is looking at asbestos litigation � incoming chairman Arlen Specter, R-Penn., says he will seek approval of a measure to end asbestos litigation in return for a trust fund to compensate victims � Christian says the Texas Civil Justice League isn’t counting on any action by Congress. “We’re not going to wait and certainly not depend on Congress to solve it, and if they do something it may not apply to our situation, so we are going to go forward,” he says. In other tort reform measures, state Rep. Corbin (Van Arsdale, R-Houston, filed H.B. 107, which would (add a chapter to Title 6 of the Civil Practice & Remedies Code to prohibit civil suits against restaurants or trade associations in which the plaintiff alleges he became (obese after eating a particular kind of food. (The (cause of action became an issue after litigation was filed against McDonald’s in 2002.) Van Arsdale did not return a telephone call seeking comment before presstime on Jan. 6. Austin plaintiffs lawyer Michael Slack, a partner (in Slack & Davis who is monitoring H.B. 107 for the (TTLA, says he wants to make sure the bill does not (harm some well-established causes of action in (which plaintiffs allege they were injured by contaminated or adulterated food or dietary supplements. “My major concern is to ensure that those particular areas are carved out for any type of liability immunity . . . for the general proposition of what I call generic obesity food suits,” Slack says. Choate says the TTLA has not yet formally studied H.B. 107. � Brenda Sapino Jeffreys

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