HBA-TBM H.B. 3125 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3125 By: Bosse Civil Practices 3/20/2001 Introduced BACKGROUND AND PURPOSE The Texas legislature has enacted limitations on the assessment of punitive damages and the threshold for joint and several liability. Manufactures and sellers who fail to warn the public of risks posed by defective products and who fail to recall the products are not excepted from the limitations. House Bill 3125 sets forth civil and criminal penalties for manufacturers and sellers who do not inform the public of defective products and knowingly market and sell such products. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Supreme Court of Texas in SECTIONS 3.01 and 3.02 of this bill. ANALYSIS House Bill 3125 amends the Civil Practice and Remedies Code to set forth provisions regarding an action for recovery of damages arising out of personal injury or death caused by a defective product in which the claimant proves by a preponderance of evidence that the defendant engaged in deceptive conduct to prevent the disclosure of a known risk to public safety (Sec. 98.002). The bill prohibits a claimant from filing such an action before the claimant provides evidence that the defendant engaged in such conduct (Sec. 98.003). The bill provides that an action cannot be filed against a seller of a defective product who did not engage in deceptive conduct and after becoming aware of a risk of a defective product acted reasonably to make the public aware of the risk. A seller who incurs damages as a result of defending against an action has, against a manufacturer or other seller who engages in deceptive conduct, a right to indemnification for damages incurred (Sec. 98.005). The bill provides protection against termination or retaliation for an employee who acts to make any governmental agency or the public aware of a risk to public safety (Sec. 98.006). The bill sets forth provisions regarding the accrual of a cause of action for a case involving personal injury or death (Sec. 16.003). The bill provides that provisions relating to proportionate responsibility do not apply to an action regarding deceptive practices that are detrimental to public safety as set forth in this bill (Sec. 33.001). The bill provides that each liable defendant who is liable for deceptive conduct is jointly and severally liable for the damages recoverable by the claimant (Sec. 33.013). The bill provides that exemplary damages to be paid by a liable defendant are not limited if the defendant is liable of deceptive conduct that endangers the public except by another law, the constitution of Texas, or the constitution of the United States (Sec. 41.008). The bill provides that in determining the amount of exemplary damages, the trier of the fact is required to consider the evidence, if any, relating to the extent to which the defendant engaged in deceptive conduct (Sec. 41.011). The bill provides that provisions relating to product liability do not apply to an action against a defendant who practiced deceptive conduct (Secs. 82.005 and 82.006). The bill amends the Penal Code to provide that an offense of deadly conduct is a felony of the second degree if the trier of fact determines beyond a reasonable doubt that the conduct engaged in by the actor was deceptive conduct that endangered the public (Sec. 22.05). The bill provides that a person commits a felony of the second degree if the person engages in deceptive conduct with regard to a risk posed by a consumer product unless a person suffers serious bodily injury, in which event it is a felony of the first degree (Sec. 22.09). The bill provides that it is an offense if in the course of business a person intentionally, knowingly, recklessly, or with criminal negligence sells a commodity with a defect known to the person. The bill also specifies the grades of offenses for a person who engages in malicious conduct endangering public safety as defined in this bill and sells an adulterated or mislabeled commodity or a commodity with a defect known to the actor (Sec. 32.42). The bill provides that a person commits an offense if the person with criminal negligence makes a misleading representation or fails to disclose any information to a governmental agency with respect to a risk to public safety created by a product and sets the grades of offenses (Sec. 37.14). The bill requires the Supreme Court of Texas not later than January 1, 2002 to adopt and amend rules governing practice and procedure to prevent the courts of this state from being used or attorneys practicing in this state from acting in a manner that constitutes a danger to the public health and safety and constitutes deceptive conduct (SECTIONS 3.01 and 3.02). EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.