Chapter 20-2 Considerations Before Pleading Level 1

• Jurisdiction: United States

20-2 Considerations Before Pleading Level 1

Since this book is addressed specifically to Texas business tort and contract litigation, our focus for Level 1 is directed to expedited actions in business cases seeking only monetary relief of $100,000 or less. Expedited actions were first introduced in Texas in 2013.⁹ Before pleading into this category of relief under Tex. R. Civ. P. 47(c)(1) and specifying this discovery level under Tex. R. Civ. P. 190.2, be aware of the potential advantages and disadvantages.¹⁰

Mandatory for Defendants. A Level 1 discovery plan is mandatory for actions seeking only monetary relief of $100,000 or less (except for cases governed by the Family Code, the Property Code, the Tax Code, or Chapter 74 of the Civil Practice & Remedies Code).¹¹ A party does not have the ability to simply opt out of Level 1 by filing a request for a Level 3 discovery control plan, although the plaintiff can opt out of the expedited actions process by filing a timely amended pleading seeking non-monetary relief or damages greater than $100,000.¹² It is also possible for any party, including a defendant, to be removed from the expedited actions process on a motion and showing of good cause.¹³ For the plaintiff, this means that the highly limited and less costly discovery permitted by Level 1 may aid in getting the case to trial sooner and more affordably, and it may still be possible to revert to Level 2 or 3 if the need for more discovery becomes obvious while still in the discovery process.
Short Discovery Period. Level 1 restricts the parties to a relatively short discovery period, starting on the day suit is filed (which means discovery requests can be served with the petition) and continuing "until 180 days after the date the first request for discovery of any kind is served on a party"¹⁴ (allowing the 180-day discovery period to start running on the day the defendant is served with the suit). Keep in mind that parties must serve discovery requests far enough in advance of the deadline to allow for a response within the discovery time period.¹⁵
Restrictions on Discovery. Level 1 restricts each party to "no more than six hours in total to examine and cross-examine all witnesses in oral depositions," expandable to ten hours by agreement or additional hours by court order.¹⁶ There are also restrictions on the number of interrogatories,¹⁷ requests for production,¹⁸and requests for admissions¹⁹ allowed, although one additional request for disclosure is allowed to obtain discovery of "all documents, electronic information, and tangible items that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses."²⁰
One-Sided Limit on Recovery. A plaintiff who opts in to the expedited actions process will be limited to a maximum recovery of $100,000, even if the jury were to return a verdict for more than that amount.²¹ (It may be possible, however, to ask the jury to assess more than $100,000 in damages, as long as the net recovery after reduction for the plaintiff's percentage of responsibility does not exceed $100,000.).²² A defendant who files a counterclaim for more than $100,000 is not subject to the same limitation on recovery.²³ (Due to this one-sided limitation on recovery, we recommend that plaintiff clients provide written acknowledgement of their understanding and authorization to proceed.)²⁴ Although it is possible for a plaintiff to amend the petition to plead out of the mandatory process, any such amendment must be filed by the earlier of 30 days after the end of the discovery period or 30 days before trial; after that date, amendment may only be done with leave of court, to be granted only if good cause is shown that outweighs any prejudice to an opponent.²⁵ A case for breach of contract, or any case for which attorney fees are recoverable by the prevailing party,²⁶ highlights the potential effect of a one-sided cap of $100,000 for recovery by the plaintiff. Even if the actual damages are clearly less than $100,000, the verdict limitation set forth in Tex. R. Civ. P. 169(a)(1) constricts "damages of any kind, penalties, costs, expenses, prejudgment interest, and attorney fees." This means that, in an expedited case, a ceiling exists on recovery of attorney fees by a prevailing plaintiff but not by a prevailing defendant, which may have an effect on settlement leverage as attorney fees continue to climb for both sides in a litigated case.²⁷ Note, however, that recovery for plaintiffs is limited on a per-claimant rather than per-side basis,²⁸ meaning that a defendant may face a judgment exceeding $100,000 when faced with multiple claimants.²⁹
Expert Witness Considerations. If the case is one for which either side will need expert testimony, be aware of the early expert designation deadlines in effect. The expedited action rules do not alter the stated time periods for designation of experts provided

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