As executives of companies headquartered in Texas, we've had front row seats to our state’s remarkable economic success story. With the world's eighth-largest economy, Texas has become a magnet for businesses seeking growth, opportunity and common-sense governance. But there's a serious threat to the Lone Star State’s continued prosperity: our deteriorating legal climate. The good news? We're on the cusp of meaningful reform that will protect Texas' position as America's best state for business.
Unfortunately, our companies’ futures and the future of companies across Texas are at risk thanks to a troubling trend in Texas courtrooms. In the past decade, our insurance costs have skyrocketed. These spiraling costs drain resources that should go toward infrastructure investment, training and employee wages and benefits.
The problem? A surge in meritless lawsuits and astronomical verdicts untethered from the facts of the case and economic reality. Texas now leads the nation in "nuclear verdicts" – jury awards exceeding $10 million. Many of these cases involve inflated medical bills that far exceed actual costs, a practice that distorts both economic and non-economic damages. When medical providers work on contingency and inflate bills knowing they'll never be submitted to insurance, it creates a false picture of damages that drives up verdicts and settlement costs.
The volatility and unpredictability of the Texas legal system remind a lot of business owners of the "Jackpot Justice" era of the 1970s and 1980s. While progress has been made since then, we're sliding backward into what some call the "Wild West" of litigation. This lopsided lawsuit environment affects every Texan through higher costs for goods and services, reduced business investment, and fewer jobs.
Fortunately, Texas legislators understand the gravity of this situation. They've crafted a two-step solution that will help restore balance while ensuring injured parties receive fair compensation. The first step, Senate Bill 29, which has been signed into law by Governor Abbott, strengthens Texas' corporate governance laws and complements our new specialized Business Court system that launched last September.
The crucial second step is Senate Bill 30, which would bring needed transparency to personal injury litigation. The bill ensures that medical damages reflect real-world costs rather than inflated bills that exist only on paper, closing loopholes that have encouraged manipulation of the system at the expense of Texas consumers and businesses.
This isn't about denying compensation to legitimately injured parties. We all want to be able to access the courthouse to redress injuries or wrongs done to us. It's about restoring predictability and fairness to a system that's become dangerously imbalanced. The current abuses in our legal system threaten not just individual businesses but the entire economic future of our state.
Thanks to the leadership of Governor Abbott, Lt. Governor Patrick and Speaker Burrows, the Texas Legislature is in the process of fixing this problem. Our state’s political leadership agrees that SB 29 and SB 30 together will help restore sanity to our civil justice system while maintaining appropriate remedies for those truly harmed by others' negligence. These reforms will give businesses the predictability they need to grow and create jobs while ensuring Texas remains the nation's best state for business.
No one wants to think of what could happen if these problems aren’t fixed, but the prospect of Texas' economy being derailed by an out-of-control litigation system is simply unacceptable. By passing both these bills, legislators can ensure our state remains a beacon for business while protecting legitimate plaintiffs' rights. That's the Texas way – balanced, fair and focused on innovation, new business development, economic growth, and good-paying jobs. With the end of the 89th legislative session rapidly approaching, the time for action is now.
Isbell is the owner and CEO of Texas TransEastern, a multi-state fuel carrier headquartered in Houston. Rowling is Chairman of TRT Holdings, a private holdings company headquartered in Dallas.
