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In Peals, this Court found that if Section 18.001 did not apply in federal court, some personal injury plaintiffs could be "priced out" of the federal judiciary and "may settle on less advantageous terms compared to their state counterparts."
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Civil No. 4:20-cv-022-KPJ
2021-01-06
Greg PEALS, Plaintiff, v. QUIKTRIP CORPORATION, d/b/a Oklahoma Quicktrip Corporation, et al., Defendants.
Aaron A. Herbert, Pro Hac Vice, Marissa Ann Maggio, Law Firm of Aaron A. Herbert PC, Dallas, TX, for Plaintiff. Christopher Murray Blanton, Peavler Briscoe, Bryan Kyle Briscoe, The Peavler Group - Grapevine, Grapevine, TX, for Defendants.
Aaron A. Herbert, Pro Hac Vice, Marissa Ann Maggio, Law Firm of Aaron A. Herbert PC, Dallas, TX, for Plaintiff.
Christopher Murray Blanton, Peavler Briscoe, Bryan Kyle Briscoe, The Peavler Group - Grapevine, Grapevine, TX, for Defendants.
MEMORANDUM OPINION AND ORDER
KIMBERLY C. PRIEST JOHNSON, UNITED STATES MAGISTRATE JUDGE Pending before the Court is Defendant QuikTrip Corporation's ("Defendant") Motion to Strike (the "Motion") (Dkt. 15), wherein Defendant seeks to strike Plaintiff Greg Peals' ("Plaintiff") affidavits served pursuant to the Court's Order Governing Proceedings (Dkt. 7). See Dkt. 15 at 1. On May 21, 2020, Plaintiff filed his response (Dkt. 21), to which Defendant filed a reply (Dkt. 23). Upon consideration of the pleadings and applicable authorities, the Court finds the Motion (Dkt. 15) is hereby GRANTED IN PART and DENIED IN PART .
I. BACKGROUND
Plaintiff alleges he visited Defendant's gas station in Little Elm, Texas, on January 15, 2018, where he slipped and fell. See Dkt. 9 at 3. Plaintiff maintains "[t]here were no warnings posted or display[s] warning shoppers about the condition," which caused Plaintiff to fall and suffer "permanent and disabling injuries." See Dkt. 9 at 3, 5. On December 9, 2019, Plaintiff filed this lawsuit against Defendant in the 158th Judicial District Court of Denton County, Texas, asserting premises liability, negligence, and gross negligence claims. See Dkt. 1 at 2; Dkt. 1-2 at 3. On January 9, 2020, Defendant removed the action to this Court. See Dkt. 1. Pursuant to the Court's Order Governing Proceedings (Dkt. 7), Plaintiff served Defendant his initial disclosures and discovery responses, wherein Plaintiff produced eleven (11) affidavits spanning nearly two hundred (200) pages (the "Affidavits"). See Dkt. 15 at 7; see generally Dkt. 15, Exs. 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12. The affiants are health care providers and custodians of health records, all attesting to the nature of Plaintiff's health issues, the treatment Plaintiff has undergone, the costs of Plaintiff's services, or a combination thereof. See generally Dkt. 15, Exs. 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12.
On May 4, 2020, Defendant filed the present Motion (Dkt. 15), wherein Defendant requests the Court strike the Affidavits, "ostensibly" served pursuant to TEX. CIV. PRAC. & REM. ANN. § 18.001, "in their entirety." Dkt. 15 at 1, 16. Defendant asserts three (3) bases for striking the Affidavits: (1) Section 18.001 does not apply in federal courts sitting in diversity; (2) Plaintiff did not comply with Section 18.001's timing provision; and (3) Plaintiff did not comply with Section 18.001's notice provision. See id. Defendant further moves that, should the Court determine Section 18.001 applies in federal courts, the Court should extend Defendants' deadline to file counter-affidavits. See id. at 16.
II. LEGAL STANDARD
Under the Erie doctrine, "federal courts apply substantive state law when adjudicating diversity-jurisdiction claims, but in doing so apply federal procedural law to the proceedings." Cates v. Sears, Roebuck & Co. , 928 F.2d 679, 687 (5th Cir. 1991) (describing the holding in Erie R.R. v. Tompkins , 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ).
As a general matter, a federal court sitting in diversity should not apply state law if a Federal Rule is in direct conflict with the state law and the Federal Rule does not violate the Rules Enabling Act. See Klocke v. Watson , 936 F.3d 240, 244 (5th Cir. 2019). However, "some modest exceptions have been made when the forum rule reflects a state substantive law or policy." ARTHUR R. MILLER & CHARLES A. WRIGHT , 19 FEDERAL PRACTICE AND PROCEDURE § 4512 nn.40, 57 (3d ed.) (October 2020 update) (compiling cases). "Thus, even though the passage of the Federal Rules of Evidence in 1975 rendered the Erie analysis inapplicable to most evidentiary questions in diversity cases, it did not have the effect of supplanting all state law evidentiary provisions with federal ones." Wray v. Gregory , 61 F.3d 1414, 1417 (9th Cir. 1995) (emphasis original).
To determine whether the state law reflects a substantive state policy, federal courts look to the final decisions of the state's highest court. See Shanks v. AlliedSignal, Inc. , 169 F.3d 988, 993 (5th Cir. 1999). If there is no ruling from a final decision of the state's highest court, "it is the duty of the federal court to determine as best it can, what the highest court of the state would decide." Lampton v. Diaz , 661 F.3d 897, 899 (5th Cir. 2011).
Federal courts also evaluate the state law under the U.S. Supreme Court's Erie "touchstones":
• whether the state law is outcome determinative;
• whether the state law is "bound up" with the state's substantive rights and obligations;
• whether the state law affects forum shopping behavior; and
• whether applying state law will avoid inequitable administration of the laws.
All Plaintiffs v. All Defendants , 645 F.3d 329, 335–36 (5th Cir. 2011) ; see Hanna v. Plumer , 380 U.S. 460, 468, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (forum shopping and inequitable administration); Byrd v. Blue Ridge Rural Elec. Coop., Inc. , 356 U.S. 525, 538–39, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958) (bound up); Guaranty Tr. Co. v. York , 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (outcome determinative).
In Gasperini v. Center for Humanities, Inc. , 518 U.S. 415, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996), the Supreme Court clarified that discouraging forum shopping and avoiding inequitable administration of the laws guides the application of the outcome-determinative test. See id. at 428, 116 S.Ct. 2211 ; see also All Plaintiffs , 645 F.3d at 336.
III. ANALYSIS
A. SECTION 18.001 OVERVIEW
Under Texas law, a plaintiff bears the burden of proving the actual amount, necessity, and reasonableness of her past medical expenses. See Hamburger v. State Farm Mut. Auto. Ins. Co. , 361 F.3d 875, 886 (5th Cir. 2004) ; Monsanto Co. v. Johnson , 675 S.W.2d 305, 312 (Tex. App.—Houston [1st Dist.] 1984, writ ref'd n.r.e.). "Traditionally, expert testimony was the only acceptable means of proving the reasonableness and necessity of past medical expenses." Rahimi v. United States , 474 F. Supp. 2d 825, 826 (N.D. Tex. 2006) (citing Castillo v. American Garment Finishers Corp. , 965 S.W.2d 646, 654 (Tex. App.—El Paso 1998, no pet.) ).
With the enactment of TEX. CIV. PRAC. & REM. ANN. § 18.001, the Texas Legislature permitted plaintiffs to submit affidavits to prove the necessity and reasonableness of medical expenses. See id. § 18.001; Castillo , 965 S.W.2d at 654. Specifically, Section 18.001(b) provides:
Unless a controverting affidavit is served as provided by this section, an affidavit that the amount a person charged for a service was reasonable at the time and place that the service was provided and that the service was necessary
is sufficient evidence to support a finding of fact by judge or jury that the amount charged was reasonable or that the service was necessary.
Id. § 18.001(b). The statute's remaining provisions specify timing and notice requirements, as well as the requirements for any counter-affidavits an opponent wishes to submit. See § 18.001(d)–(i).
The Texas Supreme Court, Courts of Appeals of Texas, and federal district courts have all recognized that Section 18.001 allows litigants to save substantial time and costs. See, e.g., Gunn v. McCoy , 554 S.W.3d 645, 672 (Tex. 2018) (noting Section 18.001 affidavits streamline proof of reasonableness and necessity); Ten Hagen Excavating, Inc. v. Castro-Lopez , 503 S.W.3d 463, 491 (Tex. App.—Dallas 2016, pet. denied) (observing Section 18.001 affidavits "can save the plaintiffs the expense of having to hire an expert to testify"); Ramirez v. United States , No. SA-19-cv-00072-JKP, 2020 WL 2198167, at *1 (W.D. Tex. May 6, 2020) (recognizing Section 18.001 affidavit "provides significant savings of time and cost to litigants, particularly personal injury litigants") (citation omitted).
To promote Section 18.001's efficiency goals, Texas appellate courts have held the statute requires counter-affidavits to satisfy a higher standard for admissibility, reasoning that adversaries should be discouraged from misusing Section 18.001 and frustrating its purpose. See Hong v. Bennett , 209 S.W.3d 795, 803 (Tex. App.—Fort Worth 2006, no pet.) ; Turner v. Peril , 50 S.W.3d 742, 747 (Tex. App.—Dallas 2001, pet. denied) ; In re Brown , No. 12-18-00295-CV, 2019 WL 1032458, at *3 (Tex. App.—Tyler Mar. 5, 2019, orig. proceeding) ; Wald Tinkle Packaging & Distrib., Inc. v. Pinok , No. 01-02-01100-CV, 2004 WL 2966293, at *9 (Tex. App.—Houston [1st Dist.] Dec. 23, 2004, no pet.). As the court in Turner v. Peril noted, Section 18.001(c)(2)(B) allows the offering party to submit an affidavit by a non-expert custodian, whereas Section 18.001(f) requires a counter-affidavit be made "by a person qualified to testify in contravention." 50 S.W.3d at 747.
For example, in Hong v. Bennett , the court held a chiropractor's counter-affidavit could not be used to controvert affidavits submitted by a medical doctor, radiologist, and pharmacist. See 209 S.W.3d at 804. The court reasoned the chiropractor's counter-affidavit could be used to controvert the reasonableness and necessity of services provided by a chiropractic affiant, but not the reasonableness and necessity of services provided by other healthcare professionals, even though they work in the same general industry. See id.
Similarly, in Turner , the court held an orthopedic surgeon's conclusory and vague counter-affidavit could not be used to rebut affidavits submitted by a hospital, pharmacy, chiropractor, diagnostic center, nurse anesthetist, and doctor, as these individuals and entities were not orthopedic surgeons themselves. See 50 S.W.3d at 747.
B. DIRECT CONFLICT
Defendant argues Federal Rule of Evidence 802 directly conflicts with Section 18.001, thereby precluding Section 18.001's application in federal court. See Dkt. 25 at 2. The Court agrees a conflict exists, but does not find this conflict, alone, precludes Section 18.001's application in federal court.
Defendant also contends Section 18.001 directly conflicts with Federal Rules of Evidence 701, 702, and 703. See Dkt. 25 at 2. Rules 701, 702, and 703 govern, respectively, opinion testimony by lay witnesses, testimony by expert witnesses, and the bases of an expert opinion. See generally Fed. R. Evid. 701, 702, 703. Although Defendant broadly asserts these Rules are in conflict with Section 18.001, Defendant does not describe how the conflict arises or cite to any authority addressing the conflict. See Dkt. 25 at 2. The Court has not been able to locate a case in which a court found a direct conflict between these Federal Rules and Section 18.001. Moreover, based on the plain language of these three Federal Rules, the Court does not see how a direct conflict exists. The provisions of Section 18.001 create an alternative to expert or lay testimony, not a prohibition on such testimony. The converse is true—Federal Rules 701, 702, and 703 describe the requirements of expert and lay testimony; however, they remain silent as to the validity of affidavits. As Defendant has not demonstrated a direct conflict, and the Court does not perceive a conflict, the Court need not address Defendant's unsubstantiated assertion of conflict.
Rule 802 provides: "Hearsay is not admissible unless any of the following provides otherwise: a federal statute; these rules; or other rules prescribed by the Supreme Court." FED. R. EVID. 802. Section 18.001 allows a court to admit affidavits that would otherwise be inadmissible hearsay. See Hong , 209 S.W.3d at 800 (describing § 18.001 as a hearsay exception).
As a federal district court found, "Because no similar exception exists by way of a federal statute, the Federal Rules of Evidence, or other rules prescribed by the Supreme Court, it appears Rule 802 and Section 18.001 are engaged in a head-first collision." Miley v. MMM Freight Corp. , No. 6:19-cv-00285-ADA-JCM, 2020 WL 5468828, at *3 (W.D. Tex. June 10, 2020). Other district courts in the Fifth Circuit have similarly ruled. See Ruelas v. W. Truck & Trailer & Trailer Maint. , No. PE-18-cv-2-DC-DF, Dkt. 83 (W.D. Tex. Sept. 26, 2019) (order) (finding direct conflict with Rule 802 ); Espinoza v. State Farm Mut. Auto. Ins. Co. , No. 7:19-cv-0299, 2020 WL 4333558, at *6 (S.D. Tex. July 28, 2020) (finding direct conflict with both Rules 801 and 802 ); see also Newby v. Kroger Co. , No. 3:19-cv-2510-N, 2020 WL 3963740, at *3 (N.D. Tex. July 11, 2020) (finding direct conflict with Rule 801 ); Davila v. Kroger Texas, LP , No. 3:19-cv-2467-N, 2020 WL 2331079, at *3 (N.D. Tex. May 8, 2020) (same).
But even where a conflict exists, federal courts have nevertheless applied state rules of evidence if they reflect a substantive state policy. See, e.g., Carota v. Johns Manville Corp. , 893 F.2d 448, 450–51 (1st Cir. 1990) (applying Massachusetts law to admit evidence of settlement, despite conflict with Rule 408); DiAntonio v. Northampton-Accomack Mem'l Hosp. , 628 F.2d 287 (4th Cir. 1980) (admitting evidence of prior proceeding under Virginia law); Foradori v. Harris , 523 F.3d 477, 516 (5th Cir. 2008) (applying Mississippi law to admit medical bills despite conflict with Rule 801 ); Barron v. Ford Motor Co. of Canada Ltd. , 965 F.2d 195, 198–201 (7th Cir. 1992) (applying North Carolina law despite conflict with Rules 401 and 402), cert. denied , 506 U.S. 1001, 113 S.Ct. 605, 121 L.Ed.2d 541 (1992) ; Potts v. Benjamin , 882 F.2d 1320, 1324 (8th Cir. 1989) (applying Arkansas law to exclude evidence despite conflict with Rule 401); Blanke v. Alexander , 152 F.3d 1224 (10th Cir. 1998) (applying Oklahoma law to admit evidence of liability insurance, despite conflict with Rules 401, 402, 403, and 411).
In light of these cases, the Court cannot end its inquiry after identifying a conflict. It may be that Section 18.001 is "one of those rare evidentiary rules which is so bound up with state substantive law that federal courts sitting in Texas should accord it the same treatment as state courts in order to give full effect to Texas' substantive policy." Conway v. Chemical Leaman Tank Lines, Inc. , 540 F.2d 837, 838 (5th Cir. 1976). The Court, thus, proceeds with a full Erie analysis.
C. FIFTH CIRCUIT AND TEXAS SUPREME COURT CASES
The Court begins by examining decisions from the Fifth Circuit and the Texas Supreme Court. See Shanks , 169 F.3d at 993. In its examination, the Court considers whether the Texas Supreme Court's decisions are "clearly contrary" to what the Fifth Circuit has previously defined as substantive. See Farnham v. Bristow Helicopters, Inc. , 776 F.2d 535, 537 (5th Cir. 1985) ("[In an Erie analysis,] we are to follow subsequent state court decisions that are clearly contrary to a previous decision of [the Fifth Circuit]."); F.D.I.C. v. Abraham , 137 F.3d 264, 269 (5th Cir. 1998) (holding "a contrary ruling squarely on point is required" to find a prior Fifth Circuit decision on Erie "clearly wrong"). Upon review of cases from the Fifth Circuit and the Texas Supreme Court, the Court finds that Section 18.001 is substantive under Fifth Circuit precedent, and the Texas Supreme Court's decisions are not clearly contrary to this finding.
1. Fifth Circuit Precedent
While the Fifth Circuit has yet to hold whether Section 18.001 is substantive or procedural, see Espinoza , 2020 WL 4333558, at *4, it has held on multiple occasions that state law governs what damages are available to the plaintiff, what the plaintiff must prove, and how it may be proven, for these are all substantive matters. See McCaig v. Wells Fargo Bank (Tex.) N.A. , 788 F.3d 463, 482 (5th Cir. 2015) ; Homoki v. Conversion Servs., Inc. , 717 F.3d 388, 398 (5th Cir. 2013) ; Hamburger , 361 F.3d at 884 ; Geiserman v. MacDonald , 893 F.2d 787, 793 (5th Cir. 1990) ; Ayres v. Sears, Roebuck & Co. , 789 F.2d 1173, 1175 (5th Cir. 1986).
Thus, in McCaig , the Fifth Circuit applied Texas law to determine whether the type of evidence offered could support the plaintiff's jury award. 788 F.3d at 482–84. Texas law permitted the plaintiff to recover damages for "mental anguish," which required her to establish a disruption in her daily routine or a high degree of mental pain or distress. See id. at 482. Texas law did not require the plaintiff to show physical symptoms, nor did it require her to offer expert testimony to prove her mental symptoms. Id. at 482–83. Applying this state-created framework, the Fifth Circuit affirmed the plaintiff's jury award and rejected the defendant's argument that a plaintiff must offer expert testimony. Id. at 483–84.
The Fifth Circuit applied a similar line of reasoning in Homoki , 717 F.3d 388. At issue was whether a witness's estimation of lost profits was too speculative. See id. at 399–400. Applying Texas law, the Fifth Circuit held the witness's sixteen years of experience established his competency, his estimations of lost profits had "reasonable certainty," and the witness did not need to offer additional "objective facts, figures, or data." Id. Thus, the offering party had offered "competent evidence" that bore "reasonable certainty," and, under Texas law, it did not need to submit documentation to support the witness's testimony. See id.
Other Fifth Circuit cases reinforce these precepts. See Hamburger , 361 F.3d at 884 (applying Texas law to allow lay testimony, rather than expert testimony, to prove causation); Ayres , 789 F.2d at 1175 (applying Texas law to allow circumstantial anecdotal evidence to prove causation); Geiserman , 893 F.2d at 793 (noting, under Texas law, lay testimony can sometimes establish the standard of care in a medical malpractice suit). Here, Plaintiff's lawsuit and the Affidavits bear all the hallmarks of substantive state law in action. At issue is what damages, if any, are available to Plaintiff in his slip-and-fall case (medical expenses), what he must prove (the necessity and reasonableness of those expenses), and how he can prove his damages (through affidavits made in compliance with Section 18.001). Accordingly, the Court finds that Fifth Circuit precedent indicates Section 18.001 is substantive.
2. Texas Supreme Court Precedent
The Court now reviews Texas Supreme Court precedent to locate a clear contradiction with the Fifth Circuit. The Court finds none.
a. Haygood v. De Escabedo
In Haygood v. De Escabedo , 356 S.W.3d 390 (Tex. 2011), the Texas Supreme Court addressed the amount a plaintiff covered by Medicare could recover in a personal injury action. Id. at 391. At issue was whether the plaintiff's damages could be based on the "full price" billed by his health care provider, or the "adjusted price" the provider had negotiated with the insurance company. See id. at 392–93. The Texas Supreme Court held that, under TEX. CIV. PRAC. & REM. ANN. § 41.0105, the plaintiff was not entitled to the full price billed by the health care provider. Id. at 398. Because the plaintiff and her insurance company only paid the lower, adjusted price, allowing the plaintiff to recover the full price would result in an unwarranted "windfall." Id.
Section 18.001 surfaces in Haygood as a secondary discussion. The plaintiff argued that, if the Texas Legislature intended to limit his recovery, it would have not only amended the statute upon which his suit was based—Section 41.0105—but also Section 18.001. Id. at 397. The court rejected the plaintiff's argument, describing Section 18.001 as "purely procedural, providing for the use of affidavits to streamline proof of the reasonableness and necessity of medical expenses." Id.
In its Motion and Reply, Defendant relies on the phrase "purely procedural" to argue Section 18.001 does not apply in federal courts. See Dkt. 15 at 10–12; Dkt. 25 at 2. The Court declines to accept this argument. Under the United States Supreme Court's directive, the Court cannot simply stop at how a state court labels an area of law. In Guaranty Trust , the United States Supreme Court ruled that a state court's characterization of substance and procedure is "immaterial" to an Erie analysis, as some laws labeled procedural under state law would nonetheless be substantive under the Erie doctrine. 326 U.S. at 109, 65 S.Ct. 1464.
For example, under Texas law, statutes of limitations are procedural. See In re: BP P.L.C. Sec. Litig. , 51 F. Supp. 3d 693, 697 (S.D. Tex. 2014) (citing Robinson v. Crown Cork & Seal Co., Inc. , 335 S.W.3d 126, 141 (Tex. 2010) ). Accordingly, in a Texas choice of law analysis, Texas courts do not consider statute of limitations when they evaluate substantive law, unless an exception applies. See id. (citing Hill v. Perel , 923 S.W.2d 636, 639 (Tex. Civ. App.—Houston [1st Dist.] 1995, no writ) ). But even though the Supreme Court of Texas considers statutes of limitations to be procedural, federal courts are required to categorize them as substantive. See Vaught v. Showa Denko, K.K. , 107 F.3d 1137, 1145 (5th Cir. 1997) ("[T]he Supreme Court has stated that generally, for diversity actions, a federal court should apply not only state statutes of limitation but also any accompanying tolling rules.") (citing Walker v. Armco Steel Corp. , 446 U.S. 740, 750–53, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980) ); Hensgens v. Deere & Co. , 869 F.2d 879, 880 (5th Cir. 1989) ("In diversity cases, of course, federal courts apply state statutes of limitations ....").
As such, the Court must look beyond the phrase "purely procedural." See Grover v. Government Employees Insurance Company , 2019 WL 2329321, at *2 ("The fact that Section 18.001 sets forth procedure, however, is not the end of the inquiry."); Butler v. United States , No. 3:15-cv-2969-M, Dkt. 41 at 3–4 (N.D. Tex. June 2, 2017) (order) (rejecting "the notion that merely because the Texas Supreme Court characterizes a statute as procedural precludes its application in ... federal court").
Upon deeper review of Haygood , the Court finds the Texas Supreme Court primarily describes Section 18.001 in substantive ways. Haygood recognizes in a personal injury action, a plaintiff can recover "the reasonable expenses for necessary medical care." Id. at 391. The court further notes affidavits submitted under Section 18.001 will "streamline the proof of the reasonableness and necessity of medical expenses," though such affidavits do not automatically "establish that the billed charges are reasonable and necessary." 356 S.W.3d at 391, 397. From these statements, the Texas Supreme Court acknowledges Section 18.001 governs how a plaintiff can prove the necessity and reasonableness of her medical expenses, placing it squarely in the substantive box. See Homoki , 717 F.3d at 398 ("[S]tate law governs what damages are available for a given claim and the manner in which those damages must be proved.") (emphasis added). There is nothing in the Haygood opinion that is "clearly contrary" to Fifth Circuit precedent. See Farnham , 776 F.2d at 537.
b. Gunn v. McCoy
The Court reaches the same conclusion with respect to Gunn v. McCoy , 554 S.W.3d 645 (Tex. 2018). In Gunn , the plaintiff prevailed in his medical malpractice suit against a physician and a medical practice group. Id. at 657. To prove the plaintiff's medical expenses were reasonable, the plaintiff submitted affidavits from subrogation agents who worked for health insurance carriers. Id. at 672. At issue was whether affidavits from subrogation agents could establish the necessity and reasonableness of medical expenses under Section 18.001(c)(2)(B). Id. The Texas Supreme Court held in the affirmative. Id.
As in Haygood , the Texas Supreme Court in Gunn described affidavits served under Section 18.001 as "purely procedural." 554 S.W.3d at 673. But the court continued, explaining that affiants from the insurance industry can establish the necessity and reasonableness of medical expenses, meaning a plaintiff need not submit an affidavit from her health care provider:
[I]t is not uncommon or surprising that a given medical provider may have no basis for knowing what is a "reasonable" fee for a specific service.... While hospitals may devote significant time and effort to establishing and updating their list prices, they generally establish those prices with the clear expectation they will be paid only a portion of them.... Insurance companies keep records and databases of both the list prices and the actual prices of specific treatments and procedures .... Thus, with national and regional bases on which to compare prices actually paid, insurance agents are generally well-suited to determine the reasonableness of expenses.... And, for better or for worse, in the context of our health care system, what is "necessary" is often heavily influenced by insurance companies and by what treatments and procedures they are willing to cover.
Id. at 673–74. Thus, Gunn actually expands the methods by which a plaintiff can prove her damages. See id. at 674. Under the Erie doctrine, the method by which a plaintiff proves her case is substantive. See Homoki , 717 F.3d at 398. Gunn appears to underscore, rather than undermine, the substantive nature of Section 18.001.
D. THE COURT'S "ERIE GUESS"
Even though the Court finds Section 18.001 to be substantive under Fifth Circuit precedent, for the sake of thoroughness, the Court will make an " Erie guess." In making an Erie guess, the Court determines, as best as it can, how the Texas Supreme Court would rule on this issue. See Lampton , 661 F.3d at 899.
Ultimately, the Court predicts that Texas's highest court would hold Section 18.001 is substantive. The Court concludes, based on the plain language of Section 18.001 and the decisions in Haygood and Gunn , the Texas Supreme Court would agree the statute expands the type of evidence allowed to prove necessary and reasonable medical expenses. See also Butler , No. 3:15-cv-2969-M, Dkt. 41 at 3–4 (concluding "Texas law governs how the Plaintiff may prove her case, and therefore, Section 18.001 applies to permit the admission of the contested affidavits...."). Under this assumption, the Court "guesses" the Texas Supreme Court would agree Section 18.001 is substantive under the Erie doctrine.
E. THE ERIE CONSIDERATIONS
Out of an abundance of caution, the Court will also consider Section 18.001 under the two Erie considerations articulated by the United States Supreme Court: (1) whether categorizing Section 18.001 as procedural is outcome determinative; and (2) whether Section 18.001 is "bound up" in a party's rights and obligations. Gasperini , 518 U.S. at 427, 116 S.Ct. 2211 ; see Hanna , 380 U.S. at 468, 85 S.Ct. 1136 ; Byrd , 356 U.S. at 538–39, 78 S.Ct. 893 ; Guaranty Tr. , 326 U.S. at 109, 65 S.Ct. 1464.
1. Outcome-Determinative Test
The "essence" of Erie is to ensure a litigation's outcome in federal court is substantially similar if it were tried in state court. See Guaranty Tr. , 326 U.S. at 109, 65 S.Ct. 1464. Accordingly, a federal court must ask itself "whether application of the rule would make so important a difference to the character or result of the litigation that failure to enforce it would unfairly discriminate against citizens of the forum State." Hanna , 380 U.S. at 468 n.9, 85 S.Ct. 1136. Put another way, the Erie doctrine exists to afford the parties equal protection, thereby requiring federal courts to consider how their decision will influence forum shopping and the administration of the laws. See id. at 467–68, 85 S.Ct. 1136.
a. Forum shopping
The forum shopping factor weighs in favor of finding that Section 18.001 is substantive. Under this factor, federal courts examine the differences between the state and federal rule, ascertaining whether such differences are "scant," or have any relevance to the choice of forum. Id. at 469, 85 S.Ct. 1136. Given Section 18.001's effect on the costs of litigation, the differences between Section 18.001 and Federal Rule of Evidence 802 can hardly be described as "scant."
As multiple state and federal courts have noted, the Texas Legislature enacted Section 18.001 to make it easier for a party to prove its damages, resulting in "significant savings of time and cost to litigants, particularly in personal injury cases." See, e.g., Turner , 50 S.W.3d at 746 ; Ruiz v. Minh Trucking, LLC , No. SA-19-cv-01191-DAE, 2020 WL 5026872, at *1 (W.D. Tex. Aug. 24, 2020). In fact, Gunn expanded who could be a proper affiant under Section 18.001. See 554 S.W.3d at 674. The Texas Supreme Court explained that holding otherwise would have "render[ed] the Legislature's streamlined proof of procedure a complicated trap [for plaintiffs]." Id.
In light of Section 18.001's legislative purpose, "[w]ere the court to find that section 18.001 embodies only state procedural law, it would deprive Plaintiff of means to avoid the significantly more expensive and time-consuming alternatives to proving damages which would otherwise be available in a personal injury action brought in a Texas state court." Rahimi , 474 F. Supp. 2d at 829. For many plaintiffs, these costs may "render it impracticable" for them to litigate in federal court at all. Bagley v. Dollar Tree Stores, Inc. , 2019 WL 6492585, at *7.
Because the cost differentials between non-expert affidavits submitted under Section 18.001 and hiring expert witnesses are substantial, a plaintiff will almost certainly prefer a state forum over a federal one. Likewise, an adversary—particularly one with greater financial means—will prefer litigating in federal court over state court. Because Section 18.001's applicability can have significant relevance in a party's choice of forum, the forum shopping factor weighs in favor of classifying Section 18.001 as substantive. See Hanna , 380 U.S. at 469, 85 S.Ct. 1136.
b. Inequitable administration of the laws
For similar reasons, Section 18.001 should be considered substantive to prevent an inequitable administration of the laws. "[S]ince a federal court adjudicating a state-created right solely because of the diversity of citizenship of the parties is for that purpose, in effect, only another court of the State, ... [it cannot] substantially affect the enforcement of that right as given by the State." Guaranty Tr. , 326 U.S. at 108–19, 65 S.Ct. 1464.
When it enacted Section 18.001, the Texas Legislature intended to make it easier for plaintiffs to prove their damages, saving them significant time and money. See Haygood , 356 S.W.3d at 398 ; Gunn , 554 S.W.3d at 672–74 ; Turner , 50 S.W.3d at 747. Because the Court is "only another court of the State," it cannot "substantially affect the enforcement of that right". Guaranty Tr. , 326 U.S. at 108–09, 65 S.Ct. 1464.
If the Court categorized Section 18.001 as procedural, the Court would substantially affect Plaintiff's rights to prove his damages efficiently, thereby producing inequitable results between the state and federal judiciaries. Essentially, the Court would hold that some personal injury plaintiffs are now priced out of federal court, merely because they suffered the misfortune of having a diverse defendant. Further, plaintiffs in federal courts may settle on less advantageous terms compared to their state counterparts, as the cost-benefit analysis will differ between state and federal court. To prevent the inequitable administration of the laws, the Court finds Section 18.001 should be substantive under this factor.
2. "Bound Up" with State Substantive Rights
Given how intimately Section 18.001 is related to a party's state-created right to prove damages efficiently, save significant resources, and avoid "complicated trap[s]," the Court finds Section 18.001 is "one of those rare evidentiary rules which [are] so bound up with state substantive law" that it must be applied in federal courts. Conway , 540 F.2d at 838 ; see Gunn , 554 S.W.3d at 674 ; Bagley , 2019 WL 6492585, at *7. The "bound up" consideration weighs in favor of categorizing Section 18.001 as substantive.
F. SECTION 18.001'S TIMING AND NOTICE PROVISIONS
Defendant argues Plaintiff has failed to comply with Section 18.001's notice and timing requirements, which should render the Affidavits "fatally defective." See Dkt. 15 at 14–15. Plaintiff's response (Dkt. 21) did not address this argument, and to date, Plaintiff has not filed a sur-reply.
To be sure, Section 18.001 provides "[t]he party offering the affidavit in evidence ... must file notice with the clerk of the court," and any such affidavit must be served ninety (90) days after the defendant files an answer, by the date a court order requires the offering party to designate an expert witness, or by the date the Texas Rules of Civil Procedure requires the offering party to designate an expert witness—whichever is sooner. See TEX. CIV. PRAC. & REM. ANN. § 18.001(d)(1)–(3), (d-2). With respect to counter-affidavits, Section 18.001 imposes similar notice and timing requirements. See id. § 18.001(e-1)(1)–(3), (g).
To the extent Section 18.001(d)–(i) imposes deadline and notice requirements for filing affidavits and counter-affidavits, these provisions are clearly procedural, and hence, the Court is not bound to follow them. See, e.g., Bagley , 2019 WL 6492585, at *7. Rather, the timing and notice requirements articulated in the Federal Rules of Civil Procedure, the Local Rules for the Eastern District of Texas, the Court's Order Governing Proceedings (Dkt. 7), and the Court's Scheduling Order (Dkt. 24) apply to Plaintiff's filing and notice of the Affidavits, as well as any counter-affidavit Defendant wishes to procure. The Court notes this matter's Scheduling Order (Dkt. 24) sets the following deadlines:
• Plaintiff must disclose his expert testimony by August 17, 2020;
• Defendant must disclose its expert testimony by September 18, 2020;
• Both parties must object to expert witnesses no later than six (6) weeks after disclosure of the expert, through either a motion to strike or motion to limit expert testimony; and
• All discovery shall be completed by October 22, 2020.
See Dkt. 24 at 2. The record reflects that Plaintiff timely served Defendants the Affidavits. See Dkt. 15 at 2 (stating Plaintiff served Defendant with the Affidavits on April 23, 2020); Dkt. 24 (Scheduling Order, setting Plaintiff's deadline to disclose expert testimony for August 17, 2020). The Court notes there is a pending motion for summary judgment (Dkt. 29) and motion to dismiss (Dkt. 35), with the pretrial conference for this action set on February 8, 2021, and trial set on February 15, 2021. Accordingly, to the extent Defendant wishes to serve Plaintiff any counter-affidavits, the Court will grant Defendants fourteen (14) days after entry of this Memorandum Opinion and Order to do so.
IV. CONCLUSION
Overall, because the Court finds (1) Fifth Circuit precedent would classify affidavits offered under Section 18.001 as substantive, (2) decisions from the Supreme Court of Texas are not clearly contrary to this finding, (3) the Court's Erie guess predicts Section 18.001 affidavits are substantive, and (4) all the Erie considerations weigh in favor of substance, not procedure, the Court finds that Section 18.001 affidavits are admissible in federal court. Further, the Court holds that Section 18.001's timing and notice requirements are procedural, and federal law governs the method by which such affidavits are disclosed and offered.
IT IS THEREFORE ORDERED that Defendants' Motion (Dkt. 15) is hereby GRANTED IN PART and DENIED IN PART as follows:
Defendant's Motion is DENIED with respect to striking Plaintiff's Affidavits, insofar as they are offered pursuant to TEX. CIV. PRAC. & REM. ANN. § 18.001.
Defendant's Motion is GRANTED with respect to Defendant's request to serve Plaintiff counter-affidavits. Defendant shall serve Plaintiff its counter-affidavits, if any, no later than fourteen (14) days after entry of this Memorandum Opinion and Order.