Judge Orders Senator to Testify in Hurricane Claims Case

A state senator will have to testify in response to allegations that he exerted improper political pressure on the state windstorm insurance agency, a judge ruled Thursday. 

Sen. Larry Taylor, R-Friendswood, has denied accusations that he pressured the Texas Windstorm Insurance Association to fight more insurance claims cases in court in order to avoid paying large settlement sums to trial lawyers who often donate to Democratic politicians. Taylor vowed to appeal the decision.

Those accusations came to light in deposition testimony by Jim Oliver, the former head of TWIA, taken in February. The deposition was part of a lawsuit brought by the Brownsville Independent School District over damages from Hurricane Dolly in 2008, a case that could involve up to $100 million. BISD’s attorney, Steve Mostyn, is the biggest donor to Democrats in Texas.

In the deposition, Oliver said Taylor complained to him about money Mostyn was “funneling into Democratic causes,” and said Taylor told him the insurance association should fight some of the lawsuits — many of which stemmed from Hurricane Ike damages — instead of settling. Oliver said Lt. Gov. David Dewhurst also tried to persuade him, but stopped short of saying that Dewhurst and Taylor told him to target Mostyn specifically. Both men said they did not do so.

Mostyn issued a subpoena for documents and testimony from Dewhurst and Taylor in March. Taylor filed a motion claiming that legislative immunity protected him from having to respond. On Thursday, Galveston County District Court Judge Bret Griffin rejected that argument, ruling that Taylor’s alleged behavior “was not part of any protected legislative function or any protected legislative committee process.” Rather, the judge said in his order, the preponderance of the evidence suggests that “Taylor engaged in political efforts to privately and personally influence the conduct of TWIA.”

But Taylor — who had not heard of the ruling before being contacted by The Texas Tribune — was quick to raise concerns about Griffin’s impartiality. Through a spokesman, he said that he would immediately appeal the ruling and contested the decision in harsh terms.

“I’m not surprised to hear about this ruling from the Texas Tribune before the court has even notified me of it,” Taylor said in a statement. “Coming in the closing hours before a holiday weekend underscores the embarrassment felt by Bret Griffin and highlights the nature of this political stunt by Steve Mostyn. I knew the fix was in when Bret Griffin heard this motion because, under the circumstances in question, any reputable jurist would have recused himself from even considering this ridiculous motion.”

The Tribune obtained a copy of the judge's order from a Mostyn representative.

Griffin and Taylor share a history of acrimony. Gov. Rick Perry appointed Griffin to the bench in January over the objections of Taylor, who is his hometown senator, and to the consternation of Texans for Lawsuit Reform, a business group that has worked to limit lawsuits and that is usually a Perry ally. Taylor argued at the time that the selection was a result of Perry’s friendship with trial lawyer and former Galveston County Democratic Party chairman Tony Buzbee, a close business partner of Griffin’s.

Taylor publicly backed Patricia Grady, who defeated Griffin in the Republican primary election in May.

Matt Welch, a Taylor spokesman, noted in an email that neither Taylor nor the the state attorney general's office, which is representing him, had received a copy of the order by 5 p.m. Thursday, which highlighted the “political gamesmanship” at play.

The Brownsville case itself has already taken many controversial turns. One was a series of racist emails between employees of the insurance association, in which they wrote, “Mexican get no more money for displacement” about a Latino claimant. An association lawyer acknowledged the racism’s potential role in December and said the association would pay a 23 percent penalty for general mistakes in the claims handling process.

The payouts from the insurance association in general have sparked concern among some Republican lawmakers, who have argued that cases involving biased or threadbare claims processing were too often settled instead of contested — with Democratic lawyers the beneficiaries. Democrats have in turn accused the GOP of seeking to reject claims for primarily political reasons.

Disclosure: Steve Mostyn was a major donor to The Texas Tribune in 2010. A complete list of Texas Tribune donors and sponsors can be viewed here.