Michael J. Truncale, United States District Judge

Micky N. Das, Tyler & Das, Houston, TX, Gilbert Timbrell Adams, III, Law Offices of Gilbert T. Adams, Beaumont, TX, Robert Timothy Tate, Tate Law Offices, P.C., Dallas, TX, for Plaintiff.

Randy Lynn Fairless, Kelley J. Friedman, Johanson & Fairless, LLP, Sugar Land, TX, Kurt W. Meaders, Meaders and Lanagan, Dallas, TX, Michael J. Lombardino, Reed Smith LLP, Houston, TX, for Defendant Great Neck Saw Manufacturers, Inc.

Peter Joseph Bambace, Jr., Kevin Dale Didway, Holm | Bambace LLP, Michael J. Lombardino, Stephen Edward Scheve, Reed Smith LLP, Houston, TX, Kelley J. Friedman, Johanson & Fairless, LLP, Sugar Land, TX, for Defendants O'Reilly Auto Enterprises, LLC, Ozark Purchasing, LLC, O'Reilly Automotive Inc.

Michael J. Lombardino, Reed Smith LLP, Houston, TX, for Defendants O'Reilly Auto Parts, O'Reilly/First Call.

Peter Joseph Bambace, Jr., Kevin Dale Didway, Holm | Bambace LLP, Michael J. Lombardino, Reed Smith LLP, Houston, TX, for Defendant O'Reilly Automotive.

O'Reilly/First Call, Pro Se.

ORDER REGARDING PLAINTIFF'S MOTION AND BRIEF IN SUPPORT FOR LEAVE OF COURT TO FILE AND USE AFFIDAVITS PURSUANT TO TEXAS CIVIL PRACTICES AND REMEDIES CODE § 18.001

Michael J. Truncale, United States District Judge

Before the Court is Plaintiff's Motion and Brief in Support for Leave of Court to File and Use Affidavits Pursuant to Texas Civil Practice and Remedies Code § 18.001. [Dkt. 35]. I. BACKGROUND

Texas law allows a plaintiff to recover for past medical expenses caused by a defendant's conduct if he can prove those expenses were reasonable and necessary. In 1985, the state legislature enacted a statute to streamline and reduce the costs of that process for cash-strapped plaintiffs. TEX. CIV. PRAC. & REM. CODE § 18.001, et seq. It works in the following way. In a state case, a plaintiff submits affidavits attesting to the reasonableness and necessity of past medical expenses. Id. § 18.001(b). A defendant may then respond with controverting affidavits. Id. § 18.001(b), (e). If the defendant successfully controverts the plaintiff's affidavits, neither set of affidavits are admissible at trial. Id. § 18.001(b). Instead, both parties must establish or counter the reasonableness and necessity of the plaintiff's expenses the traditional and more expensive way, by using expert testimony. If the defendant fails to controvert the plaintiff's affidavits their two roads diverge: the plaintiff takes the Affidavit Bypass, while the defendant is stuck paying steep fees on the Expert Tollway.

The plaintiff now seeks leave to use the same process in federal court. For the reasons provided below, that request is GRANTED .

II. DECISIONAL HISTORY

Wading into Erie ’s murky waters can be daunting. So, a federal court should readily grab hold of the lifeline created when a state court interprets the scope and nature of its own laws. By ignoring such decisions, federal courts risk "doing the very thing we profess to avoid ... giving the state law a different meaning in federal court than the state courts have given it." Woods v. Interstate Realty Co. , 337 U.S. 535, 539, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949) (Jackson, J., dissenting). That is why, as a general rule, the blurry line between substance and procedure is brought into sharp focus when "stated in the final decisions of the state's highest court." Baker v. RR Locking Sys., Inc. , 721 F.3d 716, 717 (5th Cir. 2013). However, a federal court must only follow the subsequent decisions of a state's highest court if they are "clearly contrary" to prior federal decisions. Farnham v. Bristow Helicopters, Inc. , 776 F.2d 535, 537 (5th Cir. 1985).

To answer that question, the Court recounts the history of § 18.001 ’s sojourn in federal court. That decisional history comes in three distinct phases. The first phase started with Rahimi v. United States , 474 F. Supp. 2d 825 (N.D. Tex. 2006), which was decided without the benefit of any guidance from the Texas Supreme Court. The second phase spanned the Texas Supreme Court's decisions in Haygood v. De Escabedo , 356 S.W.3d 390 (Tex. 2011) and Gunn v. McCoy , 554 S.W.3d 645 (Tex. 2018) and their aftermath. The third phase was initiated by the Texas Supreme Court's recent decision in In re Allstate Indem. Co. , 622 S.W.3d 870 (Tex. 2021).

1. Phase One: Rahimi.

When a federal court must decide whether to apply state law under Erie in the absence of a controlling state decision, it makes an "Erie guess." See SMI Owen Steel v. Marsh USA, Inc. , 520 F.3d 432, 436–37 (5th Cir. 2008). In the first case to decide § 18.001 ’s applicability in diversity cases, Rahimi v. United States , 474 F. Supp.2d 825 (N.D. Tex. 2006), Magistrate Judge Sanderson, Jr. was placed in such a position. The decisions of Texas’ intermediate courts of appeals were unhelpful because they were split on whether § 18.001 was (1) "a rule of evidence that creates a hearsay exception" or (2) merely a process "by which a plaintiff may prove up the reasonableness and necessity of damages incurred." Rahimi , 474 F. Supp. 2d at 827–28 (listing cases).

Magistrate Judge Sanderson sided with the state appellate courts characterizing § 18.001 as an evidentiary rule, reasoning that it allowed a plaintiff to "establish prima facie proof of damages sustained." Id. at 828. He contended that characterizing § 18.001 as procedural would deprive the plaintiff of the "means to avoid the significantly more expensive and time-consuming alternatives to proving damages which would otherwise be available" in state court. Id. at 829. So, he concluded, § 18.001 is "so bound up or intertwined with a litigant's substantive rights" that under Erie , it would be "inequitable" not to apply it in federal court. Id.

2. Phase Two: Haygood and Gunn.

Five years later, the Supreme Court of Texas took up the issue in Haygood v. De Escabedo , 356 S.W.3d 390 (Tex. 2011). The Texas Supreme Court concluded that § 18.001 is "purely procedural, providing for the use of affidavits to streamline proof of the reasonableness and necessity of medical expenses." Haygood , 356 S.W.3d at 397. Seven years later, in Gunn v. McCoy , 554 S.W.3d 645 (Tex. 2018), the Texas Supreme Court reaffirmed Haygood ’s holding that § 18.001 affidavits are "purely procedural." Gunn , 554 S.W.3d at 672. It also explained that within the statute's procedural scheme, "an affidavit ... does not amount to conclusive evidence of the expenses," since "[t]he statute expressly contemplates that [it] can be controverted." Id. 674–75. Gunn also emphasized that the statute does not negate the requirement that "reasonableness and necessity be in fact proven by legally sufficient evidence." Id. at 672–73.

Following Haygood and Gunn , there was an "emerging consensus" among U.S. District Courts sitting in Texas that § 18.001 is "purely procedural" and should not apply in federal court. Espinoza v. State Farm Mut. Auto Ins. Co. , No. 7:19-cv-00299, 2020 WL 4333558, at *4–5 (S.D. Tex. July 28, 2020) (Alvarez, J.) (collecting and assessing cases). But a different approach continues in the Eastern District. See Bagley v. Dollar Tree Stores, Inc. , No. 1:18-CV-580, 2019 WL 6492585 (E.D. Tex. 2019) (Crone, J.); Sikes v. Transp. Ins. Co. , 2019 U.S. Dist. LEXIS 144132 (E.D. Tex. 2019) (Gilstrap, J.); Reynolds v. United Fin. Cas. Co. , 2020 WL 8269667 (E.D. Tex. Dec. 14, 2020) (Hawthorn, M.J.); Vansill v. Dollar Tree Stores, Inc. , 520 F.Supp.3d 847 (E.D. Tex. 2021) (Priest Johnson, M.J.). And in the Western District, Magistrate Judge Chestney acknowledges the statute is "procedural," but allows the use of § 18.001 affidavits "if both parties agree." Zuniga v. Tri-National, Inc. , 2021 WL 4083411, at *1 (W.D. Tex. Sept. 8, 2021) (Chestney, M.J.).

3. Phase Three: Allstate.

The Texas Supreme Court recently weighed in on this issue for a third time. In In re Allstate Indem. Co. , 622 S.W.3d 870 (Tex. 2021), the Court refined its holdings in Haygood and Gunn. It found that § 18.001 did not suggest "that an uncontroverted affidavit may be conclusive on reasonableness and necessity." Allstate , 622 S.W.3d at 881. But at the same time, it emphasized substantive aspects of the § 18.001 process.

The dispute in Allstate arose when a trial court entered a pre-trial order prohibiting Allstate from contesting the reasonableness and necessity of medical expenses at trial after its controverting affidavit failed. Id. at 875. The Court found that the trial court "abused its discretion" by doing so because it had struck a substantive component of Allstate's defense, barring the "meaningful adversarial adjudication" of the plaintiff's claim for past medical expenses. Id. at 883. Thus, the Court granted Allstate's mandamus writ, explaining that the failure to controvert a plaintiff's affidavit does not "constrain the defendant's ability to challenge—through evidence or argument—the claimant's assertion that her medical expenses are reasonable and necessary." Id. at 881.

A state court's characterization of a rule as "procedural" does not always decide an Erie issue. Guaranty Trust Co. v. York , 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). On the other side of the looking glass, Allstate also shows how § 18.001 is often intertwined with a claimant's substantive rights. For example, if a plaintiff successfully files affidavits, either by agreement or as uncontroverted, the defendant may surprise the plaintiff at trial by objecting to those affidavits. A plaintiff who must rely entirely on those affidavits because he lacks the funds to hire an expert would then be barred from the "meaningful adversarial adjudication" of her claim. Accordingly, while § 18.001 may be "procedural" at the pre-trial phase, it accrues "substantive" weight as a case proceeds to trial.

There are two warring principles at play here. First, an interest in fostering uniformity across Texan district courts. Second, a core principle of justice: "preserving equal access to the Court for both the rich and the poor." In re Amendment to Rule 39 , 500 U.S. 13, 14, 111 S.Ct. 1572, 114 L.Ed.2d 15 (1991) (Stevens, J., dissenting). Barring these affidavits would create two different tiers of justice for diverse litigants within the federal system: the significant costs of using experts may result in certain plaintiffs being "priced out" of the federal judiciary. Vansill , 520 F. Supp. 3d at 853. Similarly, diverse plaintiffs may be forced to "settle on less advantageous terms compared to their state counterparts." Id. This too, reflects a matter of substantive concern, as the inherent value of a case should not drop merely because it is removed to federal court.

Thus, the Court finds that Haygood , Gunn , and Allstate are not "clearly contrary" to this District's jurisprudence, and proceeds to the Erie questions presented in the plaintiff's motion.

III. APPLICABLE LAW

Courts use Erie to determine whether state or federal procedure applies in a diversity case. Erie issues arise under a three-part framework: the Rules Enabling Act Test, the familiar Erie Test, and the "Arguably Procedural" Test. See Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co. , 559 U.S. 393, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010) ; Stewart Org., Inc. v. Ricoh Corp. , 487 U.S. 22, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) ; Nissho-Iwai Co. v. Occidental Crude Sales, Inc. , 848 F.2d 613 (5th Cir. 1988) ; Sims v. Great Am. Life Ins. Co. , 469 F.3d 870 (10th Cir. 2006) ; see generally John Hart Ely, The Irrepressible Myth of Erie , 87 HARV. L. REV. 693 (1974).

A. The Rules Enabling Act Test.

When a matter is covered by a Federal Rule promulgated under the authority of the Rules Enabling Act, then a statutory test is applied: whether a rule is "procedural," 28 U.S.C. § 2072(a), and whether it "abridge[s], enlarge[s] or modif[ies] any substantive right," Id. § 2072(b) ; Shady Grove , 559 U.S. at 406–07, 130 S.Ct. 1431 ("The framework for our decision is familiar. We must first determine whether [the Rule] answers the question in dispute. If it does, it governs ... unless it exceeds statutory authorization").

B. The Erie Test.

The classic Erie test applies only in narrow situations when there are no applicable rules enacted by Congress or promulgated by the Supreme Court under the Rules Enabling Act; where the federal rule is wholly judge-made. Shady Grove , 559 U.S. at 406, 130 S.Ct. 1431 ("Erie involved the constitutional power of federal courts to supplant state law with judge-made rules. In that context, it made no difference whether the rule was technically one of substance or procedure; the touchstone was whether it ‘significantly affect[s] the result of a litigation.") (citing Guaranty Trust Co. v. York , 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) ).

C. The "Arguably Procedural" Test.

Finally, when Congress enacts a statute creating law for diversity actions, courts should apply the "arguably procedural" test of Hanna v. Plumer , 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). Hanna , 380 U.S. at 472, 85 S.Ct. 1136 ("[T]he constitutional provision for a federal court system ... carries with it the congressional power to make rules governing the practice and pleading in those courts, which in turn includes a power to regulate matters which ... are rationally capable of classification as [procedural]"); Nissho-Iwai Co. , 848 F.2d at 624 ("Since the postjudgment interest rate may be rationally classified as procedural, both the Supremacy Clause [and] U.S. Const. art. VI ... command application" of the federal rule.).

When a district court decides whether to apply a rule enacted by Congress, the decision involves a far "less intricate analysis" than that governing Erie choices. Stewart Org., Inc. , 487 U.S. at 26, 108 S.Ct. 2239. The appropriate test is whether an evidentiary rule: (1) is applicable, or "sufficiently broad to control the issue" facing the court; and (2) involved a "valid exercise" of Congress’ constitutional authority. Id. at 877 (citing Stewart Org., Inc. , 487 U.S. at 26–27, 108 S.Ct. 2239 ) (internal quotations omitted). To be valid, a federal rule must be arguably procedural. Id. (citing Hanna , 380 U.S. at 472, 85 S.Ct. 1136 ). A court "wade[s] into Erie ’s murky waters" only if this test fails; if a rule is "inapplicable or invalid." Shady Grove , 559 U.S. at 398, 130 S.Ct. 1431. The Federal Rules of Evidence are congressionally enacted, and so the "Arguably Procedural" test applies. Sims , 469 F.3d at 877.

Notably, the Rules Enabling Act "delegates the power to amend the Federal Rules of Evidence to the Supreme Court." 28 U.S.C. § 2074(a). It is unclear what standards exist to determine whether a rule of evidence, as amended, falls under the aegis of direct congressional authority or under the delegated authority of the Rules Enabling Act. The Court need not address this gnarly problem, however, since both tests yield the same result here.

IV. ANALYSIS

A. The "Arguably Procedural" Test.

Direct Collision.

This initial step requires a court to consider whether "when fairly construed, the scope of [a congressionally enacted rule] is ‘sufficiently broad’ to cause a ‘direct collision’ with the state law or, implicitly, to ‘control the issue’ before the court, thereby leaving no room for the operation of that law." All Plaintiffs v. All Defendants , 645 F.3d 329, 333 (5th Cir. 2011) (citing Burlington N. R.R. Co. v. Woods , 480 U.S. 1, 4–5, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987) ). Applying that approach here, the Court finds that permitting § 18.001 affidavits in federal court would not cause a direct collision with the Federal Rules of Evidence.

The Federal Rules must be construed to "eliminate unjustifiable expense ," with the goal of "ascertaining the truth and securing a just determination." FED. R. EVID. 102 (emphasis added); FED. R. CIV. P. 1 ("They [are] construed ... to secure the just, speedy, and inexpensive determination of every action") (emphasis added); see also Luke P. Norris, Labor and the Origins of Civil Procedure , 92 N.Y.U L. REV. 462, 464 (2017) (explaining the "progressive aim" of the Rules was to ensure the public "enforcement of private rights"; they were intended to "reshape civil litigation to reflect core values of citizen access to the justice system and adjudication on the merits.").

1. Rules 701 and 702.

Rule 701's advisory committee notes explain that it seeks "to eliminate the risk that the reliability requirements set forth in Rule 702 will be evaded through the simple expedient of preferring an expert in lay witness clothing." FED. R. EVID. 701, advisory committee's note to 2000 amendments. Section 18.001 was designed to allow a claimant to prove "the issue of the reasonableness of her medical expenses without bringing an expert to testify." Allstate , 622 S.W.3d at 876 (emphasis added). At first blush, this rationale appears to contravene the policy behind Rule 702. However, in diversity cases, federal courts look to state law to determine the "general kind of evidence" that must be produced "to establish a particular state law cause of action." Wackman v. Rubsamen , 602 F.3d 391, 400 n.2 (5th Cir. 2010) (emphasis original); see also Hamburger v. State Farm Mut. Auto Ins. Co. , 361 F.3d 875, 884 (5th Cir. 2004) (applying a state law that allowed "lay testimony" rather than expert testimony to prove an element of a case). So, there is no direct collision between § 18.001 and Rules 701 and 702.

2. Rule 802.

Similarly, the Texas Supreme Court acknowledges that § 18.001 allows "claimants to introduce evidence of reasonableness and necessity through affidavits that would otherwise be hearsay." Id. at 882. Although Rule 802 mandates that hearsay is inadmissible, there are exceptions. FED. R. EVID. 802. Hearsay is admissible under Rule 807 when evidence has (1) "sufficient guarantees of trustworthiness" and (2) is "more probative" than any other evidence obtainable through "reasonable efforts." FED. R. EVID. 807. Rule 807 was enacted to provide courts with "the flexibility necessary to address unanticipated situations and to facilitate the basic purposes of the rules: ascertainment of the truth and fair adjudication of controversies." Dartez v. Fibreboard Corp. , 765 F.2d 456, 462 (5th Cir. 1985). The Court joins its sister courts in applying Rule 807 to address the present situation. Sikes , 2019 U.S. Dist. LEXIS 144132, at *5; Vansill , 520 F. Supp. 3d at 852–53. The Texas Supreme Court has determined that affidavits offered under § 18.001 have "sufficient guarantees of trustworthiness." See Vansill , 520 F. Supp. 3d at 852–53 (citing Gunn , 554 S.W.3d at 673–74 ). Moreover, as the Court has already explained, experts can be so costly that plaintiffs are "priced out" of litigating, and affidavits are more probative than other evidence available to prove the reasonableness and necessity of past medical expenses. See id. at 853. Accordingly, no direct collision exists between § 18.001 and Rule 802.

Therefore, Rules 701, 702, and 802 do not control here. The Court proceeds with a traditional Erie analysis.

B. The Traditional Erie Test.

Erie boils down to whether applying a rule would "significantly affect the result of a litigation." Shady Grove , 559 U.S. at 406, 130 S.Ct. 1431 (citing Guaranty Trust Co. v. York , 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) ). The Court has already described the numerous ways in which § 18.001 may do so. First, to a plaintiff without the means to hire an expert at trial, the affidavit process represents her only way to recover her past medical expenses. Second, the steep costs of "retaining, deposing, and litigating the qualifications of experts" would either price litigants out of federal court entirely or force them to settle on terms far less advantageous than those of their state court counterparts. Bagley , 2019 WL 6492585, at *7. Finally, and perhaps most importantly, barring § 18.001 would prohibit plaintiffs from availing themselves of a state law right to use non-medical affiants to present evidence on past medical expenses. Wackman , 602 F.3d at 400 n.2 ; Hamburger , 361 F.3d at 884. Accordingly, § 18.001 appears "so bound up or intertwined" with Texas substantive law that refusing to apply it would result in the "inequitable administration of law." See Hanna , 380 U.S. at 468, 85 S.Ct. 1136.

Therefore, § 18.001 applies in federal court. Next, the Court considers the same issue under the Rules Enabling Act.

C. The Rules Enabling Act's Statutory Test.

The Rules Enabling Act authorizes the Supreme Court to promulgate "general rules of practice and procedure," 28 U.S.C. § 2072(a), subject to the limitation that those rules "shall not abridge, enlarge, or modify any substantive right." Id. § 2072(b). In the Fifth Circuit, the Federal Rules of Evidence are characterized as "procedural." Washington v. Dep't of Trans. , 8 F.3d 296, 300 (5th Cir. 1993). So, the Court must now decide whether those rules "abridge, enlarge, or modify" the substantive rights of a plaintiff seeking to introduce the § 18.001 affidavit procedure into federal court.

Shady Grove collapsed that statutory test into a single question: whether a rule "really regulat[es] procedure." Shady Grove , 559 U.S. at 407, 130 S.Ct. 1431. Shady Grove ’s approach has been criticized for ignoring § 2072(b) ’s requirement that such rules do not "abridge, enlarge, or modify any substantive right." Shady Grove , 559 U.S. at 424–25, 130 S.Ct. 1431 (Ginsburg, J., dissenting); see also Jay Tidmarsh, Procedure, Substance, and Erie , 64 VAND. L. REV. 877, 987 (2011) ( critiquing it for its circularity, saying "a rule is procedural when it regulates procedure."). More importantly, this portion of Shady Grove , Section II-C, was joined by only two other Justices, while Justice Ginsburg's dissent garnered three additional votes. See Shady Grove , 559 U.S. at 396, 436, 130 S.Ct. 1431. So, the issue now becomes how to interpret the "abridge, enlarge, or modify" language to give § 2072(b) real bite.

One useful metric is to consider whether applying a federal procedural rule over a state rule would alter the ex ante expected value of the plaintiff's claim relative to what it would have been if the case were fully litigated in state court. Tidmarsh, Procedure , 64 VAND. L. REV. at 908. Essentially, if refusing to apply a state rule would alter the probability of recovery or the amount of recovery in a case, then that would abridge, enlarge, or modify the plaintiff's substantive rights, thereby violating § 2072(b).

Here, allowing Rules 701, 702, and 802 to prevail over the application of § 18.001 would affect the plaintiff's probability of recovery. It would alter the facts he can present, his evidentiary burden, and his ability to proceed with a claim. See Sikes , 2019 U.S. Dist. LEXIS 144132, at *4 (noting it "would impose a higher evidentiary burden on non-resident plaintiffs in federal court than resident plaintiffs in Texas state court"); Vansill , 520 F. Supp. 3d at 853 (noting it would force diverse plaintiffs to "settle on less advantageous terms compared to their state counterparts"). Similarly, refusing to allow § 18.001 affidavits in federal court would affect the plaintiff's amount of recovery. It would affect the law establishing his rights, since it would revoke his state law right to use non-medical affiants to establish the reasonableness and necessity of his past medical expenses. See Wackman , 602 F.3d at 400 n.2 (noting that federal courts look to state law to determine the "general kind of evidence" that must be produced "to establish a particular state law cause of action.").

It is certainly true that altering our "uniform system of federal procedure" to avoid all differences in litigation costs between state and federal court would "disembowel either the Constitution's grant of power over federal procedure or Congress’ exercise of it." See Shady Grove , 559 U.S. at 416, 130 S.Ct. 1431 (internal quotations removed). However, the costs involved here are not mere litigation costs akin to filing or printing fees; they would abort a case in its infancy. Therefore, since applying Federal Rules of Evidence 701, 702, and 802 would "abridge, enlarge, or modify" the substantive rights of a plaintiff seeking to use § 18.001 affidavits, and the Court holds that § 18.001 applies in federal court.

V. CONCLUSION

For all the foregoing reasons, the Plaintiff's Motion and Brief in Support for Leave of Court to File and Use Affidavits Pursuant to Texas Civil Practice and Remedies Code § 18.001 [Dkt. 35] is GRANTED . However, the Court joins its sister courts and ORDERS that federal procedural law and the Court's Docket Control Order will govern the timing and deadlines for filing or controverting an affidavit compliant with § 18.001(b) – (c), (f). Accordingly, the Court ORDERS AND SETS the following deadlines for the parties.

The Plaintiff's deadline to file § 18.001 affidavits is October 30, 2021 and the Defendant's deadline to file counter-affidavits is November 30, 2021 .