Republicans Go After Lawsuit Abuse

WASHINGTON – Congressional Republicans are taking steps to punish lawyers who file what they characterize as “frivolous” lawsuits, maintaining the practice wastes billions of dollars and forces individuals and businesses to unnecessarily spend thousands of dollars on litigation.

The House Judiciary Committee in a 17-10 vote along party lines passed and sent to the floor the Lawsuit Abuse Reduction Act, sponsored by Rep. Lamar Smith (R-Texas), which among other things imposes mandatory sanctions on lawyers who file meritless suits in federal court.

Generally speaking, a frivolous lawsuit is defined as one that clearly is intended to merely harass, delay or embarrass the opposition. The presiding judge, usually upon the motion of the opposing party, determines whether a court action meets that standard.

“Lawsuit abuse is common in America because the lawyers who bring these frivolous cases have everything to gain and nothing to lose,” Smith said. “Lawyers can file meritless lawsuits, and defendants are faced with the choice of years of litigation, high court costs and attorneys’ fees or a settlement out of court. This is legalized extortion.”

The legislation, Smith said, “restores accountability to our legal system” and will force attorneys to “think twice before filing frivolous lawsuits.” Nuisance lawsuits, he said, costs jobs and damage the economy because money that could be spent on adding employees or investing in new businesses is instead directed toward legal fees.

Smith’s legislation would require federal judges to impose monetary sanctions against lawyers who file frivolous lawsuits, directing that the money be dedicated toward the defendant’s attorney fees and costs. The court, if it deems necessary, could impose sanctions beyond what the rule calls for and would eliminate the so-called “safe harbor” provision, which establishes a 21-day period for parties to avoid sanctions by withdrawing claims.

The Lawsuit Abuse Reduction Act revolves around Rule 11 of the Federal Rules of Civil Procedure. In 1983, Congress amended Rule 11 to require monetary sanctions to “discourage dilatory or abusive tactics and to streamline the litigation process by lessening the amount of frivolous matters brought before the federal courts.”

In 1993 the Conference of Senior Circuit Judges, the principal policy-making body concerned with the administration of the U.S. Courts, moved to make Rule 11 more lenient than the 1983 version by providing presiding judges with the discretion to determine what sanctions, if any, should be imposed. The changes were adopted after a flood of litigation revolving around Rule 11 claims inundated the legal system, eating up court resources and time.

The 1993 changes included adoption of the safe harbor provision. Tort reform activists have since pressed for a stricter rule.

Smith’s measure has drawn sharp criticism. In a letter to Rep. Bob Goodlatte (R-Va.), chairman of the House Judiciary Committee, Thomas M. Susman, director of the Governmental Affairs Office for the American Bar Association, noted that the proposal circumvents congressional procedures for amending the Federal Rules of Civil Procedure. He further argued that there exists no evidence that the existing Rule 11 is inadequate, adding that the changes would impede the administration of justice by encouraging additional litigation and increasing court costs and delays.