After Hours of Debate Between Members of the House Judiciary Committee, the Lawsuit Abuse Reduction Act of 2017 (H.R. 720) Advances to the House Floor

–by Anna Pinchuk

Citations:

https://judiciary.house.gov/wp-content/uploads/2017/01/2.02.17-Transcript.pdf

http://docs.house.gov/meetings/JU/JU00/20170202/105522/BILLS-115HR720ih.pdf

http://www.americanbar.org/content/dam/aba/uncategorized/GAO/2017feb1_lara_l.authcheckdam.pdf

http://www.businesswire.com/news/home/20170202006132/en/U.S.-Chamber-Applauds-House-Judiciary-Committee-Passage

Abstract: H.R. 720, the Lawsuit Abuse Reduction Act, amends Rule 11 of the Federal Rules of Civil Procedure. The Act requires judges to impose mandatory sanctions on attorneys who file frivolous claims and eliminates the 21-day “safe harbor” provision. After approval by the House Judiciary Committee, it advanced to Congress.

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On January 30, 2017, H.R. 720, the Lawsuit Abuse Reduction Act of 2017 (LARA), sponsored by Rep. Lamar Smith (R-TX), was introduced in Congress and referred to the House Judiciary Committee. LARA amends Rule 11 of the Federal Rules of Civil Procedure. First, it requires judges to impose mandatory, instead of discretionary, sanctions on attorneys who file frivolous claims, defenses, or other legal contentions. Second, the Act strikes down the provision of Rule 11 that allows attorneys to avoid sanctions by withdrawing claims or defenses within 21 days.

Currently, Rule 11 allows judges to use their discretion in imposing sanctions. For example, a judge may impose sanctions on attorneys if they file claims for an improper purpose or their claims are not warranted by the existing law or an extension of the law. The Rule also contains a 21-day “safe harbor” provision which allows attorneys to withdraw their claims without the imposition of sanctions.

On February 2, 2017, the House Judiciary Committee approved LARA on a 17-6 vote. During the markup, Chairman of the Judiciary Committee Bob Goodlatte (R-VA) expressed support for the Act because it “would finally provide light at the end of the tunnel for the victims of frivolous lawsuits.” According to Congressman Goodlatte, current lack of mandatory sanctions leads to regular filings of baseless lawsuits and forces victims to settle cases in order to avoid litigating in court. The U.S. Chamber Institute for Legal Reform applauded the Judiciary Committee for the Act, saying, “These bills will discourage plaintiffs’ lawyers from gaming America’s justice system to their advantage.”

Representative John Conyers, Jr. (D-MI), the ranking member of the Judiciary Committee, expressed strong opposition to LARA because “it will chill the advancement of civil rights claims and increase exponentially the volume and cost of litigation in the Federal courts.” According to Representative Conyers, the version of mandatory sanctions of Rule 11 that LARA restores had already failed when it was in effect from 1983 to 1993. Representative Conyers highlighted that civil rights cases often involve novel legal arguments which may be especially susceptible to new sanctions. For example, in 1983, Rule 11 motions were higher in civil rights cases than in any other type of cases. Additionally, Representative Conyers was concerned that by eliminating the “safe harbor” provision, the modified version of the Rule will increase the amount, costs, and intensity of civil litigation, creating more ground for unnecessary delay and harassment. As a result, Representative Conyers proposed an amendment that would exclude cases brought under the Constitution or under any civil rights laws from the application of the Rule. However, the majority of the House Judiciary Committee rejected this amendment, along with other amendments from democratic representatives.

The American Bar Association (ABA) also expressed opposition to LARA. The ABA opposed LARA because Congress had already established procedures for amending the Federal Rules of Civil Procedure that are not being followed by proponents of LARA. Additionally, there is no evidence to support the contention that current Rule 11 sanctions are inadequate. The ABA is concerned that modifying Rule 11 will encourage additional litigation and increase court delays and costs.

Since 1995, bills like LARA that would toughen Rule 11 sanctions have been regularly introduced in both the House and Senate. To this day none have been successfully enacted. Last September, similar legislation passed the House on a 241-185 vote, but was not passed in the Senate. Similarly, this year, the Republican Party’s control of the House will make LARA’s passage more likely in the House. However, its passage in the Senate is not as certain.

Posted in Civil Practice, Legal Pulse