Products Liability Law Daily House passes legislation designed to prevent frivolous lawsuits
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Monday, March 13, 2017

House passes legislation designed to prevent frivolous lawsuits

By Colleen Kave, J.D.

The U.S. House of Representatives on Friday passed the Lawsuit Abuse Reduction Act of 2017 (LARA) by a vote of 230 to 188. H.R. 720, which was sponsored by U.S. Representative Lamar Smith (R-Tex.), aims to “restore the teeth Rule 11 of the Federal Rules of Civil Procedure once had to deter frivolous Federal lawsuits” and to dispel the “legal culture of fear that has come to permeate American society.” The bill was reported favorably by the House Judiciary Committee on February 24, 2017 (House Report 115-16).

Among its provisions, LARA would restore mandatory sanctions for filing frivolous lawsuits in violation of Rule 11; remove Rule 11’s “safe harbor” provision that currently allows parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them after a motion for sanctions has been filed; and require monetary sanctions, including attorneys’ fees and compensatory costs, against any party making a frivolous claim. The bill applies to cases brought by individuals and businesses, including business claims filed to harass competitors, and to both plaintiffs and defendants. Additionally, the language specifies that the changes enacted by the bill “shall not be construed to bar or impede the assertion or development of new claims, defenses, or remedies under Federal, State, or local laws, including civil rights laws, or under the Constitution.”

LARA’s proponents note that, prior to 1993, it was mandatory for judges to impose sanctions, including public censures and fines, on lawyers who filed frivolous lawsuits. However, the Civil Rules Advisory Committee (CRAC) made penalties optional as part of a much broader package of amendments to the Federal Rules propelled by the desire to reduce “satellite litigation” of Rule 11 issues that could burden judges. LARA purports to reinstitute sanctions in order to provide a significant and necessary deterrent to frivolous litigation.

Dissenters, however, contend that there is no demonstrated need for the bill; that the bill’s provisions will result in an exponential increase in the volume and cost of civil litigation in Federal courts because mandatory sanctions with no safe-harbor will lead to increased litigation; that the bill would have a particularly chilling impact on civil rights cases, notwithstanding its rule of construction; and that the bill would undermine the Judicial Conference’s deliberative process for amending procedural rules under the Rules Enabling Act.

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