House GOP Moves to Tamp Down on Frivolous Lawsuits

(CN) – House Republicans on Friday passed legislation requiring judges to sanction attorneys and other parties who file frivolous lawsuits in federal court.

The bill, H.R. 720, also known as the Lawsuit Abuse Reduction Act of 2017, passed by a 230-188 vote.

It does not change the standard federal judges use to determine whether a lawsuit is frivolous, but does mandate penalties and does away with a party’s ability to avoid sanctions by voluntarily withdrawing claims within 21 days.

Currently, a party has to make a motion for the judge in a proceeding to find a complaint, motion or other submission made by the other side frivolous, without merit or lacking any evidentiary support.

The judge then must decide whether or not to impose sanctions.

Under H.R. 720, at minimum, a party would be awarded “reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’ fees and costs,” once a judge rules that a suit was frivolous, with additional sanctions left to the judge’s discretion.

One of the bill’s main backers, Rep. Bob Goodlatte of Virginia, chairman of the House Judiciary Committee, said the bill would significantly reduce the number of meritless suits filed and thereby dramatically reduce pressure on an overtaxed federal judicial system.

“The current lack of mandatory sanctions leads to the regular filing of lawsuits that are baseless,” Goodlatte said in a statement. “So many frivolous pleadings currently go under the radar because the lack of mandatory sanctions for frivolous filings forces victims of frivolous lawsuits to roll over and settle the case, because doing that is less expensive than litigating the case to a victory in court.”

Rep. Lamar Smith, R-Texas, who sponsored the bill, said that if it is enacted into law it will prevent the filing of thousands of frivolous lawsuits each year.

The U.S. Chamber of Commerce also supported the bill, saying that if it passes Senate muster, it would  ensure plaintiffs’ attorneys are held accountable for filing frivolous claims.

But critics of the bill say it will do far more harm than good. These include the American Bar Association, which sent a lengthy letter to Goodlatte in February explaining that it opposes H.R. 720’s enactment because “it would circumvent the procedures Congress itself has established for amending the Federal Rules of Civil Procedure … [that because] by ignoring the lessons learned from ten years of experience under the 1983 mandatory version of Rule 11, Congress incurs the substantial risk that the proposed changes would impede the administration of justice by encouraging additional litigation and increasing court costs and delays.”

The ABA also argued that “there is no demonstrated evidence that the existing Rule 11 is inadequate and needs to be amended.”

Specifically, the trade association said, anecdotal examples of frivolous lawsuits cited by GOP lawmakers to illustrate a marked increase in such filings are not backed by credible research.

In reality, the ABA said, many of the lawsuits cited were brought in state courts and would not be affected by the legislation.

Another critic, Rep. John Conyers, D-Mich., said the bill could actually chill legitimate civil rights litigation, which is often based on novel arguments that are not based on existing law.

He also worried that the bill would curtail the independence of the federal judiciary.

Friday’s vote followed House passage Thursday night of a bill, H.R. 985, alternately known as the Fairness in Class Action Litigation Act of 2017, that would significant add hurdles to filing a class-action lawsuit in federal court.

That bill would require individuals seeking to participate to show they suffered the same type and magnitude of personal injury or economic loss as the group’s leader. Also, attorneys in successful class-action suits couldn’t collect payment until after the individuals in the class are paid.

The ABA also opposed H.R. 985, writing in a separate letter that the legislation “would circumvent the time-proven process for amending the Federal Rule of Civil Procedure established by Congress in the Rules Enabling Act. Rule 23 governs determinations whether class certification is appropriate.”

In addition, the ABA said, the Supreme Court recently ruled on a case in which there were questions surrounding class certification.

In that case, Tyson Foods v. Bouaphakeo, the high court held that while a class can be certified when it contains some members who have not been injured, allocation methods can be challenged.

“We urge you to allow these processes for examining and reshaping procedural and evidentiary rules to evolve as provided in the Rules Enabling Act, which reflects a healthy respect for the Separation of Powers doctrine and the role of the federal courts in determining their own rules,” the ABA letter said.

“Courts have the inherent authority to control the proceedings in their courtroom, including the power to regulate attorneys. Federal statutory changes in these areas would have substantial adverse effects on the fairness, efficiency, and timeliness of relief under class action processes, ultimately usurping the traditional regulatory authority of the court,” the letter said.

On Friday afternoon, Matt Cimento, a spokesman for the ABA, said the association did not have any further comment on the bills now that they’ve passed the House, but that the reservations expressed in the letters continue to represent the group’s thinking on them.

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