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April 01, 2011

ABA Opposes Legislation to Amend Rule 11 to Reinstate a Mandatory Sanctions Provision

The ABA told the House Judiciary Subcommittee on the Constitution last month that the association opposes legislation to amend Rule 11 of the Federal Rules of Civil Procedure to reinstate a mandatory sanctions provision that was eliminated in 1993 because it was counterproductive and harmful to the resolution of civil litigation.

The association expressed its views in a March 11 statement submitted to the subcommittee for the record of a hearing on H.R. 966, known as the Lawsuit Abuse Reduction Act.

Both H.R. 966, sponsored by House Judiciary Committee Chairman Lamar Smith (R-Texas), and S. 533, identical legislation introduced in the Senate by Sen. Charles Grassley (R-Iowa), also would require, rather than permit, the imposition of monetary sanctions, consisting of attorneys’ fee and other costs resulting from the violation, and eliminate a provision adopted in 1993 that allows parties and their attorneys to avoid sanctions by withdrawing frivolous claims within 21 days after a motion for sanctions is served.

The ABA cited three main reasons in its letter for opposing the legislation.

First, the legislation would circumvent the Rules Enabling Act, a process established by Congress to ensure that changes to the federal rules are thoroughly reviewed. Under the procedures, the Judicial Conference of the United States drafts evidentiary and procedures rules or amendments, which are then subject to public comment and recommendations. If approved by the Judicial Conference, the proposals are submitted to the U.S. Supreme Court for consideration and promulgation. The Supreme Court transmits the proposed rules or amendments to Congress, which retains the ultimate power to reject, modify or defer any rule or amendment before it takes effect.

Second, the ABA believes that the proposed revisions are unnecessary and counterproductive, stating that there is no demonstrated evidence that the existing Rule 11 is inadequate or needs to be amended.   The association disagrees with the assertion that there has been a significant increase in the filing of non-meritorious litigation in the 18 years since Rule 11 was revised to permit the discretionary imposition of sanctions.

If legitimate concerns are raised, Congress should defer to the Rules Enabling Act process “to assure a comprehensive and dynamic examination of the issues and avoid taking action that results in unintended or adverse consequences,” according to the ABA.

Third, the legislation ignores the lessons learned from the 10 years that the mandatory version of Rule 11 was in place from 1983 through 1993. During that time, according to the Judicial Conference, the mandatory application of Rule 11 created a significant incentive to file unmeritorious Rule 11 motions by providing a possibility of monetary penalty, and provided little incentive to abandon or withdraw a pleading or claim that lacked merit.

The letter stated that “past experience strongly suggests that, if enacted, these proposed changes will encourage additional litigation and increase costs and delays without accomplishing the stated goal of deterrence.”

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