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September 01, 2015

House passes lawsuit abuse reduction act; ABA says legislation is unnecessary

Despite opposition from the ABA, the Judicial Conference, and numerous other legal organizations, the House passed a bill Sept. 17 to amend Rule 11 of the Federal Rules of Civil Procedure to require, rather than permit, the imposition of monetary sanctions against lawyers for filing non-meritorious claims.

H.R. 758, passed by a 241-185 vote, also would roll back critical improvements made to the rule 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 current system, which gives judges discretion to impose monetary or non-monetary sanctions, replaced a mandatory sanctions provision that was in place from 1983 to 1992 but had been shown to increase non-meritorious lawsuit filings rather than reduce them.

The ABA opposes enactment of the legislation for the three main reasons below, which were described in a Sept. 17 letter to all members of the House from ABA Governmental Affairs Director Thomas M. Susman.

• Amendments to the Federal Rules of Civil Procedure should be vetted through the Rules Enabling Act, established by Congress to assure that amendments to the Federal Rules occur only after a comprehensive and balanced review of the problem and proposed solution is undertaken by the Judicial Conference in consultation with lawyers, scholars, individual and organizations devoted to improving the administration of justice. In stark contrast, Susman said, H.R. 758 “proposes to amend the Federal Rules over the objections of the Judicial Conference and despite compelling evidence that it will adversely affect the administration of justice.”

• There is no proof that problems created by frivolous lawsuits have increased since 1993 or that the current Rule 11 is ineffective in deterring frivolous filings. It is more likely that problems have abated since 1993 because Rule 11’s safe harbors provision provides an incentive to withdraw frivolous filings at the outset of litigation. In addition, judges have numerous tools at their disposal to impose sanctions and prevent lawsuits from going forward.

• There is substantial risk that H.R. 758 would impede the administration of justice by encouraging additional litigation over sanctions motions, which would increase, not reduce, court costs and delays.

Susman urged the House to avoid making the same mistake Congress made in 1983, when the version of Rule 11 that went into effect was “ill-conceived and created significant unintended adverse consequences that harmed litigants and impeded the administration of justice.”

During debate on the House floor, opponents of the legislation cited the ABA’s opposition to the legislation. “This bill is an affront to the judges of this country, to the Judicial Conference, and to the American Bar Association,” Rep. Steve Cohen (D-Tenn.) said, adding that it “will clog the courts with unnecessary litigation, cost money and make it more difficult to get your cases disposed of.” 

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