Lawsuit abuse reduction bill, which puts teeth in Rule 11 sanctions, also may be up for House vote

By Jessica Karmasek | Mar 7, 2017

WASHINGTON (Legal Newsline) - Legislation that would reinstate mandatory sanctions for attorneys who file frivolous lawsuits may be up for a vote this week.

According to the U.S. House of Representatives website, the Lawsuit Abuse Reduction Act of 2017, or LARA, is among a handful of legal reform bills that may be considered by the House this week. It is expected to be looked at by the House Committee on Rules Wednesday.

The office of House Majority Leader Kevin McCarthy, R-Calif., did not return messages seeking comment on when, exactly, a vote would be taken on the legislation. In the House, majority party leadership decides which bills the House will consider and in what order.

The legislation was reintroduced by U.S. Sen. Chuck Grassley, R-Iowa, and U.S. Rep. Lamar Smith, R-Texas, in late January.

If passed, the bill, H.R. 720, would change Rule 11 of the Federal Rules of Civil Procedure to remove the 21-day “safe harbor” and to make sanctions mandatory instead of discretionary if a violation is discovered. This would reverse amendments previously made to Rule 11.

In 1993, laws were passed allowing parties and their attorneys to avoid sanctions for making baseless claims by withdrawing them within 21 days after a motion for sanctions has been served.

The bill recently was approved by the House Judiciary Committee in a 17-6 vote.

The legislation, like other legal reform bills, has been introduced more than a handful of times over the years, but has never garnered enough support.

The bill was first introduced in the House and Senate in 2015. In a 19-13 vote, the House Judiciary Committee passed the bill. It then passed the full House by a vote of 241-185.

“Frivolous lawsuits have become too common. Lawyers who bring these cases have everything to gain and nothing to lose under current rules, which permit plaintiffs’ lawyers to file frivolous suits, no matter how absurd the claims, without any penalty,” Smith said at the time. “Meanwhile defendants are often faced with years of litigation and substantial attorneys’ fees.

“LARA restores accountability to our legal system by reinstating mandatory sanctions for attorneys who file frivolous lawsuits.”

The newest version of the legislation is cosponsored by Sen. Marco Rubio, a Florida Republican and former Presidential candidate, as well as Reps. Steve Chabot, Jason Trent Franks, Blake Farenthold and Ken Buck, all Republicans.

Legislators believe LARA will crack down on frivolous lawsuits that clog up the U.S. legal system.

Some lawmakers contend businesses and individuals waste billions paying out claims on meritless lawsuits every year. They believe these payouts hurt the economy and funds could be better spent on investing in new businesses and hiring new employees.

The annual direct cost of American tort litigation has been estimated at more than $250 billion, according to a press release issued by Grassley’s office.

Additionally, under the legislation, any monetary sanction imposed under Rule 11 would be paid by the parties to the suit.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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