Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va.) delivered the following remarks during floor debate on H.R. 720, Lawsuit Abuse Reduction Act (LARA).
Chairman Goodlatte: H.R. 720, the Lawsuit Abuse Reduction Act, would restore mandatory sanctions for frivolous lawsuits filed in federal court. Many Americans may not realize it, but today, under what is called Rule 11 of the Federal Rules of Civil Procedure, there is no requirement that those who file frivolous lawsuits pay for the unjustified legal costs they impose on their victims — even when those victims prove to a judge the lawsuit was without any basis in law or fact. As a result, the current Rule 11 goes largely unenforced, because the victims of frivolous lawsuits have little incentive to pursue additional litigation to have the case declared frivolous when there is no guarantee of compensation at the end of the day.
H.R. 720 would finally provide light at the end of the tunnel for the victims of frivolous lawsuits by requiring sanctions against the filers of frivolous lawsuits, sanctions which include paying back victims for the full costs of their reasonable expenses incurred as a direct result of the Rule 11 violation, including attorneys’ fees. The bill also strikes the current provisions in Rule 11 that allow lawyers to avoid sanctions for making frivolous claims and demands by simply withdrawing them within 21 days. This change eliminates the “free pass” lawyers now have to file frivolous lawsuits in federal court.
The current lack of mandatory sanctions leads to the regular filing of lawsuits that are baseless. 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. Correspondence written by someone filing a frivolous lawsuit, which became public, concisely illustrates how the current lack of mandatory sanctions for filing frivolous lawsuits leads to legal extortion. That correspondence to the victim of a frivolous lawsuit states – quote — “I really don’t care what the law allows you to do. It’s a more practical issue. Do you want to send your attorney a check every month indefinitely as I continue to pursue this?”
Under the Lawsuit Abuse Reduction Act, those who file frivolous lawsuits would no longer be able to get off scot-free, and therefore they couldn’t get away with those sorts of extortionary threats any longer.
The victims of lawsuit abuse are not just those who are actually sued. Rather, we all suffer under a system in which innocent Americans everywhere live under the constant fear of a potentially bankrupting frivolous lawsuit.
As the former chairman of The Home Depot company has written, “An unpredictable [legal] system casts a shadow over every plan and investment. It is devastating for start-ups. The cost of even one ill-timed abusive lawsuit can bankrupt a growing company and cost hundreds of thousands of jobs.”
The prevalence of frivolous lawsuits in America is reflected in the absurd warning labels companies must place on their products to limit their exposure to frivolous claims. A 5-inch brass fishing lure with three hooks is labeled “Harmful if swallowed.” A household iron contains the warning “Never iron clothes while they are being worn.” A piece of ovenware warns “Ovenware will get hot when used in oven.”
And here are just a couple of examples of frivolous lawsuits brought in federal court, where judges failed to award compensation to the victims.
A man sued a television network for two and half million dollars because he said a show it aired raised his blood pressure. When the network publicized his frivolous lawsuit, he demanded the court make them stop. Although the court found the case frivolous, not only did it not compensate the victim, it granted the man who filed the frivolous lawsuit an exemption from even paying the ordinary court filing fees.
In another case, lawyers filed a case against a parent, claiming the parent’s discipline of their child violated the Eight Amendment of the Constitution, which prohibits cruel and unusual punishment by the government, not private citizens. One of the lawyers even admitted signing the complaint without reading it. The court found the case frivolous, but awarded the victim only about a quarter of its legal costs, because Rule 11 currently doesn’t require that a victim’s legal costs be paid in full. The Lawsuit Abuse Reduction Act would change that.
I thank the former Chairman of the Judiciary Committee, Lamar Smith (R-Texas), for introducing this simple, common-sense legislation that would do so much to prevent lawsuit abuse and restore Americans’ confidence in the legal system. I urge all my colleagues to support it today.