Legislation authored by U.S. Rep. Lamar Smith (R-TX) to penalize lawyers for filing thousands of frivolous lawsuits cleared the House on Friday and will next advance to the Senate.
The Lawsuit Abuse Reduction Act (LARA) would free courts to impose sanctions like striking the pleadings, dismissing the suit, non-monetary directives or payment penalties to deter abusive lawsuits.
“Everyday attorneys file frivolous lawsuits that cost innocent Americans their livelihoods,” Smith said. “These attorneys engage in legalized extortion and try to force individuals to settle out of court instead of paying huge court costs.”
Frivolous lawsuits have been filed against a weather channel for failing to accurately predict storms, against television shows people claimed were too scary and against a university that awarded a low grade, to name a few.
LARA requires lawyers who file frivolous lawsuits to pay attorneys’ fees and court costs of innocent defendants.
Smith added, “There is currently no disincentive to deter attorneys from filing frivolous claims. By requiring attorneys who file junk lawsuits to pay the court costs of those they sue, such lawsuits will be discouraged.”
The measure would amend Rule 11 of Federal Rules of Civil Procedure to strike a provision prohibiting motions for sanctions if a claim, contention or denial is withdrawn or corrected within 21 days.
LARA would also require courts to impose an appropriate sanction on any attorney, law firm or party found to be in violation of the rule.
Speaking on the House floor, Smith responded to opponents who claim that reinstating mandatory sanctions for frivolous lawsuits would impede judicial discretion. “Under LARA, judges retain the discretion to determine whether or not a claim is frivolous. If a judge determines that a claim is frivolous, then they must award sanctions. This ensures that victims of frivolous lawsuits obtain compensation,” Smith said.
U.S. Rep. Bob Goodlatte (R-VA), the chairman of the House Judiciary Committee, said lawyers flood federal courts with frivolous suits that “have no place in our civil justice system.”
“Baseless suits brought against hard working Americans, as well as businesses large and small, have a real cost that ultimately hurt the economy,” Goodlatte said. “Judges need to have the tools necessary to combat unscrupulous lawyers, and Congress is answering their calls for reform. Our civil justice system was created to serve Americans who bring legitimate claims to court, and the reforms in LARA allow for the doors of justice to stay open, while ensuring attorneys are held accountable for filing lawsuits with no basis in law or fact.”
Speaking in support of LARA on the House floor, U.S. Rep. Steve Chabot (R-OH) said the bill is part of Smith’s larger efforts to make the legal system work better for more people all across the country.
“… Businesses are a popular target for frivolous lawsuits that lack any legal or factual basis,” Chabot said. “These lawsuits can easily result in hundreds of thousands of dollars in legal fees and discovery costs. Small businesses oftentimes don’t have the financial resources to obtain a dismissal or sometimes even good legal counsel, and, therefore, their only option, in many cases, is to settle the case.”
LARA, Chabot added, would deter abusive litigation practices that present real threats to the stability of small businesses across the country.