Lawsuit Abuse Bill Introduced By Iowa, Texas Legislators

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Senate Judiciary Committee chairman Chuck Grassley (R-Iowa) and Rep. Lamar Smith (R-Texas), former chairman of the House Judiciary Committee, have introduced legislation to reduce frivolous lawsuits that bog down the legal system and cost businesses billions of dol­lars every year. The Lawsuit Abuse Reduction Act (LARA) would impose mandatory sanctions for lawyers who file meritless suits in federal court. The sponsors comment that federal rules requiring sanctions for frivolous suits were watered down in 1993, which resulted in increased lawsuit abuse. The act restores mandatory sanctions that hold attorneys accountable for lawsuit abuse. House Judiciary Committee chairman Bob Goodlatte (R-Va.) is an original cosponsor of the bill. The bill is also cospon­sored by Sen. Marco Rubio (R-Fla.) and Reps. Steve Chabot (R-Ohio), chairman of the House Small Business Committee; Trent Franks (R-Ariz.), and Blake Farenthold (R-Texas).

“Law-abiding Americans with a legitimate legal grievance are entitled to their day in court, but unscru­pulous attorneys who file frivolous lawsuits stand in the way of valid claims and clog our legal system,” Grassley said. “Moreover, they end up hurting businesses that must devote resources to unnecessary legal expenses. Putting the brakes on frivolous lawsuits will go a long way toward balancing the scales of justice, upholding the rule of law, and improving the public good. The serious threat of pun­ishment for filing frivolous lawsuits that would be enacted with our bill will help deter these baseless suits.”

Every year, billions of dollars are wasted on frivolous lawsuits, forcing individuals and businesses to spend thousands of dollars on litigation. This ultimately costs jobs and damages the economy because money that could be spent hiring new employees or investing in new businesses is instead directed toward legal fees. The annual direct cost of American tort litigation has been estimated at more than $250 billion. The Lawsuit Abuse Reduction Act restores accountability to the U.S. legal system by pro­viding penalties for filing baseless, meritless, and frivolous lawsuits. Specifically, the bill reinstates sanctions for viola­tion of Rule 11 of the Federal Rules of Civil Procedure, which was originally intended to deter frivolous lawsuits by sanctioning the offending party. The act ensures that judges impose monetary sanctions against lawyers who file frivolous lawsuits, including the attorney’s fees and costs incurred by the victim of the suit. The bill also reverses the 1993 amendments to Rule 11 that allowed parties and their attorneys to avoid sanctions for making frivo­lous claims by withdrawing them within 21 days after a motion for sanctions has been served.

“Lawsuit abuse is common in America because the lawyers who bring these frivolous cases have every­thing to gain and nothing to lose,” said Smith. “Lawyers can file meritless lawsuits, and defendants are faced with the choice of years of litigation, high court costs and attorneys’ fees, or a settlement out of court. This is legal­ized extortion. The Lawsuit Abuse Reduction Act restores accountability to our legal system by imposing mandatory sanctions on attorneys who file worthless lawsuits. LARA ensures that our justice system is not just another tool for those who line their pockets by filing frivolous suits.”

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