May 2015: A Return to the Past in Combatting Frivolous Litigation

Washington Watch | May 2015
By Bruce Moyer

For more than a decade, Congress has considered a variety of legislative proposals aimed at curbing so-called frivolous lawsuits brought in the federal courts. A smattering of bills, largely supported by business interests, have been introduced in both chambers to revise pleading requirements and put greater teeth into judicial sanctions against attorneys and parties associated with abusive lawsuits.

The proposals under current consideration would reinstate the sanctions framework under Rule 11 of the Federal Rules of Civil Procedure, as adopted in 1983 and eliminated a decade later in 1993. The proposals also would eliminate a part of Rule 11 that permits a party to withdraw challenged pleadings on a voluntary basis without penalty. A separate set of legislative proposals would specifically address abusive litigation tactics in the patent arena.

This month’s column will focus on attempts in Congress to curb “frivolous lawsuits” through statutory amendment of Rule 11. Next month’s column will spotlight efforts to deter abusive patent litigation by so-called “patent trolls” and other nonpracticing entities that allegedly extort expensive settlements from valid patent holders.

In response to both sets of proposals, the Federal Bar Association has urged Congress to exercise caution and to respect the independence of the Federal Judiciary and its procedures for creating rules and mechanisms that deter and apply sanctions against abusive litigation practices.

“Letting Lawyers Instead of Their Conscience Be Their Guide”
Since 2004, leading Republican House lawmakers have introduced bills seeking to deter litigiousness at the slightest provocation and make attorneys more accountable. This group has included the former chairs of the House Judiciary Committee, Rep. James Sensenbrenner (R-Wis.) and Rep. Lamar Smith (R-Texas), as well as its current chair, Rep. Robert Goodlatte (R-Va.). Their commitment has been guided by Will Rogers’ observation that Americans are ‘‘letting lawyers instead of their conscience be their guide.’’ As a 2004 House report suggested, frivolous lawsuits have had a “corrosive effect on American culture and values, threatening America’s churches, schools, doctors, sports, playgrounds, friendly relations and even the Girl Scouts and other family institutions.”

The current proposals under consideration in Congress would require mandatory sanctions against attorneys and parties for baseless suits under Rule 11. They also would strike the “safe harbor” provisions in Rule 11 that allow lawyers to withdraw allegedly frivolous claims by withdrawing them within 21 days. These proposals most frequently have been contained in bills popularly called the “Lawsuit Abuse Reduction Act” (LARA). During the last Congress, the LARA of 2013 (H.R. 2655) passed the House by a 228-195 vote, largely along party lines, but the legislation stalled in the Senate, primarily over concerns raised by the Federal Judiciary and bar groups, including the Federal Bar Association (FBA).

Back to the Future?
One of the most noteworthy concerns raised about LARA lies in the way the legislation would return Rule 11 to the same version of the rule that was in place from 1983 to 1993, when it became the subject of widespread criticism in the legal community, leading to its current form, after consideration by the Judicial Conference, the Supreme Court, and Congress.

As the Committee on Rules and Practices of the Judicial Conference of the United States stated in a 2013 letter to the House Judiciary Committee, “We greatly appreciate, and share, the desire to improve the civil justice system in our federal courts, including by reducing frivolous filings. But legislation that would restore the 1983 version of Rule 11 by undoing the 1993 amendments would create a ‘cure’ far worse than the problem it is meant to solve. The 1983 provision for mandatory sanctions was eliminated because it did not provide meaningful relief from the litigation behavior it was meant to address, and instead generated wasteful satellite litigation that had little to do with the merits of cases and that added to the time and costs of litigation.”

The FBA, in similar comments to Congress, also noted how attorneys practicing in the 1980’s had witnessed the transformation of Rule 11 into a pernicious tool of abuse. It created a significant incentive to file unmeritorious Rule 11 motions to try and pressure plantiffs into financial settlements. Some aggressive lawyers were known to file Rule 11 motions in response to virtually every filing. In addition, those same aggressive lawyers used Rule 11 motions as a weapon to create conflicts of interest—or at least, the potential appearance of conflict—between their opposing lawyers and clients, when the opposing lawyer was forced to respond personally to accusations of having violated Rule 11.

“The increasing number of unmeritorious Rule 11 motions led to more and unnecessary tensions between opposing lawyers, which in turn fueled a decline in civility and professionalism in litigating other aspects of the lawsuit,” the FBA noted in a Dec. 11, 2013 letter to the Senate Judiciary Committee. “The rule provided a disincentive to abandon or withdraw a pleading or claim that lacked merit – thereby admitting error and risking sanctions—even after determining that it no longer was supportable in law or fact.”

Today, with both legislative chambers under control by the same party, will Rule 11 return to its contentious past? Pent-up pressures for change could tip the scales, but procedural obstacles in the Senate will likely force a stalemate once again.

Bruce Moyer is government relations counsel for the FBA. © 2015 Bruce Moyer. All rights reserved.

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