Lawsuit Bill Could Be D.O.A. In Senate

House seeks sanctions for 'frivolous' actions, but expect 'muchtougher sledding' ahead

By Arthur D. Postal

Washington

Legislation imposing sanctions for filing frivolous lawsuits waspassed overwhelmingly in the House of Representatives, butprospects in the Senate–which has already passed on the ideaonce–are far from certain.

Indeed, while insurance industry trade associations voicedstrong support for the bill, David Winston, senior vice presidentfor federal affairs at the National Association of Mutual InsuranceCompanies, admitted that "it will be much tougher sledding in theSenate, where 60 votes are required for passage," citing thesupermajority needed to overcome any potential filibuster by tortreform opponents.

"We will continue to push hard for Senate action on thelegislation, but it will take a Herculean effort to get it passednext year," according to Mr. Winston.

He explained that for the remainder of this year, the focus ofthe Senate Judiciary Committee will be diverted by the vacancy onthe Supreme Court. "Clearly, the president's support of thelegislation is critical, as it was when the Class Action Reform Actpassed earlier this year, and hopefully the president will use hisbully pulpit to talk about the importance of this legislation," headded.

The legislation–H.R. 420, the Lawsuit Abuse Reduction Act, orLARA–passed the House by a vote of 228-184. However, a similar billthat passed the House last year was never brought up for a Senatevote.

The legislation passed by the House calls for suspending thelicenses of lawyers found to have filed three so-called "frivolouslawsuits." Mr. Winston explained that LARA would end the need forinsurers "to use their valuable financial and human resources torespond to such lawsuits."

Brendan Reilly, director of federal government affairs at theIndependent Insurance Agents and Brokers of America, said it was"common sense to hold plaintiffs' lawyers responsible for filingunwarranted lawsuits," noting that the bill is designed "to preventthe practice of litigation tourism."

Ernie Csiszar, president and CEO of the Property CasualtyInsurers Association of America, said the bill contains "twocommon-sense proposals that will benefit all Americans throughlower costs." He cited the bill's ban on so-called "venue shopping"to keep lawsuits in courts with actual connections to the cases,and the imposition of sanctions on lawyers who file multiplefrivolous cases.

Charles E. Symington Jr., senior vice president of governmentaffairs and federal relations at IIABA, said the bill, if passed,would prevent attorneys from "shopping around forplaintiff-friendly courthouses to bolster their chances ofsuccessfully litigating cases of dubious merits."

The bill would reinstate a pre-1993 rule establishing mandatorypenalties against lawyers who file frivolous lawsuits. The penaltywould be the suspension for one year of the law license of anattorney found to have filed three baseless lawsuits in anyjudicial circuit during their careers.

The House by voice vote added an amendment sponsored by Rep.James Sensenbrenner, R-Wis., who chairs the House JudiciaryCommittee, which allows sanctions to be imposed for the destructionof certain documents in federal court cases.

The amendment also clarifies the anti-forum-shopping provisionby saying that if there is no state court in the county in whichthe injury occurred, the case may be brought in the nearest countywhere a general court is located.

The Judicial Conference of the United States, which establishespolicy for the federal judiciary, opposes the bill. The group saidit would return the courts to a system that required penalties forevery violation of the rule and "spawned thousands of courtdecisions and generated widespread criticism." Under current law,it is up to a judge to determine whether to pursue penalties forfiling frivolous lawsuits.

The Association of Trial Lawyers of America also voiced concernsabout the legislation, arguing that, if enacted, the bill wouldlimit where an injured consumer could file a suit and prevent someforeign corporations that sell unsafe products from being heldaccountable in U.S. courts.

Ken Suggs, president of the ATLA, said the bill would require asuit be brought not where there are contacts–but where thedefendant's principal place of business is located, even if that isoverseas. In other words, an injured American would have to travelabroad to file a lawsuit.

"It's bad enough that Congress has passed multiple bills thisyear allowing corporations to escape accountability, but to nowprotect foreign corporations that injure Americans with defectiveproducts shows to what extreme lengths they'll go to eliminate theright of ordinary Americans to seek justice," Mr. Suggs said.

Under current law, an injured family can sue a foreignmanufacturer that makes a defective or dangerous product whereverthere are sufficient contacts between that company and thejurisdiction–such as where the product is imported into the U.S. orwhere it is sold, Mr. Suggs said.

Caption (jury art, via Don):

Insurers will push hard for Senate passage of a House billcracking down on "frivolous" suits, but some say it will take a"Herculean effort" to get more the more than 60 votes needed toavoid a filibuster.