House Okays Frivolous Suit Ban

Sponsored by Rep. Lamar Smith, R-Texas, the measure would reinstate provisions removed from Rule 11 of the Federal Rules of Civil Procedures in 1993 that included mandatory sanctions for those filing frivolous lawsuits.

It also adds a "three strikes and your out" rule that would bar attorneys who have filed three or more frivolous actions in a jurisdiction from filing further cases in that court for at least a year.

After two attempts by Democrats to modify the bill, it was passed by a vote of 229-174, with members voting largely along party lines. It is highly unlikely, however, that the measure will be approved or will even be taken up in the Senate, as was pointed out during debate on the bill by Rep. Anthony Weiner, D-N.Y., who also sits on the Judiciary Committee.

Rep. Weiner's prediction of Senate inaction came as he was criticizing another argument for the bill?that frivolous lawsuits have indirectly increased costs for all Americans by driving up insurance premiums.

Mr. Weiner said passage of the bill would not happen because the Senate "will never take up such a bill" and he forecast that while it would restrict Americans right to got to court insurance rates would "keep going up and up" because that was the experience after litigation reform measures in California and Florida.

"So if my colleagues think that by voting for this bill they will be reducing insurance rates, nothing could be further from the truth," he remarked.

The bill would eliminate the opportunity for lawyers to avoid sanctions under current law by withdrawing a frivolous claim within 21 days after a motion for sanctions has been filed.

Also, the legislation seeks to curb abusive practices, such as shopping for friendly court jurisdictions, by requiring lawsuits to be filed either in the jurisdiction where the plaintiff suffered an injury or in the jurisdiction where the defendant's principal place of business is located.

"Because existing rules against frivolous lawsuits are ineffective, the right to sue has not only been exploited by lawyers, it has been turned into one of the most destructive business models in the American economy," said Rep. James Sensenbrenner, R-Wis., chairman of the House Judiciary Committee.

Mr. Sensenbrenner said, "Today, personal injury lawyers can gamble on taking cases on a contingency-fee basis because they only need to win one in 10 to score the big judgment that would make up for the losses in other cases.

"We all live with the consequences, including higher taxes and insurance rates, chaos in our schools, and doctors going out of business, limiting Americans' access to health care."

Despite the dim prospects of the bill, the insurance industry and others who typically are the subjects of lawsuits celebrated its passage.

The bill "takes a first step toward reforming lawsuit abuse and returning that money to Americans who desperately need it," said Carl Parks, senior vice president of government affairs for the Property Casualty Insurers Association of America.

Mr. Parks said, "With two commonsense proposals, the ban on so-called ?venue shopping' and the imposition of sanctions on lawyers who file multiple frivolous cases, the legislation will benefit all Americans through lower costs."

Lawrence Fineran, vice president for regulation and competition policy for the National Association of Manufacturers, noted that the continuing problems inflicted on the economy by the current tort system will eventually force the Senate's hand.

"At some point, the Senate will have to stand up to America's influential trial bar, too," Mr. Fineran said. "Or, at the very least, those senators blocking reform will have to stop pretending they're concerned about job loss to outsourcing."

Mr. Fineran also took issue with a Democratic criticism that H.R. 4571 would lead to an "outsourcing" of the American legal system as the "primary place of business" and would force Americans to file claims against foreign companies in their home countries.

"Trial bar allies in the House made a specious outsourcing argument against this bill, but it had no credibility whatsoever," Mr. Fineran said. "In fact, the litigation status quo is contributing to the ?out-forcing' of American jobs."

With the Presidential election less than two months away, presidential politics has loomed large over the issue of tort reform, especially since Sen. John Edwards, D-N.C., a trial lawyer, was named as the Democratic vice presidential nominee. Several Republicans made references to an article written by Sen. Edwards earlier this year in favor of mandatory penalties for lawyers who file frivolous claims.

Sherman Joyce, president of the American Tort Reform Association, called on the Democratic nominees to offer their support for H.R. 4571 in the wake of House passage.