[House Report 112-174]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-174
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LAWSUIT ABUSE REDUCTION ACT OF 2011
_______
July 21, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Smith of Texas, from the Committee on the Judiciary,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 966]
[Including cost estimate of the Congressional Budget Office]
The Committee on the Judiciary, to whom was referred the
bill (H.R. 966) to amend Rule 11 of the Federal Rules of Civil
Procedure to improve attorney accountability, and for other
purposes, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
The Amendment.................................................... 2
Purpose and Summary.............................................. 2
Background and Need for the Legislation.......................... 3
Hearings......................................................... 38
Committee Consideration.......................................... 38
Committee Votes.................................................. 39
Committee Oversight Findings..................................... 40
New Budget Authority and Tax Expenditures........................ 40
Congressional Budget Office Cost Estimate........................ 40
Performance Goals and Objectives................................. 41
Advisory on Earmarks............................................. 41
Section-by-Section Analysis...................................... 41
Changes to the Federal Rules of Civil Procedure Made by the Bill,
as Reported.................................................... 42
Dissenting Views................................................. 43
The Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Lawsuit Abuse Reduction Act of 2011''.
SEC. 2. ATTORNEY ACCOUNTABILITY.
(a) Sanctions Under Rule 11.--Rule 11(c) of the Federal Rules of
Civil Procedure is amended--
(1) in paragraph (1), by striking ``may'' and inserting
``shall'';
(2) in paragraph (2), by striking ``Rule 5'' and all that
follows through ``motion.'' and inserting ``Rule 5.''; and
(3) in paragraph (4), by striking ``situated'' and all that
follows through the end of the paragraph and inserting
``situated, and to compensate the parties that were injured by
such conduct. Subject to the limitations in paragraph (5), the
sanction shall consist of an order to pay to the party or
parties the amount of the reasonable expenses incurred as a
direct result of the violation, including reasonable attorneys'
fees and costs. The court may also impose additional
appropriate sanctions, such as striking the pleadings,
dismissing the suit, or other directives of a nonmonetary
nature, or, if warranted for effective deterrence, an order
directing payment of a penalty into the court.''.
(b) Rule of Construction.--Nothing in this Act shall be construed to
bar or impede the assertion or development of new claims, defenses, or
remedies under Federal, State, or local laws, including civil rights
laws, or under the Constitution.
Purpose and Summary
The Lawsuit Abuse Reduction Act of 2011 (``LARA'') would
prevent frivolous lawsuits and help dispel the legal culture of
fear that has come to permeate American society. The bill,
which was introduced in the House by Congressman Lamar Smith
and by Senator Chuck Grassley in the Senate on March 9, 2011,
would restore the teeth Federal Rule of Civil Procedure 11 once
had to deter frivolous Federal lawsuits.
LARA would (1) restore mandatory sanctions for filing
frivolous lawsuits in violation of Rule 11, (2) remove Rule
11's ``safe harbor'' provision that currently allows parties
and their attorneys to avoid sanctions for making frivolous
claims by withdrawing frivolous claims after a motion for
sanctions has been filed, and (3) require monetary sanctions,
including attorneys' fees and compensatory costs, against any
party making a frivolous claim.
LARA applies to cases brought by individuals as well as
businesses (both big and small), including business claims
filed to harass competitors and illicitly gain market share.
The bill also applies to both plaintiffs and defendants.\1\
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\1\Indeed, under the pre-1993 Rule 11, sanctions were imposed on
defendants for having raised frivolous defenses. In SEC v. Keating,
1992 WL 207918, [1992 Transfer Binder] Fed.Sec.L.Rep. (CCH) para.
96,906 (C.D.Cal.1992), the court imposed sanctions of the defendant
Charles Keating because 12 of 14 ``shotgun'' defenses were ``patently
frivolous.'' Sanctions were also imposed on defendants for filing
inappropriate Rule 11 motions, see Berger v. Iron Workers, 843 F.2d
1395 (D.C. Cir. 1988) (affirming in part per curiam 7 Fed. Rules Serv.
3d 306 (D.D.C. 1986)), and also for filing frivolous or harassing
counterclaims. See Aetna Insurance v. Meeker, 953 F.2d 1328 (11th Cir.
1992) (affirming district court Rule 11 sanction of defendants for
pursuing frivolous counterclaims of negligent salvage and conversion).
In Swanson v. Sheppard, 445 N.W.2d 654 (N.D.1989), for example, the
court imposed Rule 11 sanctions on the defendant because the defendant
counterclaimed ``simply to discourage the plaintiff from continuing
with his cause of action.'' Sanctions were imposed on defendants for
failing to conduct a reasonable inquiry into the legal basis for their
Rule 12(b)(6) motion to dismiss. In National Survival Game, Inc. v.
Skirmish, U.S.A., Inc., 603 F Supp at 341-42 Rule 11 sanctions on
defendants' counsel on the ground that counsel failed to conduct a
reasonable inquiry into the legal basis for the Rule 12(b)(6) motion to
dismiss, stating ``Defendants failed to cite a single case or authority
in their two-page memorandum [in support of the motion]. Apparently,
they completely ignored the firmly established precedents directly
contradictory to their position. No doubt exists that [defendants']
counsel failed to conduct the `reasonable inquiry' that Rule 11
requires to ensure that a motion `is warranted by existing law or a
good faith argument for the extension, modification or reversal of
existing law . . .''' Id. at 341-42. See also Steele v Morris, 608 F.
Supp. 274 (S.D.W.Va. 1985) (court granted the plaintiff's motion for
Rule 11 sanctions to be imposed upon the defendant, concluding that the
defendant's counsel failed to make reasonable inquiry into both the
facts and the law before filing a motion to dismiss in this case which
alleged, among other things, that the plaintiff suffered emotional
distress due to the defendant's willful, deliberate, and outrageous
conduct). Sanctions were also imposed on defendants when they were
found to have ignored firmly established precedent. In National
Survival Game, Inc. v. Skirmish, U.S.A., Inc., 603 F. Supp. 339, 341-42
(S.D.N.Y. 1985), Rule 11 sanctions were imposed because defendants
``completely ignored the firmly established precedents directly
contradictory to their position.'' And in Smith v. United Transp. Union
Local 81, the court imposed Rule 11 sanctions where the defendants
frivolously maintained a lawsuit by ignoring relevant law, relying on
irrelevant law, and basing arguments on vacated cases. 594 F. Supp. 96,
101 (S.D. Cal. 1984).
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Additionally, the bill expressly provides that ``Nothing
in'' the changes made to Rule 11 ``shall be construed to bar or
impede the assertion or development of new claims, defenses, or
remedies under Federal, State, or local laws, including civil
rights laws, or under the Constitution.''
Background and Need for the Legislation
In his 2011 State of the Union Address, President Obama
said ``I'm willing to look at other ideas to bring down costs,
including one that Republicans suggested last year: medical
malpractice reform to rein in frivolous lawsuits.'' Given
President Obama now claims to support reforms that limit
frivolous lawsuits in the context of health care, there is no
principled reason he should not also support limits on
frivolous lawsuits in other contexts as well, including limits
on frivolous lawsuits in Federal court.
A letter written by someone filing a frivolous lawsuit,
which recently became public, concisely illustrates how the
current lack of mandatory sanctions for filing frivolous
lawsuits leads to legal extortion. That letter to the victim of
a frivolous lawsuit states ``I really don't care what the law
allows you to do. It's a more practical issue. Do you want to
send your attorney a check every month indefinitely as I
continue to pursue this?''\2\
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\2\See http://pubcit.typepad.com/clpblog/2011/02/javelin-marketing-
seeks-to-suppress-criticism-of-its-insurance-leads-sales.html
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SECTION 2 OF THE LAWSUIT ABUSE REDUCTION ACT
Federal Rule of Civil Procedure 11 (``Rule 11''), as
originally adopted and prior to the adoption of weakening
amendments in 1993, was widely popular among Federal judges,
and it served to significantly limit lawsuit abuse.
In 1990, the Judicial Conference's Advisory Committee on
Civil Rules undertook a review of Rule 11 and asked the Federal
Judicial Center to conduct an empirical study of its operation
and impact. The survey of 751 Federal judges found that an
overwhelming majority of Federal judges believed that Rule 11
did not impede development of the law (95%); the benefits of
the rule outweighed any additional requirement of judicial time
(71.9%); the 1983 version of Rule 11 had a positive effect on
litigation in the Federal courts (80.9%); and the rule should
be retained in its then-current form (80.4%).\3\
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\3\Federal Judicial Center Final Report on Rule 11 to the Advisory
Committee on Civil Rules of the Judicial Conference of the United
States (May 1991). A subsequent survey conducted by the Federal
Judicial Center in June 1995, consisting of 148 Federal judges and over
1,000 trial attorneys found that the 1993 amendments that disallowed
monetary compensation for victims of frivolous lawsuits were a bad
idea. In that survey, two-thirds of judges (66%), defense attorneys
(63%), and other attorneys (66%), and even a substantial portion of
plaintiff's attorneys (43%), supported restoring Rule 11's compensatory
function once again. See Shapard et. al., Report of a Survey Concerning
Rule 11, Federal Rules of Civil Procedure at 5 (Federal Judicial Center
1995).
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Despite this wide judicial support for a strong Rule 11, in
1991 the Civil Rules Advisory Committee included provisions to
weaken Rule 11 in a much broader package of proposed amendments
to the Federal Rules. The change to Rule 11 was driven largely
by the desire to avoid ``satellite litigation'' of Rule 11
issues that could burden allegedly overworked judges.\4\ (But
of course, any rule that punishes people for filing frivolous
lawsuits must have procedures for determining whether or not
the filing is frivolous. Otherwise, the rule would operate as a
pure ``loser pays'' rule in which the losing side paid a
penalty simply because they lost the case.) The proposed
changes were then sent to the Supreme Court for approval or
modification. Exercising what it viewed to be a very limited
oversight role,\5\ the Supreme Court approved the proposed
changes without substantive comment in April, 1993.
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\4\It is worth noting that 282,307 civil cases were filed in
Federal district courts in the 1-year period ending March 31, 2010 (an
increase of 9.2% over the 258,535 civil cases filed during that period
the prior year). See Administrative Office of the United States Courts,
Federal Judicial Caseload Statistics, March 31, 2010, available at
http://www.uscourts.gov/Viewer.aspx?doc=/uscourts/Statistics/
FederalJudicialCaseloadStatistics/2010/tables/C00Mar10.pdf (Table C,
U.S. District Courts--Civil Cases Commenced, Terminated, and Pending
During the 12-Month Periods Ending March 31, 2009 and 2010). Opponents
caution that between 1983 and June 1993, when the prior version of Rule
11 was in effect, approximately 7,000 judicial opinions referencing
Rule 11 were reported--an average of 700 decisions per year. If LARA
were to result in Rule 11 filings akin to those filed under the pre-
1993 rules, then only 1 in 400 Federal civil cases filed (0.25%) would
be associated with a reported Rule 11 decision (700 out of 282,307
civil cases filed). These cases, of course, would be disbursed among 94
Federal judicial districts
and 677 district court judges along with many senior judges. See http:/
/www.uscourts.gov/JudgesAndJudgeships/FederalJudgeships.aspx.
\5\While the Supreme Court is authorized to ``prescribe'' the
general rules of Federal court practice and procedure, see Judicial
Improvements and Access to Justice Act, 28 U.S.C. Sec. 2072(a), in fact
it has been the general practice of the Supreme Court to merely act as
a conduit for the rule changes and rely on the Judicial Conference to
make the decisions in this area. As pointed out in the House
Judiciary's Committee Report on H.R. 988 in the 104th Congress, Justice
White believed that, as a matter of practice, the role of the Supreme
Court is to ``. . . transmit the Judicial Conference recommendations
without change and without careful study as long as there is no
suggestion that the committee system has not operated with integrity.''
Indeed Chief Justice Rehnquist's April 22, 1993 letter conveying the
rules to the Speaker states: ``While the Court is satisfied that the
required procedures have been observed, this transmittal does not
necessarily indicate that the court itself would have proposed these
amendments in the form submitted.'' H. Rep. No. 104-62, at 11, n.14
(1995).
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In a strongly worded dissent on the Rule 11 changes,
Justice Scalia correctly anticipated that the proposed revision
would eliminate a ``significant and necessary deterrent'' to
frivolous litigation, stating ``the overwhelming approval of
the Rule by the Federal district judges who daily grapple with
the problem of litigation is enough to persuade me that it
should not be gutted.''\6\ Justices Scalia and Thomas properly
dissented from the transmittal of the amendments to Rule 11 to
Congress, arguing that ``[t]he proposed revision would render
the Rule toothless, by allowing judges to dispense with
sanction, by disfavoring compensation for litigation expenses,
and by providing a 21-day `safe harbor' within which, if the
party accused of a frivolous filing withdraws the filing, he is
entitled to escape with no sanction at all.''\7\
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\6\Id. at 11.
\7\146 F.R.D. 401, 507-08 (1993).
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Rule 11 as it existed prior to the 1993 amendments was very
popular with Federal judges. The Federal Judicial Center
(``FJC'') was commissioned to conduct empirical studies and
surveys on the operation of the old Rule 11,\8\ and in a survey
of all Federal trial judges, the FJC found that 80% were of the
opinion that the old Rule 11 had had an overall positive effect
and should not be changed.\9\ Congress needs to restore those
positive effects once again.
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\8\Standing Committee on Rules of Practice and Procedure of the
Judicial Conference of the United States, Call for Written Comments on
Rule 11 of the Federal Rules of Civil Procedure and Related Rules as
Amended in 1983 (August 1990), reprinted in 131 F.R.D. 335 (1990).
\9\Interim Report on Rule 11, Advisory Committee on Civil Rules,
reprinted in Georgene M. Vairo, Rule 11 Sanctions: Case Law
Perspectives and Preventive Measures, App. at 1-8 to 1-10 (2d ed.
1991).
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After the proposal to gut Rule 11 was forwarded to
Congress, there was a 7-month period under the Rules Enabling
Act in which the Congress had the authority to make changes,
but time ran out before Congress could stop these damaging
amendments to Rule 11.\10\
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\10\Under the Rules Enabling Act, Congress has 7 months to act on
the proposed rules; if Congress does not act, the proposed rules become
law. See 28 U.S.C. Sec. 2074(a). Despite the introduction of H.R. 2979
in the 103rd Congress by Carlos J. Moorhead, which would have delayed
the effective date of the proposed changes to Rule 11, and a companion
bill in the Senate, no formal action was taken in the Democrat-
controlled House, and the revisions went into effect on December 1,
1993. The House later passed H.R. 988 in the 104th Congress--which,
among other things, would have restored Rule 11 to its original form--
by a vote of 232-193, but it was not taken up in the Senate.
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Section 2 of LARA would restore teeth to Rule 11 once
again.
In particular, Section 2 of LARA would:
LRequire monetary sanctions against lawyers
who file frivolous lawsuits. Indeed, a survey conducted
by the Federal Judicial Center in June, 1995,
consisting of 148 Federal judges and over 1,000 trial
attorneys found that the 1993 amendments that
prohibited monetary compensation for victims of
frivolous lawsuits were a bad idea. In that survey,
two-thirds of judges (66%), defense attorneys (63%),
and other attorneys (66%), and even a substantial
portion of plaintiff's attorneys (43%), supported
restoring Rule 11's compensatory function once
again.\11\ LARA would do just that.
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\11\See Shapard et. al., Report of a Survey Concerning Rule 11,
Federal Rules of Civil Procedure, supra note 3, at 5.
LReverse the 1993 amendments to Rule 11 that
made Rule 11 sanctions discretionary rather than
mandatory. Because today, under a weak Rule 11,
sanctions in frivolous cases are not mandatory, there
is little incentive for a victim of a frivolous lawsuit
to spend time and money seeking Rule 11 sanctions.
Deterrence cannot be achieved without certain
punishment. While a court should have discretion to
fashion an appropriate sanction based on the
circumstances of the violation, litigants making
frivolous claims should not be allowed the opportunity
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to escape sanctions entirely.
LReverse the 1993 amendments to Rule 11 that
allow parties and their attorneys to avoid sanctions
for making frivolous claims and demands by withdrawing
them within 21 days after a motion for sanctions has
been filed. Justice Scalia correctly pointed out that
such amendments would in fact encourage frivolous
lawsuits: ``In my view, those who file frivolous suits
and pleadings should have no `safe harbor.' The Rules
should be solicitous of the abused (the courts and the
opposing party), and not of the abuser. Under the
revised Rule, parties will be able to file thoughtless,
reckless, and harassing pleadings, secure in the
knowledge that they have nothing to lose: If objection
is raised, they can retreat without penalty.''\12\ LARA
would get rid of the ``free pass'' lawyers have to file
frivolous lawsuits under today's Rule 11.
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\12\Id.
It is important to remember that nothing in LARA changes
the current standard by which frivolous lawsuits are judged.
That is, under LARA, the standard a judge will use to determine
whether a case is frivolous will remain as it has been, namely
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a determination that:
Lthe case is not being presented for any
improper purpose, such as to harass or to cause
unnecessary delay or needless increase in the cost of
litigation;
Lthe claims, defenses, and other legal
contentions therein are warranted by existing law or by
a nonfrivolous argument for the extension,
modification, or reversal of existing law or the
establishment of new law;
Lthe allegations and other factual contentions
have evidentiary support or, if specifically so
identified, are likely to have evidentiary support
after a reasonable opportunity for further
investigation or discovery; and
Lthe denials of factual contentions are
warranted on the evidence or, if specifically so
identified, are reasonably based on a lack of
information or belief.
Only cases that meet the criteria outlined above will be
subject to Rule 11 sanctions under the Lawsuit Abuse Reduction
Act. The baseless nature of arguments by reform opponents that
Rule 11 somehow stifles growth in the law is belied by the fact
that Rule 11 explicitly allow for growth in the law, but not
for frivolous arguments for extensions of the law.
Further, LARA expressly provides that ``Nothing in'' the
changes made to Rule 11 ``shall be construed to bar or impede
the assertion or development of new claims, defenses, or
remedies under Federal, State, or local laws, including civil
rights laws, or under the Constitution.''
FRIVOLOUS LITIGATION HAS 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
Frivolous litigation has a corrosive effect on American
culture and values, threatening America's churches, schools,
doctors, sports, playgrounds, friendly relations, even the Girl
Scouts and other family institutions, and everyone else.
As Philip Howard has pointed out, due to an onslaught of
frivolous lawsuits ``[l]egal fear has become a defining feature
of our culture.''\13\ The values crisis caused by lawsuit abuse
reaches all parts of American society.
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\13\Philip K. Howard, The Collapse of the Common Good: How
America's Lawsuit Culture Undermines Our Freedom (2001) at 11.
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Although LARA would only amend the Federal court rule on
frivolous lawsuits, state rules are often amended to track the
changes in the Federal rules because a system of generally
uniform rules in both state and Federal courts makes filing the
proper papers for lawyers less confusing.\14\ Consequently, the
following list includes examples of frivolous lawsuits in both
state and Federal court under the expectation that many states
would amend their state rules on frivolous lawsuits to reflect
the rules in LARA were LARA to become Federal law, just as
states did just that when the Federal rules on frivolous
lawsuits were last changed.\15\
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\14\The 1993 change to Rule 11 may show the likely impact of
amending the rule through LARA on state rules of civil procedure. After
amendment of Rule 11 in 1993, at least 13 states and the District of
Columbia amended their rules to conform to the Federal rule. In some
states, this change occurred within 1 or 2 years of the amendment of
the Federal rule. In others, it took 7 or more years for the state to
catch up through their rule-amendment process. These states include
Delaware (1995), District of Columbia (1995), Hawaii (2000), Minnesota
(2000), Missouri (1994), Nevada (2005), New Jersey (1994/96), North
Dakota (1996), Tennessee (1995), Utah (1997), Vermont (1996), West
Virginia (1998), Wisconsin (1998), and Wyoming (1994). Arkansas and
Florida also partially modified their state equivalents to add the
``safe harbor'' provided by the Federal rule in 1997 and 2002,
respectively.
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States often make such changes because their policy is to maintain
consistency with the Federal rules to avoid forum shopping and to
benefit from the interpretation of the rules by Federal courts. For
example, the notes to Rule 11 of the Nevada Rules of Civil Procedure
with respect to its 2005 amendment state that ``[t]he rule is amended
to conform to the Federal rule, as amended in 1993, in its entirety.''
Similarly, Tennessee's 2003 amendment of its Rule 11 notes that
``Amended Rule 11 tracks the Federal version.'' The notes to
Wisconsin's 1998 amendment of the state equivalent to Rule 11 provide
that ``[j]udges and practitioners will now be able to look to
applicable decisions of Federal courts since 1993 for guidance in the
interpretation and application of the mandates of FRCP 11 in
Wisconsin.''
In fact, in adopting the 1993 version of Federal Rule 11, some states
noted that they did not experience significant problems with the prior
rule, but would nevertheless adopt the 1993 Federal amendments as a
matter of their policy of maintaining consistency with the Federal
rules. The Advisory Committee notes following Minnesota Rule of Civil
Procedure 11.01 may best explain the policy: ``Rule 11 is amended to
conform completely to the Federal rule. While Rule 11 has worked fairly
well in its current form . . . , the Federal rules have been amended to
create both procedural and substantive differences between state and
Federal court practices . . . On balance, the Committee believes that
the amendment of the Rule to conform to its Federal counterpart makes
the most sense, given this Committee's long-standing preference for
minimizing the differences between state and Federal practice unless
compelling local interests or long-entrenched reliance on the state
procedure makes changing a rule inappropriate.'' Vermont noted with its
1996 amendment of Rule 11 that it ``experienced far less difficulty''
than the Federal courts in administering the pre-1993 version of Rule
11, but it would conform to the Federal rule to ``substantially improve
the practice.''
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\15\Many states' rules of civil procedure are modeled after Federal
Rule 11, and therefore also do not require sanctions for the filing of
frivolous lawsuits. See Ark. R. Civ. P. 11 (Arkansas), Addition to
Reporter's Notes, 1997 Amendment (``The rule has been amended by
designating the former text as subdivision (a) and by adding new
subdivision (b), which is based [on] Rule 11(c)(1) of the Federal Rules
of Civil Procedure, as amended in 1993 . . . New subdivision (b)
provides that requests for sanctions must be made as a separate motion,
rather than simply be included as an additional prayer for relief in
another motion. The motion for sanctions is not to be filed until at
least 21 days, or other such period as the court may set, after being
served. . . .''); Minn. R. Civ. P. 11.04 (Minnesota), Advisory
Committee Comments, 2000 Amendments (``Rule 11 is amended to conform
completely to the Federal rule. . . . On balance, the Committee
believes that the amendment to the Rule to conform to its Federal
counterpart makes the most sense, given this Committee's long-standing
preference for minimizing the differences between state and Federal
practice . . .''); N.D. R. Civ. P. 1 (North Dakota), Explanatory Note
(``As will become readily apparent from a reading of the rules, they
are the Federal Rules of Civil Procedure adapted, insofar as
practicable, to state practice.''); N.D. R. Civ. P. 11 (North Dakota),
Explanatory Note (``Rule 11 was revised, effective March 1, 1996, in
response to the 1993 revision of Rule 11.''); Tenn. R. Civ. P. 11
(Tennessee), Advisory Commission Comment to 1995 Amendment (``Amended
Rule 11 tracks the current Federal version. Sanctions no longer are
mandatory, and non-monetary sanctions are encouraged. The 21-day safe
harbor provision allows otherwise sanctionable papers to be withdrawn,
thereby escaping sanctions.''); Utah R. Civ. P. 11 (Utah), Advisory
Committee Note (``The 1997 amendments conform state Rule 11 with
Federal Rule 11.''); Vt. R. Civ. P. 11 (Vermont), Reporter's Notes to
1996 Amendment (``Rule 11 is amended to conform to the 1993 amendment
of Federal Rule 11.''). In addition, state courts also often rely on
Federal court decisions when interpreting their rules. See e.g. Gray v.
Washington, 612 A.2d 839, 842 (D.C. 1992); Bryson v. Sullivan, 412
S.E.2d 327, 332 (N.C. 1992); Bryant v. Joseph Tree, Inc., 829 P.2d
1099, 1104-05 (Wash. 1992) (en banc). Sanctions for frivolous filings
are also not mandatory in 38 states and the District of Columbia. See
Ala. R. Civ. P. 11 (Alabama); Alaska R. Civ. P. 11 (Alaska); Ark. R.
Civ. P. 11 (Arkansas); Cal.C.C.P. Sec. 128.5 (California); C.R.C.P. 11
(Colorado); C.G.S.A. Sec. 52-190a (Connecticut); Del. R. Sup. Ct. R. 33
(Delaware); D.C. R. Civ. P. 11 (D.C.); Fla. R. Civ. P. 1.150 (Florida);
Hi. R. Civ. P. 11 (Hawaii); Il. C. S. Sup. Ct. R. 137 (Illinois); In.
St. Trial Rule 11 (Indiana); La. Civ. Code Ann. Art. 864 (Louisiana);
Me. R. Civ. P. 11 (Maine); Md. Rule 1-311 (Maryland); Mass. R. Civ. P.
11 (Massachusetts); Minn. R. Civ. P. 11.03 (Minnesota); Miss. R. Civ.
P. 11 (Mississippi); Miss. Code Ann. Sec. 11-55-5 (Mississippi); Mo. S.
Ct. R. 55.03 (Missouri); Neb. R. Civ. P. St. Sec. 25-824 (Nebraska);
N.H. Sup. Ct. R. 59 (New Hampshire); N.J.S.A. Sec. 2A:15-59.1 (New
Jersey); N.M.R. Dist. Ct. R. Civ. P. 1-011 (New Mexico); N.D. R. Civ.
P. 11 (North Dakota); Ohio R. Civ. P. 11 (Ohio); 12 Okl. St. Ann.
Sec. 2011 (Oklahoma); Or. R. Civ. P. 17 (Oregon); Pa. R. Civ. P. 1023.1
(Pennsylvania); Pa. R. Civ. P. 1023.4 (Pennsylvania); R.I. R. Civ. P.
11 (Rhode Island); S.C. R. Civ. P. 11 (South Carolina); Tenn. R. Civ.
P. 11.03 (Tennessee); Tex. Civ. Prac. & Remedies Code Sec. 10.004
(Texas); Utah R. Civ. P. 11 (Utah); Vt. R. Civ. P. 11 (Vermont); Va.
Sup. Ct. R. 1:4 (Virginia); Va. Sup. Ct. R. 4:1 (Virginia); Wash.
R.Civ. P. 11 (Washington); W.Va. R. Civ. P. 11 (West Virginia); W.S.A.
Sec. 802.05 (Wisconsin); Wyo. R. Civ. P. 11 (Wyoming).
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RECENT FRIVOLOUS FEDERAL LAWSUITS IN WHICH NO SANCTIONS WERE IMPOSED
What follows is a list of recent frivolous Federal lawsuits
in which no sanctions were imposed because Federal Rule 11 as
it currently exists does not require sanctions for the filing
of frivolous lawsuits. LARA would likely change the outcome in
these cases and punish lawyers who file frivolous lawsuits.
LKaren McBrien twice filed claims alleging
that Federal agencies have her under surveillance and
have conducted biomedical and genetic experiments on
her. In dismissing the lawsuits as frivolous, the court
found that ``[c]laims describing fantastic or
delusional scenarios fall into the category of cases
whose factual contentions are clearly baseless.''
McBrien v. United States, No. 09-2432 (D.D.C. Feb. 26,
2010); McBrien v. FBI, No. 09-0197, 2009 WL 260043
(D.D.C. Feb. 3, 2009). Nevertheless, Ms. McBrien moved
for reconsideration, which the court denied, and
appealed her case to the D.C. Circuit. The court
allowed her to appeal in forma pauperis without paying
the ordinary filing fee. On November 24, 2010, the D.C.
Circuit finally dismissed the case for lack of
prosecution by the plaintiff. At no point did the trial
or appellate court impose any penalty on the plaintiff
for the frivolous litigation.
LIn July 2009, three New Jersey residents,
backed by the vegan advocacy group Physicians Committee
for Responsible Medicine (PCRM) and its ``Cancer
Project,'' filed a class action lawsuit in Essex
County, New Jersey against several hot dog
manufacturers claiming they were exposed to carcinogens
by eating hot dogs. None of the plaintiffs had actually
developed cancer. The lawsuit was filed in coordination
with an anti-hot dog billboard and television
advertising campaign, which many criticized as alarmist
and unsupported by science. The lawsuit sought damages
in the amount of the total cost of their hot dog
purchases and a requirement that the companies place a
new label on packages and advertising reading:
``WARNING: CONSUMING HOT DOGS AND OTHER PROCESSED MEATS
INCREASES THE RISK OF CANCER.'' Six months after the
case was moved to Federal court, U.S. District Court
Judge Jose Linares dismissed the case. O'Donnell v.
Kraft Foods Inc., No.2:09-cv-04448-JLL-CCC (D. N.J.
Mar. 18, 2010).
LRhonda Nichols claimed a wild bird
``attacked'' her while in a home improvement store's
outdoor garden center in Fairview Heights, Illinois,
causing head injuries. She never reported the 2005
incident to the Lowe's store, but sued for at least
$100,000 in damages claiming negligence and a violation
of the Illinois Animal Control Act. Due to Lowe's
stores' incorporation in North Carolina, the case was
removed to Federal court. Nichols claimed that the wild
birds created a dangerous condition on the property and
that Lowe's failed to exercise ordinary care to ensure
that the premises were reasonably safe and failed to
prevent the birds from entering the garden center. In
January 2006, U.S. District Judge William Stiehl ruled
that a ``reasonable plaintiff'' either would have
noticed the birds or understood that contact with them
was possible in any outdoor area with plants. The final
line of the ruling: ``Each party shall bear its own
costs.'' Nichols v. Lowe's Home Center, Inc., No. 05-
CV-376-WDS (S.D. Ill. Jan. 3, 2006).
LSherry Wall, the owner of 95-pound Doberman
Pinscher that constantly got loose and frightened her
neighbors, brought a lawsuit against a Milwaukee
suburb. She claimed the local government violated her
constitutional rights by telling the local humane
society to hold the roaming dog as a stray, after which
it held the dog for 60 days before returning it to the
owner. After the trial court dismissed the case, the
owner appealed. A panel of the U.S. Court of Appeals
for the Seventh Circuit found that a neighborhood
squabble over a dog is ``nuisance litigation'' that has
no place in Federal court and ordered the owner to show
``why she should not be sanctioned for making a
frivolous argument in a meritless case.'' It does not
appear from the court docket that it ultimately entered
sanctions of any kind. Wall v. Brookfield, 406 F.3d 458
(7th Cir. 2005).
LAfter watching an episode of the reality TV
show Fear Factor on NBC in December 2004, Austin
Aitken, a part-time paralegal from Cleveland, filed a
handwritten lawsuit suing the network for $2.5 million.
He said the sight of contestants eating blended rats
disgusted him so much that his health suffered. He
claimed the show raised his blood pressure, made him
dizzy, and caused him to vomit. He also became so
disoriented, he said he ran into a doorway ``causing
suffering, injury and great pain.'' He then followed up
by requesting that the court order NBC to ``cease and
desist'' from publicizing the absurd lawsuit. U.S.
District Judge Lesley Wells called the lawsuit
frivolous as it lacked even an arguable legal claim,
and warned Mr. Aitken against filing an appeal. The
court, however, did not award NBC its defense costs. In
fact, despite dismissing the lawsuit as frivolous, the
court granted Aitken's request for an exemption from
paying ordinary filing fees. Aitken v. NBC Television
Network, No. 1:04cv02574 (N.D. Ohio Feb. 25, 2005).
LAfter her father obtained full custody over
her and her younger sisters in a divorce action, Sarah
Schottenstein sued her father and his employer for
violations of the Eighth Amendment prohibition on cruel
and unusual punishment and Fourteenth Amendment
deprivation of liberty without due process, and for
habeas corpus relief. One of her attorneys signed the
complaint without reading it, the other refused to
withdraw it and prolonged the litigation by filing an
amended complaint. The court found the lawsuit
frivolous, given that the lawsuit was against private
parties, not the state. Nevertheless, due to Rule 11's
discouragement of awarding sanctions as compensation
for unwarranted litigation expenses, the court only
sanctioned the attorneys $21,503.50 and $1,131.75,
respectively, of the defendant's nearly $75,000 in
costs. It did so despite finding that his defense costs
were not only reasonable, but ``lower than those
typically charged by attorneys at comparable law
firms'' in the area. Schottenstein v. Schottenstein,
230 F.R.D. 355 (S.D.N.Y. 2005).
LWhen the government tried to foreclose on
their home, Donald and Gloria Beaner came up with a
creative approach. They sued the United States,
claiming that their mortgage was fraudulent because the
government never provided them with ``legal tender'' or
``real money'' as defined by the U.S. Constitution.
Only silver or gold would do, they claimed. Although
the couple had engaged in a pattern of filing frivolous
lawsuits and the court had previously rejected their
claims and urged them to voluntarily dismiss their
complaint, they prolonged the litigation. Yet, despite
wasting the time of the judges and lawyers, the court
imposed only a sanction of $500 apiece. Beaner v.
United States, 361 F. Supp.2d 1063 (D. S.D. 2005).
FEDERAL FRIVOLOUS LAWSUITS IN WHICH CURRENT RULE 11'S 21-DAY ``FREE
PASS FOR FRIVOLOUS LAWSUITS'' HARMED THOSE BEING SUED
Rule 11's ``safe harbor'' requires a person who is hit with
a frivolous claim to hire an attorney to draft a motion for
sanctions, but provide a copy of the motion to the offender 21-
days before filing the request. During that time, the offender
can withdraw the frivolous claim with no penalty whatsoever.
Due to this safe harbor, many frivolous claims are never seen
by courts. Failure to strictly comply with the technical
requirements of the safe harbor provisions results in a denial
of sanctions, as occurred in the following cases. LARA would
prevent such injustices by getting rid of the 21-day safe
harbor rule for frivolous lawsuits.
LA couple who borrowed over $1 million, then
defaulted, brought a lawsuit against the lenders
asserting a civil rights claim as members of a
protected class of ``consumers looking to build their
dream home,'' conspiracy, and other claims. Although a
plaintiff was put on notice by two defendants of its
frivolous complaint, and refused to withdraw it, a
third defendant, that had not provided notice of an
intent to seek sanctions until several months later,
could not obtain any relief. Holgate v. Baldwin, 425
F.3d 671, 677 (9th Cir. 2005).
LAn online diamond seller sued a rival for
infringement of a patent by ``listing, selling,
offering for sale, and facilitating the sale of
diamonds.'' The defendants sent the plaintiffs two
letters warning that they would seek attorneys' fees
and costs pursuant to Rule 11 if they did not
voluntarily dismiss their patent claim. The plaintiffs
did not do so. Two months later, after discovery, the
plaintiff dismissed its claim, and the court did so
with prejudice. The court held, however, that the
defendant could not obtain sanctions because only
serving a motion, not a letter, will fulfill the 21-day
notice requirement of Rule 11. Diamonds.net LLC v. Idex
Online, Ltd., 254 F.R.D. 475 (S.D.N.Y. 2008).
RECENT FRIVOLOUS STATE LAWSUITS IN WHICH NO SANCTIONS
WERE IMPOSED
While LARA itself does not affect state law regarding
frivolous litigation, as described above, many states
voluntarily amend their own state rules on frivolous litigation
to mirror the Federal rules. If states followed LARA, the
following frivolous lawsuits filed in state court would likely
be appropriately punished.
LLindsay Lohan sought $100 million from E-
Trade for use of the name ``Lindsay'' in reference to a
female baby in a commercial aired during the Super
Bowl. Lohan's name was never mentioned in the ad. Lohan
filed a lawsuit, however, in the Nassau County Supreme
Court in the New York, claiming that the public knows
her by the singular name, like Oprah or Madonna, and
that referring to the baby as a ``milk-aholic''
directly references her life. Lohan claimed $50 million
in compensatory damages, as well as $50 million in
exemplary (punitive) damages. The case was not thrown
out of court as frivolous, but settled in September
2010 for an undisclosed sum. An E*Trade spokeswoman
said ``It was a simple business decision. We always
have to consider the cost and time involved in
litigation, and we are pleased to have the matter
behind us.''
LIn October 2009, Yvette Gorzelany, Joanna
Obiedzinski, and Paulina Pakos sued in New Jersey
Superior Court in Bergen County over their appearance
in photographs included in the book ``Hot Chicks with
Douchebags.'' The plaintiffs were not identified in
photo captions, which were taken at a club, or
discussed anywhere in the entire book. They brought
claims for intentional and negligent infliction of
emotional distress, conspiracy to commit fraud,
invasion of privacy, unfair competition under a
nonexistent statute described as the Business and
Professional Code Section 17200 (a cut and paste error
from the frequently abused California law of that
name), defamation and ``humiliation'' (another
nonexistent claim). Four months later, a New Jersey
judge threw out the suit, finding that the book was
obviously an attempt at satire and that the plaintiffs
had no actionable claim.
LIn 2005, Roy Pearson Jr, an administrative
law judge in Washington, D.C., sued a family-owned dry
cleaning shop for $67 million, later reduced to $54
million, for allegedly losing his pants. Pearson
claimed the Chung family failed to live up to
``satisfaction guaranteed'' and ``next day service''
signs displayed in the store. After more than 2 years
of litigation, Pearson's lawsuit was tried before a
D.C. Superior Court judge who ruled for the Chungs.
Judge Judith Bartnoff ordered Pearson to pay the
family's litigation costs and noted that she would
consider awarding attorneys' fees after still more
motions and hearings. Pearson, however, continued to
prolong the litigation through 2008 and into 2009 until
the District's highest court finally denied Pearson's
appeal and request for rehearing. Meanwhile, the South
Korean immigrants closed their store and decided
against pursuing reimbursement of $83,000 in defense
costs. Pearson was denied reappointment as an
Administrative Law Judge due to his lack of ``judicial
temperament.'' He then brought a Federal lawsuit
against the city for the loss of his job, which he
again lost, but continued until the D.C. Circuit denied
his appeal in May 2010.
LWhile shopping at an open air mall in Skokie,
Illinois in 2004, Marcy Meckler had just left the
Tiffany & Co. jewelry store and was walking to
Nordstrom when she ``had a squirrel jump up and attach
itself to her leg,'' according to the lawsuit she filed
nearly 2 years later in Cook County Circuit Court. She
claimed that the mall was responsible for ``encouraging
the squirrel'' to be in its courtyard and for ``failing
to warn the plaintiff of the squirrel's presence.'' She
originally sued for common law negligence, but later
added a claim under the Illinois Animal Control Act,
which imposes strict liability on the ``owner'' of an
animal that attacks a person without provocation. The
lawsuit demanded in excess of $50,000 for the severe
injuries she experienced ``while frantically attempting
to escape from the squirrel and detach it from her
leg.'' Cook County Circuit Court Judge Kathy M.
Flanagan allowed Meckler to amend her complaint twice,
but dismissed the case with prejudice on the third
attempt in a July 2007 ruling.
FRIVOLOUS LAWSUITS AFFECT EVERYONE: CHURCHES
In response to litigation against a church after a
parishioner committed suicide, churches have begun implementing
policies discouraging counseling by ministers. Instead,
parishioners are being referred to secular psychologists and
other therapists.\16\ According to a recent Newsweek cover
story, ``The Rev. Ron Singleton's door is always open. That
way, when the Methodist minister of a small congregation in
Inman, S.C., is counseling a parishioner, his secretary across
the hall is a witness in case Singleton is accused of
inappropriate behavior. (When his secretary is not around, the
reverend does his counseling at the local Burger King.)
Singleton has a policy of no hugging from the front; just a
chaste arm around the shoulders from the side. And he's
developed a lame little hand pat to console the lost and the
grieving. The dearth of hugging is `really sad,' he says, but
what is he going to do? He could ill afford a lawsuit.''\17\
---------------------------------------------------------------------------
\16\Id. at 32.
\17\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 43.
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: SCHOOLS
A poll found that ``[n]early 8 in 10 teachers (78%) said
students are quick to remind them that they have rights or that
their parents can sue.''\18\
---------------------------------------------------------------------------
\18\Public Agenda, ``Teaching Interrupted: Do Discipline Policies
in Today's Public Schools Foster the Common Good?'' (May 2004) at 2-3.
---------------------------------------------------------------------------
The Supreme Court's 1975 Goss v. Lopez\19\ decision
extended Federal due process rights to student discipline and
literally made every school discipline decision a potential
Federal case. According to Newsweek:
---------------------------------------------------------------------------
\19\419 U.S. 565 (1975) (holding imposition of suspensions without
preliminary hearings violated students' due process rights guaranteed
by Fourteenth Amendment).
``Legal fear'' is just as intense in the educational
system. Many Americans sense that schools have become
chaotic and undisciplined over time and the quality of
teachers has declined. Many teachers say that the joy
has gone out of their jobs. What's not generally known
is the role of courts and Congress in creating these
problems by depriving teachers and principals of the
freedom to use their own common sense and best
judgment. Thanks to judicial rulings and laws over the
past four decades, parents can sue if their kids are
suspended for even a single day--for any reason--
without adequate ``due process.''\20\
---------------------------------------------------------------------------
\20\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 48.
Unruly students sense the teachers' fear and their own
empowerment. ``A kid will be acting out in class, and
you touch his shoulder, and he'll immediately come back
with `Don't touch me or I'll sue,' or, `You don't have
any witnesses','' says Rob Wiel, who taught high-school
math and coached football and baseball in the Denver
suburbs for 20 years before retiring recently.\21\
---------------------------------------------------------------------------
\21\Id. at 49.
In New Jersey, ``[a] state judge . . . threw out a lawsuit
filed by an Atlantic County man who said assigned seating in a
school lunchroom violated his 12-year-old daughter's right to
free speech. Superior Court Judge Valerie Armstrong said
Galloway Township school administrators had the right to impose
the restriction to maintain order and safety in a cafeteria
that serves 260 students in each of four 30-minute lunch
periods.''\22\
---------------------------------------------------------------------------
\22\John Curran, ``Judge Rejects a Rights Suit Over School's Lunch
Seating,'' The Philadelphia Inquirer (July 20, 2004) at B4.
---------------------------------------------------------------------------
According to the St. Petersburg Times:
In Pinellas County [Florida], two Palm Harbor
University High School baseball players sued the school
district claiming they were wrongly booted from school
because of a roughhousing incident that occurred on a
team road trip. In Hillsborough County, Robinson High
School senior Nicole ``Nikki'' Youngblood filed suit
after her picture was left out of the school yearbook
when she refused to wear a feminine drape instead of a
shirt and tie as she wished. These two cases only
scratch the surface of lawsuits filed against local
public school districts on an almost daily basis. More
and more, offenses that used to be settled inside the
schoolhouse now end up at the courthouse. The result,
educators say, is less money for learning. ``We spend
millions and millions on attorney fees every year that
has nothing to do with the classroom,'' said Wayne
Blanton, executive director of the Florida School
Boards Association. ``Every lawsuit we have to defend
is money that doesn't get to the classroom.'' . . .
``Lots of people file suit,'' said Crosby Few,
Hillsborough School Board attorney. ``A lot of them are
frivolous.'' . . . In the book, Judging School
Discipline: The Crisis of Moral Authority, the authors
argue that the hundreds of lawsuits challenging school
disciplinary procedures have hurt the quality of public
education. One of the authors, Richard Arum, an
associate professor of sociology at New York
University, said just the threat of lawsuits keeps
teachers from taking charge of their classrooms.\23\
---------------------------------------------------------------------------
\23\Melanie Ave, ``Lawsuits Drain School Dollars,'' St. Petersburg
Times (February 2, 2004) (emphasis added).
---------------------------------------------------------------------------
And as the Arizona Republic has reported:
Scottsdale School Board member Christine Schild has
called the legal fees ``outrageous.'' . . . Legal bills
for the 2003-04 school year are estimated to be as high
as $675,000. This is the highest amount in recent
years, and possibly ever . . . Large school districts
routinely spend thousands of dollars each year on
attorneys. The most common expenses are for student
expulsion hearings and employee discipline . . . [D]ay-
to-day legal expenses involving disputes with employees
and student discipline are not covered by insurance and
come out of the operating budget.\24\
---------------------------------------------------------------------------
\24\Anne Ryman, ``Baracy to Pick In-house Attorney for School
District,'' The Arizona Republic (July 8, 2004) at 1.
Thanks to frivolous lawsuits, ``in America, hugging or,
indeed, even a pat on the back is now considered so dangerous
that teachers can't do it.''\25\ According to Lynn Maher of the
New Jersey chapter of the National Education Association
(``NEA''), ``Our policy is basically don't hug children.''\26\
The guidelines of the Pennsylvania chapter of the NEA urge
teachers to do no more than ``briefly touch'' a child's arm or
shoulder.\27\
---------------------------------------------------------------------------
\25\Philip K. Howard, The Collapse of the Common Good: How
America's Lawsuit Culture Undermines Our Freedom (2001) at 5.
\26\Id. at 5.
\27\Id. at 5.
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: DOCTORS
According to Newsweek:
Dr. Sandra R. Scott of Brooklyn, N.Y., has never been
sued for malpractice, but that doesn't keep her from
worrying. As an emergency-room doctor, she often hears
her patients threaten lawsuits--even while she's
treating them. ``They'll come in, having bumped their
heads on the kitchen cabinet, and meanwhile I'll be
dealing with two-car crashes,'' she says. ``And if they
don't have the test they think they should have in a
timely fashion, they'll get very angry. All of a
sudden, it's `You're not treating me, this hospital is
horrible, I'm going to sue you'.''\28\ ``I'm only a
human being,'' she says. ``I'm an educated physician
but the miracles are out of my hands.''\29\
---------------------------------------------------------------------------
\28\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 43-44.
\29\Id. at 51.
When Dr. Brian Bachelder moved back to Mt. Gilead,
Ohio, to practice family medicine in 1984, he hoped to
emulate the country doc who'd treated him as a kid . .
. But in recent years, Bachelder, 49, has watched
litigation reshape his practice. Last December, facing
malpractice premiums that soared from $12,000 in 2000
to $57,000 in 2003, Bachelder decided to lower his bill
by cutting out higher-risk procedures like vasectomies,
setting broken bones and delivering babies--even though
obstetrics was his favorite part of the practice . . .
Today the threat of litigation hangs over nearly every
move Bachelder makes, changing the very nature of his
relationship with patients. He worries that the
slightest mistake could provoke a lawsuit. ``Anything
less than perfection is malpractice,'' he says. Even in
confronting the most common ailments--headaches or ear
infections--Bachelder must consider the possibility of
a rare and devastating disease. He often orders
expensive tests--not just to rule out the worst, but
also to bolster his case before a potential jury . . .
Bachelder's fear of lawsuits isn't just theoretical--
he's been sued a half-dozen times in his 20-year
career. In one case, Bachelder referred a boy with a
bladder problem to a urologist. The urologist operated,
and the patient subsequently sued; Bachelder was also
named in the complaint. He was eventually dropped from
the case, but not before his liability insurance paid
out $40,000 in legal fees.\30\
---------------------------------------------------------------------------
\30\Debra Rosenberg, ``Hard Pill to Swallow,'' Newsweek (December
15, 2003) at 46.
The most dangerously incompetent doctors often remain
in place for many years, in part because employers fear
wrongful-dismissal lawsuits by fired doctors even more
than malpractice suits by their victims.\31\
---------------------------------------------------------------------------
\31\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 48.
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: SPORTS
The New Yorker reports on how diving boards and U.S.
Olympic diving medals have both become a thing of the past due
to frivolous lawsuits: ``After a golden age in the seventies .
. . the American pool has suffered a gradual decline: thanks,
for the most part, to concerns about safety and liability,
diving boards have been removed and deep ends undeepened. . . .
Such developments have consequences. . . . In the last two
Olympics, medal counts for [once-dominant] American divers
reached their lowest levels since the 1912 Games.''\32\
---------------------------------------------------------------------------
\32\Field Maloney, ``Cannonball!'' New Yorker, Talk of the Town
(September 8, 2004).
---------------------------------------------------------------------------
According to Newsweek:
Ryan Warner is a volunteer who runs an annual softball
tournament in Page, Ariz., that usually raises about
$5,000 to support local school sports programs. But not
this year. A man who broke his leg at a recent
tournament sliding into third base filed a $100,000
lawsuit against the city, and Warner fears he may be
named as a defendant. ``It's very upsetting when you're
doing something for the community, not making any money
for yourself, to be sued over something over which you
had no control,'' he says. So Warner canceled the
tournament.\33\
---------------------------------------------------------------------------
\33\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 44.
Parents, on behalf of their children, increasingly sue
not only for physical injuries, but for ``hurt
feelings'' when they don't make a team, says John
Sadler of Columbia, S.C., who insures amateur sports
leagues . . . If a ref steps into a fight, he can be
sued if one of the players he is holding back takes a
punch. If the ref doesn't intervene, he can be sued for
allowing the fight to go on.\34\
---------------------------------------------------------------------------
\34\Id. at 49.
Even apparently innocent soccer moms are at risk. In
Jupiter, Fla., one mother volunteered to pick up a
pizza for the team. She drove over the foot of a child
who, left unattended, had run into the road. The police
did not even give the woman a ticket. But the parents
of the child sued the mother and the soccer league and
tried to sue the city, the refs and various
sponsors.\35\
---------------------------------------------------------------------------
\35\Id.
Other examples include the following. In Vestavia Hills,
Alabama, the father of Laura Brooke Smith ``sued [the] school
district, saying his daughter's rejection from the high school
cheerleading squad despite professional coaching has caused her
humiliation and mental anguish.''\36\ A student was barred from
participating in her high school's cheerleading tryouts ``as
punishment for passing a profane note on a . . . school bus in
2003.'' In response, her father hired a lawyer and filed a
lawsuit ``saying the punishment violated his daughter's
constitutional rights.'' An appeals court dismissed the
lawsuit, agreeing with school officials that students ``do not
have a constitutional right to participate in extra-curricular
activities.''\37\
---------------------------------------------------------------------------
\36\Fox News (May 31, 2001).
\37\Kelly Melhart, ``Court Dismisses Suit over Punishment,'' Fort
Worth-Star Telegram (April 19, 2005).
---------------------------------------------------------------------------
In North Haven, Connecticut, the ``families of two high
school sophomores have filed a Federal lawsuit over the
school's decision to drop them from the drum majorette
squad.''\38\
---------------------------------------------------------------------------
\38\Ann DiMatteo, ``Families Sue Over Unfair Twirl Tryouts,'' The
New Haven Register, May 18, 2001.
---------------------------------------------------------------------------
And in Pennsylvania, ``[a] teenager, who felt she was
destined for greatness as a softball player, has filed a
$700,000 lawsuit against her former coach, alleging his
`incorrect' teaching style ruined her chances for an athletic
scholarship.''\39\
---------------------------------------------------------------------------
\39\Dave Sommers, ``Legal Pitch,'' The Trentonian, May 1, 2001.
---------------------------------------------------------------------------
ABC News reported that:
When his 16-year-old son didn't get the most valuable
player award, Michel Croteau didn't get upset. He hired
a lawyer and sued his son's youth hockey league to the
tune of more than $200,000 . . . The Croteaus are not
alone. In the last year, parents have filed more than
200 non-injury-related sports lawsuits against coaches,
leagues and school districts in the United States,
according to Gil Fried, a University of New Haven
professor who specializes in sports law . . . The
Butzke family sued the Comsewogue, N.Y., school
district because their eighth-grade daughter was taken
off the varsity high school soccer team. The Branco
family took legal action against the Washington
Township, N.J., school district after their son, David,
was cut from the junior varsity basketball team . . .
The Rubin family sued California's New Haven Unified
School District for $1.5 million because their son got
kicked off the varsity basketball team . . . The family
felt James Logan High School Coach Blake Chong may have
cost their son not just a scholarship, but an NBA
career.\40\
---------------------------------------------------------------------------
\40\ABCNews.com Report, ``Blame the Coach? Angry Parents Take
School Coaches to Court'' (August 7, 2003).
In 1999, even major league baseball issued a directive to
players that they should no longer throw foul balls to eager
fans in the stands because there might be a lawsuit if someone
got hurt trying to recover a souvenir.\41\ Yet another lawsuit
was filed against Major League Baseball for injuries resulting
from being hit by a practice ball before Game One of the 2000
World Series.\42\
---------------------------------------------------------------------------
\41\Philip K. Howard, The Collapse of the Common Good: How
America's Lawsuit Culture Undermines Our Freedom (2001) at 46.
\42\Zach Haberman, ``Fan Blinded by Ball Sues Yanks for $5M,'' The
New York Post (April 11, 2005).
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: PLAYGROUNDS
The lawsuit culture is even changing the traditional
American landscape: playgrounds are increasingly removing
seesaws for fear of liability.\43\ According to Newsweek:
---------------------------------------------------------------------------
\43\Philip K. Howard, The Collapse of the Common Good: How
America's Lawsuit Culture Undermines Our Freedom (2001) at 3.
Playgrounds all over the country have been stripped of
monkey bars, jungle gyms, high slides and swings,
seesaws and other old-fashioned equipment once
popularized by President John F. Kennedy's physical-
fitness campaign. The reason: thousands of lawsuits by
people who hurt themselves at playgrounds. But some
experts say that new, supposedly safer equipment is
actually more dangerous because risk-loving kids will
test themselves by, for instance, climbing across the
top of a swing set. Other kids sit at home and get
fat--and their parents sue McDonald's.\44\
---------------------------------------------------------------------------
\44\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars,'' Newsweek
(December 15, 2003) at 44.
As Philip Howard has written, ``just letting a claim go to
a jury . . . will affect whether seesaws stay in playgrounds
all across America.''\45\
---------------------------------------------------------------------------
\45\Philip K. Howard, The Collapse of the Common Good (New York:
2001) at 58.
---------------------------------------------------------------------------
Today, a brochure from the National Program for Playground
Safety advises: ``Seesaw use is quite complex because it
requires two children to cooperate and combine their actions,''
and now ``there is a trend to replace [them] with spring-
centered seesaws.''\46\ A culture of legal fear is actually
reducing the opportunities of American children to burn
calories in playgrounds.
---------------------------------------------------------------------------
\46\U.S. Consumer Product Safety Commission, Handbook for Public
Playground Safety, Pub. No. 325 at 23.
---------------------------------------------------------------------------
And according to one recent article:
Andrea Levin is grateful that Broward County schools
care about her daughter's safety. But this year when
they posted a sign that demanded ``no running'' on the
playground, it seemed like overkill. ``I realize we
want to keep kids from cracking their heads open,''
said Levin, whose daughter is a Gator Run Elementary
fifth grader in Weston. ``But there has to be a place
where they can get out and run.'' Broward's ``Rules of
the Playground'' signs, bought from an equipment
catalogue and displayed at all 137 elementary schools
in the district, are just one of several steps taken to
cut down on injuries and the lawsuits they inspire.
``It's too tight around the equipment to be running,''
said Safety Director Jerry Graziose, the Broward County
official who ordered the signs. ``Our job was to try to
control it.'' How about swings or those hand-pulled
merry-go-rounds? ``Nope. They've got moving parts.
Moving parts on equipment is the number one cause of
injury on the playgrounds.'' Teeter-totters? ``Nope.
That's moving too.'' Sandboxes? ``Well, I have to be
careful about animals'' turning them into litter boxes.
Cement crawl tubes? ``Vagrants. The longer they are,
the higher possibility that a vagrant could stay in
them. We have shorter ones now that are made out of
plastic or fiberglass.'' Broward playgrounds aren't the
only ones to avoid equipment that most adults remember.
Swings, merry-go-rounds, teeter-totters and other old
standards are vanishing from schools and parks around
the country, according to the National Program for
Playground Safety . . . Since 1999, Broward County
schools paid out about $561,000 to settle 189 claims
for playground accidents, about 5 percent of the amount
the district spent on all injury claims in that time.
To keep those numbers low, Graziose said, he needs to
keep thinking of ways to make playgrounds safe . . .
``To say `no running' on the playground seems crazy,''
said [Broward County School Board Member Robin]
Bartleman, who agreed to be interviewed on a recent
outing at Everglades. ``But your feelings change when
you're in a closed-door meeting with lawyers.'' . . .
The girls tried out the horizontal ladder and balance
beam for a few minutes before settling on a game of
stacking plate-size dirt chunks into a neat pile . . .
Bartleman, the only board member with children in
elementary school, created a subcommittee this year to
suggest ways to redesign school playgrounds. Safety is
important, she said, but there's got to be a way to
make Broward's playgrounds more interesting than dirt.
``I would have never thought about this until my
daughter came up to me 1 day and said `Momma, I hate
going to that playground,''' she said.\47\
---------------------------------------------------------------------------
\47\Chris Kahn, ``In the Pusuit of Safety, Teeter-totters and
Swings Are Disappearing from Playgrounds,'' The Sun-Sentinel (July 18,
2005).
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: GOOD DEEDS
According to the Chicago Daily Herald:
By day, Dave Peterson works with diagnostic
multiplexers and beam shakers to maintain the Fermi
National Accelerator Laboratory's antiproton source.
But at dawn and dusk the Geneva resident drags a
homemade snowplow behind his daughter's Pacific Electra
mountain bike, clearing a 16-inch wide section of the
Fox River Trail as he rides to and from work in
Batavia. Because he rides at a time when few are
watching, he's become something of a local legend the
last two winters, a Bigfoot. ``It's one of those weird
things that has touched a nerve with a lot of people,''
Peterson said. A whole lot. In fact, many of the path's
regulars have come to expect it to be clear--and that
has put Peterson's plowing on hiatus. The county has
asked him to stop because if there's an expectation
that the trail will be plowed, there's a greater chance
for litigation, said Kane County Forest Preserve
District operations supervisor Pat McQuilkin. ``If a
person falls, you are more liable than if you had never
plowed at all. Crazy world,'' wrote AnnMarie Fauske,
the district's community affairs director, in response
to a letter to Peterson. ``Unfortunately, the times we
are in allow for a much more litigious environment than
common sense would dictate.'' . . . ``There is
something I can do here,'' Peterson said. ``I can use
my skills as an engineer to make life easier for the
little old ladies who walk on the path.'' But the
forest preserve worries that if they take a wrong step
and fall, those little old ladies might decide to
sue.\48\
---------------------------------------------------------------------------
\48\Garrett Ordower, ``County Tells Bicyclist Thanks, But Stop
Plowing Trail,'' The Chicago Daily Herald (February 21, 2004).
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: THE GIRL SCOUTS
The Girl Scouts in Metro Detroit alone have to sell 36,000
boxes of cookies each year just to pay for liability
insurance.\49\ According to former Girl Scout Laurie Super [of
Downington, Pennsylvania], ``[i]t's getting harder to sell
[cookies] . . . Our local Wawa stores said they couldn't let
the girls set up their booth anymore, because of liability
issues.''\50\
---------------------------------------------------------------------------
\49\See ``Fine Filers of Frivolous Lawsuits,'' The Detroit News
(February 24, 2004).
\50\Julia Moskin, ``Crave Thin Mints?'' The New York Times (March
14, 2004).
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE: SANTA CLAUS
Even Santa Claus lives under a constant threat of legal
harassment. As the Los Angeles Times quoted one Santa Claus,
``When I started doing this years ago, I never even thought
about liability . . . But Santas have a pretty good chance of
getting sued . . .''\51\
---------------------------------------------------------------------------
\51\J.R. Moehringer, ``Ho! Ho! Is More Like Uh-Oh,'' The Los
Angeles Times (December 23, 2004).
---------------------------------------------------------------------------
FRIVOLOUS LAWSUITS AFFECT EVERYONE:
A LEGAL CULTURE OF FEAR STIFLES COMMON SENSE
The corrosive effects of lawsuit abuse were recently
summarized by Newsweek:
Americans will sue each other at the slightest
provocation. These are the sorts of stories that fill
schoolteachers and doctors and Little League coaches
with dread that the slightest mistake--or offense to an
angry or addled parent or patient--will drag them into
litigation hell, months or years of mounting legal fees
and acrimony and uncertainty, with the remote but scary
risk of losing everything . . . Americans don't just
sue big corporations or bad people. They sue doctors
over misfortunes that no doctor could prevent. They sue
their school officials for disciplining their children
for cheating. They sue their local governments when
they slip and fall on the sidewalk, get hit by drunken
drivers, get struck by lightning on city golf courses--
and even when they get attacked by a goose in a park
(that one brought the injured plaintiff $10,000). They
sue their ministers for failing to prevent suicides.
They sue their Little League coaches for not putting
their children on the all-star team. They sue their
wardens when they get hurt playing basketball in
prison. They sue when their injuries are severe but
self-inflicted, when their hurts are trivial and when
they have not suffered at all. Many of these cases do
not belong in court. But clients and lawyers sue
anyway, because they hope they will get lucky and win a
jackpot from a system that allows sympathetic juries to
award plaintiffs not just real damages--say, the cost
of doctor's fees or wages lost--but millions more for
impossible-to-measure ``pain and suffering'' and highly
arbitrary ``punitive damages.'' (Under standard
``contingency fee'' arrangements, plaintiffs' lawyers
get a third to a half of the take.) . . . Many
Americans sue because they have come to believe that
they have the ``right'' to impose the costs and burdens
of defending a lawsuit on anyone who angers them,
regardless of fault or blame. The cost to society
cannot be measured just in money, though the bill is
enormous, an estimated $200 billion a year, more than
half of it for legal fees and costs that could be used
to hire more police or firefighters or teachers.\52\
---------------------------------------------------------------------------
\52\Stuart Taylor, Jr. and Evan Thomas, ``Civil Wars'' Newsweek
(December 15, 2003) at 44-45.
[T]he time may come when ordinary Americans recognize
that for every sweepstakes winner in the legal lottery,
there are millions of others who have to live with the
consequences--higher taxes and insurance rates,
educational and medical systems seriously warped by
lawsuits, fear and uncertainty about getting sued
themselves.\53\
---------------------------------------------------------------------------
\53\Id. at 51. Although the American Trial Lawyers Association has
vociferously attacked the Newsweek article, Newsweek stands solidly by
its report, stating ``NEWSWEEK received a large volume of mail from
trial lawyers critical of our cover story. We stand by the story as
both accurate and fair. The criticisms are for the most part easily
refuted with material in the public record.'' Newsweek, ``Mail Call''
(January 12, 2004).
---------------------------------------------------------------------------
ADDITIONAL EXAMPLES OF FRIVOLOUS LAWSUITS
The following are more typical examples of the frivolous
lawsuits that have tormented innocent Americans.\54\
---------------------------------------------------------------------------
\54\Britain's most senior judges, the Appellate Committee of the
House of Lords, has branded Britain's U.S.-style claims system an
``evil'' that interferes with civil liberties and freedom in a landmark
ruling in a compensation case. In the case of Tomlinson v. Congleton
Borough Council, [2003] U.K.H.L. 47 (2003), the Appellate Committee
stated ``The pursuit of an unrestrained culture of blame and
compensation has many evil consequences and one is certainly the
interference with the liberty of the citizen. Of course there is some
risk of accidents arising out of the joie de vivre of the young, but
that is no reason for imposing a grey and dull safety regime on
everyone.''
LAccording to Reuters, ``A lawsuit against . .
. U.S. weather forecasters . . . over the South Asian
tsunami disaster is fueling calls for greater curbs on
what critics say are frivolous cases brought by lawyers
out to make a quick buck. The suit, brought on behalf
of a group of tsunami victims, `perfectly illustrates'
the need for U.S. laws to hold lawyers liable for the
economic damages they inflict on those they sue, said
legal scholar Lester Brickman.''\55\ The petition was
filed in Federal court in Manhattan.\56\
---------------------------------------------------------------------------
\55\Gail Appleson, ``Tsunami Suit Shows Need to Curb Lawyers,
Critics Say,'' Reuters (March 8, 2005).
\56\Id.
LBarbara Streisand sued the California Coastal
Records Project, which took thousands of pictures of
the California coastline intended to protect the
state's shoreline. The photographs are made available
free of charge to state and local governments,
university researchers, conservation organizations, and
others. Streisand sued because a picture of her Malibu
estate (her mansion composed only 3% of one photo among
thousands) was posted on the public interest
organization's Web site. She sued for $50 million (five
separate claims for $10 million each), but on May 10,
2004, Streisand was ordered to pay the people she sued
$154,000 in legal fees they accrued defending against
her ridiculous lawsuit.\57\
---------------------------------------------------------------------------
\57\See Jennifer Pittman, ``The Blame Game'' The Silicon Valley/San
Jose Business Journal (January 9, 2004); Kenneth R. Weiss, ``Streisand
Sues Over Photograph of Her Coast Home on Web Site,'' The Los Angeles
Times (May 30, 2003) at B1; Streisand v. Adelman, Case No. SC077257
(Sup. Ct. Los Angeles Cty.) (complaint filed May 30, 2003); Streisand
v. Adelman, Case No. SC077257 (Sup. Ct. Los Angeles Cty.) (ruling on
submitted matters: Motion to Tax Costs and Motion for Attorneys; Fees).
LAccording to the Indianapolis Star, ``Indiana
drivers who get into wrecks with someone who is talking
on a cell phone can forget about suing the phone's
manufacturer. The Indiana Court of Appeals on Friday
dismissed an Evansville lawsuit in which Terry L.
Williams tried to do just that after a March 2002
traffic crash. Williams collided with Kellie Meagher,
who was allegedly talking on a Cingular Wireless phone.
In the lawsuit, Williams alleged Cingular knew--or
should have known--that Meagher would use the phone
while driving. Vanderburgh Superior Court Judge Mary
Margaret Lloyd dismissed Cingular from the suit. After
the dismissal, Williams asked the judge to reconsider,
citing new evidence that included a `Blondie' cartoon
strip in which Blondie, while talking on a cell phone,
caused an accident. But the Evansville judge was
unmoved. Now an appellate court also agrees that
Cingular was not liable.''\58\
---------------------------------------------------------------------------
\58\Kevin Corcoran, ``Court: Don't Blame Cell-Phone Maker for
Crash,'' The Indianapolis Star (June 5, 2004).
LAccording to the Albany Times Union, ``The
spectacle of American spending always gets a little
silly in the holiday season, but shoppers over the next
few weeks will be hard-pressed to match the performance
last year of Antoinette Millard. She ran up bills of
almost $1 million in New York luxury stores like
Cartier and Barneys, and, according to court papers,
Millard is now suing American Express for improperly
soliciting her to sign up for a big-spender's credit
card, her purchasing weapon of choice.''\59\
---------------------------------------------------------------------------
\59\Steve Lohr, ``Buying Easy, Paying Hard,'' Times Union (December
5, 2004) at A1.
LIn April, 1995, Carl and Diana Grady sued
Frito Lay claiming that Dorito chips stuck in Charles
Grady's throat and tore his esophagus. The Gradys
wanted to present the ``expert'' testimony of Dr.
Charles Beroes to support their claim that Doritos are
inherently dangerous and negligently designed. Beroes'
research included pressing Doritos onto a scale until
the tip snapped off, and measuring the amount of time
it took saliva to soften the Doritos. None of Beroes'
tests involved chewing. After 8 years of costly
litigation, the Pennsylvania Supreme Court threw out
the case, noting that Dr. Beroes' tests ``smacked of a
high school science fair project and did not bear any
relationship to the reality of the . . . consumption of
foodstuffs.''\60\ Justice Saylor pointed out in his
concurring opinion ``the common sense notion that it is
necessary to properly chew hard foodstuffs prior to
swallowing.''\61\
---------------------------------------------------------------------------
\60\Grady v. Frito-Lay, Inc., 839 A.2d 1038, 1042 (Pa. 2003)
(citing Grady v. Frito-Lay, Inc., 2000 WL 33436367, at *2) (Pa.Com.Pl.
April 3, 2000)).
\61\Grady v. Frito-Lay, Inc., 839 A.2d 1038, 1053 (Pa. 2003)
(Saylor, J., concurring).
LAfter 3 years of litigation, an appeals court
finally held that the survivor of a crash cannot sue an
airline for punitive damages when the pilots did not
intentionally crash the plane. At midnight on June 1,
1999, during a severe thunderstorm, a fully loaded
American Airlines jet crashed while trying to land in
Little Rock, Arkansas. Eleven people died, including
the pilot. Two passengers sued seeking compensatory and
punitive damages. A U.S. district court judge ruled
that ``uncontroverted evidence'' showed the pilots had
a good faith belief that the plane could be landed
safely.\62\ Upholding the district court's decision,
Judge Morris Arnold held that no reasonable jury could
find that the members of the flight crew crashed the
plane on purpose. Judge Morris wrote, ``[s]tated
differently, we hold that no reasonable jury could find
that the members of the flight crew knew, or ought to
have known, in light of the surrounding circumstances,
that their conduct would naturally and probably result
in injury.''\63\
---------------------------------------------------------------------------
\62\In re: Aircraft Accident at Little Rock, Arkansas on June 1,
1999, 231 F.Supp. 852, 879 (E.D.Ark. 2002).
\63\In re: Aircraft Accident at Little Rock, Arkansas on June 1,
1999, 351 F.3d 874, 878-79 (8th Cir. 2004).
LAfter 5 years of litigation, the Nevada
Supreme Court dismissed the appeal of Lane Holmes, who
sued the Turtle Stop in Las Vegas, claiming a cup
caused him to suffer leg burns from dripping hot
coffee.\64\ The court upheld the decision of the trial
court that ruled ``[t]he danger is open and
obvious.''\65\
---------------------------------------------------------------------------
\64\Holmes v. Turtle Stop, Inc., 62 P.3d 1165 (Nev. 2000).
\65\Cy Ryan, ``Court Says Warning About Hot Coffee Unnecessary,''
The Las Vegas Sun (July 11, 2000).
LA woman in Knoxville, Tennessee, sought
$125,000 in damages against McDonald's, claiming a hot
pickle dropped from a hamburger, burning her chin and
causing her mental injury. Her husband also sued for
$15,000 for loss of consortium.\66\
---------------------------------------------------------------------------
\66\See Randy Kenner, ``Lawsuit on Hot Pickle Draws Attention
Around the Globe,'' Knoxville News-Sentinel (October 10, 2000) at A1.
LOn September 3, 2003, a Federal district
judge in New York threw out for a second time a lawsuit
filed on behalf of obese children claiming McDonald's
Corporation was legally responsible for their over-
consumption of food.\67\ The court earlier noted the
national ramifications of the complaint and the
requested damages, stating ``McDonalds has also,
rightfully, pointed out that this case, the first of
its kind to progress far enough along to reach the
stage of a dispositive motion, could spawn thousands of
similar `McLawsuits' against restaurants . . . The
potential for lawsuits is even greater given the
numbers of persons who eat food prepared at other
restaurants in addition to those serving fast
food.''\68\
---------------------------------------------------------------------------
\67\See Pelman v. McDonald's Corp., S.D.N.Y. 02 Civ. 7821 (RWS), at
34-35 (September 3, 2003).
\68\Pelman v. McDonald's Corp., 237 F.Supp.2d 512, 518 (S.D.N.Y.
2003).
LThe Michigan Court of Appeals threw out a
case brought by Richard Overton, who ``pointed to
defendant's television advertisements featuring Bud
Light as the source of fantasies coming to life,
fantasies involving tropical settings, and beautiful
women and men engaged in unrestricted merriment.
Plaintiff sought monetary damages in excess of $10,000,
alleging that defendant's misleading advertisements had
caused him physical and mental injury, emotional
distress, and financial loss.''\69\
---------------------------------------------------------------------------
\69\Overton v. Anheauser-Busch Co., 517 N.W.2d 308, 309 (Mich. App.
1994).
LIn Florida, a woman sued Universal Studios
for $15,000 for ``extreme fear, emotional distress and
mental anguish'' because the theme park's annual
haunted house was too scary.\70\
---------------------------------------------------------------------------
\70\Tim Barker, ``Universal Fall Leads to Lawsuit,'' Orlando
Sentinel (January 5, 2000) at C1.
LAfter over 3 years of litigation, Georgia's
Court of Appeals held that the day trading firms where
Mark Barton invested before embarking on a shooting
rampage are not liable for the victims' injuries and
deaths. A unanimous panel on the court stated ``We find
this case is one in which the issue of proximate cause
is so plain, palpable and indisputable as to demand
summary judgment for the defendants.''\71\ The court
noted that it was ``troubled by the implication that
the list of defendants potentially liable for any
person's violence, if sparked by economic misfortune,
would be limited only by the number of stock brokers,
investment advisers, lawyers, business partners,
lottery ticket sellers, etc., whom the assailant blamed
for his financial losses.''\72\
---------------------------------------------------------------------------
\71\Brown v.All-Tech Investment Group, 2003 WL 23315394 (Ga. App.)
at *5.
\72\Id. at *7, n.5.
LAfter a decade of litigation, Texas' 1st
Court of Appeals reversed a $43 million judgment
against a car manufacturer in a products liability suit
that alleged a defective seat belt caused the 1992
drowning death of a woman with a blood-alcohol level of
0.17 who failed to escape from her Honda Civic when it
became submerged under water.\73\
---------------------------------------------------------------------------
\73\Honda of America Manufacturing, Inc. v. Norman, 104 S.W.3d. 600
(Tex. App. 2003).
LThe family of a man who died on a fishing
trip sued the Weather Channel for $10 million, claiming
that the man relied on the channel's forecast for his
safety. In dismissing the case, the Miami Federal court
stated that if forecasters were held accountable, ``the
duty could extend to farmers who plant their crops
based on a forecast of no rain, construction workers
who pour concrete or lay foundation based on the
forecast of dry weather, or families who go to the
beach for the weekend.''\74\
---------------------------------------------------------------------------
\74\See ``Storm Death Is Not Weatherman's Fault,'' New York Post
(March 29, 1999) at 84.
LA West Virginia man who fell down an
escalator at an airport finally dropped a lawsuit filed
against US Airways over the accident. According to the
Associated Press, ``The lawsuit in circuit court in
Fort Myers alleged the airline didn't warn Floyd
Shuler, 61, about the adverse affects of drinking
alcohol on a plane. Shuler said in a news release from
Wheeling, W.Va., that he didn't intend for the suit to
be filed. `I learned about the filing of the lawsuit
against US Airways . . . along with everyone else,'
Shuler said. `It was never my intent to take on the
airline industry. I apologize for any inconvenience
this has caused US Airways.' Shuler's attorney, Paul
Kutcher, did not return a phone call from The
Associated Press seeking comment. The suit . . . said
US Airways was negligent by failing to warn Shuler that
the effects of alcohol are greater at night on airline
passengers. The suit also alleged that the company did
not properly maintain the escalator at Southwest
Florida International Airport when he fell down it on
Aug. 28, 1999, and it sought damages in excess of
$15,000.''\75\
---------------------------------------------------------------------------
\75\Associated Press, ``Man Drops Suit Filed Against Airline After
He Drank Booze, Fell,'' USA Today (April 4, 2004).
LSeveral months after the Escondido,
California library's resident cat attacked Richard
Espinosa's 50-pound Labrador-mix assistance dog,
Espinosa filed a $1.5-million claim against the city,
alleging that he was harmed due to the dog's injuries.
According to the legal papers filed, Espinosa claimed
his Federal and state constitutional rights were
violated and that ``. . . the defendants actions and
subsequent inactions caused Espinosa to suffer
significant lasting, extreme and severe mental anguish
and emotional distress including, but not limited to,
terror, humiliation, shame, embarrassment,
mortification, chagrin, depression, panic, anxiety,
flashbacks, nightmares, loss of sleep . . .''\76\
According to the North County Times, ``It took a jury
little more than 2 hours of deliberation Friday to
reject a claim from a man that the city of Escondido
violated his civil rights when a cat living in a city
library attacked his assistance dog more than 3 years
ago . . . Espinosa originally asked for $1.5 million in
compensation and damages . . . During jury selection
Wednesday, Judge Hofmann excused four potential jurors
who said they felt the case was `frivolous' and that
they could not be impartial. Others also said the case
was without merit, but said they could look beyond that
feeling. `After that first juror said the word
``frivolous,'' and so did the next five, I thought the
whole panel should have been thrown out,' Espinosa said
. . . The city offered twice to settle with Espinosa,
including one offer of $1,000. Espinosa declined.
Nelson was unable to estimate how much the city spent
defending itself against Espinosa's allegations, but he
said it was a considerable sum. He also said the case
could drag on for months or years if Espinosa does
appeal.''\77\
---------------------------------------------------------------------------
\76\Chuck Shepherd, ``News of the Weird,'' The Orlando Weekly
(August 30, 2001).
\77\Teri Figueroa, ``Jury Rejects Claim by Man in Attack on Dog by
Library Cat,'' The North County Times (January 20, 2004).
LIn Ohio, Hamilton County Commissioner Todd
Portune sued the Bengals and the National Football
League claiming the team violated its stadium lease by
failing to be competitive. The complaint, which also
named the other 31 NFL franchises as defendants,
alleges fraud, civil conspiracy, antitrust violations
and breach of contract.\78\
---------------------------------------------------------------------------
\78\Terry Kinney, ``Commissioner Sues Bengals, NFL,'' (Associated
Press January 31, 2003).
LAfter 3 years of litigation, the Nebraska
Supreme Court upheld a lower court ruling and found
Ford Motor Co. and Bridgestone/Firestone Inc. not
liable for the death of a woman killed by a man who
gave her a lift after she got a flat tire. The woman's
parents claimed in the lawsuit that a Firestone
Wilderness AT tire on their daughter's Ford Explorer
failed, setting off the chain of events that resulted
in her death. The Nebraska court said the companies
could not have foreseen the murderer's criminal
acts.\79\
---------------------------------------------------------------------------
\79\Kevin O'Hanlon, ``Court: Faulty Tire Didn't Cause Murder,'' the
Associated Press (August 8, 2003).
---------------------------------------------------------------------------
ABSURD WARNING LABELS REQUIRED BY FRIVOLOUS LAWSUITS
Today, testaments to the age of frivolous lawsuits are
written on all manner of product warnings that aim to prevent
obvious misuse. One warning label on a toilet brush states ``Do
not use for personal hygiene.''\80\ A label on a snow sled says
``Beware: sled may develop a high speed under certain snow
conditions.'' A 5-inch brass fishing lure with three hooks is
labeled ``Harmful if swallowed.'' A warning on an electric
router made for carpenters states ``This product not intended
for use as a dental drill.'' A warning label on a baby stroller
cautions ``Remove child before folding.'' A sticker on a 13-
inch wheel on a wheelbarrow warns ``Not intended for highway
use.'' A dishwasher carries the warning ``Do not allow children
to play in the dishwasher.'' A manufactured fireplace log
states ``Caution--Risk of Fire.'' A household iron contains the
warning ``Never iron clothes while they are being worn.''\81\
And a cardboard car sun shield that keeps sun off the dashboard
warns ``Do not drive with sun shield in place.''\82\
---------------------------------------------------------------------------
\80\David N. Goodman, ``Toilet Brush Warning Wins Consumer Award,''
The Associated Press (January 6, 2005).
\81\Sonny Garrett, ``Warning: People Are as Dumb as You Think,''
The Baxter Bulletin (April 17, 2004) (compiling list from Michigan
Lawsuit Abuse Watch in Annual Wacky Warning Label Contest).
\82\Larry D. Hatfield, ``Dumbest Warning Labels Get their Due,''
The San Francisco Chronicle (January 24, 2002).
---------------------------------------------------------------------------
What follows are some pictorial displays of wacky warning
labels required by our frivolous lawsuit culture.
PICTORIAL DISPLAYS OF ABSURD WARNING LABELS REQUIRED BY FRIVOLOUS
LAWSUITS
----------
THE COSTS LAWSUITS IMPOSE ON SOCIETY
The annual direct cost of American tort litigation--
excluding much securities litigation, punitive damages, and the
multibillion-dollar settlement reached between the tobacco
companies and the states in 1998--exceeds $250 billion, almost
2 percent of gross domestic product,\83\ as illustrated in the
following charts:
---------------------------------------------------------------------------
\83\See Towers Perrin, 2009 Update on U.S. Tort Cost Trends 5
(2009),
http://www.towersperrin.com/tp/getwebcachedoc?webc=USA/2009/200912/
2009_tort_trend_
report_12-8_09.pdf (costs as of 2008). As noted by Manhattan Institute
fellow Walter Olson:
[The Towers Perrin] studies are particularly useful in
assessing long-term trends in liability-cost burdens (since
long-term data will tend to transcend the vagaries of
passing hard/soft markets) and in international comparisons
(since well-defined liability insurance markets exist in
other advanced countries and can be subjected to comparable
metrics). Perhaps for those very reasons, and because the
figures are widely acknowledged within the industry as
having a high degree of accuracy in measuring what they set
out to measure, the [Towers Perrin] numbers have been
furiously attacked by organized trial lawyers and their
---------------------------------------------------------------------------
allies.
Walter K. Olson to PointofLaw.com, http://www.pointoflaw.com/archives/
2008/11/tilling
hasttowe.php (Nov. 21, 2008, 11:14 EST). For a response to these
criticisms, see Posting of James R. Copland to PointofLaw.com, http://
www.pointoflaw.com/archives/000877.php (Jan. 19, 2005, 19:11 EST); see
also Towers Perrin, Corrections and Clarifications (2005), http://
www.towersperrin.com/tillinghast/pdf/response_0517.pdf.S6601
It should be emphasized that statistics do not capture the
very real experiences of victims of lawsuit abuse, and this
debate is not principally about aggregate statistics regarding
the number of lawsuits filed. The costs of America's lawsuit
culture are staggering. As chronicled by Sebastian Mallaby in
the Washington Post:
The most complete study of the tort system's cost comes
from the consulting firm Tillinghast-Towers Perrin.
Tillinghast's clients are mainly insurers, which are at
loggerheads with the trial bar, so you may mistrust its
data. Nonetheless, Tillinghast has published seven
updates to its original 1985 study, refining its
methodology along the way. Its numbers are the best
available. And they are stunning . . . the really
shocking thing is where the billions went. Injured
plaintiffs--the fabled little guys for whom the system
is supposedly designed--got less than half the money.
According to Tillinghast's 2002 data, plaintiffs'
lawyers swallowed 19 percent of the $233 billion.
Defense lawyers pocketed an additional 14 percent, and
other administrative costs, mainly at insurance firms,
accounted for a further 21 percent. The legal-
administrative complex thus guzzled fully 54 percent of
the money in the tort system, or $126 billion. That's
43 times as much as the Federal Government has budgeted
this year to combat the global AIDS pandemic. No other
system for compensating misfortune has such outrageous
administrative costs. To guard against the possibility
of sickness, people buy medical insurance. The health
insurance industry, justly regarded as a paper-clogged
nightmare, has administrative costs of 14 percent. To
guard against the danger of disability, we have the
Social Security program. The overhead for the Social
Security disability system is around 3 percent. If you
want a really good number to set against the 54 percent
overhead in the tort system, just take a look at
Medicare. Its overhead is about 2 percent. So the tort
system's administrative costs are a scandal . . .
Measured as a share of GDP, America's tort system is
more than twice as expensive as it was in 1960, twice
as expensive as the current systems in France or
Canada, and three times as expensive as the system in
Britain. A reasonable goal for the American tort system
is to halve it.\84\
---------------------------------------------------------------------------
\84\Sebastian Mallaby, ``The Trouble with Torts,'' The Washington
Post (January 10, 2005) at A17. See also U.S. Tort Costs: 2004 Update:
Trends and Findings on the Cost of the U.S. Tort System, Towers Perrin
Tillinghast (2004) (``Looking ahead, we anticipate growth in U.S. tort
costs to range from 5% to 8% in 2005, with a midpoint of 6.5% We expect
a similar increase in 2006.'').
---------------------------------------------------------------------------
As columnist Stuart Taylor, Jr., has observed:
The most recent [National Center for State Courts]
report states that its (incomplete) data ``indicate a
40 percent increase in tort filings'' from 1975 to
2002. Census figures indicate that the population
increase from 1975 to 2002 was about 33 percent. So
tort filings per capita have not declined by 8 percent
since 1975; they have increased somewhat . . . And
although the tort system's inflation-adjusted direct
costs per capita did decline modestly during the
1990's, they soared by a stunning 14.4 percent in 2001
and another 13.3 percent in 2002, to an estimated 2002
total of $233 billion. The tort system consumes 2.2
percent of GDP in the U.S.--almost four times the
percentage in 1950; more than triple the 0.6 percent in
the United Kingdom; and more than double the 0.8
percent in Japan, France, and Canada.\85\
---------------------------------------------------------------------------
\85\Stuart Taylor, Jr., ```False Alarm' by Stephanie Mencimer
[Washington Monthly, Oct. 2004]--A Response by Stuart Taylor, Jr.
[Newsweek, National Journal],'' available at http://
www.overlawyered.com/pages/taylormencimerwashingtonmonthly.html.
According to the Economic Report of the President, ``The
expansive tort system has a considerable impact on the U.S.
economy. Tort liability leads to lower spending on research and
development, higher health care costs, and job losses.''\86\
And according to the Council of Economic Advisers, ``the United
States tort system is the most expensive in the world, more
than double the average cost of other industrialized
nations.''\87\ The direct costs of medical malpractice claims
jumped by an average of 11.9 percent a year from 1975 to
2002.\88\
---------------------------------------------------------------------------
\86\Economic Report of the President (February 2004) at 203.
\87\Council of Economic Advisers, ``Who Pays for Tort Liability
Claims? An Economic Analysis of the U.S. Tort Liability System'' (April
2002) at 1.
\88\Tillinghast-Towers Perrin, U.S. Tort Costs: 2003 Update: Trends
and Findings on the Costs of the U.S. Tort System, at 2.
---------------------------------------------------------------------------
Of the costs of tort litigation, only 22 cents on the
dollar went to compensate alleged victims' economic losses;
almost as much (19 cents) went to their lawyers; 24 cents went
to payments for inherently unquantifiable noneconomic losses,
mainly pain and suffering; 14 cents went to defense costs; and
21 cents went to insurance overhead costs.\89\
---------------------------------------------------------------------------
\89\Id. at 17. According to an analysis of a report by the National
Center for State Courts by Newsweek's Stuart Taylor, Jr., although tort
filings declined by 9 percent from 1992 to 2001, almost all of that
decline came in routine car-crash lawsuits. The report shows that
medical malpractice claims increased by 24 percent from 1992-2001 and
that total tort filings soared by 40 percent from 1975 to 2001, despite
a dip during the 1990's. See Stuart Taylor, Jr. Response to ATLA's
Claims, available at http://www.overlawyered.com/archives/000708.html.
Chief Justice Rehnquist released new data on January 1, 2004, showing
an 8 percent drop in civil filings in fiscal year 2003, ``primarily as
a result of decreases in personal injury/product liability cases
involving asbestos (such filings had soared 98 percent the previous
year).'' William H. Rehnquist, 36 The Third Branch 1 (January 2004),
2003 Year-End Report on the Federal Judiciary, Chapter III, n.5. See
also Economic Report of the President (February 2004), at 204-05 (``The
number of injuries handles by the tort system has increased along with
expenditures. The number of filings per capita started to rise in the
early 1980's and peaked in the mid-1980's, at least in the 16 states
for which data on lawsuit filings are available between 1975 and 2000.
Much of the decline in filings since 1985 appears to have occurred in
California, where medical liability reforms included a $250,000 limit
for noneconomic damages that was found constitutional in 1985.'').
---------------------------------------------------------------------------
A report by Judyth Pendell, Senior Fellow at the AEI-
Brookings Joint Center for Regulatory Studies, and Paul Hinton,
Vice President of NERA Economic Consulting, has concluded that
``[t]he tort liability price tag for small businesses in
America is $88 billion a year'' and that ``[s]mall businesses
bear 68 percent of business tort liability costs, but take in
only 25% of business revenue.''\90\ The small businesses
studied in the report account for 98% of the total number of
businesses with employees in the United States.\91\ A more
recent study found the tort liability price tag for small
businesses in 2008 was $105.4 billion dollars.\92\
---------------------------------------------------------------------------
\90\Judyth Pendell and Paul Hinton, Liability Costs for Small
Business U.S. Chamber Institute for Legal Reform, June, 2004 at 1
(``small business'' defined as ``those with less than $10 million in
annual revenue and at least one employee in addition to the owner'').
\91\Id.
\92\``Tort Liability Costs for Small Businesses,'' U.S. Chamber
Institute for Legal Reform (2010) at 11, available at
www.instituteforlegalreform.com/get_ilr_doc.php?docId=1044.
---------------------------------------------------------------------------
Without the serious threat of punishment for filing
frivolous lawsuits, innocent individuals and companies will
continue to face the harsh economic reality that simply paying
off frivolous claimants through monetary settlements is often
cheaper than litigating the case. If it costs $10,000 to defend
yourself in court against frivolous charges, it makes financial
sense to settle the case for $9,000, even if you weren't at
fault in any way. This perverse dynamic not only results in
legalized extortion, but it leads to increases in the insurance
premiums all individuals and businesses must pay.\93\
---------------------------------------------------------------------------
\93\Opponents of reform often claim that contingency fees--
agreements by which personal injury attorneys are allowed a percentage
cut from any monetary damages awarded to their client--provide a
``screening mechanism'' that weeds out frivolous cases. The argument
used is that personal injury attorneys will not take frivolous cases
because doing so would leave them with no monetary recovery. The
perverse dynamic outlined above, along with the fact that filing fees
are usually no more than a hundred dollars and additional defendants
can be named in the lawsuit at no extra charge, makes clear that
contingency fee agreements provide no effective screening mechanism at
all since personal injury attorneys can simply take advantage of the
legal costs they impose on defendants simply in virtue of their filing
a case to extort money from those they sue.
---------------------------------------------------------------------------
polls and expert opinion overwhelmingly support legislation barring
frivolous lawsuits
We all pay for frivolous lawsuits through higher prices as
consumers and through higher taxes as taxpayers.
A poll found that 83% of likely voters believe there are
too many lawsuits in America, 76% believe lawsuit abuse results
in increased prices for goods and services, and 65% said they
would be more likely to vote for congressional candidates who
supported curbs on lawsuit abuse.\94\ Another poll found that
73% of Americans support requiring sanctions against attorneys
who file frivolous lawsuits.\95\
---------------------------------------------------------------------------
\94\See American Tort Reform Association, ``National Poll on Tort
Reform'' (February 27, 2003).
\95\See Insurance Research Council, ``IRC Study Finds Strong
Support for Wide Variety of Civil Justice Reform Measures'' (April 5,
2004) at 4.
---------------------------------------------------------------------------
Small businesses rank the cost and availability of
liability insurance as second only to the costs of health care
as their top priority,\96\ and both problems are fueled by
frivolous lawsuits.
---------------------------------------------------------------------------
\96\Bruce D. Phillips, ``Small Business Problems and Priorities''
(National Federation of Independent Business Research Foundation, June
2004).
---------------------------------------------------------------------------
When Business Week wrote an extensive article on what the
most effective legal reforms would be, Business Week stated
that what's needed is ``Penalties That Sting.'' As Business
Week recommends, ``Give judges stronger tools to punish
renegade lawyers. Before 1993, it was mandatory for judges to
impose sanctions such as public censures, fines, or orders to
pay for the other side's legal expenses on lawyers who filed
frivolous lawsuits. Then the Civil Rules Advisory Committee
(CRAC), an obscure branch of the courts, made penalties
optional. This needs to be reversed . . . by Congress.''\97\
---------------------------------------------------------------------------
\97\Mike France, ``Special Report--Tort Reform: How to Fix the Tort
System,'' Business Week (March 14, 2005) at 76.
---------------------------------------------------------------------------
frivolous lawsuits against innocent victims have become commonplace,
especially threatening small businesses and health care
Because existing rules against frivolous lawsuits are
ineffective, as one commentator has pointed out, ``The right to
sue has been exploited by lawyers. They can gamble on taking
cases on a contingency basis because they need only win 1 in 10
to score the big judgment that will make up for the other
losses.''\98\
---------------------------------------------------------------------------
\98\Mortimer B. Zuckerman (Editorial) ``Welcome to Sue City,
U.S.A.'' U.S. News & World Report (June 16, 2003) at 64.
---------------------------------------------------------------------------
Small businesses and workers suffer. For instance, the
nation's oldest ladder manufacturer, family-owned John S.
Tilley Ladders Co. of Watervliet, New York, near Albany, filed
for bankruptcy protection and sold off most of its assets due
to litigation costs. Founded in 1855, the Tilley firm could not
handle the cost of liability insurance, which had risen from 6%
of sales a decade ago to 29%, even though the company never
lost an actual court judgment. ``We could see the handwriting
on the wall and just want to end this whole thing,'' said
Robert Howland, a descendant of company founder John
Tilley.\99\
---------------------------------------------------------------------------
\99\Carrie Coolidge, ``The Last Rung; The Tort System Takes Down a
149-year-old Ladder Manufacturer,'' Forbes (January 12, 2004) at 52.
---------------------------------------------------------------------------
As Bernie Marcus, co-founder and former chairman of The
Home Depot, has described, ``An unpredictable tort system casts
a shadow over every plan and investment. It is devastating for
start-ups. The cost of even one ill-timed abusive lawsuit can
bankrupt a growing company and cost hundreds of thousands of
jobs. CEOs and their boards are forced to lower their
aspirations and hold back on innovations to manage defensively.
This is holding our nation back from competing effectively in
the global marketplace and offshore competition is seriously
cutting into market share for U.S. companies.''\100\
---------------------------------------------------------------------------
\100\Washington Legal Foundation, ``Conversations With . . .''
(Fall 2004).
---------------------------------------------------------------------------
Doctors and patients suffer. Before the 1960's, only one
physician in seven had ever been sued in their entire
lifetime,\101\ whereas today's rate is about one in seven
physicians sued per year.\102\
---------------------------------------------------------------------------
\101\See ``Opinion Survey of Medical Professional Liability,'' JAMA
164:1583-1594 (1957).
\102\See R. Bovbjerg, ``Medical Malpractice: Problems & Reforms,''
The Urban Institute, Intergovernmental Health Policy Project (1995).
---------------------------------------------------------------------------
Further, the Harvard Medical Practice Study found that over
half of the filed medical professional liability claims they
studied were brought by plaintiffs who suffered either no
injuries at all, or, if they did, such injuries were not caused
by their health care providers, but rather by the underlying
disease.\103\ The researchers found that, of the 47 medical
malpractice claims they studied that resulted in
litigation,\104\ ``[i]n 14 cases, the physicians reviewed the
record and found no adverse event. For most of these cases, the
physicians examined the outcome and concluded that the cause
was the underlying disease rather than medical treatment . . .
In these 14 cases, our physician reviewers took a stand
opposite to that of the plaintiff-patient's expert.''\105\
Further, the reviewers found that in an additional 10 cases an
adverse event occurred, but there was no negligence on the part
of the health care provider.\106\ Of the 47 claims filed that
the researchers analyzed, less than half demonstrated any
actual negligence, and many demonstrated no discernable
injury.\107\
---------------------------------------------------------------------------
\103\See Harvard Medical Practice Study to the State of New York,
Patients, Doctors, and Lawyers: Medical Injury, Malpractice Litigation,
and Patient Compensation in New York at 11-5 (1990) (``[T]he tort
system imposes the costs of defending claims on [health care] providers
who may not even have been involved in an injury, let alone a negligent
injury.'').
\104\See id. at 7-1.
\105\See id. at 7-33.
\106\See id. at 7-33.
\107\See also Paul Weiler, et al., A Measure of Malpractice (1993)
at 71 (``[Of those 47,] 10 claims involved hospitalization that had
produced injuries, though not due to provider negligence; and another
three cases exhibited some evidence of medical causation, but not
enough to pass our probability threshold. That left 26 malpractice
claims, more than half the total of 47 in our sample, which provided no
evidence of medical injury, let alone medical negligence.'').
---------------------------------------------------------------------------
response to federal judicial center 2005 survey
The Federal Judicial Center's 2005 survey of U.S. district
court judges (``FJC 2005 Survey'') will no doubt be misused by
opponents of legal reform as evidence that frivolous lawsuits
are ``not a problem.'' The survey of the Federal Judicial
Center shows nothing of the sort.
The Lawsuit Abuse Reduction Act would largely restore
Federal Rule of Civil Procedure 11 to what it was before it was
made toothless in 1993. Rule 11, prior to the adoption of
weakening amendments in 1993, which eliminated mandatory and
serious sanctions against those who filed frivolous lawsuits,
was widely popular among Federal judges, and it served to
significantly limit lawsuit abuse. In 1990, the Judicial
Conference's Advisory Committee on Civil Rules (the same
organization that requested the FJC 2005 Survey) undertook a
review of Rule 11 at the time and asked the Federal Judicial
Center to conduct an empirical study of its operation and
impact. The survey of 751 Federal judges found that an
overwhelming majority of Federal judges believed, based on
their experience under both a weaker and stronger Rule 11, that
a stronger Rule 11 did not impede development of the law (95%);
the benefits of the rule outweighed any additional requirement
of judicial time (71.9%); the stronger version of Rule 11 had a
positive effect on litigation in the Federal courts (80.9%);
and the rule should be retained in its then-current form
(80.4%).\108\ Note that of the 751 judges surveyed in 1990, 583
responded, roughly twice times as many as responded to the
FJC's 2005 Survey.
---------------------------------------------------------------------------
\108\Federal Judicial Center Final Report on Rule 11 to the
Advisory Committee on Civil Rules of the Judicial Conference of the
United States (May 1991).
---------------------------------------------------------------------------
Enter the Federal Judicial Center's 2005 survey, which only
278 judges responded to, and in which half of the judges
surveyed (and over half of the judges that responded to the
survey) had no experience with the stronger version of Rule 11.
As the FJC 2005 Survey states, ``the Center E-mailed
questionnaires to two random samples of 200 district judges
each . . . One sample comprised solely judges appointed to the
bench before January 1, 1992 . . . [t]he other sample comprised
solely judges appointed to the bench after January 1,
1992.''\109\ The FJC report keeps secret the dates on which the
respondent judges first came to serve on the bench, so we have
no way of knowing whether any of those judges had any
significant experience as judges under the stronger Rule 11
that was in effect the decade before 1993. Appendix A of the
FJS 2005 Survey states that ``all judges in the first group [of
200 out of 400 surveyed] would have had at least 1 year on the
bench before the 1993 amendments to Rule 11 went into effect.''
That provides little comfort that any significant number of the
judges surveyed had any significant experience under the
stronger Rule 11. So the survey is fundamentally flawed in that
we have no reason to believe it included any significant number
of judges who had any significant experience under the stronger
Rule 11.
---------------------------------------------------------------------------
\109\FJC 2005 Survey, at 2.
---------------------------------------------------------------------------
Further, the FJC Report found that even of the Federal
judges surveyed, 55% indicated that the purpose of Rule 11
should be both deterrence and compensation.\110\ The Lawsuit
Abuse Reduction Act would fulfill both purposes. And a full 85%
of the Federal judges surveyed in the FJC 2005 Survey reported
that ``groundless litigation in Federal civil cases on [their
individual] docket'' was a ``problem.''
---------------------------------------------------------------------------
\110\FJC 2005 Survey at 2.
---------------------------------------------------------------------------
Of course, legislators should take the opinions of this
very small, and flawed, sample of judges for what it is, namely
the views of a group of people who do not suffer in any direct
way the costs of frivolous, abusive lawsuits. Those who do
suffer those costs, including the large financial costs of
nuisance lawsuits filed for their settlement value--namely the
small business community--overwhelmingly support the Lawsuit
Abuse Reduction Act. The National Federation of Independent
Business, for example, has made passing the Lawsuit Abuse
Reduction Act their top legislative priority. The small
business community rejects the absurd notion today the amount
of frivolous lawsuits filed are ``just right.''
When sanctions for filing frivolous lawsuits are not
mandatory, as they are not mandatory now, those who are the
victims of frivolous lawsuits have no incentive to litigate the
frivolous nature of the claims against them because there is
currently no guarantee that even if the claims against them are
found to be frivolous they will be compensated for the harm
caused by those frivolous claims. What happens instead is that,
today, the victims of frivolous lawsuits are routinely extorted
to settle the case for certain sums just below those what would
be necessary to litigate the case to judgment, at which point
the case drops out of the dockets of the very judges who were
surveyed by the FJC. (Note also that the very small number of
judges surveyed by the FJC were not asked whether groundless
litigation was generally a problem.)
Just a couple weeks before for FJC 2005 Survey was
released, here's what U.S. District Judge Loretta Preska had to
say about the current state of Federal litigation:
This action is one of dozens of similar bootless
actions filed in twenty-three district courts across
the United States on behalf of uninsured and indigent
patients, wherein Plaintiffs argue, without basis in
law, that private non-profit hospitals are required to
provide free or reduced-rate services to uninsured
persons . . . This orchestrated assault on scores of
nonprofit hospitals, necessitating the expenditure of
those hospitals' scares resources to beat back
meritless legal claims, is undoubtedly part of the
litigation explosion that has been so well-documented
in the media. E.g., Walter K. Olson, The Litigation
Explosion: What Happened When America Unleashed the
Lawsuit (1991); Philip K. Howard, The Collapse of the
Common Good: How America's Lawsuit Culture Undermines
Our Freedom (2001) . . . For the foregoing reasons, the
Defendants' motions to dismiss the above-captioned
actions are granted in their entirety with prejudice.
The Clerk of the Court shall mark these actions closed
and all pending motions denied as moot.\111\
---------------------------------------------------------------------------
\111\Kolari v. New York-Presbyterian Hospital, 2005 WL 710452
(S.D.N.Y.).
Judges are unlikely to view frivolous litigation as a
problem because such cases rarely reach the bench. An
overwhelming number of cases settle before trial. When a
frivolous claim is filed, one of two things occur under the
current Rule 11: either the small business challenges the
plaintiff and the plaintiff simply withdraws the claim and
walks away (as they are allowed to do under the current Rule
11); or the small business settles rather than proceed with a
motion for sanctions because it is unlikely that the court will
fully reimburse it for the cost of defending against the
frivolous claim, and the cost of defending against the claim is
more than the expense of settlement.
The current situation favors judges, not small businesses
who are harmed by the litigation. Under the current Rule 11,
judges are relieved of their obligation to consider whether or
not a case is frivolous. They do not need to hold a hearing on
whether the case is frivolous and impose sanctions because, as
a matter of practice, the current Rule 11 allows frivolous
lawsuits to be withdrawn (with no reimbursement to the victim
of the suit) or settled (for just under the cost of defending
against it). While this is convenient for judges, it is not
fair to small businesses.
Everyone who sits back for a moment and reflects will
understand that a limitless variety of frivolous lawsuits clog
our courts in ways they did not previously. Judges, like frogs
in a pot of boiling water, are not those most likely to
appreciate the costs of frivolous lawsuits. Judges don't feel
the painful costs of frivolous lawsuits, and as they have sat
as judges over the last decade they have only seen the
standards of how frivolous lawsuits should be treated erode
over time, starting with the explicitly forgiving nature of the
toothless Rule 11 that was enacted in 1993. It's time courts
were made to take the harm caused by frivolous lawsuits
seriously again--by making sanctions for filing frivolous
lawsuits mandatory, not discretionary, on the part of the
judge--and to empower the victims of frivolous lawsuits with
the certainty that they will be compensated for the frivolous
lawsuits they suffer under. Only the Lawsuit Abuse Reduction
Act can help free all Americans from the fear they feel today
under the constant threat of frivolous lawsuits.
Finally, the Federal judiciarytends to oppose any legal
reforms it does not itself propose. For example, the Federal
judiciary also opposed the Class Action Fairness Act,
legislation that overwhelmingly passed Congress and became law
several years ago.\112\
---------------------------------------------------------------------------
\112\The Class Action Fairness Act passed the Senate by a vote of
72--26, and the House by a vote of 279--149.
---------------------------------------------------------------------------
In the end, it is the American people and their duly-
elected representatives, not unelected judges appointed for
life, who should be determining the appropriate punishments for
those who file frivolous lawsuits.
Hearings
The Committee's Subcommittee on the Constitution held 1 day
of hearings on the need for H.R. 966, on March 11, 2011.
Testimony was received from Elizabeth A. Milito, NFIB Small
Business Legal Center; Professor Lonny Hoffman, University of
Houston Law Center; and Victor E. Schwartz, Shook, Hardy &
Bacon, L.L.P., with additional material submitted by other
individuals and organizations.
Committee Consideration
On July 7, 2011, the Committee met in open session and
ordered the bill H.R. 966 favorably reported with an amendment,
by a rollcall vote of 20 to 13, a quorum being present.
Committee Votes
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
following rollcall votes occurred during the Committee's
consideration of H.R. 966.
1. An amendment offered by Mr. Johnson that would have
added back to Rule 11 the 21-day safe harbor provision.
Defeated 12 to 15.
ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot......................................................
Mr. Issa........................................................
Mr. Pence.......................................................
Mr. Forbes......................................................
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe.........................................................
Mr. Chaffetz....................................................
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch...................................................... X
Ms. Sanchez..................................................... X
-----------------------------------------------
Total....................................................... 12 15
----------------------------------------------------------------------------------------------------------------
2. An amendment offered by Ms. Jackson Lee to give courts
discretion to determine the appropriate sanction. Defeated 12
to 19.
ROLLCALL NO. 2
----------------------------------------------------------------------------------------------------------------
Ayes Nays Present
----------------------------------------------------------------------------------------------------------------
Mr. Smith, Chairman............................................. X
Mr. Sensenbrenner, Jr........................................... X
Mr. Coble....................................................... X
Mr. Gallegly.................................................... X
Mr. Goodlatte................................................... X
Mr. Lungren..................................................... X
Mr. Chabot...................................................... X
Mr. Issa........................................................
Mr. Pence....................................................... X
Mr. Forbes......................................................
Mr. King........................................................
Mr. Franks...................................................... X
Mr. Gohmert..................................................... X
Mr. Jordan...................................................... X
Mr. Poe......................................................... X
Mr. Chaffetz.................................................... X
Mr. Griffin..................................................... X
Mr. Marino...................................................... X
Mr. Gowdy....................................................... X
Mr. Ross........................................................ X
Ms. Adams....................................................... X
Mr. Quayle...................................................... X
Mr. Conyers, Jr., Ranking Member................................ X
Mr. Berman......................................................
Mr. Nadler...................................................... X
Mr. Scott....................................................... X
Mr. Watt........................................................ X
Ms. Lofgren..................................................... X
Ms. Jackson Lee................................................. X
Ms. Waters......................................................
Mr. Cohen....................................................... X
Mr. Johnson..................................................... X
Mr. Pierluisi................................................... X
Mr. Quigley..................................................... X
Ms. Chu......................................................... X
Mr. Deutch......................................................
Ms. Sanchez..................................................... X
-----------------------------------------------
Total....................................................... 12 19
----------------------------------------------------------------------------------------------------------------
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII of the Rules
of the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
New Budget Authority and Tax Expenditures
Clause 3(c)(2) of rule XIII of the Rules of the House of
Representatives is inapplicable because this legislation does
not provide new budgetary authority or increased tax
expenditures.
Congressional Budget Office Cost Estimate
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, the Committee sets forth, with
respect to the bill, H.R. 966, the following estimate and
comparison prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 18, 2011.
Hon. Lamar Smith, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 966, the ``Lawsuit
Abuse Reduction Act of 2011.''
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Martin von
Gnechten, who can be reached at 226-2860.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure
cc:
Honorable John Conyers, Jr.
Ranking Member
H.R. 966--Lawsuit Abuse Reduction Act of 2011.
H.R. 966 would amend Rule 11 of the Federal Rules of Civil
Procedure to require courts to impose appropriate sanctions on
attorneys, law firms, or parties who file frivolous lawsuits
and to require them to compensate parties injured by such
conduct. (Courts currently may, but are not required to, impose
such sanctions.)
Under the legislation, any monetary sanction imposed under
Rule 11 would be paid by the parties to the suit. Thus, CBO
estimates that enacting the legislation would result in no
significant cost to the Federal Government. H.R. 966 would not
affect direct spending or revenues; therefore, pay-as-you-go
procedures do not apply.
H.R. 966 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of State, local, or tribal
governments.
The CBO staff contact for this estimate is Martin von
Gnechten. The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
Performance Goals and Objectives
The Committee states that pursuant to clause 3(c)(4) of
rule XIII of the Rules of the House of Representatives, H.R.
966 will reduce frivolous litigation in Federal courts.
Advisory on Earmarks
In accordance with clause 9 of rule XXI of the Rules of the
House of Representatives, H.R. 966 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.
Section-by-Section Analysis
The following discussion describes the bill as reported by
the Committee.
Sec. 1. Short title. Section 1 sets forth the short title
of the bill as the ``Lawsuit Abuse Reduction Act of 2011.''
Sec. 2. Attorney Accountability. Section 2 restore
mandatory sanctions for filing frivolous lawsuits in violation
of Rule 11, removes Rule 11's ``safe harbor'' provision that
currently allows parties and their attorneys to avoid sanctions
for making frivolous claims by withdrawing frivolous claims
after a motion for sanctions has been filed, and requires
monetary sanctions, including attorneys' fees and compensatory
costs, against any party making a frivolous claim. It also
contains a rule of construction that states ``Nothing in this
Act shall be construed to bar or impede the assertion or
development of new claims, defenses, or remedies under Federal,
State, or local laws, including civil rights law, or under the
Constitution.''
Changes to the Federal Rules of Civil Procedure
Made by the Bill, as Reported
Changes to the Federal Rules of Civil Procedure made by the
bill, as reported, are shown as follows (existing rule proposed
to be omitted is enclosed in black brackets, new matter is
printed in italics, existing rule in which no change is
proposed is shown in roman):
RULE 11 OF THE FEDERAL RULES OF
CIVIL PROCEDURE
Rule 11. Signing Pleadings, Motions, and other Papers; Representations
to the Court; Sanctions
(a) * * *
* * * * * * *
(c) Sanctions.--
(1) In general.--If, after notice and a reasonable
opportunity to respond, the court determines that Rule
11(b) has been violated, the court [may] shall impose
an appropriate sanction on any attorney, law firm, or
party that violated the rule or is responsible for the
violation. Absent exceptional circumstances, a law firm
must be held jointly responsible for a violation
committed by its partner, associate, or employee.
(2) Motion for sanctions.--A motion for sanctions
must be made separately from any other motion and must
describe the specific conduct that allegedly violates
Rule 11(b). The motion must be served under [Rule 5,
but it must not be filed or be presented to the court
if the challenged paper, claim, defense, contention, or
denial is withdrawn or appropriately corrected within
21 days after service or within another time the court
sets. If warranted, the court may award to the
prevailing party the reasonable expenses, including
attorney's fees, incurred for the motion.] Rule 5.
* * * * * * *
(4) Nature of a sanction.--A sanction imposed under
this rule must be limited to what suffices to deter
repetition of the conduct or comparable conduct by
others similarly [situated. The sanction may include
nonmonetary directives; an order to pay a penalty into
court; or, if imposed on motion and warranted for
effective deterrence, an order directing payment to the
movant of part or all of the reasonable attorney's fees
and other expenses directly resulting from the
violation.] situated, and to compensate the parties
that were injured by such conduct. Subject to the
limitations in paragraph (5), the sanction shall
consist of an order to pay to the party or parties the
amount of the reasonable expenses incurred as a direct
result of the violation, including reasonable
attorneys' fees and costs. The court may also impose
additional appropriate sanctions, such as striking the
pleadings, dismissing the suit, or other directives of
a nonmonetary nature, or, if warranted for effective
deterrence, an order directing payment of a penalty
into the court.
* * * * * * *
Dissenting Views
I. INTRODUCTION
H.R. 966, the ``Lawsuit Abuse Reduction Act'' (LARA), rolls
back the 1993 amendments to Rule 11 of the Federal Rules of
Civil Procedure--imposing mandatory sanctions and eliminating
the 21-day safe harbor provision. Although LARA is flawed in
many ways, most issues with this legislation boil down to two
concerns. First, it will raise the amount, cost, and intensity
of civil litigation and provide more grounds for unnecessary
delay and harassment in the courtroom. Second, a return to the
1983 regime will chill legitimate civil rights claims.
Ordinarily, when the Majority proposes legislation to limit
access to the civil justice system, reasonable minds can
disagree as to the extent of the damage the bill will cause.
This, however, is not the case with H.R. 966, the ``Lawsuit
Abuse Reduction Act'' (LARA). This legislation will turn back
the clock to a time when the Federal Rules of Civil Procedure
limited judicial discretion, discouraged civil rights cases,
and permitted ``satellite'' litigation to run wild. We oppose
H.R. 966 because a decade of past practice proves that it will
have a disastrous impact on the administration of justice.
LARA is also opposed by the Alliance for Justice, the
American Bar Association, the Center for Justice and Democracy,
the Consumer Federation of America, the NAACP, the National
Employment Lawyers Association, the National Women's Health
Network, the National Consumer Voice for Quality Long-Term
Care, Public Citizen, and the U.S. Public Interest Research
Group. In addition, LARA is opposed by the Judicial Conference
of the United States, the principal policymaking body for the
judicial branch charged with proposing amendments to the
Federal Rules of Civil Procedure under the careful, deliberate
process outlined in the Rules Enabling Act.\1\
---------------------------------------------------------------------------
\1\28 U.S.C. Sec. Sec. 2701-2077.
---------------------------------------------------------------------------
For the reasons set forth herein, we respectfully dissent.
II. SUMMARY OF THE BILL AND ITS PROBLEMATIC PROVISIONS
The ``Lawsuit Abuse Reduction Act of 2011'' marks the third
time that Chairman Smith has introduced a bill to roll back the
1993 amendments to Rule 11.\2\ The bill changes Rule 11 in
three ways:
---------------------------------------------------------------------------
\2\See Lawsuit Abuse Reduction Act of 2004, H.R. 4571, 108th Cong.
(2004); Lawsuit Abuse Reduction Act of 2005, H.R. 420, 109th Cong.
(2005).
LIt takes away the discretion of the court and
makes sanctions mandatory in cases of Rule 11
---------------------------------------------------------------------------
violations.
LIt removes the 21-day safe harbor provision.
Parties will no longer have the ability to correct or
withdraw a filing before Rule 11 proceedings commence.
LIt replaces the description of available
sanctions. Under the current rule, sanctions are
designed for deterrence; monetary sanctions are rare
and, if imposed, most likely to be paid to the court as
a penalty. After LARA, monetary sanctions are mandatory
and must include, at the very least, payment of court
costs and attorneys' fees to the other party.
This last proposal appears to reach significantly past the 1983
rule, which stated that an ``appropriate sanction . . . may
include an order to pay the other party or parties the amount
of the reasonable expenses incurred . . . including a
reasonable attorney's fee.''\3\ In contrast, LARA requires that
sanctions include, at minimum, an order to pay court costs and
attorneys' fees.
---------------------------------------------------------------------------
\3\Fed. R. Civ. P. 11 (1983) (repealed 1993) (emphasis added).
---------------------------------------------------------------------------
The rule of construction, as amended in markup, states that
nothing in the bill may be ``construed to bar or impede the
assertion or development of new claims, defenses, or remedies
under Federal, State, or local laws, including civil rights
laws, or under the Constitution.'' This provision is a reaction
to evidence that the 1983 version of Rule 11 effectively barred
plaintiffs from bringing civil rights and anti-discrimination
claims. It is unclear, however, how this provision would
prevent defendants from tying up civil rights cases in Rule 11
satellite litigation to delay or drive up legal costs.
The Judicial Conference has warned that ``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.''\4\ Moreover, ``no serious problem has been
brought to the Rules Committees' attention. . . . There is no
need to reinstate the 1983 version of Rule 11 that proved
contentious and diverted so much time and energy of the bar and
bench.''\5\ The American Bar Association also considers LARA
``to be ill-advised and unnecessary.''\6\ Among other
objections, the ABA believes that LARA's ``premise is not based
on an empirical foundation, and the proposed amendments ignore
lessons learned.''\7\
---------------------------------------------------------------------------
\4\Letter from Lee H. Rosenthal, U.S. Dist. Judge, S.D. Tex., and
Mark R. Kravitz, U.S. Dist. Judge, D. Conn., to Chairman Lamar Smith,
H. Comm. on the Judiciary (Mar. 14, 2011).
\5\Id.
\6\Letter from Thomas M. Susman, Director, Governmental Affairs
Office, American Bar Association, to Chairman Trent Franks, Subcomm. on
the Constitution, H. Comm. on the Judiciary (Mar. 11, 2011).
\7\Id.
---------------------------------------------------------------------------
In 2005, as the House prepared to vote on an earlier
version of LARA, the Federal Judicial Center conducted a survey
of 278 Federal judges to discern their views on Rule 11. The
results were overwhelmingly in favor of the rule as amended in
1993:
L85 percent of the judges surveyed viewed
``groundless litigation'' as no more than a small
problem in their courtrooms;
L91 percent opposed the proposed requirement
that sanctions be imposed for every Rule 11 violation;
L85 percent strongly or moderately supported
Rule 11's safe harbor provision; and
L84 percent disagreed with the proposition
that an award of attorney fees should be mandatory for
every Rule 11 violation.\8\
---------------------------------------------------------------------------
\8\David Rauma & Thomas E. Willging, Report of a Survey of United
States District Judges' Experiences and Views Concerning Rule 11,
Federal Rules of Civil Procedure, Federal Judicial Center (2005).
In the end, 87 percent of the judges surveyed wanted Rule 11 to
stay as amended in 1993. Only 4 percent expressed support for
the amendments proposed by Judiciary Republicans.\9\
---------------------------------------------------------------------------
\9\Id.
---------------------------------------------------------------------------
III. H.R. 966 UNDOES SIGNIFICANT IMPROVEMENTS TO RULE 11
Rule 11 of the Federal Rules of Civil Procedure requires
``[e]very pleading, written motion, and other paper'' to be
``signed by at least one attorney of record.''\10\ By signing,
the attorney certifies: (1) the paper is not ``presented for
any improper purpose, such as to harass, cause unnecessary
delay, or needlessly increase the cost of litigation;'' (2) any
claims ``are warranted by existing law or by a nonfrivolous
argument for extending, modifying, or reversing existing law or
for establishing new law;'' (3) all factual contentions have
``evidentiary support'' or ``will likely have evidentiary
support after a reasonable opportunity for further
investigation or discovery;'' and (4) any denials of factual
contentions are ``warranted on the evidence'' or ``reasonably
based on belief or a lack of information.''\11\ If a court
determines that Rule 11 has been violated, a wide range of
sanctions is available.\12\
---------------------------------------------------------------------------
\10\Fed. R. Civ. P. 11(a).
\11\Fed. R. Civ. P. 11(b).
\12\Fed. R. Civ. P. 11(c).
---------------------------------------------------------------------------
Since it first took effect in 1938, Rule 11 has been
amended only twice. H.R. 966 attempts to sidestep the Judicial
Conference and amend the rule for a third time.
A. The 1938 Rule
In its original form, Rule 11 required attorneys to sign
pleadings and to certify that, to the best of their
``knowledge, information, and belief,'' each pleading was well-
grounded.\13\ The court held sole discretion over the
imposition of sanctions.\14\ During the 45 years this version
of the rule was in effect, the courts ruled on only 19 Rule 11
motions, found a violation of the rule only 11 times, and
imposed sanctions in only 3 cases.\15\ This version of Rule 11
was seldom used and largely ignored.\16\
---------------------------------------------------------------------------
\13\Fed. R. Civ. P. 11 (1938) (repealed 1983).
\14\Id.
\15\Peter A. Joy, The Relationship Between Civil Rule 11 & Lawyer
Discipline: An Empirical Analysis Suggesting Institutional Choices in
the Regulation of Lawyers, 37 Loy. L. A. L. Rev. 765, 765-66 (2004).
\16\See Lonny Sheinkopf Hoffman, The Lawsuit Abuse Reduction Act:
The Legislative Bid to Regulate Lawyer Conduct, 25 Rev. Litig. 719, 722
(2006).
---------------------------------------------------------------------------
1. The 1983 Amendment
The 1983 Advisory Committee on Civil Rules recognized that,
``in practice, Rule 11 has not been effective in deterring
abuses.''\17\ In an attempt to curb an increase in the number
and rising costs of civil suits, the Advisory Committee added
significant teeth to the sanction provisions. The amended rule
required attorneys to conduct a ``reasonable inquiry'' into the
factual and legal merits of every document submitted in court,
and mandated sanctions if courts found attorneys in violation
of this responsibility.\18\
---------------------------------------------------------------------------
\17\Fed. R. Civ. P. 11 (1983) Advisory Committee's note to the 1983
amendment.
\18\Fed. R. Civ. P. (1983) (repealed 1993).
---------------------------------------------------------------------------
Instead of deterring unnecessary litigation, the 1983
amendment became a ``font of rancor'' between parties in civil
suits.\19\ The nineteen Rule 11 filings between 1938 and 1983
gave way to almost 7,000 reported cases during the decade the
1983 rule was in effect.\20\ A 1989 study showed that roughly
one-third of all Federal civil lawsuits involved Rule 11
``satellite'' litigation.\21\ Roughly one-fourth of all cases
on the docket were burdened by Rule 11 actions that did not
result in sanctions.\22\ Attorneys now had a double duty: ``one
to try the case, and the other to try the opposing
counsel.''\23\ Commentators criticized the 1983 rule for
spawning a veritable ``cottage industry'' of Rule 11
litigation.\24\
---------------------------------------------------------------------------
\19\Don J. DeBenedictis, Rule 11 Snags Lawyers: Critics Charge
Ruling Will Discourage Civil Rights Cases, 77 A.B.A. J. 16 (1999).
\20\Hoffman, supra note 16, at 727.
\21\Uncertain and Certain Litigation Abuses, 2004: Hearing on
``Safeguarding Americans from a Legal Culture of Fear: Approaches to
Limiting Lawsuit Abuse'' before the H. Comm. on the Judiciary, 108th
Cong. (2004) (statement of Theodore Eisenberg, Professor, Cornell
University).
\22\Id.
\23\Id.
\24\Carl Tobias, The 1993 Revision to Federal Rule 11, 70 IND. L.J.
171, 173-74 (1994) (noting statistics on growth in Rule 11 practice).
---------------------------------------------------------------------------
In 1992, the Advisory Committee held two public hearings on
proposed amendments to Rule 11. The Committee noted that
``widespread criticisms of the 1983 version of the rule, though
frequently exaggerated or premised on faulty assumptions, were
not without some merit.''\25\ It found that the rule ``tended
to impact plaintiffs more frequently and severely than
defendants,'' occasionally ``created problems for a party which
seeks to assert novel legal contentions,'' and provided
``little incentive, and perhaps a disincentive, for a party to
abandon positions after determining they are no longer
supportable in fact or law.''\26\ Other studies found that
sanctions were disproportionately imposed against plaintiffs in
civil rights and anti-discrimination cases.\27\
---------------------------------------------------------------------------
\25\Letter from the Honorable Sam C. Pointer, Jr., Chairman,
Advisory Committee on Civil Rules, to the Honorable Robert E. Keeton,
Chairman, Standing Committee on Rules of Practice and Procedure (May 1,
1992), reprinted in 146 F.R.D. 519 (1993) (transmitting proposed
amendments to the Federal Rules of Civil Procedure and the Federal
Rules of Evidence, and accompanying Committee Notes).
\26\Id.
\27\See Carl Tobias, Rule 11 and Civil Rights Litigation, 37 Buff.
L. Rev. 485 (1989); Margaret L. Sanner & Carl Tobias, Rule 11 & Rule
Revision, 37 Loy. L.A. L. Rev. 573 (2004); Danielle Kie Hart, And the
Chill Goes On--Federal Civil Rights Plaintiffs Beware: Rule 11 Vis-a-
vis 28 U.S.C. Sec. 1927 and the Court's Inherent Power, 37 Loy. L.A. L.
Rev. 645 (2004).
---------------------------------------------------------------------------
2. The 1993 Amendment
In 1993, the Advisory Committee amended several key aspects
of Rule 11. It removed virtually all financial incentive for a
party to pursue nuisance Rule 11 sanctions, or to defend
against them to the bitter end. Still in effect today, this
version of Rule 11 sets a more objective standard for attorney
behavior--i.e., courtroom activity must be ``warranted by
existing law or by a nonfrivolous argument for the extension,
modification, or reversal of existing law or the establishment
of a new law.''\28\ Sanctions are to be imposed only at the
discretion of the court, and must be limited to ``what is
sufficient to deter repetition of such conduct or comparable
conduct by others similarly situated.''\29\ Because the purpose
of Rule 11 is ``to deter rather than to compensate,'' monetary
sanctions, if imposed, ``should ordinarily be paid into the
court as a penalty.''\30\ Only in exceptional cases should
payment be made to those injured by the violation and, even
then, ``any such award . . . should not exceed the expenses and
attorneys' fees for the services directly and unavoidably
caused by the violation of the certification requirement.''\31\
A 21-day ``safe harbor'' provision allows a litigant to
withdraw or amend any offending document before the court
continues with Rule 11 proceedings.\32\
---------------------------------------------------------------------------
\28\Fed R. Civ. P. 11(b)(2).
\29\Id. at 11(c)(4).
\30\Fed R. Civ. P. 11 Advisory Committee's note to 1993 amendment.
\31\Id.
\32\Fed R. Civ. P. 11(c)(1).
---------------------------------------------------------------------------
By all empirical accounts, the 1993 amendments have been
tremendously successful. The Sixth Circuit observed that the
Advisory Committee ``anticipated that civility among attorneys
and between bench and bar would be furthered by having
attorneys communicate with each other and with an eye toward
potentially resolving their difference prior to court
involvement.''\33\ In the lower courts, the safe harbor
provision has had ``the salutary effect of providing the
appropriate due process considerations to sanction litigation,
reducing Rule 11 volume and eliminating abuses proscribed by
this rule.''\34\
---------------------------------------------------------------------------
\33\Ridder v. City of Springfield, 109 F.3d 288, 294 (6th Cir.
1997).
\34\Photocircuits Corp. v. Marathon Agents, Inc., 162 F.R.D. 449,
452 (E.D.N.Y. 1995).
---------------------------------------------------------------------------
IV. H.R. 966 UNDERMINES THE JUDICIAL CONFERENCE'S DELIBERATIVE
PROCESSES AS REQUIRED UNDER THE RULES ENABLING ACT.
For most of the past century, Congress has trusted the
Federal judiciary to make its own procedural rules. H.R. 966
abrogates that trust.
In 1922, Congress tasked the Judicial Conference of the
United States to serve as the principal policymaking body for
the judicial branch.\35\ Federal statute requires the
Conference to conduct ``a continuous study of the operation and
effect'' of the rules of procedure, and propose changes to the
rules ``to promote simplicity in procedure, fairness in
administration, the just determination of litigation, and the
elimination of unjustifiable defense and delay.''\36\
---------------------------------------------------------------------------
\35\Id. Sec. 331.
\36\Id.
---------------------------------------------------------------------------
In 1934, Congress passed the Rules Enabling Act, which
authorizes the Federal judiciary to prescribe its own rules of
practice, procedure, and evidence.\37\ The Judicial Conference
has taken on this responsibility as well. Specifically, the
Conference assigns these matters to its Committee on Rules of
Practice and Procedure and its advisory committees, which
recommend proposed changes to the rules ``as may be necessary
to maintain consistency and otherwise promote the interest of
justice.''\38\ Each committee is composed of Federal judges,
practicing lawyers, law professors, state chief justices, and
representatives of the Department of Justice.\39\ The process
for amending rules of procedure is deliberate and exhaustive:
---------------------------------------------------------------------------
\37\28 U.S.C. Sec. Sec. 2071 et seq.
\38\28 U.S.C. Sec. 2073(b).
\39\``A Summary for the Bench and Bar: The Federal Rules of
Practice and Procedure,'' Admin. Office of the U.S. Courts, Oct. 2010,
available at http://www.uscourts.gov/RulesAndPolicies/
FederalRulemaking/RulemakingProcess/SummaryBenchBar.aspx.
The pervasive and substantial impact of the rules on
the practice of law in the Federal courts demands
exacting and meticulous care in drafting rule changes.
The rulemaking process is time consuming and involves a
minimum of seven stages of formal comment and review.
From beginning to end, it usually takes two to 3 years
---------------------------------------------------------------------------
for a suggestion to be enacted as a rule. . . .
[C]omments received from this extensive and thorough
public examination are studied very carefully by the
committees and generally improve the amendments. The
committees actively encourage the submission of
comments, both positive and negative, to ensure that
proposed amendments have been considered by a broad
segment of the bench and bar.\40\
---------------------------------------------------------------------------
\40\Id.
This careful process gives Congress the opportunity to reject,
modify, or defer changes before they take effect.\41\ In stark
contrast, H.R. 966 is a reckless attempt to amend the rules
directly, over the objections of the Judicial Conference and
without input from experts or practitioners.
---------------------------------------------------------------------------
\41\28 U.S.C. Sec. Sec. 2074, 2075.
---------------------------------------------------------------------------
V. MANDATORY SANCTIONS LEAD TO INCREASED LITIGATION.
Supporters of H.R. 966 want to curb a perceived increase in
frivolous litigation. The actual effect of the legislation,
however, will be to increase litigation. Under the LARA regime,
with mandatory sanctions and no opportunity to correct
mistakes, the parties to a lawsuit have every incentive to file
Rule 11 complaints and seek out court costs and legal fees and
obvious motives to defend against such actions to the bitter
end. This dynamic is more than theoretical. Under the 1983
version of the rule, ``satellite'' litigation aimed at Rule 11
sanctions flourished.
The Judicial Conference also recognizes that LARA is a step
backwards. The 1983 version of Rule 11 was amended because it
``spawned thousands of court decisions unrelated to the merits
of the cases, sowed discord in the bar, and generated
widespread criticism.''\42\ Reinstituting mandatory sanctions
would create conflicts of interest between lawyers and their
clients and exacerbate tensions between competing
attorneys.\43\ Moreover, the changes would create
``disincentive to abandon or withdraw a pleading or claim that
lacked merit--and thereby admit error--after determining that
it no longer was supportable in law or fact''\44\ Since the
adoption of the 1993 amendments, the Conference had observed
``a marked decline in Rule 11 satellite litigation without any
noticeable increase in the number of frivolous filings.''\45\
---------------------------------------------------------------------------
\42\Letter from Rosenthal & Kravitz, supra note 4.
\43\Id.
\44\Id.
\45\Id.
---------------------------------------------------------------------------
Elizabeth A. Milito, a representative of the National
Federation of Independent Business, testified before the
Subcommittee on Constitution that frivolous lawsuits create a
``climate of fear'' for small businesses. However, the NFIB
surveyed 3,530 of its members in 2008 on the biggest threats
facing small business.\46\ Out of 75 possible concerns
surveyed, ``cost and frequency of lawsuits/threatened suits''
ranked 65th.\47\ More than a third of respondents found that
the threat of lawsuits were ``not a problem'' at all.\48\
---------------------------------------------------------------------------
\46\Bruce D. Phillips & Holly Wade, ``Small Business Problems &
Priorities,'' National Federation of Independent Business Research
Foundation (June 2008).
\47\Id. at 18.
\48\Id. at 14.
---------------------------------------------------------------------------
In the final analysis, the ``climate of fear'' for small
businesses is based almost entirely on anecdotal evidence--and
even this is thin. In 2004, 2005, and again 2011, the Majority
cited to the single example of a ladder company in upstate New
York ``that was forced to sell of most of its assets because of
litigation costs.''\49\ That characterization does not square
with the facts of the bankruptcy as it was originally reported:
although insurance premiums had risen considerably, the ladder
company was profitable until ``competition from bigger
companies using foreign labor . . . became unbearable.''\50\
Moreover, the company ``wasn't even sued all that much.''\51\
The ``climate of fear'' is unsubstantiated, and small
businesses should be far more concerned with a return to the
climate of hostility engendered by the 1983 rule.
---------------------------------------------------------------------------
\49\ Markup of H.R. 966, The Lawsuit Abuse Reduction Act of 2011,
before the H. Comm. on the Judiciary, 112th Cong. (July 7, 2010)
(statement of Rep. Smith, Chairman, H. Comm. on the Judiciary). See
also H. R. Rep. No. 108-682, at 12 (2004); H. R. Rep. No. 109-123, at
14 (2005).
\50\Carrie Coolidge, ``The Last Rung, The Tort System Takes Down a
149-year-old Ladder Manufacturer,'' Forbes (Jan. 12, 2004), at 52.
\51\Id.
---------------------------------------------------------------------------
VI. H.R. 966 WILL HAVE A CHILLING IMPACT ON CIVIL RIGHTS CASES
Because civil rights cases often involve an ``argument for
the extension, modification, or reversal of existing law or the
establishment of a new law,'' they were particularly
susceptible to Rule 11 before the 1993 amendments. A 1991
Federal Judicial Center study found that ``[t]he incidence of
Rule 11 motions or sua sponte orders is higher in civil rights
cases than in some other types of cases.''\52\ Another study
showed that ``civil rights cases made up 11.4% of Federal cases
filed'' but that ``22.7% of the cases in which sanctions had
been imposed were civil rights cases.''\53\ Under the 1983
rule, civil rights cases were clearly disadvantaged.
---------------------------------------------------------------------------
\52\Elizabeth C. Wiggins, et al., Special Issue on Rule 11, FJC
Directions No. 2, at 10 (Nov. 1991).
\53\Lawrence C. Marshall, et al., The Use and Impact of Rule 11, 86
Nw. U.L. Rev. 943, 971-75 (1992).
---------------------------------------------------------------------------
H.R. 966 would restore this regime and provide no recourse
for appeal when sanctions are imposed. The Honorable Robert L.
Carter, United States District Court Judge for the Southern
District of New York, considered changes like these and
remarked:
I have no doubt that the Supreme Court's opportunity to
pronounce separate schools inherently unequal [in Brown
v. Board of Education] would have been delayed for a
decade had my colleagues and I been required, upon pain
of potential sanctions, to plead our legal theory
explicitly from the start.\54\
---------------------------------------------------------------------------
\54\Symposium, The 50th Anniversary of the Federal Rules of Civil
Procedure, 1938-1988, 137 U. Pa. L. Rev. 2179, 2193 (June 1989).
And, as one witness testified before the Judiciary Committee in
2004, ``A Congress considering reinstating the fee-shifting
aspect of Rule 11 in the name of tort reform should understand
what it will be doing. It will be discouraging civil rights
cases disproportionately affected by old Rule 11 in the name of
addressing purported abuse in an area of law, personal injury
tort, found to have less abuse than other areas.''\55\
---------------------------------------------------------------------------
\55\Uncertain and Certain Litigation Abuses, 2004: Hearing on
``Safeguarding Americans from a Legal Culture of Fear: Approaches to
Limiting Lawsuit Abuse'' before the H. Comm. on the Judiciary, 108th
Cong. (2004) (statement of Theodore Eisenberg, Professor, Cornell
University).
---------------------------------------------------------------------------
The bill's rule of construction, as amended in Committee by
Mr. Scott, states: ``Nothing in this Act shall be construed to
bar or impede the assertion or development of new claims,
defenses, or remedies under Federal, State, or local laws,
including civil rights laws, or under the Constitution.''\56\
This provision is new to this version of LARA, and is intended
to address the undisputed effect of the 1983 rule on civil
rights litigation. This intent is to be applauded.
---------------------------------------------------------------------------
\56\Lawsuit Abuse Reduction Act of 2011, H.R. 966, 112th Cong.
Sec. 2(b) (2011).
---------------------------------------------------------------------------
We note, however, that the 1983 rule was also facially
neutral with respect to the development of novel legal claims.
The rule of construction does nothing to prevent defendants
from wielding Rule 11 as a weapon against legitimate
plaintiffs, tying up civil rights cases in long and costly
satellite litigation. Past practice shows that abuse of Rule 11
need not be overt.
For all these reasons, we respectfully dissent.
John Conyers, Jr.
Jerrold Nadler.
Robert C. ``Bobby'' Scott.
Melvin L. Watt.
Zoe Lofgren.
Sheila Jackson Lee.
Maxine Waters.
Steve Cohen.
Henry C. ``Hank'' Johnson, Jr.
Pedro R. Pierluisi.
Mike Quigley.
Ted Deutch.