House Approves Legislation Cracking Down On Frivolous Lawsuits Guaranteed Penalty For Detroit Personal Injury Lawyers Filing Frivolous Lawsuits

WASHINGTON, D.C. - The House today by a 229-to-174 margin approved legislation cracking down on frivolous lawsuits by mandating sanctions against personal injury lawyers who file meritless claims. H.R. 4571, the Lawsuit Abuse Reduction Act (LARA), was introduced by Rep. Lamar S. Smith (R-Tex.) and now heads to the Senate for consideration.

House Judiciary Committee Chairman F. James Sensenbrenner, Jr. (R-Wis.), stated, “Every year jobs are lost, prices are raised, and small businesses go out of business because of the cost of frivolous lawsuits. No part of American society rests easy in a legal culture of fear. Churches are discouraging counseling by ministers. Children have learned to threaten teachers with lawsuits. Youth sports are shutting down in the face of lawsuits for injuries and even hurt feelings. Monkey bars and other once common equipment are now endangered species at playgrounds. As a result, children stay home and get fat, and their parents sue the restaurants that serve them. The Girl Scouts in Metro Detroit alone have to sell 36,000 boxes of cookies each year just to pay for liability insurance.

“Because existing rules against frivolous lawsuits are ineffective, the right to sue has not only been exploited by lawyers, it’s been turned into one of the most destructive business models in the American economy. Today, personal injury lawyers can gamble on taking cases on a contingency fee basis because they need only win 1 in 10 to score the big judgment that will make up for the losses in other cases. And we all live with the consequences, including higher taxes and insurance rates, chaos in our schools, and doctors going out of business, limiting Americans’ access to health care. Small businesses and workers may suffer most,” continued Chairman Sensenbrenner.

LARA contains 4 main provisions: 1) it establishes mandatory sanctions for filing frivolous lawsuits in violation of Rule 11 of the Federal Rules of Civil Procedure; 2) it abolishes Rule 11's current “free pass” provision which allows lawyers to avoid sanctions for making frivolous claims by simply withdrawing frivolous claims within 21 days after a motion for sanctions has been filed; 3) it prevents forum-shopping of cases by requiring that personal injury cases be brought only where the plaintiff resides, where the plaintiff was allegedly injured, or where the defendant’s principal place of business is located; and 4) a “3 Strikes and You’re Out” provision that mandates a 1-year suspension of a law license to practice in a federal court after a lawyer has filed 3 or more frivolous lawsuits in the same federal court.

This “3 Strikes and You’re Out” provision enjoys strong support across the political spectrum. For instance, the John Kerry for President campaign has endorsed national legislation in which “[l]awyers who file frivolous cases would face tough, mandatory sanctions, including a ‘three strikes and you're out’ provision that forbids lawyers who file three frivolous cases from bringing another suit for the next 10 years.”

“Frivolous lawsuits bankrupt individuals, ruin reputations, drive up insurance premiums, increase health care costs, and put a drag on the economy,” said Rep. Smith. “Frivolous suits are brought when there is no evidence that shows negligence on the part of the defendant. These nuisance lawsuits make a mockery of our legal system. The gaming of the system by a few lawyers drives up the cost of doing business and drives down the integrity of the judicial system.”

LARA does not change the standard for determining whether a lawsuit is frivolous. LARA focuses on frivolous lawsuits and does not affect legitimate cases