SideBAR is the newsletter of the FBA’s Federal Litigation Section. Robert E. Kohn, Editor.

SideBAR • Published by the Federal Litigation Section of the Federal Bar Association • Summer 2011

Judges Oppose the Bill.

A bill called the “Lawsuit Abuse Reduction Act of 2011” (H.R. 966) was reported from the House Judiciary Committee yesterday, and it is expected to receive a vote by the House of Representatives before the end of this session of Congress.  Track it here.  The bill would repeal parts of Rule 11 of the Federal Rules of Civil Procedure that have been in force since 1993, when the Judicial Conference of the United States proposed the current provisions and the Supreme Court approved them.  Subsection (c) of Rule 11 gives federal judges authority to impose sanctions against a litigant or a lawyer who files a complaint, an answer or a motion without a reasonable factual investigation or an adequate legal basis.  Read the current rule here.

Federal judges have opposed returning to the older version the rule.  Before the 1993 amendments (which the law seeks to repeal), judges say that Rule 11 was itself a tool for the court system to be “abused by resourceful lawyers.”  According to a letter on March 14, 2011 from two committees of the Judicial Conference, under the pre-1993 version of the rule, “[a]n entire ‘cottage industry’ developed that churned tremendously wasteful satellite litigation that had everything to do with strategic gamesmanship and little to do with underlying claims.”  Read their letter here.  As a result, “Rule 11 motions came to be met with counter-motions that sought Rule 11 sanctions for making the original Rule 11 motion.”

The 2011 bill would eliminate a provision adopted in 1993 that currently allows a party to withdraw a challenged pleading or motion on a voluntary basis, without the added costs and delay to the challenging party of seeking and obtaining a court order.  See Fed. R. Civ. P. 11(c)(2).  Thus, under the bill, there would no longer be a “safe harbor” provision that allows an adverse party to withdraw or modify a challenged pleading or other paper before a sanctions motion can be filed or otherwise presented to the court.

After 1993, since the current version of Rule 11 became effective, federal judges have also been able to exercise their discretion over choosing the kinds of different sanctions that fit each particular case.  The bill would revoke a major part of that judicial discretion by specifying that, in addition to any other sanctions the court might impose, the court must order the offending party or attorney “to pay to the [other] party or parties the amount of the reasonable expenses incurred as a direct result of the violation, including reasonable attorneys’ fees and costs.”  In doing so, the bill would repeal the current provision in Rule 11(c)(2) that that fees and costs “may” be awarded “if warranted.”  In place of that provision, the bill would further authorize punitive monetary awards, to be paid into the court, “if warranted for effective deterrence.”