NAMIC Applauds Passage of Tort Reform Bill

On Tuesday, by a vote of 229-174, the House of Representatives favorably approved H.R. 4571, the Lawsuit Abuse Reduction Act of 2004.

H.R. 4571 would amend Rule 11 of the Federal Rules of Civil Procedure to penalize attorneys who file frivolous lawsuits. The legislation also limits forum shopping by restricting plaintiffs to file lawsuits only in the jurisdiction where the plaintiff was injured, where the plaintiff resides, or the jurisdiction in which the defendant’s company is domiciled. The bill was introduced in June by Rep. Lamar Smith, R-TX, and currently has 24 co-sponsors.

An amendment, in the nature of a substitute, offered by Rep. Jim Turner, D-Texas, failed by a vote of 177 yeas and 226 opposed. The “Three Strikes and You’re Out” amendment would impose mandatory sanctions on attorneys that file frivolous pleadings or engage in frivolous conduct during discovery. The amendment would also reportedly make it more difficult for court records to be sealed.

“NAMIC applauds the Congress for passing the Lawsuit Abuse Reduction Act,” Marliss Browder, NAMIC federal affairs director, commented. “This bill would restore mandatory sanctions against those filing such suits that were eliminated in 1993. Due to the dramatic increase in filing class action lawsuits in the United States in the last decade – many of which would be considered frivolous – our member companies, as well as businesses in many other industries, have been forced to use more of there valuable financial and human resources that would otherwise be available to grow their business and employ more American workers,” Browder continued.

On Sept. 8, the House Judiciary Committee favorably approved H.R. 4571 on an 18-10 vote. An amendment offered by Rep. Ric Keller, R-Fla., to disbar lawyers for at least one year if they file three frivolous lawsuits in a federal court was easily approved by a vote of 20-6.

“We realize that time is now running out, however NAMIC remains committed to passing class action reform legislation this year and are cautiously optimistic that the Senate will follow suit and pass this important piece of legislation,” Browder added.