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Washington-When it comes to rule-making, the Judicial Conference of the United States generally has the corner on what works best in the federal courts. But last week, the U.S. House of Representatives resurrected and approved a rule on attorney sanctions that the conference, as well as most academics, judges and lawyers, believed had been justly interred in the old-rule graveyard more than a decade ago. Election-season politics, a last-gasp effort to enact any so-called tort reform law this year, and a weak relationship between the judicial and legislative branches, coalesced in final passage of H.R. 4571. The bill would reinstate mandatory sanctions for lawyers who file frivolous lawsuits under Rule 11 of the Federal Rules of Civil Procedure, and would eliminate the current “safe harbor” that gives lawyers 21 days to withdraw a suit after a motion for sanctions has been filed. The legislation, sponsored by Representative Lamar Smith, a Texas Republican, passed the House, 229-174, last week. It not only revives the 1983 version of Rule 11 but also would create a “three strikes and you’re out for one year” requirement. Lawyers who have had sanctions imposed three times in the same court-federal or state-would be suspended from practicing for one year after the third time. The current Rule 11 provision excluding sanctions for discovery violations would be eliminated by the House bill. And, the bill would apply its new Rule 11, for the first time, to state cases affecting interstate commerce. State judges would be required to make the interstate commerce determination within 30 days after a motion for sanctions has been applied. New venue provisions, also in the House bill, would allow a plaintiff to sue only where he or she lives or was injured, or where the defendant’s principal place of business is located. This is an attempt to eliminate what the bill’s supporters call “judicial hellholes” favoring plaintiffs. “I think it’s a bad idea, period,” emphasized procedural scholar Georgene Vairo of Loyola Law School, Los Angeles, who has written extensively on Rule 11. “If you don’t have the political muscle to get your substantive proposals through, it’s a really bad idea to do it through your procedural rules,” Vairo said. “Judges do a pretty good job of coming up with rules they need. This is tort reform through the backdoor.” But Matt Webb, director of legal reform policy at the U.S. Chamber of Commerce Institute for Legal Reform, said, “There’s really a philosophical difference here [over the two versions of Rule 11]. There’s a lot of stuff out there that obviously folks in the business community and the legal reform world would consider in the way of frivolous filings. A lot of times Rule 11 ends up being a toothless tiger.” Dead on arrival? The question now is whether the legislation will be dead on arrival in the Senate. There is no companion bill in the Senate as has been the case with other tort measures passed by the House, so there is no easy vehicle to move. And supporters of changes in the tort system have been unable to garner enough votes in the Senate this session to pass any of the major tort-related measures, such as class action, medical malpractice and asbestos. “I really don’t think this has any seriousness behind it,” said Jackson Williams, legislative counsel to Public Citizen’s Congress Watch, an opponent of the bill. “The House majority has a lot of time on its hands. They’ve been passing bills a second time because they don’t have anything to do. Idle hands are the devil’s workshop.” But Webb countered, “There’s always a possibility, particularly because of the way Senate rules are: Any senator can offer any amendment. It’s not outside the realm of possibility that something could happen. The House wanted to take the lead. Now that they’ve done their job, we’ll go talk to the folks in the Senate.” Old v. new Congress has not always deferred completely to judicial-rule revisers, said another procedural scholar, Carl Tobias of the University of Richmond School of Law. When Congress has gotten involved, he explained, it has been more in the area of criminal law and evidence than in the civil area. By the time of the 1993 changes to Rule 11, Tobias recalled, “There was pretty broad consensus that the ’83 amendment had not worked in a number of ways.” In a letter to House Judiciary Chairman F. James Sensenbrenner, R-Wis., Leonidas Ralph Mecham, secretary to the Judicial Conference, said that the 1983 version of Rule 11, like H.R. 4571, required sanctions for every violation of the rule. “It spawned thousands of court decisions and generated widespread criticism,” he wrote. “The rule was abused by resourceful lawyers, and an 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. Rule 11 motions came to be met with counter motions that sought Rule 11 sanctions for making the original Rule 11 motion.” Before the 1983 version came about, Vairo recalled, “The culture was very, very anti-sanctions. Judges just wouldn’t do it. It took a couple of years for the ’83 version of rule to start rolling. But once it did, it really did. That’s why we saw the 1993 version rolling back some of the draconian aspects of the ’83 rule-not so much in the language as in the way it was being used. “To the extent the ’83 rule was bad, it was a good thing because most people agree and most judges agree the ’83 version increased everybody’s consciousness about the need to impose sanctions in appropriate cases,” she added. Tobias and Mecham, in his letter to Sensenbrenner, noted that the Advisory Committee on Civil Rules spent nearly five years studying the impact of the 1983 rule. One of the studies conducted became a major point of contention in the debate over H.R. 4571. Sensenbrenner, both on the day his committee approved the bill and on the day the House finally endorsed it, pointed to a 1991 study by the judiciary’s research arm, the Federal Judicial Center, as evidence that the 1983 version was preferable. “At that time, 751 federal judges found that an overwhelming majority of them, 95%, believed Rule 11 did not impede development of the law; 72% believed that the benefits of the rule outweighed any additional requirement of judicial time; 81% believed that the 1983 version of Rule 11 had a positive effect on litigation in the Federal courts; and 80% believed that the rule should be retained in its then-current form,” Sensenbrenner told his House colleagues. “That is what the judges who were on the bench at the time this rule was in effect said. “The Judicial Conference ought to spend their time looking back at their own records and their own surveys rather than sending these types of letters advising us that what we are doing here is no good,” he concluded. But the Judicial Conference, in its letter to Sensenbrenner, said the 1991 study also showed that most judges found other methods more effective than Rule 11 in handling frivolous litigation, and that about one-half of the judges reported that Rule 11 exacerbated behavior between lawyers. Additionally, Mecham wrote, a call for comment on the rule issued a year earlier produced a substantial response calling for changes in the rule. A number of Democratic judiciary lawmakers used the conference’s letter on the floor to oppose the bill. But Sensenbrenner and other Republican supporters continued to emphasize the 1991 study. At the time of the 1993 rule change, there were groups, noted Vairo, particularly trade associations representing businesses often sued, that did not want the 1983 rule amended. “They were concerned it would result in judges not imposing sanctions anymore,” she recalled. But a 1995 study by the Federal Judicial Center on the effect of the 1993 amendments found that more than 75% of the judges and lawyers who responded would oppose mandatory sanctions for rule violations, and a majority believed that frivolous litigation was being handled effectively by judges. Tort torte “The problem is a small-business problem,” said Victor Schwartz of Kansas City, Mo.’s Shook, Hardy & Bacon, who represents the American Tort Reform Association, a bill supporter. “We’re not talking about civil rights actions, but stuff not in the headlines-nickel and dime, $10,000, $15,000, $20,000 claims. They have no weaponry to fight them. “This is the bottom of the barrel of the plaintiffs’ bar,” he added. “They bring a $20,000 claim against a restaurant owner for a person who was never in the restaurant. The lawyer calls and tries to settle for just under the cost of the defense.” The chamber’s Webb agreed, adding, “You have the safe harbor in there and they think no harm, no foul. Unfortunately, if you’re on the receiving end of that, you still have to litigate that matter and you not only have to litigate the substance but whether or not it was frivolous. There is a cost associated with that.” State court extension Schwartz and Webb said they know that the extension of Rule 11 to state courts will be controversial. But Schwartz added, “Small businesses are in state courts. A number of states have automatic trigger provisions in their rules, so if the federal rule changes, the state rule changes. That’s why a lot of small businesses were upset by the 1993 changes. They got caught in the tripwire.” Vairo and others counter that the state court provisions raise serious constitutional problems and run counter to federalism concerns, which, ironically, is a traditional concern of the Republican supporters of the bill. Tobias agreed and noted that the passage of H.R. 4571 was another example of Congress rejecting the judiciary’s advice this session. He pointed to the so-called Feeney Amendment, dealing with judicial sentencing, and as-yet unsuccessful bills to strip court jurisdiction over challenges to the pledge of allegiance and the Federal Defense of Marriage Act. “It’s a little hard to understand in the face of the chief justice’s almost pleading on a number of fronts,” said Tobias. “I think this bill is tort reform politics and election politics.” In the end, Vairo said, “This is more about ideology and symbols. The rule is virtually as potent today as it used to be, not to mention that you have other tools out there, all sorts of things to sanction lawyers who are bad, and judges are now much more attuned to using those tools. “I think Rule 11 has become, in some respects, the bellwether for a lot of what we see and perceive as problems with litigation,” she added.

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