House passes bill to sanction lawyers for frivolous suits

The legislation also takes aim at "venue shopping."

By Mike Norbut — Posted Nov. 21, 2005

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For the second consecutive year, the House of Representatives has passed a measure designed to reduce frivolous lawsuits by penalizing the attorneys who file them.

The bill, which passed by a 228-184 vote in late October, calls for federal courts to apply sanctions against an attorney who, according to a judge's opinion, has filed a lawsuit without merit. The penalty would be paying the defendant's "reasonable expenses," including attorney's fees.

The measure also calls for the court to suspend an attorney's license for one year if he or she files three or more frivolous lawsuits.

"Frivolous lawsuits bankrupt individuals, ruin reputations, drive up insurance premiums, increase health care costs and put a drag on the economy," Rep. Lamar Smith (R, Texas), the bill's sponsor, said in a statement. "Today almost any party can bring any suit in almost any jurisdiction. That's because plaintiffs and their attorneys have nothing to lose."

In addition to sanctioning lawyers who file meritless lawsuits, the bill would prevent so-called "venue shopping" by requiring personal injury cases to be filed where the plaintiff lives or was injured or where the defendant's main business is located.

The bill would apply to all cases and was not passed specifically to address medical liability insurance issues. It would amend federal civil procedure rules to make attorneys more accountable for their actions, supporters of the bill said.

While it continues to lobby for a $250,000 noneconomic damages cap in medical liability cases, the AMA urged Congress to vote for the Lawsuit Abuse Reduction Act of 2005.

"Physicians and their insurers are forced to expend considerable resources to defend lawsuits with no merit," AMA Executive Vice President and CEO Michael D. Maves, MD, MBA, wrote in a letter to lawmakers. "These costs are enormous considering that 75% of medical liability claims in 2004 were closed without any payment to the plaintiff, yet physicians still faced large legal defense costs."

Doctors point to meritless lawsuits as a significant factor causing the current medical liability crisis around the country. The AMA counts 20 states as being in a crisis, marked by escalating liability insurance premiums that are forcing physicians to retire early, stop seeing high-risk patients or move to a different state with lower premiums.

By keeping frivolous claims out of court, the bill could help stabilize defense costs, Dr. Maves told legislators.

But the Assn. of Trial Lawyers of America said the bill would force state courts to conduct a pretrial hearing to determine if a case affected interstate commerce. If it did, the federal sanctioning rules would apply, even though state law may be nearly identical, ATLA officials said. It would be a time-consuming step just to determine jurisdiction, attorneys said.

"The bill is unnecessary -- all 50 states already have laws that allow judges to throw out a frivolous suit and sanction the attorney who filed it -- but Congress has shown once again it places a higher priority on protecting negligent corporations than the rights of ordinary Americans to seek justice," said ATLA President Ken Suggs.

The bill now heads to the Senate, which did not vote on the legislation last year. Political pundits speculate the bill will again be shelved without a vote.

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