To direct the Securities and Exchange Commission to revise its rules so as to increase the threshold amount for requiring issuers to provide certain disclosures relating to compensatory benefit plans.

Madam Speaker, pursuant to House Resolution 403, I call up the bill (H.R. 2655) to amend rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for other purposes, and ask for its immediate consideration.

Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous materials on H.R. 2655, currently under consideration.

Madam Speaker, I yield myself such time as I may consume.

H.R. 2655, the Lawsuit Abuse Reduction Act, would restore mandatory sanctions for frivolous lawsuits filed in Federal Court.

Many Americans may not realize it, but today, under what is called rule 11 of the Federal Rules of Civil Procedure, there is no requirement that those who file frivolous lawsuits pay for the unjustified legal costs they impose on their victims. As a result, the current rule 11 goes largely unenforced. When there is no guarantee of compensation, the victims of frivolous lawsuits have little incentive to spend even more money to pursue additional litigation to have the case declared frivolous.

H.R. 2655 would finally provide light at the end of the tunnel for the victims of frivolous lawsuits by requiring sanctions against those who file them, sanctions that include paying their victims the full cost of their reasonable expenses incurred as a direct result of the rule 11 violation, including attorneys' fees.

The bill also strikes the current provision in rule 11 that allows lawyers to avoid sanctions by making frivolous claims and demands by simply withdrawing them within 21 days. This change eliminates the ``free pass'' lawyers now have to file frivolous lawsuits in Federal Court.

To be clear, under rule 11, a lawsuit is frivolous if it is presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation if it is not warranted by existing law or if the factual contentions have no evidentiary support. In other words, a lawsuit will only be found frivolous if it has no basis in law or fact.

Yet the current lack of mandatory sanctions leads to the regular filing of lawsuits that are clearly baseless. For example, in just the last year, a small business owner was sued for violations of Federal regulations in a parking lot that he doesn't own or lease. A woman had her car repossessed and then filed a $5 million Federal lawsuit for the half tank of gas she had left in the car.

A high school teacher sued a school district claiming it discriminated against her because she has a phobia--a fear of young children. Her case was dismissed by the Equal Employment Opportunity Commission, but that didn't prevent her from filing a Federal lawsuit.

These real yet absurd cases have real-life consequences for their victims who have to shell out thousands of dollars just to respond to frivolous pleadings, endure sleepless nights, and spend time away from their family, work, and customers. Let's not forget that the victims of frivolous lawsuits are real victims.

Do any of my colleagues on the other side of the aisle claim that judges should have the discretion to deny damage awards to victims of legal wrongs proved in court? If not, why should judges have the discretion to deny damage awards to victims of frivolous lawsuits who prove in court that the case against them was frivolous?

It is difficult to see how a vote against the bill before us today could be interpreted as anything other than a denial that victims of frivolous lawsuits are indeed real victims. But indeed they are real victims, and they deserve to be guaranteed compensation when they prove the claims against them are frivolous in court.

Let's also remember that the victims of lawsuit abuse are not just those who are actually sued. Rather, we all suffer under a system in which innocent Americans everywhere live under the constant fear of a potentially bankrupting frivolous lawsuit.

As the former chairman of The Home Depot Company has written:

An unpredictable legal system casts a shadow over every

plan and investment. It is devastating for start-ups. The

cost of even one ill-timed abusive lawsuit can bankrupt a

growing company and cost hundreds of thousands of jobs.

The prevalence of frivolous lawsuits is reflected in the absurd warning labels companies must place on their products to limit their liability. A 5-inch brass fishing lure with three hooks is labeled, ``Harmful if swallowed.'' A vanishing fabric marker with disappearing ink warns it should not be used as a writing instrument for signing checks or any legal documents. A label on a Scooter says, ``Warning: This product moves when used.'' A household iron contains the warning, ``Never iron clothes while they are being worn.'' And a cardboard sun shield that keeps sun off the dashboard warns, ``Do not drive with sun shade up.''

The potential for frivolous lawsuits are behind all these absurd warning labels which, while humorous in their own way, serve as a warning to us about what the world will increasingly look like if we don't make the rules more fair.

Today, absurd lawsuits can sometimes bring sanctions against those

who filed them; but even when they do, the current rules result in far too little compensation for the victims of the frivolous lawsuit.

In his 2011 State of the Union address, President Obama said:

I'm willing to look at other ideas to rein in frivolous

lawsuits.

Well, I hope the President has time to read this one-page bill and lend his support to a proposal that would significantly reduce the burden of frivolous litigation on innocent Americans.

I thank the former chairman of the House Judiciary Committee, Congressman Lamar Smith, for introducing this simple, commonsense legislation that would do so much to prevent lawsuit abuse and restore Americans' confidence in the legal system.

I reserve the balance of my time.

Madam Speaker, at this time, it is my pleasure to yield 5 minutes to the gentleman from Arizona (Mr. Franks), the chairman of the Subcommittee on the Constitution and Civil Justice.

Madam Speaker, it is my pleasure to yield 5 minutes to the gentleman from Texas (Mr. Smith), the former chairman of the House Judiciary Committee and the chief sponsor of this legislation.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I did not think that, when I came down here today to debate this 1-page bill for Lawsuit Abuse Reduction Act, it would somehow get linked with the more than 2,000-page monstrosity popularly known, or unpopularly known, as ObamaCare, and told that somehow the promise that was made over and over and over again, that if you like the health insurance you have, you can keep it, was not the fault of the legislation itself, and the people making that promise, but was, rather, the fault of the insurance companies who have to deal with this more than 2,000-page monstrosity, and the more than 20,000 pages of regulations that have been written, and have to rewrite virtually every insurance policy for health care in America because of the mandates and the regulations that are in that legislation; and somehow, the more than 4 million Americans, almost all of whom are the little guys, as I have just heard referenced, that somehow this is the fault of the insurance companies who are doing what they have been required to do under the law, and that is to make changes in the law that necessitates changing all of their policies, that necessitates making sure that things that are mandated by the law are included in their coverage, whether the people who had the policies that they liked could afford these new changes or not.

So many, many Americans are forced, by this legislation, to seek new health insurance, in some cases, far more expensive, and they can't afford it. But somehow that is made out to be the fault of the insurance companies, not the people who wrote the law, voted for the law, and then are implementing the law in spite of promises that were made that cannot be kept, not by insurance companies who are abiding by the law, but by others.

Now, to compare that to this legislation, which is a 1-page modest bill, to ensure that people who are the victims of frivolous lawsuits and fraudulent lawsuits cannot have justice in our Federal judicial system, I think, is just plain wrong.

And the chart that has just been displayed regarding rule 11 filings during the 1983-1993 period, when there was an increase in the number of hearings related to rule 11, that is a spike for justice. That is a spike for the increased opportunity for people who have been subjected to some of the most outrageous lawsuits that were described by the gentleman from Texas, that were described in my opening remarks, and that is their opportunity to seek real justice.

That is what this bill is all about, reinstating a spike for justice for the little guy, for the small business person, the individual who finds himself subject to a lawsuit under some of the most ridiculous circumstances you can imagine and saying, you know what, my life has been turned upside down by this lawsuit. I am not getting sleep at night. I am having to spend thousands or tens of thousands or even hundreds of thousands of dollars on attorneys. I am having to do things to change the way I live my life, and it is all because of something that was frivolous and fraudulent, and now I am seeking to have some redress, some redress for that wrong that was done.

That is the very basic principle of the American jurisprudence system, that people, when they are harmed, have the right to go to court and seek redress of their grievances. And that is exactly what this provision in this law does under rule 11. It says that if the court finds that the lawsuit is frivolous, then there is a mandatory requirement that the individual who is the victim of that frivolous lawsuit should recover losses.

That is, indeed, what this legislation is all about, and I am proud to support it.

I yield to the gentlewoman from Texas.

Reclaiming my time, if that were the case, then I don't think the President would have unilaterally delayed for 1 year the employer mandate where the vast majority of Americans are.

Imagine if this bill had taken effect as originally planned, and all of the employers in America, looking at their insurance policies for their employees, were also having to tell their employees that they could no longer afford to provide insurance or they are going to provide a different plan, or the employee had to pay more money, or the employee was being put into the exchanges, all of those things would be significant, serious problems.

But we digress from the importance of this legislation right here, which is something that we can join together, in a bipartisan way, to see that we have justice in our judicial system when people are unfairly sued, unfairly subject to frivolous or fraudulent lawsuits.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I continue to reserve the balance of my time.

Will the gentleman yield?

I would ask the gentleman from Pennsylvania, what other sorts of legal claims should a victim be able to prove in court but be denied damages by the judge?

Well, you are in court. You have got a frivolous lawsuit. The court finds it is a frivolous lawsuit. You prove that you are the victim of that legal claim and you prove it in court, yet you can be denied damages by the judge.

What other legal remedy, what other legal claim would the gentleman cite other than frivolous lawsuits where that would be the case? Are there any others?

Mr. Speaker, I yield myself 1 minute, and I would be happy to yield to the gentleman to respond.

Well, I thank the gentleman for his comment.

And I would just point out that I practiced law during the time that the mandatory sanctions were in place in Federal court and found that it was a very good environment to do so. I was then elected to Congress and got here and found that, lo and behold, a small panel of judges changed that rule without looking at the evidence of a survey of Federal judges where 751 Federal judges found that an overwhelming majority believed--

Mr. Speaker, I yield myself such time as I may consume.

Federal judges found that an overwhelming majority of Federal judges believed, based on their experience under both a weaker and stronger rule 11, that a stronger rule 11 did not impede development of the law, 95 percent; the benefits of the rule outweighed any additional requirement of judicial time, 71.9 percent; the stronger version of rule 11 had a positive effect on litigation in the Federal courts, 81 percent; and the rule should be retained in its then current form. What we are attempting to reinstate into the law, 80.4 percent supported retaining the then-current mandatory sanctions under the law.

Mr. Speaker, this is about seeking real justice, and the fact of the matter is that, just like a judge could not deny well-founded damages in a lawsuit brought by an individual under a valid legal claim of any other kind, they should not be able to have the discretion to deny any damages when a frivolous lawsuit is proven and the expenses of having to undertake the defense of that frivolous lawsuit are made. And

yet time after time after time today, people do not even bother to do it anymore because of the low, low, low record of granting damages in findings of frivolous lawsuits since it was made discretionary, and the mandatory provision should be reinstated in the law.

I reserve the balance of my time.

Mr. Speaker, I will continue to reserve the balance of my time.

Mr. Speaker, I yield myself the remainder of my time.

Mr. Speaker, I am pleased that my friend and colleague from Michigan (Mr. Conyers), the ranking member of the Judiciary Committee, raised the important issue of civil rights. It is absolutely important. And I share his concern that individuals who believe that their civil rights have been infringed in any way have the opportunity to bring actions in Federal court as long as those actions are not frivolous or based upon fraud. In fact, looking back during the time when we had mandatory sanctions from 1983 to 1993, the Federal Judicial Center, in its study, found that the imposition rate of sanctions in civil rights cases was not out of line with that in any other type of case.

Now, we have not rested there. When the committee marked up this legislation, the gentleman from Virginia (Mr. Scott) offered a bipartisan amendment which was added to the bill at the very end. I said it was a one-page bill. I am actually slightly mistaken. It is a one-and-a-third-page bill. And the one-third page that was added reads this way:

Rule of Construction--Nothing in this Act or an amendment

made by this Act shall be construed to bar or impede the

assertion or development of new claims, defenses, or remedies

under Federal, State, or local laws, including civil rights

laws, or under the Constitution of the United States.

So this measure is carefully crafted to make sure that we are not harming people's rights to seek legitimate redress of grievances in our courts. What it is designed to do is to eliminate frivolous and fraudulent lawsuits. And from the evidence of the survey of Federal judges who worked for 10 years under the rule that we would instate again with the passage of this legislation, the overwhelming majority of them said they would not change the rule, and it is unfortunate that a small committee chose to move forward to make that change notwithstanding.

I would add, too, that those who claim that this is not about the little guy are overlooking the fact that small businesses are affected by frivolous lawsuits all the time. And the National Federation of Independent Business, which bills itself as ``the voice of small business'' and which represents hundreds of thousands of small businesses all across America, endorses this legislation. In fact, they wrote to us and said that 84 percent of National Federation of Independent Business members agree that attorneys should face mandatory sanctions if they bring forth a frivolous lawsuit. The NFIB urges you to support final passage of H.R. 2655 and will consider it an NFIB key vote in the 113th Congress.

So in terms of the little guy--both the small business person and the individual--this legislation is designed to protect individuals against frivolous or fraudulent lawsuits. And, as I pointed out in my dialogue with another Member a little while ago, I don't believe anybody can come forward and give me any other example where a legal claim is validly brought in court and the victim is able to prove that wrong was perpetrated and prove that there are damages resulting from that wrong and yet be denied those damages by the judge. I challenge anybody to come forward and show me that.

So why, if you have a process that says under rule 11--which it did say at one time and would say again with the passage of this legislation--that you have a right to a process to show and establish that a lawsuit is frivolous, why after you have done that wouldn't it be mandatory that the process take one step further and assess the appropriate amount of damages that would be due and owing that victim of that abusive lawsuit that suffers in all the same ways that other people suffer when they are the victim of abusive actions of other kinds that result in actions being brought in court?

So I urge my colleagues to support this legislation, and I yield back the balance of my time.

Mr. Speaker, I claim the time in opposition to the motion to recommit.

Mr. Speaker, I rise in opposition to this motion because the base bill makes sanctions for filing frivolous lawsuits in Federal court mandatory.

Under rule 11, a lawsuit is frivolous if it is presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation, if it is not warranted by existing law, or if the factual contentions have no evidentiary support. In other words, a lawsuit will only be found frivolous if it has no basis in law or fact. As soon as the judge finds that any claim of any kind is founded in law or fact, then no claim for damages because of a frivolous lawsuit would lie.

Who here thinks that lawyers should be able to avoid any penalty when the lawsuit they file is found by a Federal judge to have been simply filed to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation? Or, when the Federal judge finds that the lawsuit is not warranted by existing law or to have no evidentiary support?

If you think lawyers should be able to get off scot-free when they file those sorts of frivolous lawsuits, vote for this motion to recommit. If you agree with me that the victims of frivolous lawsuits are real victims and that they have to shell out thousands of dollars, endure sleepless nights, and spend time away from their family, work, and customers just to respond to frivolous pleadings, then you must oppose this motion to recommit.

When Business Week wrote an extensive article on what the most effective legal reforms would be, it stated what is needed are ``penalties that sting.'' As Business Week recommended:

Give judges stronger tools to punish renegade lawyers.

Before 1993, it was mandatory for judges to impose sanctions

such as public censures, fines, or orders to pay for the

other side's legal expenses on lawyers who filed frivolous

lawsuits. Then the Civil Rules Advisory Committee, an obscure

branch of the courts, made penalties optional. This needs to

be reversed . . . by Congress.

H.R. 2655, the Lawsuit Abuse Reduction Act, would do just that.

The specific language of the motion to recommit means that it literally immunizes from sanctions frivolous civil rights claims. That doesn't further civil rights; that sets them back, because the only claims that sanctions could be issued on would be claims for which there is no basis in law or fact.

That does not advance the cause.

I would add that the language in the motion to recommit adds, ``shall not apply in the case of any action brought under, one, civil rights laws, and two, the Constitution.'' That second provision, the Constitution, means that the motion to recommit covers every single lawsuit brought in any United States court in the land and any Federal court, and so it goes well beyond what is the stated intent of the motion to recommit.

A better way to look at this is to look at what the Federal Judicial Center found in its study when it looked at the imposition of the mandatory sanctions under rule 11 that existed from 1983 to 1993. It found that the imposition rate of sanctions in civil rights cases was not out of line with that in any other type of cases.

Furthermore, when this bill was drafted for this Congress--a very narrowly drafted bill, just 1\1/3\ pages long--we added a rule of construction for specific protection for valid, legitimate civil rights lawsuits that are based in law or fact.

It says in the rule of construction, as I said earlier:

Nothing in this act or an amendment made by this act shall

be construed to bar or impede the assertion or development of

new claims, defenses, or remedies under Federal, State, or

local laws, including civil rights laws or under the

Constitution of the United States.

That is the proper way to protect civil rights litigation. Meritorious civil

litigation founded in law or in fact. That indeed is what the legislation does, and that is why the House should reject the motion to recommit and pass the Lawsuit Abuse Reduction Act.

I yield back the balance of my time.

Madam Speaker, I yield myself such time as I may consume.

I rise in opposition to H.R. 2655. I suggest that what we are doing here this afternoon will turn the clock back to a time when the Federal Rules of Civil Procedure discouraged civil rights cases, limited judicial discretion, and permitted satellite litigation to run wild. I repeat, we may turn the clock back to a time when the Federal Rules of Civil Procedure discouraged civil rights cases, limited judicial discretion, and permitted satellite litigation to run wild.

And here is how it accomplishes it, by undoing the 1993 amendments to rule 11 of the Federal Rules of Civil Procedure by: one, restricting judicial discretion; two, requiring mandatory sanctions for even unintentional violations; and three, eliminating the current rule's 21- day safe harbor provision, which has been so beneficial to our Federal court system.

And so to put it as simply as possible, H.R. 2655 will have a disastrous impact on the administration of justice.

Now, how would this bill chill legitimate civil rights litigation?

Civil rights cases often concern novel issues which made them particularly susceptible to rule 11 before the 1993 amendments. I hope all the Members of this body appreciate how significant this is and the important history that was made during that earlier period of time.

For example, a 1991 Federal Judicial Center study found that the incidence of rule 11 motions was ``higher in civil rights cases than in some other types of cases.''

Another study showed that, while civil rights cases comprised about 11 percent of Federal cases filed, more than 22 percent of the cases in which sanctions had been imposed were civil rights cases.

This legislation will also substantially increase the amount, cost, and intensity of civil litigation and create more grounds for unnecessary delay and harassment in the courtroom. Experts in civil procedure are virtually unanimous on this point.

By allowing rule 11 to be used as a tool to impose court costs on the other side, the 1983 version spawned a virtual cottage industry of rule 11 litigation. Each party had a financial incentive to tie up the other in rule 11 proceedings.

Professor Theodore Eisenberg of Cornell University has demonstrated that roughly one-third of all Federal lawsuits were burdened by satellite litigation during the period when this prior version of the rule was in effect. Attorneys had a double duty, he argued: ``one to try the case, and the other to try the opposing counsel.''

In recognition of these problems, the Judicial Conference amended the rule in 1993 to its present form. And so we should realize that we have the support and appreciate the constructive assistance of many of these organizations: the American Bar Association, the Alliance for Justice, the Consumer Federation of America, the National Consumer Law Center, the National Consumers League, Public Citizen, and the United States Public Interest Research Group, among others.

In addition, the legislation is opposed by the Judicial Conference of the United States, the principal policymaking body for the judicial branch charged with proposing amendments to the Federal Rules of Civil Procedure under the careful, deliberate process outlined in the Rules Enabling Act.

Madam Speaker, I reserve the balance of my time.

Committee on Rules of Practice and Procedure of the

Judicial Conference of the United States,

Washington, DC, July 23, 2013.

Hon. John Conyers, Jr.

Ranking Member, Committee on the Judiciary,

Washington, DC.

Dear Representative Conyers: We write to present the views

of the Judicial Conference Rules Committees on H.R. 2655, the

Lawsuit Abuse Reduction Act of 2013.

As the current chairs of the Judicial Conference's

Committee on the Rules of Practice and Procedure (the

``Standing Rules Committee'') and the Advisory Committee on

the Federal Rules of Civil Procedure (the ``Advisory

Committee''), we oppose H.R. 2655, which seeks to reduce

lawsuit abuse by amending Rule 11 of the Federal Rules of

Civil Procedure. The bill would reinstate a mandatory

sanctions provision of Rule 11 that was adopted in 1983 and

eliminated in 1993. The bill would also eliminate a provision

adopted in 1993 to allow a party to withdraw challenged

pleadings on a voluntary basis, without the costs and delay

to the challenging party of seeking and obtaining a court

order. The concerns we express are the same concerns

expressed by the Judicial Conference in 2004 and 2005, and by

the Standing Rules Committee and Advisory Committee in 2011,

when similar legislation was introduced.

We greatly appreciate, and share, the desire to improve the

civil justice system in our federal courts, including by

reducing frivolous filings. But legislation that would

restore the 1983 version of Rule 11 by undoing the 1993

amendments would create a ``cure'' far worse than the problem

it is meant to solve. Such legislation also contravenes the

longstanding Judicial Conference policy opposing direct

amendment of the federal rules by legislation instead of

through the careful, deliberate process Congress established

in the Rules Enabling Act, 28 U.S.C. Sec. Sec. 2071-2077.

The 1993 changes followed years of examination and were

made on the Judicial Conference's strong recommendation, with

the Supreme Court's approval, and after congressional review.

The 1983 provision for mandatory sanctions was eliminated

because it did not provide meaningful relief from the

litigation behavior it was meant to address, and instead

generated wasteful satellite litigation that had little to do

with the merits of cases and that added to the time and costs

of litigation.

The 1983 version of Rule 11 required sanctions for every

violation of the rule. This mandatory sanctions provision

quickly became a tool of abuse in civil litigation. Seeking

to use mandatory sanctions to their advantage, aggressive

lawyers filed motions for Rule 11 sanctions in response to

virtually every filing in a civil case. Much time and money

was spent in Rule 11 battles 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.

The 1983 version of Rule 11 spawned thousands of court

decisions unrelated to the merits of the cases, sowed discord

in the bar, and generated widespread criticism. As letters

from the Judicial Conference commenting on proposed

legislation similar to H.R. 2655 pointed out, some of the

serious problems caused by the 1983 amendments to Rule 11

included:

1. creating a significant incentive to file unmeritorious

Rule 11 motions by providing a greater possibility of

receiving money;

2. engendering potential conflicts of interest between

clients and their lawyers;

3. exacerbating tensions between lawyers; and

4. providing a disincentive to abandon or withdraw a

pleading or claim that lacked merit--thereby admitting error

and risking sanctions--even after determining that it no

longer was supportable in law or fact.

The 1993 amendments to Rule 11 were designed to remedy the

major problems with the rule, strike a fair balance between

competing interests, and allow parties and courts to focus on

the merits of the underlying cases rather than on Rule 11

motions. Since 1993, the rule has established a safe harbor,

providing a party 21 days within which to withdraw a

particular claim or defense before sanctions can be imposed.

If the party fails to withdraw an allegedly frivolous claim

or defense within the 21 days, a court may impose sanctions,

including assessing reasonable attorney fees. The 1983

version of Rule 11 authorized a court to sanction discovery-

related abuse under Rule 11, Rule 26(g), or Rule 37, which

created confusion. Under the 1993 amendments to Rule 11,

sanctioning of discovery-related abuse is limited to Rules 26

and 37, which provide for sanctions that include awards of

reasonable attorney fees.

The 1993 amendments to Rule 11 culminated a long, critical

examination of the rule begun four years earlier. The

Advisory Committee reviewed a significant number of empirical

studies of the 1983 version of Rule 11, including three

separate studies conducted by the Federal Judicial Center in

1985, 1988, and 1991, a Third Circuit Task Force report on

Rule 11 in 1989, and a New York State Bar Committee report in

1987.

After reviewing the literature and empirical studies of

problems caused by the 1983 amendments to Rule 11, the

Advisory Committee issued in 1990 a preliminary call for

general comment on the operation and effect of the rule. The

response was substantial and

clearly called for a change in the rule. The Advisory

Committee concluded that the cost-shifting in Rule 11 created

an incentive for too many unnecessary Rule 11 motions.

Amendments to Rule 11 were drafted by the Advisory Committee,

approved by the Standing Rules Committee, and approved by the

Judicial Conference. The Supreme Court promulgated and

transmitted the amendments to Congress in May 1993 after

extensive scrutiny and debate by the bench, bar, and public

in accordance with the Rules Enabling Act process.

Experience with the amended rule since 1993 has

demonstrated a marked decline in Rule 11 satellite litigation

without any noticeable increase in frivolous filings. In June

1995, the Federal Judicial Center conducted a survey of 1,130

lawyers and 148 judges on the effects of the 1993 Rule 11

amendments. About 580 attorneys and 120 judges responded. The

Center found general satisfaction with the amended rule. It

also found that a majority of the judges and lawyers did not

favor a provision that would require mandatory sanctions when

the rule is violated.

In 2005, the Federal Judicial Center surveyed federal trial

judges to get a clearer picture of how the revised Rule 11

was operating. A copy of the study is enclosed. The study

showed that judges on the front lines--those who must contend

with frivolous litigation and apply Rule 11--strongly believe

that the current rule works well. The study's findings

include the following highlights:

More than 80 percent of the 278 district judges surveyed

indicated that ``Rule 11 is needed and it is just right as it

now stands'';

87 percent prefer the existing Rule 11 to the 1983 version

or the version proposed by legislation (e.g., H.R. 4571 (the

Lawsuit Abuse Reduction Act of 2004) or H.R. 420 (the Lawsuit

Abuse Reduction Act of 2005));

85 percent strongly or moderately support Rule 11's safe

harbor provisions;

91 percent oppose the proposed requirement that sanctions

be imposed for every Rule 11 violation;

84 percent disagree with the proposition that an award of

attorney fees should be mandatory for every Rule 11

violation;

85 percent believe that the amount of groundless civil

litigation has not grown since the promulgation of the 1993

rule (for judges commissioned before 1992) or since their

first year as a federal district judge (for judges

commissioned after January 1, 1992), with 12 percent noting

that such litigation has not been a problem, 19 percent

noting that such litigation decreased during their tenure on

the federal bench, and 54 percent noting that such litigation

has remained relatively constant; and

72 percent believe that addressing sanctions for discovery

abuse in Rules 26(g) and 37 is better than in Rule 11.

The findings of the Federal Judicial Center underscore the

judiciary's united opposition to legislation amending Rule

11. Lawyers share this view. In 2005, the American Bar

Association issued a resolution opposing a proposed bill

similar to H.R. 2655.

Minimizing frivolous filings is, of course, vital. But

there is no need to reinstate the 1983 version of Rule 11 to

work toward this goal. Judges have many tools available to

respond to, and deter, frivolous pleadings. Those tools

include 28 U.S.C. Sec. 1915(e), which requires courts to

dismiss cases brought in forma pauperis that the court

determines are frivolous or malicious or fail to state a

claim, and 28 U.S.C. Sec. 1915A, which requires courts to

dismiss prisoner complaints against governmental entities,

officers, or employees that are frivolous, malicious, or fail

to state a claim. Rule 12(b)(6) authorizes courts to dismiss

pleadings that fail to state a claim on which relief can be

granted. Section 1927 of Title 28 of the United States Code

authorizes sanctions against lawyers for ``unreasonably and

vexatiously'' multiplying the proceedings in any case. And

the present version of Rule 11 itself provides an effective,

balanced tool, without the problems and satellite litigation

the 1983 version created.

In May 2010, the Advisory Committee held a major conference

on civil litigation, examining the problems of costs and

delay--which encompass frivolous filings--and potential ways

to improve the system. The Conference encouraged, and

generated, a broad spectrum of criticisms by lawyers,

litigants (including businesses and governmental entities),

judges, and academics of the current approaches to federal

civil cases, including the rules, and proposals for change.

Conspicuous in their absence were any criticism of Rule 11 or

any proposal to restore the 1983 version of the rule. Three

years after the Conference, the Advisory Committee and

Standing Rules Committee have approved publication of rules

amendments designed to respond to suggestions made at the

Conference on new means of reducing cost and delay in civil

litigation and enhancing practical access to the federal

courts. These three years of intense work did not find any

reason to consider Rule 11 amendments.

Undoing the 1993 Rule 11 amendments would frustrate the

purpose and intent of the Rules Enabling Act. Congress

designed the Rules Enabling Act process in 1934 and reformed

it in 1988 to produce the best rules possible by ensuring

broad public participation and thorough review by the bench,

the bar, and the academy. The Act charges the judiciary with

the task of neutral, independent, and thorough analysis of

the rules and their operation. The Rules Committees are

dedicated to extensive study and analysis of the rules,

including empirical research, so that they can propose rules

that will best serve the American justice system and will not

produce unintended consequences. Experience has shown that

this process works well.

In summary, experience, research, and thoughtful

deliberation have shown that there is no need to reinstate

the 1983 version of Rule 11 that proved contentious and

costly to litigants and diverted so much time and energy of

the bar and bench. Doing so would add to, not improve, the

problems of costs and delay that we are working to address.

We urge you on behalf of the Rules Committees to not adopt

the proposed legislation amending Rule 11.

Thank you for considering the Rules Committees' views. We

look forward to continuing to work together to ensure that

our civil justice system is working well to fulfill its vital

role. If you or your staff have any questions, please contact

Benjamin Robinson, Deputy Rules Officer and Counsel, at 202-

502-1820.

Sincerely,

Jeffrey S. Sutton,

U.S. Circuit Judge, Chair, Committee on Rules of Practice

and Procedure.

David G. Campbell,

U.S. District Judge, Chair, Advisory Committee on Civil

Rules.

Madam Speaker, I am pleased now to yield such time as he may consume to the distinguished gentleman from New York (Mr. Nadler), a

senior member of the House Judiciary Committee.

Madam Speaker, I am now pleased to yield as much time as she may consume to the gentlewoman from Houston, Texas (Ms. Jackson Lee), a senior active member of the House Judiciary Committee.

Madam Speaker, I am pleased to yield an additional 2 minutes to the gentlewoman from Texas (Ms. Jackson Lee).

Madam Speaker, it is my pleasure now to yield 4 minutes to the distinguished gentleman from Pennsylvania (Mr. Cartwright).

I yield the gentleman an additional 1 minute.

Mr. Speaker, I am pleased now to yield 2 minutes to the gentleman from Florida, Ted Deutch, a very effective member of the House Judiciary Committee.

Mr. Speaker, I yield myself the balance of my time.

Ladies and gentlemen, as we see now, the Lawsuit Abuse Reduction Act will turn back the clock to a time when the Federal Rules of Civil Procedure discouraged civil rights cases and permitted satellite litigation to run wild.

I want to point out, in closing, that this is now the second day this week that the House is considering legislation aimed at solving a nonexistent problem that has little or no chance of seeing the light of day in the other body and is solely aimed at limiting access to justice for victims of egregious harms.

Just as I asked yesterday, who actually supports this legislation? Why are we putting their interests ahead of victims'? And why are we engaged in this charade when there are real problems facing our Nation that our constituents are still waiting for us to address?

With just 13 legislative days left this year, we still haven't considered immigration reform. We haven't passed a budget. We haven't considered a single piece of legislation that will create jobs and put America back to work. So really, whose interest is this House concerned with today? I urge my colleagues, oppose this legislation.

Mr. Speaker, I yield back the balance of my time.

Madam Speaker, let me thank the gentleman for his outstanding leadership of this committee, and let me thank the manager as well. This is an important initiative. Using the time to be able to speak to the Members is very important, and I am glad to have been given the courtesy of being yielded as much time, and I will use it efficiently for this particular legislation.

This is another gift to large, prosperous, and threatening entities against a single plaintiff, the plaintiff who secures a lawyer, who is attempting to create the scales of justice and to balance, if you will, the needs of that individual plaintiff, those small plaintiffs, those collective plaintiffs who are seeking justice.

It is a fact that the threat of lawsuits is not a concern of small businesses, as has been represented. A 2008 study by the National Federation of Independent Business indicated that the biggest threat facing small businesses was other concerns and was not costs and frequency of lawsuits. That was No. 65. They have other issues that we should be concerned about.

It is a fact that judges support the current version of the rule, and rule 11 is just one of many tools that judges use. It is not the only tool to be able to be responsive to someone who may be abusing the system.

Remember, we are here to perpetuate justice, and justice has scales. In many instances, that scale is tipped towards the one with the most money, the deepest pockets, and the longest time to wear you out as a plaintiff.

Let me refresh my colleagues' minds and understanding of the Federal system, that tort cases are a very small percentage of that civil docket. So this is not an instance. Many of these cases are filed in State court, these personal injury cases, these cases dealing with large damages because people have been injured because of bad products and other matters.

Here we have a bill looking for a problem. In actuality, LARA will increase, not decrease, litigation, and you can see the spiking that occurred. The Lawsuit Abuse Reduction Act would return rule 11 to the 1983 version. Litigation spiked after the 1983 amendment to rule 11. From 1982 to the peak in 1991, satellite litigation increased by more than 10,000 percent. Here we go with a gift to those who are truly litigious.

Just as we have been on the floor of the House pounding the Affordable Care Act because cancelation letters have been sent--they haven't been sent by Republicans. They haven't been sent by Democrats. They haven't been sent by Health and Human Services. They haven't been sent by people who are committed to making sure every American has health insurance. They have been sent by fat-cat insurance companies who are sending cancelation letters.

Here we go again, the scale of justice imbalanced. Again, the same problem: the mother, the single parent, the family waiting to get on the Affordable Care Act. In the normal course of the process, they get a cancelation letter. What an unnecessary act. That letter could have been that they were modifying their insurance, but there go the big guys again. You haven't heard one single sound coming out of the mouths of insurance companies to answer the question of why did they send the letters, and here we are on the floor of the House making it even worse.

Under the LARA regime, with mandatory sanctions and no opportunity to correct mistakes, the parties to a lawsuit have every incentive to file rule 11 complaints and seek court costs and legal fees, and to defend against such actions to the bitter end. This is a dynamic that should not happen. We should allow a pullback. We should allow a correction. All we are doing is just throwing them over the cliff and under the bus.

The changes would create a disincentive to abandon or withdraw a pleading or claim that lacks merit and thereby admit error after determining that it no longer was supportable by law or fact. As I have indicated, we have seen this kind since 1983 spike.

I have another statistic. Rule 11 cases spiked to 7,000 during the decade following the 1983 rule. So when a lawyer wants to do right with his client, the little guys, then, of course, they are blocked from solving the problems.

They use horror stories like demand letters, where a lawyer writes a letter demanding compensation in order to get a potential defendant to settle without having to file suit. That is not covered by rule 11. As far as I know, that is not an illegal procedure to engage in discussion, to be able to resolve the matter before going to a costly lawsuit. Again, that is the little guy's tool. So you are going to beat up on the little guy--the construction worker that falls because of violations of OSHA rules, or the person that works in a chicken plant who has carpal tunnel syndrome because there were no appropriate rest times for them to get off of the line, and you are going to make the argument that this is right for justice.

Madam Speaker, this graph speaks for itself. This will add an extra burden of cost to those who are trying to find a way for Lady Justice's scales to be balanced. My belief, under the Sixth Amendment, the right to counsel, and many other aspects of the Bill of Rights, is that the Founding Fathers believed that justice should be rendered regardless of your race, color or creed, regardless of whether you were an indentured servant, regardless of whether or not you came in Pilgrims' Pride or came in some other matter.

Rule 11 completely disputes that concept of justice. I am appalled that we are here at this point today, and it equates to the fat-cat insurance companies who have decided to send out letters when they well knew that this was a process that would work ongoing in their modification that could be noted to those recipients that their insurance was not going away, it was only going to be made better. I would like to make the justice system better.

I thank the gentleman for his time, and I would like to make sure that the little guy has an opportunity to walk into any court of the United States of America and stand tall and feel that the judge, no matter what size his pocketbook is, will give him as much credence and respect as the big guys coming in with millions, maybe billions, to make sure he does not or she does not win justice in the court.

Today I would ask our colleagues to vote for fairness for Lady Justice and to vote against this initiative and this legislation.

Mr. Speaker, I rise in opposition to H.R. 2655, The Lawsuit Abuse Reduction Act--a flawed piece of legislation and a step backwards.

It amazes me that we did not learn the lesson from the ten years we had under the 1983 mandatory version of Rule 11. H.R. 2655 and its Senate companion S. 1288, the Lawsuit Abuse Reduction Act, known as LARA, would amend Rule 11 of the Federal Rule of Civil Procedure by replacing the current version of the Rule, which has been in effect since 1993, with the 1983 version of Rule 11. Based on what we have seen it is quite likely that the effect of this bill if enacted would be to increase litigation costs due to the filing of sanction motions-- leading to more delay.

The bill should be called ``The Lacking All Rational Analysis Act of 2013,'' because any impartial look would inform that this bill is unnecessary and a waste of time.

Congress should reject this measure, which would force the federal judiciary to enforce a

rule that legal scholars, judges, and lawyers agree was a complete failure. LARA would increase litigation, unnecessarily meddle with the authority of the federal judiciary, and disproportionately affect plaintiffs, especially plaintiffs in civil rights cases.

Encourages satellite litigation. For the 10 years that mandatory sanctions were in effect, litigation surrounding Rule 11 significantly increased. Any time a party filed a Rule 11 motion--because judges had no discretion and were forced to issue a sanction for even the smallest violation of the Rule--a countermotion would be immediately filed and a whole side or ``satellite'' litigation business erupted. Congress does not need to be in the business of promoting more paper wars amongst attorneys.

Threatens an independent judiciary. Since 1993, Rule 11 has been discretionary rather than mandatory.

Under current Rule 11, judges are able to use their discretion to assess the complex nature of a case, and evaluate potential violations of the rule and issue sanctions accordingly. This appropriately leaves the determination of whether or not sanctions should be imposed for a violation of Rule 11 to the judges who hear the cases, and not Congress. Perhaps it is time that we allow judges to do their jobs and then we can move on to comprehensive immigration reform, tax reform, and other prudent legislative initiatives that the American people would like us to do.

Jeopardizes civil rights cases. Sanctions were more often imposed against plaintiffs than defendants and more often imposed against plaintiffs in certain kinds of cases, primarily in civil rights and certain kinds of discrimination cases. A leading study on this issue showed that although civil rights cases made up 11.4% of federal cases filed, 22.7% of the cases in which sanctions had been imposed were civil rights cases. Unfortunately Mr. Speaker, we are not at a time in our nation's great history where we can upend the law and make the filing of civil rights cases prohibitive. As we have seen recently with such appalling examples such as the Trayvon Martin case--we have a long way to go--and the civil rights bar should not cringe in fear at the thought of filing a case to do justice.

I urge my colleagues to reject this legislation.

Will the gentleman yield?

The gentleman is very kind to yield.

Very briefly, let me say it is about policy and process. The gentleman knows that most of America is very happy about the changes in the Affordable Care Act to get them out of the junk insurance policies that they have had.

I thank the gentleman very much.

Madam Speaker, let me be very clear. I want to say to the gentleman from Virginia that I would venture to say that those attacks on frivolous lawsuits are the big guys against the little guys, who had very legitimate and good intentions. It may be their resources were limited, and so they have to be subjected to a rule 11 on a perfectly legitimate litigation to be called frivolous.

The other point that I was making is that there is something between process and policy. I will stand again to say that the policy of making better health plans and better and healthier Americans is supported by all.

The process that I challenge is that the big insurance companies decided to use the process of cancelation letters, not letters that said modify. They decided to use their big authority to be able to undermine a policy of lifting the boats of all Americans for good health.

That is what I see rule 11 as. I see that as undermining the basic scales of justice. It says to get back money for frivolous lawsuits. Well, the frivolous lawsuits may be on one individual or a group of small individuals who feel

that they have been harmed. They may have lost. They may be in the midst of pleadings, but they don't have the resources to file a rule 11. So what happens is those who want to be punitive will use a rule 11.

I think a judge can make determinations under the present system, and so the spiking that we are talking about is a spiking of rule 11 filings. That is more litigation. That is more litigation. That is what we are suggesting that we don't want.

And this response and respect that the President and others are giving, all of us want to give respect to the mishap that has been created by the insurance companies. And so, fine. The President is giving respect to the constituents because his bottom line is to make sure all uninsured Americans, like the 6 million in the State of Texas, get the opportunity to be insured.

Let me thank the gentleman for the time. I believe that we are going down the wrong path for rule 11.

I thank the gentleman for yielding.

Madam Speaker, I rise today in opposition to H.R. 2655, the so-called Lawsuit Abuse Reduction Act. Unfortunately, rather than reduce abusive litigation, this bill will have just the opposite effect.

We don't need to speculate about the disastrous effect of this legislation because we know from experience just what a fiasco it will be. The rule this legislation would restore was in effect from 1983 until 1993. It was a disaster.

After a decade with this rule, the Judicial Conference, the rulemaking body for the Federal judiciary, rightly rejected it in favor of the rule we have today. In fact, this legislation goes even beyond the text of the 1983 rule, broadening the flawed mandatory sanctions even further.

Worse still, the Judiciary Committee has not made even the pretense of considering this very radical change in civil procedure with any care. In fact, no hearings have been held on this legislation in this Congress.

The process, or lack of it, demonstrates the wisdom of the Rules Enabling Act, in which Congress gave the Judicial Conference the responsibility for reviewing court rules and proposing changes. They have done this job admirably, expending years of careful study to existing rules, how they are functioning, and the implications of any proposed changes.

While the sponsor has expressed the desire to limit unnecessary litigation, the experience with the old rule 11, which this bill would restore, was the exact opposite. Rule 11 litigation became a routine part of civil litigation, infecting one-third of all cases. Rather than serving as a disincentive, the old rule 11 actually made the system even more litigious and more costly.

In the decade following the 1983 amendments, which this bill would restore, there were almost 7,000 reported rule 11 cases, becoming part of approximately one-third of all Federal lawsuits. Many civil cases, one-third, became two cases: one case on the merits and the other on dueling rule 11 complaints.

Madam Speaker, it is rare in life that you get a controlled scientific experiment, but we had one here from 1983 to 1993. We saw the results, and they were disastrous, and only incautious people try to repeat disastrous scientific experiments.

The drain on the courts' and the parties' resources caused the Judicial Conference to revisit the rule and to adopt the changes that this bill would undo. In a July 23, 2013, letter to Chairman Goodlatte and Ranking Member Conyers, Judge Jeffrey Sutton of the United States Court of Appeals for the Sixth Circuit and chair of the Committee on Rules of Practice and Procedure and Judge David Campbell of the U.S. District Court for the District of Arizona and chair of the Advisory Committee on Civil Rules said:

Experience, research, and thoughtful deliberation have

shown that there is no need to reinstate the 1983 version of

rule 11 that proved contentious and costly to litigants and

diverted so much time and energy of the bar and bench. Doing

so would add to, not improve, the problems of costs and delay

that we are working to address. We urge you on behalf of the

Rules Committee to not adopt the proposed legislation

amending rule 11.

I might add that, in committee, the majority quoted a survey of judges from 1993 saying that we shouldn't change the rules then. Today, the judges very much are very glad we changed the rule because they have lived under both systems.

Madam Speaker, in addition to all these considerations of costs, the bill would hinder the evolution of the common law. One way the common law evolves is by people making claims in court, especially in civil rights cases. Civil rights cases often involve an argument for the extension, modification, or reversal of existing law or the establishment of a new law, and often they have relied upon novel legal theories that are particularly susceptible to someone claiming that they are abusive or frivolous. Had the provisions of this bill been in place at the time, they could have discouraged a number of landmark civil right cases, including BROWN v. BOARD OF EDUCATION of Topeka, and they could prevent new cases from ever being considered. Perhaps that is why all the civil rights groups, all the consumer rights groups oppose this bill.

Madam Speaker, the courts have ample authority to sanction conduct that undermines the integrity of our legal system, but this legislation is the wrong solution in search of a problem. By taking us back to a time when rule 11 actually promoted routine, costly, and unnecessary litigation, this bill is a cure worse than the disease. We know what this rule does, and the courts rightly rejected it 20 years ago. We should benefit from that experience, not repeat the scientific experiment, and reject this legislation.

I thank the gentleman from Michigan.

Madam Speaker, I come here as a freshman in this Congress. I come from northeastern Pennsylvania, my first time involved in the political theater. And I tell you, Madam Speaker, that I have plied my entire adult life in the civil courts. I have handled all manner of civil cases on behalf of defendants, on behalf of plaintiffs, on behalf of people, on behalf of companies. I have seen the whole spectrum of civil litigation; and I have been doing that, both before and after the repeal of the mandatory LARA provision in 1993, so I am as qualified as anybody in this Chamber to speak to the merits of this so-called lawsuit abuse reduction bill.

It is a bill that should fail; and I say this, not just because it tends to shut the door further on consumers seeking justice in the court system of the United States, but because it also reinstates a rule that has already been seen to be misapplied, to be misplaced, to be a bad rule.

In 1993, we abandoned this rule for a reason. It wasn't because we pulled it out of thin air, the idea to abandon this mandatory sanctions under rule 11 rule. It is because of the experience.

The gentlelady from Texas held up the chart. You saw the spiking in rule 11 filings. That wasn't because people were out diligently cleaning up the mess in civil courts. It is because they were encouraged to make those filings because of the mandatory nature of the rule. They felt like their clients expected them to file for rule 11 if they won a motion or if they won a case, and it led to enormous increases in unnecessary, what we call satellite litigation.

It was the Federal judges who complained to the Judicial Conference. They went to the Supreme Court, and Congress ultimately decided, in its wisdom, to abrogate that rule and abandoned it because of all of this wasteful litigation that was going on.

We had a Federal judge outside of Philadelphia, United States District Judge Robert Gawthrop, who saw so much of it he added a nickname to this rule 11 litigation that people felt compelled to file. He called it ``zombie litigation.'' He called it zombie litigation, and he was enormously relieved when, in 1993, this Congress did away with it.

Current law allows judges to punish frivolous filings; and, on occasion, frivolous things happen in court, and the judges don't like them and they have the power to punish them. And it is within their discretion that they do that.

We like discretion to be vested in Federal judges. We are careful about selecting Federal judges. We vet Federal judges. We interview Federal judges. We actually confirm them here on Capitol Hill to make sure that they have sound discretion and good sense; and it is best left to the sound discretion and good sense of Federal judges to handle the situation when someone goes overboard with a filing.

This is us here now trying to fix a problem that doesn't exist. The National Center for State Courts--make no mistake, tort cases constitute 5 percent of filings in civil court. It is debt collection, it is breach of contracts cases that take up 70 percent.

From 1999-2008, tort case filings in State courts in the United States dropped 25 percent. Dropped to 2008. And this is all after the abrogation of the mandatory rule 11 rule.

What this bill is really after is simply to make people afraid to go to court to assert their rights, to assert their voting rights, to assert their workplace safety rights, to assert the rights guaranteed them under the United States Constitution. This bill makes them afraid to go to court to assert their rights, and that is why I urge my fellow Members, Madam Speaker, to vote against this bill.

I yield to the gentleman from Virginia.

I am not sure what the gentleman is referring to.

I thank the gentleman.

The answer is this: we don't have idiots as Federal judges in this country. If a Federal judge sees a situation where somebody is really acting egregiously, really abusing the system, really filing a frivolous case, then that Federal judge just about uniformly will sanction the guilty party. We see that over and over and over. What we are doing here is imposing a cookie-cutter, one-size-fits-all remedy that the judges don't like. It adds to increased litigation, and it is unnecessary and expensive litigation.