The House Subcommittee on the Constitution recently conducted a hearing on a bill (H.R. 966) that would amend Federal Rule of Civil Procedure 11 to impose more stringent sanctions on those who file frivolous lawsuits. The current version of the rule provides that a federal district court “may” impose an appropriate sanction on a lawyer, law firm or party that files any paper in court without an attorney’s signature, which certifies that, after reasonable inquiry, it is not presented for any improper purpose, it is not frivolous, and the factual contentions or defenses have evidentiary support. The proposed “Lawsuit Abuse Reduction Act of 2011” would make sanctions for violations mandatory and would include attorney’s fees and costs in the penalties assessed.

Among those testifying in favor of the bill was Shook, Hardy & Bacon Public Policy Partner Victor Schwartz, speaking on behalf of the U.S. Chamber Institute for Legal Reform. Schwartz discussed the challenges small businesses face when required to defend frivolous lawsuits. Claiming that “the current version of Rule 11 permits attorneys to file the lawsuit first and try to back up their claims with law and fact later,” Schwartz discussed the history of the rule and its amendments, noting that a previous, more stringent version was amended over the objection of two U.S. Supreme Court justices. Justice Antonin Scalia said of that amendment that it would “render the Rule toothless by allowing judges to dispense with sanction,” and allow parties “to file thoughtless, reckless, and harassing pleadings, secure in the knowledge that they have nothing to lose: If objection is raised, they can retreat without penalty.”