Lawsuit Abuse Reduction Act of 2005

Floor Speech

LAWSUIT ABUSE REDUCTION ACT OF 2005 -- (House of Representatives - October 27, 2005)

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Mr. CHABOT. Mr. Chairman, I want to first of all commend the gentleman from Texas for his leadership in this area. This is a very important piece of legislation. I think he does us all proud by pushing for this and ultimately, I believe, being successful in its passage.

I am pleased to be a cosponsor of H.R. 420, legislation that will help curtail frivolous lawsuits. It is reassuring to once again see that the Congress is taking measures to help rid our court system of lawsuits that are costly and hurt both consumers and businesses in our country. The legislation is aimed at enforcing the laws that govern attorneys in relation to filing frivolous lawsuits. The actual standard of what constitutes a frivolous lawsuit will not change. But consequences for such actions will.

In 1993, the Civil Rules advisory committee, an unelected body, decided that sanctions against attorneys who file frivolous lawsuits should be optional. Justice David Brewer once wrote: ``America is the paradise of lawyers.''

In my opinion, this ``paradise'' has resulted in increased prices for consumer goods and higher insurance premiums and a decrease in domestic manufacturing, which has been one of the things that we have heard more and more discussion about in this country, the loss of manufacturing jobs.

H.R. 420 seeks to rein in lawsuit-happy litigators by restoring mandatory sanctions for filing frivolous lawsuits, a violation of Rule 11 of the Federal Rules of Civil Procedure. This bill also prevents forum shopping by requiring that personal injury cases be brought only where the plaintiff resides, where the plaintiff was allegedly injured, or where the defendant's principal place of business is located.

Finally, the bill would apply a three-strikes-and-you-are-out rule, as we have heard, to attorneys who commit three or more Rule 11 violations in Federal district court. As a member of the House Judiciary Committee, as well as a member of the Small Business Committee, I have heard endless accounts of family-owned small businesses being led to financial ruin by the exorbitant cost of frivolous lawsuits.

According to the NFIB, the National Federation of Independent Businesses, small business owners ranked the cost and availability of liability insurance as the second most important problem facing small business owners today. Small business owners know that if they are sued, they are likely to have to choose between a long and costly trial or an expensive settlement. Either choice significantly impacts the operations of a business and the livelihood of its employees. This hurts the little guy because of these lawsuits.

Most business decisions today are made with this new reality in mind. This bill will help make American small businesses more competitive by lowering their unnecessary legal expenses, allowing business owners to focus on hiring new employees and expanding available products.

This bill will help make American businesses more competitive. It will allow business owners to focus on hiring new employees, which is really critical in this economy that we are faced with, and expanding the availability of products and services and improving the American economy.

Mr. Chairman, I again want to thank the gentleman from Texas for his leadership in introducing this important piece of legislation. It is time that we put an end to these frivolous lawsuits that are impacting the economy, that are hurting, especially, small businesses and are resulting in the loss of jobs of many, many Americans in this country.

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