[House Report 108-684]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-684

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 PROVIDING FOR CONSIDERATION OF H.R. 4571, LAWSUIT ABUSE REDUCTION ACT 
                                OF 2004

                                _______
                                

 September 13, 2004.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Mr. Sessions, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 766]

    The Committee on Rules, having had under consideration 
House Resolution 766, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 4571, 
the Lawsuit Abuse Reduction Act of 2004, under a modified 
closed rule. The rule provides one hour of debate in the House 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on the Judiciary.
    The rule waives all points of order against consideration 
of the bill. The rule provides that the bill shall be 
considered as read for amendment. The rule further provides 
that the amendment in the nature of a substitute recommended by 
the Committee on the Judiciary now printed in the bill shall be 
considered as adopted.
    The rule makes in order the amendment printed in this 
report, if offered by Representative Turner of Texas or his 
designee, which shall be considered as read, and which shall be 
debatable for 40 minutes equally divided and controlled by the 
proponent and an opponent. The rule waives all points of order 
against the amendment printed in this report.
    Finally, the rule provides one motion to recommit with or 
without instructions.

                   SUMMARY OF AMENDMENT MADE IN ORDER

    (Summary derived from information provided by the amendment 
sponsor.)
    1. Turner (TX): Amendment in the Nature of a Substitute. 
Section 1. Sanctions for Frivolous Pleading--Imposes mandatory 
sanctions on frivolous pleadings (first violation--required 
payment of costs and attorneys fees; second violation--adds 
that the attorney is held in contempt and monetary fine; third 
violation--adds referral to state bar for disciplinary 
proceedings).
    Section 2. Sanctions for Frivolous Conduct During 
Discovery--Imposes mandatory sanctions on discovery violations 
(first violation--required payment of costs and attorneys fees; 
second violation--adds that the attorney is held in contempt 
and monetary fine; third violation--adds referral to state bar 
for disciplinary proceedings).
    Section 3. Ban on Frivolous Concealment of Unlawful 
Conduct--Limits the ability of corporate wrongdoers to conceal 
any conduct harmful to public welfare by requiring that court 
records may not be sealed unless the court first finds that 
such sealing is justified.
    Section 4. Enhanced Sanctions for Document Destruction--
Provides that parties which destroy documents in connection 
with civil proceedings shall be punished with mandatory civil 
sanctions, held in contempt of court, and referred to state bar 
for disciplinary proceedings.
    Section 5. Expelled Disposition of Frivolous and other 
Lawsuits in State Courts--Imposes the Civil Justice Reform Act, 
which has proved successful in federal courts, to the state 
courts in order to speed up the pretrial process and weed out 
junk lawsuits. (40 minutes).

                    TEXT OF AMENDMENT MADE IN ORDER

  Strike all after the enacting clause and insert the 
following:

SECTION 1. ``THREE STRIKES AND YOU'RE OUT'' FOR FRIVOLOUS PLEADINGS.

  (a) Signature Required.--Every pleading, written motion, and 
other paper in any action shall be signed by at least 1 
attorney of record in the attorney's individual name, or, if 
the party is not represented by an attorney, shall be signed by 
the party. Each paper shall state the signer's address and 
telephone number, if any. An unsigned paper shall be stricken 
unless omission of the signature is corrected promptly after 
being called to the attention of the attorney or party.
  (b) Certificate of Merit.--By presenting to the court 
(whether by signing, filing, submitting, or later advocating) a 
pleading, written motion, or other paper, an attorney or 
unrepresented party is certifying that to the best of the 
person's knowledge, information and belief, formed after an 
inquiry reasonable under the circumstances--
          (1) it is not being presented for any improper 
        purpose, such as to harass or to cause unnecessary 
        delay or needless increase in the cost of litigation;
          (2) the claims, defenses, and other legal contentions 
        therein are warranted by existing law or by a non 
        frivolous argument for the extension, modification, or 
        reversal of existing law or the establishment of new 
        law; and
          (3) the allegations and other factual contentions 
        have evidentiary support or, if specifically so 
        identified, are reasonable based on a lack of 
        information or belief.
  (c) Mandatory Sanctions.--
          (1) First violation.--If, after notice and a 
        reasonable opportunity to respond, a court, upon motion 
        or upon its own initiative, determines that subsection 
        (b) has been violated, the court shall find each 
        attorney or party in violation in contempt of court and 
        shall require the payment of costs and attorneys fees. 
        The court may also impose additional appropriate 
        sanctions, such as striking the pleadings, dismissing 
        the suit, and sanctions plus interest, upon the person 
        in violation, or upon both such person and such 
        person's attorney or client (as the case may be).
          (2) Second violation.--If, after notice and a 
        reasonable opportunity to respond, a court, upon motion 
        or upon its own initiative, determines that subsection 
        (b) has been violated and that the attorney or party 
        with respect to which the determination was made has 
        committed one previous violation of subsection (b) 
        before this or any other court, the court shall find 
        each such attorney or party in contempt of court and 
        shall require the payment of costs and attorneys fees, 
        and require such person in violation (or both such 
        person and such person's attorney or client (as the 
        case may be)) to pay a monetary fine. The court may 
        also impose additional appropriate sanctions, such as 
        striking the pleadings, dismissing the suit and 
        sanctions plus interest, upon such person in violation, 
        or upon both such person and such person's attorney or 
        client (as the case may be).
          (3) Third and subsequent violations.--If, after 
        notice and a reasonable opportunity to respond, a 
        court, upon motion or upon its own initiative, 
        determines that subsection (b) has been violated and 
        that the attorney or party with respect to which the 
        determination was made has committed more than one 
        previous violation of subsection (b) before this or any 
        other court, the court shall find each such attorney or 
        party in contempt of court, refer each such attorney to 
        one or more appropriate State bar associations for 
        disciplinary proceedings, require the payment of costs 
        and attorneys fees, and require such person in 
        violation (or both such person and such person's 
        attorney, or client (as the case may be)) to pay a 
        monetary fine. The court may also impose additional 
        appropriate sanctions, such as striking the pleadings, 
        dismissing the suit, and sanctions plus interest, upon 
        such person in violation, or upon both such person and 
        such person's attorney or client (as the case may be).
          (4) Appeal; stay.--An attorney has the right to 
        appeal a sanction under this subsection. While such an 
        appeal is pending, the sanction shall be stayed.
          (5) Not applicable to civil rights claims.--
        Notwithstanding subsection (d), this subsection does 
        not apply to an action or claim arising out of Federal, 
        State, or local civil rights law or any other Federal, 
        State, or local law providing protection from 
        discrimination.
  (d) Applicability.--Except as provided in subsection (c)(5), 
this section applies to any paper filed on or after the date of 
the enactment of this Act in--
          (1) any action in Federal court; and
          (2) any action in State court, if the court, upon 
        motion or upon its own initiative, determines that the 
        action affects interstate commerce.

SEC. 2. ``THREE STRIKES AND YOU'RE OUT'' FOR FRIVOLOUS CONDUCT DURING 
                    DISCOVERY.

  (a) Signatures Required on Disclosures.--Every disclosure 
made pursuant to subdivision (a)(1) or subdivision (a)(3) of 
Rule 26 of the Federal Rules of Civil Procedure or any 
comparable State rule shall be signed by at least one attorney 
of record in the attorney's individual name, whose address 
shall be stated. An unrepresented party shall sign the 
disclosure and state the party's address. The signature of the 
attorney or party constitutes a certification that to the best 
of the signer's knowledge, information, and belief, formed 
after a reasonable inquiry, the disclosure is complete and 
correct as of the time it is made.
  (b) Signatures Required on Discovery.--
          (1) In general.--Every discovery request, response, 
        or objection made by a party represented by an attorney 
        shall be signed by at least one attorney of record in 
        the attorney's individual name, whose address shall be 
        stated. An unrepresented party shall sign the request, 
        response, or objection and state the party's address. 
        The signature of the attorney or party constitutes a 
        certification that to the best of the signer's 
        knowledge, information, and belief, formed after a 
        reasonable inquiry, the request, response, or objection 
        is:
                  (A) consistent with the applicable rules of 
                civil procedure and warranted by existing law 
                or a good faith argument for the extension, 
                modification, or reversal of existing law;
                  (B) not interposed for any improper purpose, 
                such as to harass or to cause unnecessary delay 
                or needless increase in the cost of litigation; 
                and
                  (C) not unreasonable or unduly burdensome or 
                expensive, given the needs of the case, the 
                discovery already had in the case, the amount 
                in controversy, and the importance of the 
                issues at stake in the litigation.
          (2) Stricken.--If a request, response, or objection 
        is not signed, it shall be stricken unless it is signed 
        promptly after the omission is called to the attention 
        of the party making the request, response, or 
        objection, and a party shall not be obligated to take 
        any action with respect to it until it is signed.
  (c) Mandatory Sanctions.--
          (1) First violation.--If without substantial 
        justification a certification is made in violation of 
        this section, the court, upon motion or upon its own 
        initiative, shall find each attorney or party in 
        contempt of court and shall require the payment of 
        costs and attorneys fees. The court may also impose 
        additional sanctions, such as imposing sanctions plus 
        interest or imposing a fine upon the person in 
        violation, or upon such person and such person's 
        attorney or client (as the case may be).
          (2) Second violation.--If without substantial 
        justification a certification is made in violation of 
        this section and that the attorney or party with 
        respect to which the determination is made has 
        committed one previous violation of this section before 
        this or any other court, the court, upon motion or upon 
        its own initiative, shall find each attorney or party 
        in contempt of court and shall require the payment of 
        costs and attorneys fees, and require such person in 
        violation (or both such person and such person's 
        attorney or client (as the case may be)) to pay a 
        monetary fine. The court may also impose additional 
        sanctions upon such person in violation, or upon both 
        such person and such person's attorney or client (as 
        the case may be).
          (3) Third and subsequent violations.--If without 
        substantial justification a certification is made in 
        violation of this section and that the attorney or 
        party with respect to which the determination is made 
        has committed more than one previous violation of this 
        section before this or any other court, the court, upon 
        motion or upon its own initiative, shall find each 
        attorney or party in contempt of court, shall require 
        the payment of costs and attorneys fees, require such 
        person in violation (or both such person and such 
        person's attorney or client (as the case may be)) to 
        pay a monetary fine, and refer such attorney to one or 
        more appropriate State bar associations for 
        disciplinary proceedings. The court may also impose 
        additional sanctions upon such person in violation, or 
        upon both such person and such person's attorney or 
        client (as the case may be).
          (4) Appeal; stay.--An attorney has the right to 
        appeal a sanction under this subsection. While such an 
        appeal is pending, the sanction shall be stayed.
  (d) Applicability.--This section applies to any paper filed 
on or after the date of the enactment of this Act in--
          (1) any action in Federal court; and
          (2) any action in State court, if the court, upon 
        motion or upon its own initiative, determines that the 
        action affects interstate commerce.

SEC. 3. BAN ON CONCEALMENT OF UNLAWFUL CONDUCT.

  (a) In General.--A court may not order that a court record be 
sealed or subjected to a protective order, or that access to 
that record be otherwise restricted, unless the court makes a 
finding of fact in writing that identifies the interest that 
justifies the order and that determines that the order is no 
broader than necessary to protect that interest.
  (b) Applicability.--This section applies to any court record, 
including a record obtained through discovery, whether or not 
formally filed with the court.

SEC. 4. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION.

  (a) In General.--Whoever influences, obstructs, or impedes, 
or endeavors to influence, obstruct, or impede, a pending court 
proceeding through the intentional destruction of documents 
sought in, and highly relevant to, that proceeding--
          (1) shall be punished with mandatory civil sanctions 
        of a degree commensurate with the civil sanctions 
        available under Rule 37 of the Federal Rules of Civil 
        Procedure, in addition to any other civil sanctions 
        that otherwise apply; and
          (2) shall be held in contempt of court and, if an 
        attorney, referred to one or more appropriate State bar 
        associations for disciplinary proceedings.
  (b) Applicability.--This section applies to any court 
proceeding in any Federal or State court.

SEC. 5. EXPEDITED DISPOSITION OF FRIVOLOUS AND OTHER LAWSUITS.

  (a) In General.--For each State, each judicial district in 
the State shall, within 2 years of the date of the enactment of 
this Act, develop and implement a civil justice expense and 
delay reduction plan and submit it to the appropriate governing 
body of the State. The governing body shall make the plan 
available to the public.
  (b) Principles.--Each plan required by subsection (a) shall 
apply to actions in State court that affect interstate commerce 
and any other actions that the governing body considers 
appropriate. The plan shall be developed and implemented with 
regard to the following principles:
          (1) Systematic, differential treatment of civil cases 
        that tailors the level of individualized and case 
        specific management to such criteria as case 
        complexity, the amount of time reasonably needed to 
        prepare the case for trial, and the judicial and other 
        resources required and available for the preparation 
        and disposition of the case.
          (2) Early and ongoing control of the pretrial process 
        through involvement of a judicial officer in--
                  (A) assessing and planning the progress of a 
                case;
                  (B) setting early, firm trial dates, such 
                that the trial is scheduled to occur within 
                eighteen months after the filing of the 
                complaint, unless a judicial officer certifies 
                that--
                          (i) the demands of the case and its 
                        complexity make such a trial date 
                        incompatible with serving the ends of 
                        justice; or
                          (ii) the trial cannot reasonably be 
                        held within such time because of the 
                        complexity of the case or the number or 
                        complexity of pending criminal cases;
                  (C) controlling the extent of discovery and 
                the time for completion of discovery, and 
                ensuring compliance with appropriate requested 
                discovery in a timely fashion; and
                  (D) setting, at the earliest practicable 
                time, deadlines for filing motions and a time 
                framework for their disposition.
          (3) For all cases that the court or an individual 
        judicial officer determines are complex and any other 
        appropriate cases, careful and deliberate monitoring 
        through a discovery-case management conference or a 
        series of such conferences at which the presiding 
        judicial officer--
                  (A) explores the parties' receptivity to, and 
                the propriety of, settlement or proceeding with 
                the litigation;
                  (B) identifies or formulates the principal 
                issues in contention and, in appropriate cases, 
                provides for the staged resolution or 
                bifurcation of issues for trial consistent with 
                Rule 42(b) of the Federal Rules of Civil 
                Procedure;
                  (C) prepares a discovery schedule and plan 
                consistent with any presumptive time limits 
                that a district court may set for the 
                completion of discovery and with any procedures 
                a district court may develop to--
                          (i) identify and limit the volume of 
                        discovery available to avoid 
                        unnecessary or unduly burdensome or 
                        expensive discovery; and
                          (ii) phase discovery into two or more 
                        stages; and
                  (D) sets, at the earliest practicable time, 
                deadlines for filing motions and a time 
                framework for their disposition.
          (4) Encouragement of cost-effective discovery through 
        voluntary exchange of information among litigants and 
        their attorneys and through the use of cooperative 
        discovery devices.
          (5) Conservation of judicial resources by prohibiting 
        the consideration of discovery motions unless 
        accompanied by a certification that the moving party 
        has made a reasonable and good faith effort to reach 
        agreement with opposing counsel on the matters set 
        forth in the motion.
          (6) Authorization to refer appropriate cases to 
        alternative dispute resolution programs that--
                  (A) have been designated for use in a 
                district court; or
                  (B) the court may make available, including 
                mediation, minitrial, and summary jury trial.
  (c) Techniques.--In developing the plan required by 
subsection (a), a judicial district shall consider and may 
include the following techniques:
          (1) A requirement that counsel for each party to a 
        case jointly present a discovery-case management plan 
        for the case at the initial pretrial conference, or 
        explain the reasons for their failure to do so.
          (2) A requirement that each party be represented at 
        each pretrial conference by an attorney who has the 
        authority to bind that party regarding all matters 
        previously identified by the court for discussion at 
        the conference and all reasonably related matters.
          (3) A requirement that all requests for extensions of 
        deadlines for completion of discovery or for 
        postponement of the trial be signed by the attorney and 
        the party making the request.
          (4) A neutral evaluation program for the presentation 
        of the legal and factual basis of a case to a neutral 
        court representative selected by the court at a 
        nonbinding conference conducted early in the 
        litigation.
          (5) A requirement that, upon notice by the court, 
        representatives of the parties with authority to bind 
        them in settlement discussions be present or available 
        by telephone during any settlement conference.
          (6) Such other features as the judicial district 
        considers appropriate.

                                  
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