[House Report 115-16]
[From the U.S. Government Publishing Office]





115th Congress      }                                {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session        }                                {         115-16

======================================================================



 
                  LAWSUIT ABUSE REDUCTION ACT OF 2017

                                _______
                                

 February 24, 2017.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 720]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 720) to amend Rule 11 of the Federal Rules of Civil 
Procedure to improve attorney accountability, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page

Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................     8
Committee Consideration..........................................     8
Committee Votes..................................................     8
Committee Oversight Findings.....................................    17
New Budget Authority and Tax Expenditures........................    18
Congressional Budget Office Cost Estimate........................    18
Duplication of Federal Programs..................................    19
Disclosure of Directed Rule Makings..............................    19
Performance Goals and Objectives.................................    19
Advisory on Earmarks.............................................    19
Section-by-Section Analysis......................................    19
Dissenting Views.................................................    19

                          Purpose and Summary

    The Lawsuit Abuse Reduction Act of 2017 (``LARA'') would 
help prevent frivolous lawsuits and help dispel the legal 
culture of fear that has come to permeate American society. The 
bill, which was introduced in the House by Congressman Lamar 
Smith on January 30, 2017, would restore the teeth Rule 11 of 
the Federal Rules of Civil Procedure once had to deter 
frivolous Federal lawsuits.
    LARA would (1) restore mandatory sanctions for filing 
frivolous lawsuits in violation of Rule 11, (2) remove Rule 
11's ``safe harbor'' provision that currently allows parties 
and their attorneys to avoid sanctions for making frivolous 
claims by withdrawing frivolous claims after a motion for 
sanctions has been filed, and (3) require monetary sanctions, 
including attorneys' fees and compensatory costs, against any 
party making a frivolous claim.
    LARA applies to cases brought by individuals as well as 
businesses (both big and small), including business claims 
filed to harass competitors and illicitly gain market share, 
and to both plaintiffs and defendants.\1\
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    \1\Indeed, under the pre-1993 Rule 11, sanctions were imposed on 
defendants for having raised frivolous defenses. In SEC v. Keating, 
1992 WL 207918, [1992 Transfer Binder] Fed.Sec.L.Rep. (CCH) para. 
96,906 (C.D.Cal.1992), the court imposed sanctions of the defendant 
Charles Keating because 12 of 14 ``shotgun'' defenses were ``patently 
frivolous.'' Sanctions were also imposed on defendants for filing 
inappropriate Rule 11 motions, see Berger v. Iron Workers, 843 F.2d 
1395 (D.C. Cir. 1988) (affirming in part per curiam 7 Fed. Rules Serv. 
3d 306 (D.D.C. 1986)), and also for filing frivolous or harassing 
counterclaims. See Aetna Insurance v. Meeker, 953 F.2d 1328 (11th Cir. 
1992) (affirming district court Rule 11 sanction of defendants for 
pursuing frivolous counterclaims of negligent salvage and conversion). 
In Swanson v. Sheppard, 445 N.W.2d 654 (N.D.1989), for example, the 
court imposed Rule 11 sanctions on the defendant because the defendant 
counterclaimed ``simply to discourage the plaintiff from continuing 
with his cause of action.'' Sanctions were imposed on defendants for 
failing to conduct a reasonable inquiry into the legal basis for their 
Rule 12(b)(6) motion to dismiss. In National Survival Game, Inc. v. 
Skirmish, U.S.A., Inc., 603 F. Supp. 339 (S.D.N.Y. 1985), the court sua 
sponte imposed Rule 11 sanctions on defendants' counsel on the ground 
that counsel failed to conduct a reasonable inquiry into the legal 
basis for the Rule 12(b)(6) motion to dismiss, stating ``Defendants 
failed to cite a single case or authority in their two-page memorandum 
[in support of the motion]. Apparently, they completely ignored the 
firmly established precedents directly contradictory to their position. 
No doubt exists that [defendants'] counsel failed to conduct the 
`reasonable inquiry' that Rule 11 requires to ensure that a motion `is 
warranted by existing law or a good faith argument for the extension, 
modification or reversal of existing law. . . .''' Id. at 341-42. See 
also Steele v. Morris, 608 F. Supp. 274 (S.D.W.Va. 1985) (court granted 
the plaintiff's motion for Rule 11 sanctions to be imposed upon the 
defendant, concluding that the defendant's counsel failed to make 
reasonable inquiry into both the facts and the law before filing a 
motion to dismiss in this case which alleged, among other things, that 
the plaintiff suffered emotional distress due to the defendant's 
willful, deliberate, and outrageous conduct). Sanctions were also 
imposed on defendants when they were found to have ignored firmly 
established precedent. In National Survival Game, Inc. v. Skirmish, 
U.S.A., Inc., 603 F. Supp. 339, 341-42 (S.D.N.Y. 1985), Rule 11 
sanctions were imposed because defendants ``completely ignored the 
firmly established precedents directly contradictory to their 
position.'' And in Smith v. United Transp. Union Local 81, the court 
imposed Rule 11 sanctions where the defendants frivolously maintained a 
lawsuit by ignoring relevant law, relying on irrelevant law, and basing 
arguments on vacated cases. 594 F. Supp. 96, 101 (S.D. Cal. 1984).
---------------------------------------------------------------------------
    Additionally, the bill expressly provides that ``Nothing 
in'' the changes made to Rule 11 ``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.''

                Background and Need for the Legislation

    A letter written by someone filing a frivolous lawsuit, 
which became public, concisely illustrates how the current lack 
of mandatory sanctions for filing frivolous lawsuits leads to 
legal extortion. That letter to the victim of a frivolous 
lawsuit states ``I really don't care what the law allows you to 
do. It's a more practical issue. Do you want to send your 
attorney a check every month indefinitely as I continue to 
pursue this?''\2\
---------------------------------------------------------------------------
    \2\See http://pubcit.typepad.com/clpblog/2011/02/javelin-marketing-
seeks-to-suppress-criticism-of-its-insurance-leads-sales.html.
---------------------------------------------------------------------------
    When Business Week wrote an extensive article on what the 
most effective legal reforms would be, Business Week stated 
that what is needed are ``Penalties That Sting.'' As Business 
Week recommends, ``[g]ive 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 
(CRAC), an obscure branch of the courts, made penalties 
optional. This needs to be reversed . . . by Congress.''\3\
---------------------------------------------------------------------------
    \3\Mike France, ``Special Report--Tort Reform: How to Fix the Tort 
System,'' Business Week (March 14, 2005) at 76.
---------------------------------------------------------------------------

                     THE 1993 AMENDMENTS TO RULE 11

    Rule 11 of the Federal Rules of Civil Procedure, as 
originally adopted and prior to the adoption of weakening 
amendments in 1993, was widely popular among Federal judges and 
served to significantly limit lawsuit abuse.
    In 1990, the Judicial Conference's Advisory Committee on 
Civil Rules undertook a review of Rule 11 and asked the Federal 
Judicial Center (FJC) to conduct an empirical study of its 
operation and impact. The survey of 751 Federal judges found 
that an overwhelming majority of Federal judges believed that 
Rule 11 did not impede development of the law (95%); the 
benefits of the rule outweighed any additional requirement of 
judicial time (71.9%); the 1983 version of Rule 11 had a 
positive effect on litigation in the Federal courts (80.9%); 
and the rule should be retained in its then-current form 
(80.4%).\4\
---------------------------------------------------------------------------
    \4\Federal Judicial Center Final Report on Rule 11 to the Advisory 
Committee on Civil Rules of the Judicial Conference of the United 
States (May 1991). A subsequent survey conducted by the Federal 
Judicial Center in June, 1995, consisting of 148 Federal judges and 
over 1,000 trial attorneys found that the 1993 amendments that 
disallowed monetary compensation for victims of frivolous lawsuits were 
a bad idea. In that survey, two-thirds of judges (66%), defense 
attorneys (63%), and other attorneys (66%), and even a substantial 
portion of plaintiff's attorneys (43%), supported restoring Rule 11's 
compensatory function once again. See John Shapard et. al., Federal 
Judicial Center, Report of a Survey Concerning Rule 11, Federal Rules 
of Civil Procedure at 5.
---------------------------------------------------------------------------
    Despite this wide judicial support for a strong Rule 11, in 
1991 the Civil Rules Advisory Committee included provisions to 
weaken Rule 11 in a much broader package of proposed amendments 
to the Federal Rules driven largely by the desire to avoid 
``satellite litigation'' of Rule 11 issues that could burden 
allegedly overworked judges.\5\ (But of course, any rule that 
punishes people for filing frivolous lawsuits must have 
procedures for determining whether or not the filing is 
frivolous. Otherwise, the rule would operate as a pure ``loser 
pays'' rule in which the losing side paid a penalty simply 
because they lost the case.) The proposed changes were then 
sent to the Supreme Court for approval or modification. 
Exercising what it viewed to be a very limited oversight 
role,\6\ the Supreme Court approved the proposed changes 
without substantive comment in 1993.
---------------------------------------------------------------------------
    \5\It is worth noting that 282,307 civil cases were filed in 
Federal district courts in the 1-year period ending March 31, 2010 (an 
increase of 9.2% over the 258,535 civil cases filed during that period 
the prior year). See Administrative Office of the United States Courts, 
Federal Judicial Caseload Statistics (March 31, 2010) (Table C, U.S. 
District Courts--Civil Cases Commenced, Terminated, and Pending During 
the 12-Month Periods Ending March 31, 2009 and 2010). Opponents caution 
that between 1983 and June 1993, when the prior version of Rule 11 was 
in effect, approximately 7,000 judicial opinions referencing Rule 11 
were reported--an average of 700 decisions per year. If LARA were to 
result in Rule 11 filings akin to those filed under the pre-1993 rules, 
then only 1 in 400 Federal civil cases filed (0.25%) would be 
associated with a reported Rule 11 decision (700 out of 282,307 civil 
cases filed). These cases, of course, would be disbursed among 94 
Federal judicial districts and 677 district court judges. See http://
www.uscourts.gov/JudgesAndJudgeships/FederalJudgeships.aspx.
    \6\While the Supreme Court is authorized to ``prescribe'' the 
general rules of Federal court practice and procedure, see Judicial 
Improvements and Access to Justice Act, 28 U.S.C. Sec. 2072(a), in fact 
it has been the general practice of the Supreme Court to merely act as 
a conduit for the rule changes and rely on the Judicial Conference to 
make the decisions in this area. As pointed out in the House 
Judiciary's Committee Report on H.R. 988 in the 104th Congress, Justice 
White believed that, as a matter of practice, the role of the Supreme 
Court is to ``transmit the Judicial Conference recommendations without 
change and without careful study as long as there is no suggestion that 
the committee system has not operated with integrity.'' Indeed Chief 
Justice Rehnquist's April 22, 1993 letter conveying the rules to the 
Speaker states: ``While the Court is satisfied that the required 
procedures have been observed, this transmittal does not necessarily 
indicate that the court itself would have proposed these amendments in 
the form submitted.'' H.R. Rep. No. 104-62, at 11, n.14 (1995).
---------------------------------------------------------------------------
    In a strongly worded dissent on the Rule 11 changes, 
Justice Scalia correctly anticipated that the proposed revision 
would eliminate a ``significant and necessary deterrent'' to 
frivolous litigation, stating ``the overwhelming approval of 
the Rule by the Federal district judges who daily grapple with 
the problem of litigation is enough to persuade me that it 
should not be gutted.''\7\ Justices Scalia and Thomas properly 
dissented from the transmittal of the amendments to Rule 11 to 
Congress, arguing that ``[t]he proposed revision would render 
the Rule toothless, by allowing judges to dispense with 
sanction, by disfavoring compensation for litigation expenses, 
and by providing a 21-day `safe harbor' within which, if the 
party accused of a frivolous filing withdraws the filing, he is 
entitled to escape with no sanction at all.''\8\
---------------------------------------------------------------------------
    \7\146 F.R.D. 401, 507, 509-10 (1993).
    \8\Id. at 507-08.
---------------------------------------------------------------------------
    After the proposal to gut Rule 11 was forwarded to 
Congress, there was a 7-month period under the Rules Enabling 
Act in which the Congress had the authority to make changes, 
but time ran out before Congress could stop these damaging 
amendments to Rule 11.\9\
---------------------------------------------------------------------------
    \9\Under the Rules Enabling Act, Congress has 7 months to act on 
the proposed rules; if Congress does not act, the proposed rules become 
law. See 28 U.S.C. Sec. 2074(a). Despite the introduction of H.R. 2979 
in the 103rd Congress by Carlos J. Moorhead, which would have delayed 
the effective date of the proposed changes to Rule 11, and a companion 
bill in the Senate, no formal action was taken in the Democrat-
controlled House, and the revisions went into effect on December 1, 
1993. The House later passed H.R. 988 in the 104th Congress--which, 
among other things, would have restored Rule 11 to its original form--
by a vote of 232-193, but it was not taken up in the Senate.
---------------------------------------------------------------------------

        SECTION 2 OF THE LAWSUIT ABUSE REDUCTION ACT (``LARA'')

    Section 2 of LARA would restore teeth to Rule 11 once 
again. In particular, Section 2 of LARA would:

         LRequire monetary sanctions against lawyers 
        who file frivolous lawsuits. Indeed, a survey conducted 
        by the Federal Judicial Center in June, 1995, 
        consisting of 148 Federal judges and over 1,000 trial 
        attorneys found that the 1993 amendments that 
        prohibited monetary compensation for victims of 
        frivolous lawsuits were a bad idea. In that survey, 
        two-thirds of judges (66%), defense attorneys (63%), 
        and other attorneys (66%), and even a substantial 
        portion of plaintiff's attorneys (43%), supported 
        restoring Rule 11's compensatory function once 
        again.\10\ LARA would do just that.
---------------------------------------------------------------------------
    \10\See John Shapard et. al., Federal Judicial Center, Report of a 
Survey Concerning Rule 11, Federal Rules of Civil Procedure at 5.

         LReverse the 1993 amendments to Rule 11 that 
        made sanctions discretionary rather than mandatory. 
        Because today, under a weak Rule 11, sanctions in 
        frivolous cases are not mandatory, there is little 
        incentive for a victim of a frivolous lawsuit to spend 
        time and money seeking Rule 11 sanctions. Deterrence 
        cannot be achieved without certain punishment. While a 
        court should have discretion to fashion an appropriate 
        sanction based on the circumstances of the violation, 
        litigants making frivolous claims should not be allowed 
---------------------------------------------------------------------------
        the opportunity to escape sanctions entirely.

         LReverse the 1993 amendments to Rule 11 that 
        allow parties and their attorneys to avoid sanctions 
        for making frivolous claims and demands by withdrawing 
        them within 21 days after a motion for sanctions has 
        been filed. Justice Scalia correctly pointed out that 
        such amendments would in fact encourage frivolous 
        lawsuits: ``In my view, those who file frivolous suits 
        and pleadings should have no `safe harbor.' The Rules 
        should be solicitous of the abused (the courts and the 
        opposing party), and not of the abuser. Under the 
        revised Rule, parties will be able 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.''\11\ LARA 
        would get rid of the ``free pass'' lawyers have to file 
        frivolous lawsuits under today's Rule 11.
---------------------------------------------------------------------------
    \11\Id.

    It is important to remember that nothing in LARA changes 
the current standard by which frivolous lawsuits are judged. 
That is, under LARA, the standard a judge will use to determine 
whether a case is frivolous will remain as it has been, namely 
---------------------------------------------------------------------------
a determination that:

         Lthe case 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;

         Lthe claims, defenses, and other legal 
        contentions therein are warranted by existing law or by 
        a nonfrivolous argument for the extension, 
        modification, or reversal of existing law or the 
        establishment of new law;

         Lthe allegations and other factual contentions 
        have evidentiary support or, if specifically so 
        identified, are likely to have evidentiary support 
        after a reasonable opportunity for further 
        investigation or discovery; and

         Lthe denials of factual contentions are 
        warranted on the evidence or, if specifically so 
        identified, are reasonably based on a lack of 
        information or belief.

    Only cases that meet the criteria outlined above will be 
subject to Rule 11 sanctions under LARA. The baseless nature of 
arguments by reform opponents that Rule 11 somehow stifles 
growth in the law is belied by the fact that Rule 11 explicitly 
allows for growth in the law, but not for frivolous arguments 
for extensions of the law.
    Further, LARA expressly provides that ``Nothing in'' the 
changes made to Rule 11 ``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.''

            RESPONSE TO FEDERAL JUDICIAL CENTER 2005 SURVEY

    The Federal Judicial Center's 2005 survey of U.S. district 
court judges (``FJC 2005 Survey'') will no doubt be misused by 
opponents of legal reform as evidence that frivolous lawsuits 
are ``not a problem.'' The survey of the Federal Judicial 
Center shows nothing of the sort.
    The Lawsuit Abuse Reduction Act would largely restore Rule 
11 of the Federal Rules of Civil Procedure to what it was 
before it was made toothless in 1993. Rule 11, prior to the 
adoption of weakening amendments in 1993, which eliminated 
mandatory and serious sanctions against those who filed 
frivolous lawsuits, was widely popular among Federal judges, 
and it served to significantly limit lawsuit abuse. In 1990, 
the Judicial Conference's Advisory Committee on Civil Rules 
(the same organization that requested the FJC 2005 Survey) 
undertook a review of Rule 11 at the time and asked the FJC to 
conduct an empirical study of its operation and impact. The 
survey of 751 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%); the benefits of 
the rule outweighed any additional requirement of judicial time 
(71.9%); the stronger version of Rule 11 had a positive effect 
on litigation in the Federal courts (80.9%); and the rule 
should be retained in its then-current form (80.4%).\12\ Note 
that of the 751 judges surveyed in 1990, 583 responded, roughly 
twice as many as responded to the FJC's 2005 Survey.
---------------------------------------------------------------------------
    \12\Federal Judicial Center Final Report on Rule 11 to the Advisory 
Committee on Civil Rules of the Judicial Conference of the United 
States (May 1991).
---------------------------------------------------------------------------
    Enter the FJC 2005 survey, which only 278 judges responded 
to, and in which half of the judges surveyed (and over half of 
the judges that responded to the survey) had no experience with 
the stronger version of Rule 11. As the FJC 2005 Survey states, 
``the Center E-mailed questionnaires to two random samples of 
200 district judges each. . . . One sample comprised solely 
judges appointed to the bench before January 1, 1992 . . . 
[t]he other sample comprised solely judges appointed to the 
bench after January 1, 1992.''\13\ The FJC report keeps secret 
the dates on which the respondent judges first came to serve on 
the bench, so we have no way of knowing whether any of those 
judges had any significant experience as judges under the 
stronger Rule 11 that was in effect the decade before 1993. 
Appendix A of the FJS 2005 Survey states that ``all judges in 
the first group [of 200 out of 400 surveyed] would have had at 
least 1 year on the bench before the 1993 amendments to Rule 11 
went into effect.'' That provides little comfort that any 
significant number of the judges surveyed had any substantial 
experience under the stronger Rule 11. So the survey is 
fundamentally flawed in that we have no reason to believe it 
included a meaningful number of judges who had any significant 
experience under the stronger Rule 11.
---------------------------------------------------------------------------
    \13\FJC 2005 Survey, at 2.
---------------------------------------------------------------------------
    Further, the FJC Report found that even of the Federal 
judges surveyed, 55% indicated that the purpose of Rule 11 
should be both deterrence and compensation.\14\ The Lawsuit 
Abuse Reduction Act would fulfill both purposes. And a full 85% 
of the Federal judges surveyed in the FJC 2005 Survey reported 
that ``groundless litigation in Federal civil cases on [their 
individual] docket'' was a ``problem.''
---------------------------------------------------------------------------
    \14\FJC 2005 Survey at 2.
---------------------------------------------------------------------------
    When sanctions for filing frivolous lawsuits are not 
mandatory, which they are not now, those who are the victims of 
frivolous lawsuits have no incentive to litigate the frivolous 
nature of the claims against them because there is no guarantee 
that even if the claims against them are found to be frivolous 
they will be compensated for the harm caused by those frivolous 
claims. What happens instead is that the victims of frivolous 
lawsuits are routinely extorted to settle the case for certain 
sums just below those that would be necessary to litigate the 
case to judgment, at which point the case drops out of the 
dockets of the very judges who were surveyed by the FJC.
    Just a couple weeks before for FJC 2005 Survey was 
released, here is what U.S. District Judge Loretta Preska had 
to say about the current state of Federal litigation:

        This action is one of dozens of similar bootless 
        actions filed in 23 district courts across the United 
        States on behalf of uninsured and indigent patients, 
        wherein Plaintiffs argue, without basis in law, that 
        private non-profit hospitals are required to provide 
        free or reduced-rate services to uninsured persons . . 
        . This orchestrated assault on scores of nonprofit 
        hospitals, necessitating the expenditure of those 
        hospitals' scares resources to beat back meritless 
        legal claims, is undoubtedly part of the litigation 
        explosion that has been so well-documented in the 
        media. E.g., Walter K. Olson, The Litigation Explosion: 
        What Happened When America Unleashed the Lawsuit 
        (1991); Philip K. Howard, The Collapse of the Common 
        Good: How America's Lawsuit Culture Undermines Our 
        Freedom (2001) . . . For the foregoing reasons, the 
        Defendants' motions to dismiss the above-captioned 
        actions are granted in their entirety with prejudice. 
        The Clerk of the Court shall mark these actions closed 
        and all pending motions denied as moot.\15\
---------------------------------------------------------------------------
    \15\Kolari v. New York-Presbyterian Hospital, 2005 WL 710452 
(S.D.N.Y.) (emphasis added).

    Judges are unlikely to view frivolous litigation as a 
problem because such cases rarely reach the bench. An 
overwhelming number of cases settle before trial. When a 
frivolous claim is filed, one of two things occur under the 
current Rule 11: either the small business challenges the 
plaintiff and the plaintiff simply withdraws the claim and 
walks away (as they are allowed to do under the current Rule 
11); or the small business settles rather than proceed with a 
motion for sanctions because it is unlikely that the court will 
fully reimburse it for the cost of defending against the 
frivolous claim, and the cost of defending against the claim is 
more than the expense of settlement. In both scenarios, the 
small business is forced to devote time and resources to defend 
against wasteful, frivolous claims. The current situation 
favors judges, not small businesses or others who are harmed by 
the litigation.
    Finally, the Federal judiciary seems to have a flat policy 
of opposing any legal reforms that it does not itself 
propose.\16\ Under that policy, for example, the Federal 
judiciary also opposed the Class Action Fairness Act, 
legislation that overwhelmingly passed Congress and became law 
10 years ago.\17\
---------------------------------------------------------------------------
    \16\See letter from Committee on Rules of Practice and Procedure of 
the Judicial Conference of the United States to the Hon. John Conyers, 
Jr. (July 23, 2013) at 1 (stating the Judicial Conference opposes 
legislation that ``contravenes the longstanding Judicial Conference 
policy 
opposing direct amendment of the Federal rules by legislation''), 
available at http://
democrats.judiciary.house.gov/sites/democrats.judiciary.house.gov/
files/documents/JudConf130723.pdf.
    \17\The Class Action Fairness Act passed the Senate by a vote of 
72-26, and the House by a vote of 279-149.
---------------------------------------------------------------------------
    In the end, it is the American people and their duly-
elected representatives, not unelected judges appointed for 
life, who should be determining the appropriate punishments for 
those who file frivolous lawsuits.

                                Hearings

    The Committee on the Judiciary held no hearings on H.R. 
720.

                        Committee Consideration

    On February 2, 2017, the Committee met in open session and 
ordered the bill H.R. 720 favorably reported, without 
amendment, by a rollcall vote of 17 to 6, a quorum being 
present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 720.
    1. An amendment offered by Mr. Conyers to exempt actions 
raising civil rights or constitutional claims. The amendment 
was defeated by a rollcall vote of 11 to 18.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................      X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................      X
                                                ------------------------
    Total......................................     11      18
------------------------------------------------------------------------


    2. An amendment offered by Mr. Cohen to condition the 
effective date on the Administrative Office of the Courts' and 
the Justice Department's providing Judiciary Committees with 
assessments of potential effects on resources of Federal 
courts, the Justice Department, and private litigants. The 
amendment was defeated by a rollcall vote of 10 to 19.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................      X
                                                ------------------------
    Total......................................     10      19
------------------------------------------------------------------------


    3. An amendment offered by Mr. Johnson to condition the 
effective date on the Judicial Conference having opportunity to 
review Rule 11 pursuant to Rules Enabling Act process and 
approving any amendment. The amendment was defeated by a 
rollcall vote of 10 to 19.

                             ROLLCALL NO. 3
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................      X
                                                ------------------------
    Total......................................     10      19
------------------------------------------------------------------------


    4. An amendment offered by Ms. Jackson Lee to strike the 
provision mandating the award of reasonable attorneys' fees and 
expenses and restore court discretion to make such awards. The 
amendment was defeated by a rollcall vote of 10 to 19.

                             ROLLCALL NO. 4
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................              X
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................      X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................      X
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................     10      19
------------------------------------------------------------------------


    5. An amendment offered by Mr. Raskin to exempt actions 
concerning ethics in government from the bill. The amendment 
was defeated by a rollcall vote of 6 to 17.

                             ROLLCALL NO. 5
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................              X
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................      6      17
------------------------------------------------------------------------


    6. An amendment offered by Mr. Jeffries to exempt 
whistleblower actions from the bill. The amendment was defeated 
by a rollcall vote of 6 to 17.

                             ROLLCALL NO. 6
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................      X
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................      X
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................      6      17
------------------------------------------------------------------------


    7. An amendment offered by Mr. Cicilline to restore the 21-
day safe harbor provision. The amendment was defeated by a 
rollcall vote of 4 to 18.

                             ROLLCALL NO. 7
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................
Mr. Issa (CA)..................................              X
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................      4      18
------------------------------------------------------------------------


    8. An amendment offered by Mr. Swalwell to exempt 
immigration actions from the bill. The amendment was defeated 
by a rollcall vote of 4 to 17.

                             ROLLCALL NO. 8
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................              X
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................
Mr. Issa (CA)..................................
Mr. King (IA)..................................              X
Mr. Franks (AZ)................................              X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................              X
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Labrador (ID)..............................              X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................
Mr. Buck (CO)..................................              X
Mr. Ratcliffe (TX).............................              X
Mr. Bishop (MI)................................              X
Ms. Roby (AL)..................................              X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................              X
Mr. Biggs (AZ).................................              X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................      X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................      X
Mr. Swalwell (CA)..............................      X
Mr. Lieu (CA)..................................      X
Mr. Raskin (MD)................................
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................      4      17
------------------------------------------------------------------------


    9. Motion to report H.R. 720 favorably to the House of 
Representatives. The motion was agreed to by a rollcall vote of 
17 to 6.

                             ROLLCALL NO. 9
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................      X
Mr. Sensenbrenner, Jr. (WI)....................      X
Mr. Smith (TX).................................      X
Mr. Chabot (OH)................................
Mr. Issa (CA)..................................      X
Mr. King (IA)..................................      X
Mr. Franks (AZ)................................      X
Mr. Gohmert (TX)...............................
Mr. Jordan (OH)................................      X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................      X
Mr. Gowdy (SC).................................      X
Mr. Labrador (ID)..............................      X
Mr. Farenthold (TX)............................
Mr. Collins (GA)...............................      X
Mr. DeSantis (FL)..............................
Mr. Buck (CO)..................................      X
Mr. Ratcliffe (TX).............................      X
Mr. Bishop (MI)................................      X
Ms. Roby (AL)..................................      X
Mr. Gaetz (FL).................................
Mr. Johnson (LA)...............................      X
Mr. Biggs (AZ).................................      X
 
Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................              X
Mr. Cohen (TN).................................
Mr. Johnson (GA)...............................              X
Ms. Chu (CA)...................................
Mr. Deutch (FL)................................
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................              X
Mr. Richmond (LA)..............................
Mr. Jeffries (NY)..............................
Mr. Cicilline (RI).............................              X
Mr. Swalwell (CA)..............................              X
Mr. Lieu (CA)..................................              X
Mr. Raskin (MD)................................
Ms. Jayapal (WA)...............................
                                                ------------------------
    Total......................................     17       6
------------------------------------------------------------------------


                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 720, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, February 8, 2017.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 720, the ``Lawsuit 
Abuse Reduction Act of 2017.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese, 
who can be reached at 226-2860.
            Sincerely,
                                                Keith Hall,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member




             H.R. 720--Lawsuit Abuse Reduction Act of 2017.

      As ordered reported by the House Committee on the Judiciary 
                          on February 2, 2017.




    H.R. 720 would amend Rule 11 of the Federal Rules of Civil 
Procedure to require courts to impose appropriate sanctions on 
attorneys, law firms, or parties who file frivolous lawsuits 
and require them to compensate parties injured by such conduct. 
Under current law, courts may, but are not required to, impose 
such sanctions.
    Under the legislation, any monetary sanction imposed under 
Rule 11 would be paid by the parties to the suit. Thus, CBO 
estimates that implementing the bill would have no effect on 
the federal budget. Enacting H.R. 720 would not affect direct 
spending or revenues; therefore, pay-as-you-go procedures do 
not apply.
    CBO estimates that enacting H.R. 720 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 720 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Robert Reese. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                    Duplication of Federal Programs

    No provision of H.R. 720 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 720 specifically directs 
to be completed no specific rule makings within the meaning of 
5 U.S.C. Sec. 551.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
720 will reduce frivolous litigation in Federal courts.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 720 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

    The following discussion describes the bill as reported by 
the Committee.
    Sec. 1. Short title. Section 1 sets forth the short title 
of the bill as the ``Lawsuit Abuse Reduction Act of 2017.''
    Sec. 2. Attorney Accountability. Section 2 restores 
mandatory sanctions for filing frivolous lawsuits in violation 
of Rule 11 of the Federal Rules of Civil Procedure, removes 
Rule 11's ``safe harbor'' provision that currently allows 
parties and their attorneys to avoid sanctions for making 
frivolous claims by withdrawing frivolous claims after a motion 
for sanctions has been filed, and requires monetary sanctions, 
including attorneys' fees and compensatory costs, against any 
party making a frivolous claim. It also contains a rule of 
construction that states, ``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.''

                            Dissenting Views

    Federal Rule of Civil Procedure 11 sets forth standards 
pertaining to filings and other submissions to Federal courts 
by attorneys and parties and gives courts the discretion to 
impose sanctions should those requirements be violated. H.R. 
720, the ``Lawsuit Abuse Reduction Act of 2017'' (LARA), would 
turn back the clock to a time when Rule 11 discouraged civil 
rights cases, restricted judicial discretion, and engendered 
vast amounts of time-consuming and costly ``satellite'' 
litigation. In sum, H.R. 720 would reinstate the version of 
Rule 11, in effect between 1983 and 1993, that mandated 
imposition of sanctions for any violation of the Rule and 
removed the current safe-harbor allowing the withdrawal of an 
allegedly offending submission. Further, H.R. 720 would mandate 
the payment of attorneys' fees and costs to the prevailing 
party on any Rule 11 sanction motion for purposes of 
compensation rather than deterrence, going well beyond the 1983 
rule. The decade of experience with the 1983 version of Rule 11 
documents what a disastrous impact it had on the administration 
of justice, the result of which caused the Federal judiciary to 
adopt the current Rule 11.
    Our principal concerns with H.R. 720 are that: (1) there is 
no demonstrated need for the bill; (2) the 1983 version of Rule 
11, which the bill would reinstate, exponentially increased the 
volume and cost of civil litigation in Federal courts because 
mandatory sanctions with no safe-harbor led to increased 
litigation; (3) the bill would have a particularly chilling 
impact on civil rights cases, notwithstanding its rule of 
construction; and (4) the bill would undermine the Judicial 
Conference's deliberative process for amending procedural rules 
under the Rules Enabling Act.\1\ Simply put, H.R. 720 would 
accomplish the opposite of its stated purpose by greatly 
increasing the amount, cost, and intensity of civil litigation, 
provide more grounds for unnecessary delay and harassment in 
the courtroom, and, most importantly, chill legitimate civil 
rights claims.
---------------------------------------------------------------------------
    \1\28 U.S.C. Sec. Sec. 2071-77 (2017).
---------------------------------------------------------------------------
    Not surprisingly, 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 specified in 
the Rules Enabling Act, opposes H.R. 720, noting that it 
``creates a cure worse than the problem it is meant to 
solve.''\2\ The American Bar Association also opposes this 
legislation,\3\ as do numerous consumer and environmental 
groups, including Public Citizen,\4\ the Alliance for Justice, 
the Center for Justice and Democracy, Committee to Support the 
Antitrust Laws, the Consumer Federation of America, Consumers 
Union, Earthjustice, the National Association of Consumer 
Advocates, the National Consumer Law Center, the National 
Employment Lawyers Association, the National Women's Health 
Network, the Natural Resources Defense Council, the Sierra 
Club, and U.S. Public Interest Research Group.\5\ Finally, last 
Congress, the Obama Administration issued a strong veto threat, 
noting that the bill was ``both unnecessary and 
counterproductive'' and that it ``actually increase 
litigation.''\6\
---------------------------------------------------------------------------
    \2\Letter from David G. Campbell, U.S. District Judge, D. Ariz., 
Chair, Advisory Committee on Rules of Practice and Procedure, & John 
Bates, U.S. District Judge, D.D.C., Chair, Advisory Committee on Civil 
Rules, to John Conyers, Jr., Ranking Member, H. Comm. on the Judiciary 
(Feb. 1, 2017) (on file with the H. Comm. on the Judiciary Democratic 
staff) [hereinafter ``Judicial Conference letter''].
    \3\Letter from Thomas M. Susman, Director, Governmental Affairs 
Office, American Bar Association, to Bob Goodlatte (R-VA), Chair, & 
John Conyers, Jr., Ranking Member, H. Comm. on the Judiciary (Feb. 1, 
2017) (on file with the H. Comm. on the Judiciary Democratic staff) 
[hereinafter ``ABA 2015 letter''].
    \4\Letter from Lisa Gilbert, Director, & Susan Harley, Deputy 
Director, Public Citizen Congress Watch Div. to U.S. House of 
Representatives (Feb. 1, 2017) (on file with the H. Comm. on the 
Judiciary Democratic staff) [hereinafter ``Public Citizen letter''].
    \5\Letter from the Alliance for Justice et al. to Bob Goodlatte (R-
VA), Chair, & John Conyers, Jr. (D-MI), Ranking Member, H. Comm. on the 
Judiciary (Feb. 1, 2017) (on file with the H. Comm. on the Judiciary 
Democratic staff) [hereinafter ``Groups letter.'']
    \6\Executive Office of the President, Office of Management and 
Budget, Statement of Administration Policy--H.R. 758, Lawsuit Abuse 
Reduction Act of 2015 (Sept. 16, 2015).
---------------------------------------------------------------------------
    For the reasons set forth herein, we respectfully dissent.

                              DESCRIPTION

    Every pleading, written motion or other paper submitted to 
a court must be signed by the attorney of record or by the 
party, if unrepresented by counsel, pursuant to Rule 11(a) of 
the Federal Rules of Civil Procedure.\7\ Rule 11(b) provides 
that by presenting such signed document to the court, the 
attorney or party is deemed to certify ``to the best of the 
person's knowledge, information, and belief, formed after an 
inquiry reasonable under the circumstances'' that:
---------------------------------------------------------------------------
    \7\Fed. R. Civ. P. 11(a).

        (1) it is not being presented for any improper purpose, 
        such as to harass, cause unnecessary delay, or 
---------------------------------------------------------------------------
        needlessly increase the cost of litigation;

        (2) the claims, defenses, and other legal contentions 
        are warranted by existing law or by a nonfrivolous 
        argument for extending, modifying, or reversing 
        existing law or for establishing new law;

        (3) the factual contentions have evidentiary support 
        or, if specifically so identified, will likely have 
        evidentiary support after a reasonable opportunity for 
        further investigation or discovery; and

        (4) the denials of factual contentions are warranted on 
        the evidence or, if specifically so identified, are 
        reasonably based on belief or a lack of information.\8\
---------------------------------------------------------------------------
    \8\Fed. R. Civ. P. 11(b).

    Should a court determine that a party has violated these 
requirements, Rule 11(c) authorizes the court to impose 
sanctions.\9\ A motion for sanctions must specifically describe 
the allegedly violative conduct and be served upon the 
offending entity, but such motion may not be filed or presented 
to the court if the challenged submission is withdrawn or 
corrected within 21 days after service of such motion.\10\ This 
is the Rule's so-called ``safe harbor'' provision. Rule 11(c) 
gives the court discretion to award reasonable attorneys' fees 
and expenses to a prevailing party\11\ and specifies that a 
sanction must be limited to what is sufficient to deter 
repetition of the conduct at issue or comparable conduct by 
others and may include nonmonetary directives, the payment of a 
penalty, or the award of attorneys' fees and expenses to the 
moving party directly resulting from the violation.\12\
---------------------------------------------------------------------------
    \9\Fed. R. Civ. P. 11(c)(1).
    \10\Fed. R. Civ. P. 11(c)(2).
    \11\Fed. R. Civ. P. 11(c)(3).
    \12\Fed. R. Civ. P. 11(c)(4).
---------------------------------------------------------------------------
    H.R. 720 amends Rule 11(c) in several ways. First, it 
removes a judge's discretionary authority to impose sanctions 
for a Rule 11 violation by making the imposition of sanctions 
mandatory. Second, it eliminates Rule 11(c)(2)'s ``safe 
harbor'' provision, which currently allows the target of a Rule 
11 motion for sanctions to withdraw or correct the paper, 
claim, defense, contention, or denial that is the subject of 
the motion for sanctions within 21 days after service. Third, 
it amends Rule 11(c)(4) to require that a sanction not only 
deter repetition of the conduct at issue, but also compensate 
parties injured by such conduct. It further amends Rule 
11(c)(4) to require a court to include, as part of any Rule 11 
sanction, the payment of the moving party's reasonable 
attorneys' fees, costs, and other expenses incurred as a direct 
result of the Rule 11 violation. Currently, the award of such 
expenses as part of a Rule 11 sanction is discretionary. 
Finally, H.R. 720 includes a rule of construction stating that 
nothing in the bill or any amendment made by it can be 
construed to bar or impede the assertion or development of new 
legal theories, including under civil rights laws or the United 
States Constitution.

                               BACKGROUND

  I. THE JUDICIAL CONFERENCE'S DELIBERATIVE PROCESSES UNDER THE RULES 
                              ENABLING ACT

    For most of the past century, Congress has entrusted the 
Federal judiciary to make its own procedural rules. In 1922, 
Congress tasked the Judicial Conference of the United States to 
serve as the principal policymaking body for the judicial 
branch.\13\ Federal statute requires the Conference to conduct 
``a continuous study of the operation and effect'' of the rules 
of procedure, and propose changes to the rules ``to promote 
simplicity in procedure, fairness in administration, the just 
determination of litigation, and the elimination of 
unjustifiable defense and delay.''\14\
---------------------------------------------------------------------------
    \13\28 U.S.C. Sec. 331 (2017).
    \14\Id.
---------------------------------------------------------------------------
    In 1934, Congress passed the Rules Enabling Act, which 
authorizes the Federal judiciary to prescribe its own rules of 
practice, procedure, and evidence.\15\ In practice, this 
responsibility is undertaken by the Judicial Conference of the 
United States, which assigns its Committee on Rules of Practice 
and Procedure and advisory committees to recommend proposed 
changes to the rules ``as may be necessary to maintain 
consistency and otherwise promote the interest of 
justice.''\16\ Each committee is composed of Federal judges, 
practicing lawyers, law professors, state chief justices, and 
representatives of the Department of Justice.\17\
---------------------------------------------------------------------------
    \15\28 U.S.C. Sec. Sec. 2071 et seq. (2017).
    \16\28 U.S.C. Sec. 2073(b) (2017).
    \17\A Summary for the Bench and Bar: The Federal Rules of Practice 
and Procedure, Admin. Office of the U.S. Courts (Oct. 2010), available 
at http://www.uscourts.gov/RulesAndPolicies/FederalRulemaking/
RulemakingProcess/SummaryBenchBar.aspx.
---------------------------------------------------------------------------
    The process for amending rules of procedure is highly 
deliberative and very exhaustive:

        The pervasive and substantial impact of the rules on 
        the practice of law in the Federal courts demands 
        exacting and meticulous care in drafting rule changes. 
        The rulemaking process is time consuming and involves a 
        minimum of seven stages of formal comment and review. 
        From beginning to end, it usually takes 2 to 3 years 
        for a suggestion to be enacted as a rule. . . .

        [C]omments received from this extensive and thorough 
        public examination are studied very carefully by the 
        committees and generally improve the amendments. The 
        committees actively encourage the submission of 
        comments, both positive and negative, to ensure that 
        proposed amendments have been considered by a broad 
        segment of the bench and bar.\18\
---------------------------------------------------------------------------
    \18\Id.

This careful process also gives Congress the opportunity to 
reject, modify, or defer rules changes before they take 
effect.\19\
---------------------------------------------------------------------------
    \19\28 U.S.C. Sec. Sec. 2074, 2075 (2017).
---------------------------------------------------------------------------

                 II. FEDERAL RULE OF CIVIL PROCEDURE 11

    In its original form, Rule 11 required attorneys to sign 
pleadings and to certify that, to the best of their 
``knowledge, information, and belief,'' each pleading was well-
grounded.\20\ The court had sole discretion over the imposition 
of sanctions.\21\ During the 45 years that this version of the 
rule was in effect, the Federal courts ruled on only 19 Rule 11 
motions for sanctions, found a violation of the Rule only 11 
times, and imposed sanctions in only three cases.\22\ The 1938 
version of Rule 11 was seldom used and largely ignored.\23\
---------------------------------------------------------------------------
    \20\Fed. R. Civ. P. 11 (1938) (repealed 1983).
    \21\Id.
    \22\Peter A. Joy, The Relationship Between Civil Rule 11 & Lawyer 
Discipline: An Empirical Analysis Suggesting Institutional Choices in 
the Regulation of Lawyers, 37 LOY. L.A. L. REV. 765, 765-66 (2004).
    \23\See Lonny Sheinkopf Hoffman, The Lawsuit Abuse Reduction Act: 
The Legislative Bid to Regulate Lawyer Conduct, 25 REV. LITIG. 719, 722 
(2006).
---------------------------------------------------------------------------
    In 1983, the Advisory Committee on Civil Rules (Advisory 
Committee) concluded that, ``in practice, Rule 11 has not been 
effective in deterring abuses.''\24\ In an attempt to curb an 
increase in the number and rising costs of civil suits, the 
Advisory Committee substantially revised the Rule's sanction 
provisions. The amended rule required an attorney to conduct a 
``reasonable inquiry'' into the factual and legal merits of 
every document submitted in court, and mandated the imposition 
of sanctions if a court found that the attorney violated this 
responsibility.\25\
---------------------------------------------------------------------------
    \24\Fed. R. Civ. P. 11 (1983) Advisory Committee's note to the 1983 
amendment.
    \25\Fed. R. Civ. P. 11 (1983) (repealed 1993).
---------------------------------------------------------------------------
    Nevertheless, the 1983 amendments, instead of deterring 
unnecessary litigation, became a ``font of rancor'' between 
parties in civil suits.\26\ As compared to the mere 19 Rule 11 
filings between 1938 and 1983, nearly 7,000 motions for 
sanctions were made during the decade that the 1983 rule was in 
effect.\27\ A 1989 study showed that roughly one-third of all 
Federal civil lawsuits involved Rule 11 ``satellite'' 
litigation\28\ and approximately one-fourth of all cases on the 
docket involved Rule 11 actions that did not result in 
sanctions.\29\ As a result, attorneys had a double duty: ``one 
to try the case, and the other to try the opposing 
counsel.''\30\ Commentators criticized the 1983 rule for 
spawning a veritable ``cottage industry'' of Rule 11 
litigation.\31\
---------------------------------------------------------------------------
    \26\Don J. DeBenedictis, Rule 11 Snags Lawyers: Critics Charge 
Ruling Will Discourage Civil Rights Cases, 77 A.B.A. J. 16 (1999).
    \27\See Hoffman at 727.
    \28\Uncertain and Certain Litigation Abuses, 2004: Hearing on 
Safeguarding Americans from a Legal Culture of Fear: Approaches to 
Limiting Lawsuit Abuse before the H. Comm. on the Judiciary, 108th 
Cong. (2004) (statement of Theodore Eisenberg, Professor, Cornell 
University).
    \29\Id.
    \30\Id.
    \31\Carl Tobias, The 1993 Revision to Federal Rule 11, 70 IND. L.J. 
171, 173-74 (1994) (noting statistics on growth in Rule 11 practice).
---------------------------------------------------------------------------
    In 1992, the Advisory Committee held two public hearings on 
proposed amendments to Rule 11. The Committee noted that 
``widespread criticisms of the 1983 version of the rule, though 
frequently exaggerated or premised on faulty assumptions, were 
not without some merit.''\32\ It found that the rule ``tended 
to impact plaintiffs more frequently and severely than 
defendants,'' occasionally ``created problems for a party which 
seeks to assert novel legal contentions,'' and provided 
``little incentive, and perhaps a disincentive, for a party to 
abandon positions after determining they are no longer 
supportable in fact or law.''\33\ Other studies found that 
sanctions were disproportionately imposed against plaintiffs in 
civil rights and anti-discrimination cases.\34\
---------------------------------------------------------------------------
    \32\Letter from the Sam C. Pointer, Jr., Chairman, Advisory 
Committee on Civil Rules, to Robert E. Keeton, Chairman, Standing 
Committee on Rules of Practice and Procedure (May 1, 1992), reprinted 
in 146 F.R.D. 519 (1993) (transmitting proposed amendments to the 
Federal Rules of Civil Procedure and the Federal Rules of Evidence, and 
accompanying Committee Notes).
    \33\Id.
    \34\See Carl Tobias, Rule 11 and Civil Rights Litigation, 37 BUFF. 
L. REV. 485 (1989); Margaret L. Sanner & Carl Tobias, Rule 11 & Rule 
Revision, 37 LOY. L.A. L. REV. 573 (2004); Danielle Kie Hart, And the 
Chill Goes On--Federal Civil Rights Plaintiffs Beware: Rule 11 Vis-a-
vis 28 U.S.C. Sec. 1927 and the Court's Inherent Power, 37 LOY. L.A. L. 
REV. 645 (2004).
---------------------------------------------------------------------------
    In 1993, the Advisory Committee amended several key aspects 
of Rule 11. It removed virtually all financial incentives for a 
party to pursue nuisance Rule 11 sanctions, or to defend 
against them to the bitter end. Still in effect today, this 
version of Rule 11 sets a more objective standard for attorney 
behavior, i.e., courtroom activity must be ``warranted by 
existing law or by a nonfrivolous argument for the extension, 
modification, or reversal of existing law or the establishment 
of a new law.''\35\
---------------------------------------------------------------------------
    \35\Fed. R. Civ. P. 11(b)(2).
---------------------------------------------------------------------------
    Sanctions may be imposed only at the discretion of the 
court and must be limited to ``what is sufficient to deter 
repetition of such conduct or comparable conduct by others 
similarly situated.''\36\ Because Rule 11's purpose is ``to 
deter rather than to compensate,'' monetary sanctions, if 
imposed, ``should ordinarily be paid into the court as a 
penalty.''\37\ Only in exceptional cases should payment be made 
to those injured by the violation and, even then, ``any such 
award . . . should not exceed the expenses and attorneys' fees 
for the services directly and unavoidably caused by the 
violation of the certification requirement.''\38\ A 21-day 
``safe harbor'' provision allows a litigant to withdraw or 
amend any offending document before the court continues with 
Rule 11 proceedings.\39\
---------------------------------------------------------------------------
    \36\Fed. R. Civ. P. 11(c)(4).
    \37\Fed. R. Civ. P. 11, Advisory Committee's note to 1993 
amendment.
    \38\Id.
    \39\Fed. R. Civ. P. 11(c)(1).
---------------------------------------------------------------------------
    By all empirical accounts, the 1993 amendments have been 
tremendously successful. For example, the Sixth Circuit 
observed that the Advisory Committee ``anticipated that 
civility among attorneys and between bench and bar would be 
furthered by having attorneys communicate with each other and 
with an eye toward potentially resolving their difference prior 
to court involvement.''\40\ In the lower courts, the safe 
harbor provision has had ``the salutary effect of providing the 
appropriate due process considerations to sanction litigation, 
reducing Rule 11 volume and eliminating abuses proscribed by 
this rule.''\41\
---------------------------------------------------------------------------
    \40\Ridder v. City of Springfield, 109 F.3d 288, 294 (6th Cir. 
1997).
    \41\Photocircuits Corp. v. Marathon Agents, Inc., 162 F.R.D. 449, 
452 (E.D.N.Y. 1995).
---------------------------------------------------------------------------

                         CONCERNS WITH H.R. 720

         I. THERE IS NO DEMONSTRATED NEED FOR THIS LEGISLATION

    H.R. 720's proponents seek to roll back significant 
improvements to Rule 11 made by the 1993 amendments even though 
there is no evidence that there are problems with the current 
sanctions regime. Observing that H.R. 720 ``would reinstate a 
mandatory sanctions provision of Rule 11 adopted in 1983 and 
removed as counterproductive,'' the Judicial Conference warns 
that the measure would create ``a cure worse than the problem 
it is meant to solve.''\42\ The Conference further notes:
---------------------------------------------------------------------------
    \42\Judicial Conference letter, at 1.

        The facts do not support any assumption that mandatory 
        sanctions deter frivolous filings. A decade of 
        experience with the 1983 mandatory sanctions 
        demonstrated that it failed to 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. The 1983 version of Rule 11 required sanctions 
        for every violation of the rule, and quickly became a 
        tool of abuse. Aggressive filings of Rule 11 sanctions 
        motions required expenditure of tremendous resources on 
        Rule 11 battles having nothing to do with the merits of 
        the case and everything to do with strategic 
        gamesmanship. Many Rule 11 motions in turn triggered 
        counter-motions seeking Rule 11 sanctions as a penalty 
        for filing of the original Rule 11 motion.\43\
---------------------------------------------------------------------------
    \43\Id. at 2

In sum, the Conference concludes that the 1983 version of Rule 
11 resulted in serious unintended consequences, chiefly an 
explosion of satellite litigation . . . [and] a significant 
increase in abusive litigation.\44\
---------------------------------------------------------------------------
    \44\Id.
---------------------------------------------------------------------------
    In response to proponents' claims that this legislation is 
needed to stem a purported growth in frivolous lawsuits, the 
ABA observes that ``[t]here simply is no proof that the 
problems with groundless litigation have gotten worse since the 
1993 amendments went into effect. In fact, it is more likely 
that problems have abated because Rule 11's safe harbor 
provides an incentive to withdraw frivolous filings at the 
outset of litigation.''\45\
---------------------------------------------------------------------------
    \45\Id. at 3.
---------------------------------------------------------------------------
    Among various factors the ABA noted in support of this 
conclusion, the ABA cites the major 2-day conference on the 
costs, delays, and burdens of Federal civil litigation that the 
Judicial Conference's Civil Rules Advisory Committee hosted and 
at which more than 200 judges, attorneys, academics, and 
justice system users (including members of the business 
community and defense bar) participated. As the ABA notes, ``no 
research paper or participant suggested that frivolous lawsuits 
were a problem or that Rule 11 was inadequate and needed to be 
amended.''\46\
---------------------------------------------------------------------------
    \46\Id.
---------------------------------------------------------------------------
    In addition, the Federal Judicial Center conducted a survey 
in 2005 which found that 85 percent of the judges surveyed 
viewed ``groundless litigation'' as no more than a small 
problem in their courtrooms and 91 percent opposed the proposed 
requirement that sanctions be imposed for every Rule 11 
violation.\47\ The survey further found that 85 percent 
strongly or moderately supported Rule 11's safe harbor 
provision; and 84 percent disagreed with the proposition that 
an award of attorneys' fees should be mandatory for every Rule 
11 violation.\48\ Most notably, 87 percent of the judges 
surveyed wanted the current Rule 11 to remain in force, and 
only 4 percent expressed support for the amendments that H.R. 
720 now proposes to make.\49\
---------------------------------------------------------------------------
    \47\David Rauma & Thomas E. Willging, Report of a Survey of United 
States District Judges' Experiences and Views Concerning Rule 11, 
Federal Rules of Civil Procedure, Federal Judicial Center (2005).
    \48\Id.
    \49\Id.
---------------------------------------------------------------------------
    In the last Congress, Elizabeth Milito, on behalf of the 
National Federation of Independent Businesses (NFIB), testified 
before the Subcommittee on Constitution and Civil Justice at a 
hearing on a measure identical to H.R. 720 that frivolous 
demand letters and lawsuits impose disproportionately high 
costs on small businesses.\50\ Yet, NFIB's own survey of 3,856 
of its members, conducted in 2012, shows that this is not a 
major concern. The survey, which asked them to rank among 75 
concerns the biggest threats facing small business, ranked the 
concern, ``cost and frequency of lawsuits/threatened suits,'' 
71 out of 75 concerns, which was down six places from NFIB's 
previous survey in 2008.\51\ In fact, almost 39 percent of 
respondents said that the threat of lawsuits was ``not a 
problem'' at all.\52\ A far more problematic and realistic 
concern that small businesses should consider is how H.R. 720 
would return Federal litigation to the costly and time-
consuming climate of hostility engendered by the 1983 rule.
---------------------------------------------------------------------------
    \50\The Lawsuit Abuse Reduction Act of 2015: Hearing on H.R. 758 
Before the Subcomm. on the Constitution and Civil Justice of the H. 
Comm. on the Judiciary, 114th Cong. 11-12 (2015) [hereinafter ``2015 
Hearing''].
    \51\Holly Wade, Small Business Problems & Priorities, National 
Federation of Independent Business Research Foundation, at 14, 19 (Aug. 
2012).
    \52\Id. at 14. The 2016 NFIB survey showed that lawsuits ranked 
only slight higher as a concern, ranking 68 out of 75 concerns. Holly 
Wade, Small Business Problems & Priorities, National Federation of 
Independent Business Research Foundation, at 11 (August 2016).
---------------------------------------------------------------------------

  II. MANDATORY SANCTIONS AND LACK OF A SAFE HARBOR PROVISION LEAD TO 
                     INCREASED LITIGATION AND COSTS

    While there is no empirical support to justify a change to 
Rule 11, its history clearly illustrates why, after a decade of 
real-world experience, the Judicial Conference rejected the 
approach proposed in H.R. 720 and adopted the current version 
of Rule 11. Although H.R. 720's supporters claim there is a 
need to curb a perceived increase in frivolous litigation, the 
legislation will have the opposite effect. Under the bill, 
which imposes mandatory sanctions and offers no opportunity to 
correct mistakes, the parties to a lawsuit will have every 
incentive to file Rule 11 sanctions motions and seek court 
costs and legal fees, which would be mandatory rather than 
discretionary as is currently the case. Parties also would have 
obvious incentives to defend against such actions to the bitter 
end. This dynamic is more than theoretical. Under the 1983 
version of the rule, ``satellite'' litigation aimed at Rule 11 
sanctions flourished.
    Based on its firsthand experience with the 1983 version of 
Rule 11 and the many problems it engendered, the Federal courts 
clearly recognize that H.R. 720 is a major step backwards. The 
Judicial Conference amended the 1983 version of Rule 11 because 
it ``generated wasteful satellite litigation that had little to 
do with the merits of cases'' and because the mandatory 
sanctions ``quickly became a tool of abuse.''\53\ Moreover, 
``aggressive filings of Rule 11 sanctions motions required 
expenditure of tremendous resources on Rule 11 battles having 
nothing to do with the merits of the case and everything to do 
with strategic gamesmanship,'' which, in turn ``triggered 
counter-motions seeking Rule 11 sanctions as a penalty for 
filing of the original Rule 11 motion.''\54\ Reinstituting 
mandatory sanctions would create conflicts of interest between 
lawyers and their clients and exacerbate tensions between 
opposing attorneys.\55\
---------------------------------------------------------------------------
    \53\Judicial Conference letter.
    \54\Id.
    \55\Id.
---------------------------------------------------------------------------
    Similarly, the ABA noted in its letter to the Committee 
opposing H.R. 720 that ``past evidence strongly suggests that 
the proposed changes would encourage new litigation over 
sanction motions, thereby increasing, not reducing, court costs 
and delays. This is a costly and completely avoidable 
outcome.''\56\ The ABA quoted a 2004 letter from the Judicial 
Conference to the Committee which stated that mandatory 
application of Rule 11 ``created a significant incentive to 
file unmeritorious Rule 11 motions by providing a possibility 
of monetary penalty; engender[ed] potential conflicts of 
interest between clients and lawyers; and provid[ed] little 
incentive . . . to abandon or withdraw a pleading or claim--and 
thereby admit error--that lacked merit.''\57\ The ABA further 
noted that the ``1983 version of Rule 11 was premised on 
anecdotal information rather than on comprehensive empirical 
data analyzed through the prism of those most familiar with the 
federal courts. It was ill-conceived and its unintended 
consequences have been well-documented.''\58\ H.R. 720 restores 
a highly problematic rule, notwithstanding a decade of evidence 
and prior experience with its flawed provisions.
---------------------------------------------------------------------------
    \56\ABA letter.
    \57\Id. (quoting Letter from the Judicial Conference of the United 
States to Chairman James Sensenbrenner, H. Comm. on the Judiciary 
(2004)).
    \58\Id.
---------------------------------------------------------------------------
    To highlight this concern with the bill, several Members 
offered amendments to address this problem. Representative 
Sheila Jackson Lee (D-TX), for example, offered an amendment 
that would have eliminated H.R. 720's provision mandating the 
award of reasonable attorneys' fees and costs and restoring 
judicial discretion to award such fees and costs, in an effort 
to reduce the risk of runaway satellite litigation. The 
Committee rejected this amendment by a 10 to 19 vote.\59\
---------------------------------------------------------------------------
    \59\Unofficial Tr. of Markup of H.R. 720, the Lawsuit Abuse 
Reduction Act (LARA) of 2017, by the H. Comm. on the Judiciary, 115th 
Cong. 79 (Feb. 2, 2017) [hereinafter Markup Tr.].
---------------------------------------------------------------------------
    As another way to mitigate the bill's potential to spawn 
satellite litigation, Representative David Cicilline (D-RI) 
offered an amendment that would have restored the current safe-
harbor provision in Rule 11 that allows a party to withdraw an 
allegedly frivolous submission within 21 days after service of 
a Rule 11 sanctions motion. The Committee rejected this 
amendment by a 4 to 18 vote.\60\
---------------------------------------------------------------------------
    \60\Id. at 119.
---------------------------------------------------------------------------
    In response to the bill's potential to cause a tremendous 
increase in litigation, Representative Steve Cohen (D-TN) 
offered an amendment that would have delayed the bill's 
effective date until the Administrative Office of the United 
States Courts and the Attorney General of the United States 
submitted reports to the House and Senate Judiciary Committees 
assessing the resources burden on courts and the potential 
litigation costs on the government and private parties imposed 
by H.R. 720. The Committee rejected this amendment by voice 
vote.\61\
---------------------------------------------------------------------------
    \61\Id. at 46.
---------------------------------------------------------------------------
    Members also offered amendments seeking to exempt from the 
bill certain types of actions. Representative Hakeem Jeffries 
(D-NY), for instance, offered an amendment exempting 
whistleblower actions from H.R. 720. His amendment failed by a 
vote of 6 to 17.\62\ Representative Eric Swalwell (D-CA) 
offered an amendment exempting immigration actions from the 
bill. His amendment failed by a vote of 4 to 17.\63\ 
Representative Jamie Raskin (D-MD) offered an amendment that 
would have exempted actions concerning ethics in government 
from the bill. His amendment failed by a vote of 6 to 17.\64\ 
And, Representative Cohen offered an amendment exempting 
actions challenging the legality of executive orders from the 
bill. His amendment also failed by a vote of 10 to 19.\65\
---------------------------------------------------------------------------
    \62\Id. at 110.
    \63\Id. at 128.
    \64\Id. at 89.
    \65\Id. at 55.
---------------------------------------------------------------------------

    III. H.R. 720 WILL HAVE A CHILLING EFFECT ON CIVIL RIGHTS CASES

    The avalanche of satellite litigation and the associated 
increase in litigation costs and resource burdens fueled by 
H.R. 720 will undoubtedly have a chilling effect on all civil 
litigation in Federal court, including employment, 
environmental, and consumer rights cases.\66\ In fact, the 1983 
rule, which H.R. 720 reinstates, had a particularly adverse 
impact on civil rights cases. In light of the fact that civil 
rights cases often involve an ``argument for the extension, 
modification, or reversal of existing law or the establishment 
of a new law,'' they were particularly susceptible to Rule 11 
before the 1993 amendments. A 1991 Federal Judicial Center 
study found that the ``incidence of Rule 11 motions or sua 
sponte orders is higher in civil rights cases than in some 
other types of cases.''\67\ Another study showed that ``civil 
rights cases made up 11.4% of Federal cases filed'' but that 
``22.7% of the cases in which sanctions had been imposed were 
civil rights cases.''\68\ Under the 1983 rule, civil rights 
cases were clearly disadvantaged.
---------------------------------------------------------------------------
    \66\See, e.g., Groups letter; Public Citizen letter.
    \67\Elizabeth C. Wiggins, et al., Special Issue on Rule 11, Federal 
Judicial Center Directions No. 2, at 10 (Nov. 1991).
    \68\Lawrence C. Marshall, et al., The Use and Impact of Rule 11, 86 
NW. U.L. REV. 943, 971-75 (1992).
---------------------------------------------------------------------------
    H.R. 720 would restore this regime and provide no recourse 
for appeal when sanctions are imposed. The late Robert L. 
Carter, United States District Judge for the Southern District 
of New York and, before that, one of the lawyers representing 
the plaintiffs in Brown v. Board of Education, considered 
changes like these and remarked, ``I have no doubt that the 
Supreme Court's opportunity to pronounce separate schools 
inherently unequal [in Brown] would have been delayed for a 
decade had my colleagues and I been required, upon pain of 
potential sanctions, to plead our legal theory explicitly from 
the start.''\69\
---------------------------------------------------------------------------
    \69\Symposium, The 50th Anniversary of the Federal Rules of Civil 
Procedure, 1938-1988, 137 U. PA. L. REV. 2179, 2193 (June 1989).
---------------------------------------------------------------------------
    As Robert Peck, President of the Center for Constitutional 
Litigation, testified last Congress at the hearing on a measure 
identical to H.R. 720, the plaintiffs in both Brown v. Board of 
Education\70\ and National Federation of Independent Business 
v. Sebelius\71\ (the constitutional challenge to the Affordable 
Care Act) would likely have faced Rule 11 sanctions under the 
1983 version of Rule 11 had it been in effect at the time these 
actions were filed, given the then-novel nature of their 
arguments.\72\ He further observed that the measure's rule of 
construction would not protect civil rights claims because it 
does nothing to address the primary problem for civil rights 
cases, i.e., the inability to develop sufficient facts absent 
compulsory discovery. Typically, such facts become available 
only after a case has been filed, a filing that, in turn, may 
not happen given the legislation's potential chilling effect on 
civil rights cases.\73\ For this reason, he described the rule 
of construction as ``ineffective window dressing that does not 
solve the problem that its drafters apparently concede is 
real.''\74\
---------------------------------------------------------------------------
    \70\347 U.S. 483 (1954).
    \71\132 S.Ct. 2566 (2012).
    \72\2015 Hearing at 23, 32 (statement of Robert S. Peck, President, 
Center for Constitutional Litigation, P.C.).
    \73\Id. at 40.
    \74\Id.
---------------------------------------------------------------------------
    These major problems with the approach taken in H.R. 720 
have long been recognized. Similar concerns were voiced by 
Professor Theodore Eisenberg of Cornell Law School at a hearing 
held before the Committee in 2004:

        A Congress considering reinstating the fee-shifting 
        aspect of Rule 11 in the name of tort reform should 
        understand what it will be doing. It will be 
        discouraging civil rights cases disproportionately 
        affected by old Rule 11 in the name of addressing 
        purported abuse in an area of law, personal injury 
        tort, found to have less abuse than other areas.\75\
---------------------------------------------------------------------------
    \75\Uncertain and Certain Litigation Abuses, 2004: Hearing on 
Safeguarding Americans from a Legal Culture of Fear: Approaches to 
Limiting Lawsuit Abuse Before the H. Comm. on the Judiciary, 108th 
Cong. (2004) (statement of Theodore Eisenberg, Professor, Cornell 
University).

    Representative Jerrold Nadler (D-NY) highlighted another 
potential way that the legislation could have a 
disproportionate impact on civil rights claims. During the 
Subcommittee hearing on identical legislation considered last 
Congress, he observed that the Committee report in support of 
LARA from a prior Congress cited as an example of ``frivolous'' 
litigation a lawsuit filed by a high school student after her 
picture was left out of her school yearbook when she refused to 
wear feminine clothing.\76\ He then asked Mr. Peck whether, in 
light of the fact that 14 states have laws that prohibit 
discrimination based on gender identity, the student's claims 
may be worthy of judicial consideration even if they are novel 
or untested but could nonetheless be sanctionable under the 
bill. Mr. Peck answered that it was entirely possible that such 
a claim could be sanctionable.\77\ In short, whether a claim is 
``frivolous'' or not, particularly in the civil rights context, 
is very much open to argument.
---------------------------------------------------------------------------
    \76\2015 Hearing at 62.
    \77\Id. at 40.
---------------------------------------------------------------------------
    The sponsors of H.R. 720 argue that the bill's rule of 
construction responds to these concerns. We disagree. This rule 
of construction, which provides that nothing in the bill 
``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,''\78\ fails to prevent 
defendants from wielding Rule 11 (as amended by H.R. 720) as a 
weapon against legitimate plaintiffs and tying up civil rights 
cases in long and costly satellite litigation. While the intent 
of this provision is to address the undisputed effect of the 
1983 Rule on civil rights litigation--an intent that is to be 
applauded--the 1983 Rule was also facially neutral with respect 
to the development of novel legal claims, and yet it 
nonetheless had a disproportionate impact on civil rights 
claims.
---------------------------------------------------------------------------
    \78\H.R. 720, 115th Cong. Sec. 2(b) (2017).
---------------------------------------------------------------------------
    For these reasons, Ranking Member John Conyers, Jr. (D-MI) 
offered an amendment that simply would have exempted 
constitutional and civil rights cases from H.R. 720. The 
Committee, however, rejected this amendment by a vote of 11 to 
18.\79\
---------------------------------------------------------------------------
    \79\Markup Tr. at 40.
---------------------------------------------------------------------------

         IV. H.R. 720 UNDERMINES THE RULES ENABLING ACT PROCESS

    H.R. 720 departs from the well-established and successful 
approach that Congress itself authorized in empowering the 
Federal judiciary to make its own procedural rules based on the 
judiciary's day-to-day, real-world experience with the 
application of those rules. Clearly, Congress retains the power 
to review those rules and to accept, modify, or reject any 
proposed changes pursuant to the extensive Rules Enabling Act 
process. Yet, this is a power that Congress rarely uses. 
Indeed, it was telling that when Subcommittee Ranking Member 
Cohen asked witnesses during the legislative hearing on a 
substantively identical bill considered in the last Congress 
for an example of an instance where Congress directly amended a 
court procedural rule, none of the witnesses could cite a 
single example.\80\ Nevertheless, H.R. 720 recklessly attempts 
to amend a Federal civil procedure rule directly, over the 
objections of the Judicial Conference, in complete disregard of 
the Conference's firsthand experience with the 1983 rule.
---------------------------------------------------------------------------
    \80\2015 Hearing at 60.
---------------------------------------------------------------------------
    To highlight the importance of the Rules Enabling Act 
process and the inappropriateness of H.R. 720's attempt to 
circumvent it, Representative Hank Johnson (D-GA) offered an 
amendment that conditioned the bill's effective date on the 
Judicial Conference having the opportunity to review the 
changes to Rule 11 proposed by H.R. 720 using the Rules 
Enabling Act process, to approve such amendments, and to submit 
the results of its review to the House and Senate Judiciary 
Committees. The Committee rejected this amendment by a vote of 
10 to 19.\81\
---------------------------------------------------------------------------
    \81\Markup Tr. at 64.
---------------------------------------------------------------------------

                               CONCLUSION

    H.R. 720 seeks to reinstate a version of Rule 11 that was 
widely recognized to have been an utter failure during the 
decade it was in place. The Judicial Conference, after years of 
careful consideration, research, experience, and public 
comment, adopted the current Rule 11, which, by most accounts, 
has been a success. The individuals and businesses served by 
our legal system do not need to incur the substantially 
increased expense and delay associated with a regime imposed by 
H.R. 720 that will foster satellite litigation aimed at seeking 
and opposing Rule 11 sanctions. Those seeking to vindicate 
their civil rights deserve to have their claims heard without 
the threat of Rule 11 motions intended to harass and 
intimidate. Nonetheless, proponents of H.R. 720 disregard these 
significant concerns and now seek to repeat history with a 
flawed mandatory sanctions regime.
    For these reasons, and those discussed above, we 
respectfully dissent and urge our colleagues to reject this 
flawed legislation.

                                   Mr. Conyers, Jr.
                                   Mr. Nadler.
                                   Ms. Lofgren.
                                   Ms. Jackson Lee.
                                   Mr. Cohen.
                                   Mr. Johnson, Jr.
                                   Mr. Deutch.
                                   Mr. Gutierrez.
                                   Ms. Bass.
                                   Mr. Richmond.
                                   Mr. Jeffries.
                                   Mr. Cicilline.
                                   Mr. Swalwell
                                   Mr. Lieu
                                   Mr. Raskin
                                   Ms. Jayapal

                                  [all]