Abusive Lawsuits Hurt Innocent Americans

Frivolous lawsuits have become too common in the United States. In recent years, for example, meritless lawsuits have been filed against the Weather Channel for failing to accurately predict storms. But when it rains it pours for abusive litigation. Frivolous lawsuits also have been filed against television shows people claimed were too scary, and against fast-food companies because inactive children gained weight.

The prevalence of these lawsuits is partly because the lawyers who bring these cases have everything to gain and nothing to lose. These lawyers can file frivolous lawsuits no matter how absurd the claims, often without any penalty. Meanwhile defendants are faced with years of litigation, escalating attorneys’ fees, and damage to their reputations.

The courts serve as an essential part of the American legal system. Courts provide a valuable check on the legislative and executive branches. They also help ensure that the rights of all Americans are protected and that people have their valid legal grievances addressed. Those with a legitimate legal claim are entitled to their day in court. But abusive litigation undermines our justice system.

Burdening the courts with frivolous lawsuits not only bogs down the legal system, but also impedes economic growth. When faced with these lawsuits, American job creators are forced to slow down hiring and stop investing. Their efforts and capital are spent defending themselves and their reputations as opposed to hiring more Americans or investing in research and development that will enable the discovery of new, revolutionary or innovative products.

These frivolous cases have an even greater impact on small businesses. The annual direct cost of American tort litigation has been estimated at more than $250 billion. According to the Small Business Administration, small businesses account for 66 percent of the new jobs created over the last four decades. These job creators often have fewer resources to dedicate to defending themselves against meritless lawsuits. They face the difficult decision of whether to pay an expensive settlement or lay off employees or freeze hiring in order to fight a frivolous case. This is legalized extortion.

Earlier this year, I introduced the Lawsuit Abuse Reduction Act, or LARA, which would prevent the filing of hundreds of thousands of pages of frivolous legal pleadings in federal court. Attorneys who file these lawsuits should be held accountable for their actions.

LARA ensures that judges impose monetary sanctions on lawyers who file frivolous lawsuits, including the attorney’s fees and costs incurred by the victim of the frivolous lawsuit. It also abolishes the “safe harbor” provision in Rule 11 of the Federal Rules of Civil Procedure that allows an attorney to avoid sanctions by withdrawing their suit within 21 days after a motion for sanctions has been filed.

LARA applies even-handedly to cases brought by individuals as well as by businesses, both big and small. The bill also applies to both plaintiffs and defendants. It seeks to reduce the billions of dollars wasted on frivolous lawsuits every year, which force individuals and businesses to spend thousands of dollars on litigation.

In these challenging economic times, too many Americans are still looking for work. Their search is made all the more difficult by the lawyers who file these frivolous lawsuits. We need to free up our businesses to hire more and invest more. Though it will not stop all lawsuit abuse, LARA encourages attorneys to think twice before filing a frivolous lawsuit.