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Important Federal Bill Would Reduce Impacts of Frivolous Lawsuits on Job Creators

| Tort Reform & Legal Climate

Last week, a bill was introduced in the U.S. House and Senate that would reduce the harmful impacts of frivolous lawsuits on America’s job creators. The Lawsuit Abuse Reduction Act of 2017 would amend Rule 11 of the Federal Rules of Civil Procedure to make it mandatory – rather than a matter of judicial discretion – for courts to impose sanctions on parties that attempt to introduce frivolous claims. By ensuring that parties who introduce frivolous lawsuits are appropriately penalized for this intentional abuse of our federal judiciary, employers and others who often find themselves the unfair targets of such extortion will be able to breathe a little easier with the passage of this important legislation.

Rep. Bob Goodlatte, chairman of the House Judiciary Committee, elaborated on the impact of the Lawsuit Abuse Reduction Act after that committee approved the bill on a 17-6 vote last Thursday: “The current lack of mandatory sanctions leads to the regular filing of lawsuits that are baseless,” stated Rep. Goodlatte. “So many frivolous pleadings currently go under the radar because the lack of mandatory sanctions for frivolous filings forces victims of frivolous lawsuits to roll over and settle…because doing that is less expensive than litigating the case to a victory in the court.”

The Lawsuit Abuse Reduction Act of 2017 is similar to a number of bills that have been introduced in recent legislative sessions. As such, it reflects the long-standing efforts of the business community and other pro-growth allies who have been fighting to alleviate the harmful, growth-killing impacts of frivolous lawsuits. The NC Chamber is encouraged by the introduction of this important bill, and we remain hopeful that the 115th Congress and the new administration will be successful in strengthening this component of our nation’s legal climate. We will keep you updated as this issue continues to advance in 2017.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber