As I write this, on May 5, 2017, all eyes are on health care. Yesterday afternoon, while millions watched, the House of Representations voted 217 to 213 to repeal the Affordable Care Act. With this vote, Congress threatens to wreak havoc on a $3 trillion-a-year industry, on which all of us rely. Concern about this congressional action is roiling op-ed pages, spilling out into town hall meetings, and even resulting in pro-Obamacare TV spots, airing across the United States.
Yet, just out of view, Congress is hard at work dismantling another system—a system that is arguably just as vital to our economy and just as critical to our collective well being.
At this moment, numerous bills that alter the civil justice system have already passed the House of Representatives. Though they were passed in lopsided votes and without the fanfare that attended the House’s passage of the American Health Care Act of 2017, each of these bills demands our attention. That’s because each would, in its own way, upend time-honored procedures for where cases are brought, how they are litigated, and whether plaintiffs get a fair shot or, instead, face a stacked deck. That, in turn, will determine if the laws on the books are adequately enforced or, instead, if corporations, governmental actors, and others can violate our laws—whether involving the environment, civil rights, product safety, consumer protections, or just about anything else—with impunity.
Like health care debates, the particulars of civil justice reform can quickly get complicated. But, I’ll nevertheless explain one of the many bills at issue, to give you a sense of what’s at stake.
A bill I worry is particularly likely to become law is the Lawsuit Abuse Reduction Act (H.R. 70, S. 237), or LARA for short. This measure, which sailed through the House on January 30, 2017, over the ABA’s strong objection, targets Federal Rule of Civil Procedure 11.
As many readers of Stanford Lawyer no doubt know, Rule 11 governs our civil justice system and authorizes federal judges to impose sanctions on those who make “frivolous” filings. Essentially, the rule gives judges a cudgel; using the rule, judges can mete out appropriate penalties if they feel lawyers or litigants are behaving badly.
So, what does LARA do? At its core, LARA beefs up Rule 11. Under the current version of the rule, the decision whether to impose sanctions rests within judges’ sound discretion. Eliminating this discretion, LARA forces judges to mete out sanctions in particular instances. It also abolishes the current rule’s “safe-harbor” provision that gives litigants threatened with Rule 11 sanctions time to reconsider
and withdraw a contested filing. In so doing, LARA ties judges’ hands and returns us to a version of Rule 11 that was in place from 1983 to 1993.
Because LARA turns back the clock, to really understand the bill, we have got to go back in time.
In 1983, the Rules Committee—the government body officially charged with revising the Federal Rules of Civil Procedure—amended Rule 11 and toughened it in various ways. By upping penalties and expanding when penalties could be imposed, the Rules Committee sought to cut down on abusive litigation.
Yet, after this change went into effect, it quickly became apparent that the effort was backfiring. The amended Rule 11 wasn’t actually improving the civil justice system and, in fact, was making matters worse—so much so that one scholar has called the 1983 amendments “one of the most ill-advised procedural experiments ever tried.” Of various problems, four stand out.
First, though the 1983 amendments were supposed to cut down on needless filings, they in fact generated mountains of wasteful satellite litigation. In less than 10 years the rule generated nearly 7,000 reported sanctions decisions.
Second, though the 1983 amendments sought to curb only “frivolous” litigation, there’s evidence that they actually chilled even meritorious suits and dampened counsels’ creativity. Relevant here, a survey of more than 3,000 federal litigators found that over one in five plaintiffs’ lawyers reported that fear of Rule 11 liability caused them to withhold asserting a particular claim or defense that they thought had merit.
Third, reformers didn’t predict that the 1983 amendments would affect relations between counsel. But, contrary to expectations, it is widely believed that they did so—and not for the better. In surveys, judges and counsel complained that the amended rule damaged relationships between lawyers and, as Judge Jack Weinstein put it, “infuse[d] our court proceedings with a spirit of meanness and intolerance.” Nor was this bad blood necessarily limited to lawyers. In the words of Professor Steve Burbank [Penn Law]:
The 1983 version of Rule 11 “poisoned the federal courts, turning lawyers against lawyers, lawyers against clients, and federal judges against both.”
Fourth and finally, back when Rule 11 was initially amended, there was a sense that the reform would be symmetric. Reformers did not predict that one side of the “v” would be affected any more or any differently than the other side of the “v.” But again, experience proved otherwise. In fact, studies showed that plaintiffs were more often the target of sanctions motions than their defense-side counterparts, and judges imposed sanctions on plaintiffs at unusually high rates.
Things were so bad that, in 1993, the Rules Committee re-revised Rule 11, to soften many of its harsh edges.
Thus, what LARA does is essentially exhume the 1983 version of Rule 11—an idea that was long ago tried, exhaustively studied, and, nearly all agree, failed spectacularly. Worse, it does so despite the fact that there’s no reliable evidence indicating there’s any problem to solve. There’s absolutely no reliable data showing that frivolous litigation is a big problem plaguing our federal courts. To the contrary, there is data, published in 2005 by the Federal Judicial Center, showing that federal judges—the neutral experts who oversee our civil justice system on a day-to-day basis—overwhelmingly think groundless litigation is a small or very small problem. The same Federal Judicial Center survey reports that federal judges are also, by lopsided margins, opposed to any LARA-like “fix.”
In sum, in the civil justice system, as in our health care system, big changes are afoot, in immensely complicated and critically important areas. In both contexts, I’d advise that politicians stick to the old adage of “First, do no harm.” They ought not meddle in either system in the absence of compelling evidence indicating there’s a problem to be solved. And, if they are going to meddle, politicians absolutely should not prescribe outdated and long-discredited cures.