Bob Goodlatte

Mr. GOODLATTE

Mr. GOODLATTE. Reclaiming my time, if that were the case, then I don't think the President would have unilaterally delayed for 1 year the employer mandate where the vast majority of Americans are. Imagine if this bill had taken effect as originally planned, and all of the employers in America, looking at their insurance policies for their employees, were also having to tell their employees that they could no longer afford to provide insurance or they are going to provide a different plan, or the employee had to pay more money, or the employee was being put into the exchanges, all of those things would be significant, serious problems. But we digress from the importance of this legislation right here, which is something that we can join together, in a bipartisan way, to see that we have justice in our judicial system when people are unfairly sued, unfairly subject to frivolous or fraudulent lawsuits. Madam Speaker, I reserve the balance of my time.

Mr. GOODLATTE. Madam Speaker, I continue to reserve the balance of my time.

Mr. GOODLATTE. Will the gentleman yield?

Mr. GOODLATTE. I would ask the gentleman from Pennsylvania, what other sorts of legal claims should a victim be able to prove in court but be denied damages by the judge?

Mr. GOODLATTE. Well, you are in court. You have got a frivolous lawsuit. The court finds it is a frivolous lawsuit. You prove that you are the victim of that legal claim and you prove it in court, yet you can be denied damages by the judge. What other legal remedy, what other legal claim would the gentleman cite other than frivolous lawsuits where that would be the case? Are there any others?

Mr. GOODLATTE. Mr. Speaker, I yield myself 1 minute, and I would be happy to yield to the gentleman to respond.

Mr. GOODLATTE. Well, I thank the gentleman for his comment. And I would just point out that I practiced law during the time that the mandatory sanctions were in place in Federal court and found that it was a very good environment to do so. I was then elected to Congress and got here and found that, lo and behold, a small panel of judges changed that rule without looking at the evidence of a survey of Federal judges where 751 Federal judges found that an overwhelming majority believed--

Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may consume. 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 percent; the benefits of the rule outweighed any additional requirement of judicial time, 71.9 percent; the stronger version of rule 11 had a positive effect on litigation in the Federal courts, 81 percent; and the rule should be retained in its then current form. What we are attempting to reinstate into the law, 80.4 percent supported retaining the then-current mandatory sanctions under the law. Mr. Speaker, this is about seeking real justice, and the fact of the matter is that, just like a judge could not deny well-founded damages in a lawsuit brought by an individual under a valid legal claim of any other kind, they should not be able to have the discretion to deny any damages when a frivolous lawsuit is proven and the expenses of having to undertake the defense of that frivolous lawsuit are made. And yet time after time after time today, people do not even bother to do it anymore because of the low, low, low record of granting damages in findings of frivolous lawsuits since it was made discretionary, and the mandatory provision should be reinstated in the law. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I will continue to reserve the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I claim the time in opposition to the motion to recommit.

Mr. GOODLATTE. Mr. Speaker, I yield myself the remainder of my time. Mr. Speaker, I am pleased that my friend and colleague from Michigan (Mr. Conyers), the ranking member of the Judiciary Committee, raised the important issue of civil rights. It is absolutely important. And I share his concern that individuals who believe that their civil rights have been infringed in any way have the opportunity to bring actions in Federal court as long as those actions are not frivolous or based upon fraud. In fact, looking back during the time when we had mandatory sanctions from 1983 to 1993, the Federal Judicial Center, in its study, found that the imposition rate of sanctions in civil rights cases was not out of line with that in any other type of case. Now, we have not rested there. When the committee marked up this legislation, the gentleman from Virginia (Mr. Scott) offered a bipartisan amendment which was added to the bill at the very end. I said it was a one-page bill. I am actually slightly mistaken. It is a one-and-a-third-page bill. And the one-third page that was added reads this way: Rule of Construction--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. So this measure is carefully crafted to make sure that we are not harming people's rights to seek legitimate redress of grievances in our courts. What it is designed to do is to eliminate frivolous and fraudulent lawsuits. And from the evidence of the survey of Federal judges who worked for 10 years under the rule that we would instate again with the passage of this legislation, the overwhelming majority of them said they would not change the rule, and it is unfortunate that a small committee chose to move forward to make that change notwithstanding. I would add, too, that those who claim that this is not about the little guy are overlooking the fact that small businesses are affected by frivolous lawsuits all the time. And the National Federation of Independent Business, which bills itself as ``the voice of small business'' and which represents hundreds of thousands of small businesses all across America, endorses this legislation. In fact, they wrote to us and said that 84 percent of National Federation of Independent Business members agree that attorneys should face mandatory sanctions if they bring forth a frivolous lawsuit. The NFIB urges you to support final passage of H.R. 2655 and will consider it an NFIB key vote in the 113th Congress. So in terms of the little guy--both the small business person and the individual--this legislation is designed to protect individuals against frivolous or fraudulent lawsuits. And, as I pointed out in my dialogue with another Member a little while ago, I don't believe anybody can come forward and give me any other example where a legal claim is validly brought in court and the victim is able to prove that wrong was perpetrated and prove that there are damages resulting from that wrong and yet be denied those damages by the judge. I challenge anybody to come forward and show me that. So why, if you have a process that says under rule 11--which it did say at one time and would say again with the passage of this legislation--that you have a right to a process to show and establish that a lawsuit is frivolous, why after you have done that wouldn't it be mandatory that the process take one step further and assess the appropriate amount of damages that would be due and owing that victim of that abusive lawsuit that suffers in all the same ways that other people suffer when they are the victim of abusive actions of other kinds that result in actions being brought in court? So I urge my colleagues to support this legislation, and I yield back the balance of my time.

Mr. GOODLATTE. Madam Speaker, pursuant to House Resolution 403, I call up the bill (H.R. 2655) to amend rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for other purposes, and ask for its immediate consideration.

Mr. GOODLATTE. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous materials on H.R. 2655, currently under consideration.

Mr. GOODLATTE. Madam Speaker, I yield myself such time as I may consume. H.R. 2655, the Lawsuit Abuse Reduction Act, would restore mandatory sanctions for frivolous lawsuits filed in Federal Court. Many Americans may not realize it, but today, under what is called rule 11 of the Federal Rules of Civil Procedure, there is no requirement that those who file frivolous lawsuits pay for the unjustified legal costs they impose on their victims. As a result, the current rule 11 goes largely unenforced. When there is no guarantee of compensation, the victims of frivolous lawsuits have little incentive to spend even more money to pursue additional litigation to have the case declared frivolous. H.R. 2655 would finally provide light at the end of the tunnel for the victims of frivolous lawsuits by requiring sanctions against those who file them, sanctions that include paying their victims the full cost of their reasonable expenses incurred as a direct result of the rule 11 violation, including attorneys' fees. The bill also strikes the current provision in rule 11 that allows lawyers to avoid sanctions by making frivolous claims and demands by simply withdrawing them within 21 days. This change eliminates the ``free pass'' lawyers now have to file frivolous lawsuits in Federal Court. To be clear, under rule 11, a lawsuit is frivolous if it is presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation if it is not warranted by existing law or if the factual contentions have no evidentiary support. In other words, a lawsuit will only be found frivolous if it has no basis in law or fact. Yet the current lack of mandatory sanctions leads to the regular filing of lawsuits that are clearly baseless. For example, in just the last year, a small business owner was sued for violations of Federal regulations in a parking lot that he doesn't own or lease. A woman had her car repossessed and then filed a $5 million Federal lawsuit for the half tank of gas she had left in the car. A high school teacher sued a school district claiming it discriminated against her because she has a phobia--a fear of young children. Her case was dismissed by the Equal Employment Opportunity Commission, but that didn't prevent her from filing a Federal lawsuit. These real yet absurd cases have real-life consequences for their victims who have to shell out thousands of dollars just to respond to frivolous pleadings, endure sleepless nights, and spend time away from their family, work, and customers. Let's not forget that the victims of frivolous lawsuits are real victims. Do any of my colleagues on the other side of the aisle claim that judges should have the discretion to deny damage awards to victims of legal wrongs proved in court? If not, why should judges have the discretion to deny damage awards to victims of frivolous lawsuits who prove in court that the case against them was frivolous? It is difficult to see how a vote against the bill before us today could be interpreted as anything other than a denial that victims of frivolous lawsuits are indeed real victims. But indeed they are real victims, and they deserve to be guaranteed compensation when they prove the claims against them are frivolous in court. Let's also remember that the victims of lawsuit abuse are not just those who are actually sued. Rather, we all suffer under a system in which innocent Americans everywhere live under the constant fear of a potentially bankrupting frivolous lawsuit. As the former chairman of The Home Depot Company has written: An unpredictable legal system casts a shadow over every plan and investment. It is devastating for start-ups. The cost of even one ill-timed abusive lawsuit can bankrupt a growing company and cost hundreds of thousands of jobs. The prevalence of frivolous lawsuits is reflected in the absurd warning labels companies must place on their products to limit their liability. A 5-inch brass fishing lure with three hooks is labeled, ``Harmful if swallowed.'' A vanishing fabric marker with disappearing ink warns it should not be used as a writing instrument for signing checks or any legal documents. A label on a Scooter says, ``Warning: This product moves when used.'' A household iron contains the warning, ``Never iron clothes while they are being worn.'' And a cardboard sun shield that keeps sun off the dashboard warns, ``Do not drive with sun shade up.'' The potential for frivolous lawsuits are behind all these absurd warning labels which, while humorous in their own way, serve as a warning to us about what the world will increasingly look like if we don't make the rules more fair. Today, absurd lawsuits can sometimes bring sanctions against those who filed them; but even when they do, the current rules result in far too little compensation for the victims of the frivolous lawsuit. In his 2011 State of the Union address, President Obama said: I'm willing to look at other ideas to rein in frivolous lawsuits. Well, I hope the President has time to read this one-page bill and lend his support to a proposal that would significantly reduce the burden of frivolous litigation on innocent Americans. I thank the former chairman of the House Judiciary Committee, Congressman Lamar Smith, for introducing this simple, commonsense legislation that would do so much to prevent lawsuit abuse and restore Americans' confidence in the legal system. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Speaker, I rise in opposition to this motion because the base bill makes sanctions for filing frivolous lawsuits in Federal court mandatory. Under rule 11, a lawsuit is frivolous if it is presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation, if it is not warranted by existing law, or if the factual contentions have no evidentiary support. In other words, a lawsuit will only be found frivolous if it has no basis in law or fact. As soon as the judge finds that any claim of any kind is founded in law or fact, then no claim for damages because of a frivolous lawsuit would lie. Who here thinks that lawyers should be able to avoid any penalty when the lawsuit they file is found by a Federal judge to have been simply filed to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation? Or, when the Federal judge finds that the lawsuit is not warranted by existing law or to have no evidentiary support? If you think lawyers should be able to get off scot-free when they file those sorts of frivolous lawsuits, vote for this motion to recommit. If you agree with me that the victims of frivolous lawsuits are real victims and that they have to shell out thousands of dollars, endure sleepless nights, and spend time away from their family, work, and customers just to respond to frivolous pleadings, then you must oppose this motion to recommit. When Business Week wrote an extensive article on what the most effective legal reforms would be, it stated what is needed are ``penalties that sting.'' As Business Week recommended: Give 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, an obscure branch of the courts, made penalties optional. This needs to be reversed . . . by Congress. H.R. 2655, the Lawsuit Abuse Reduction Act, would do just that. The specific language of the motion to recommit means that it literally immunizes from sanctions frivolous civil rights claims. That doesn't further civil rights; that sets them back, because the only claims that sanctions could be issued on would be claims for which there is no basis in law or fact. That does not advance the cause. I would add that the language in the motion to recommit adds, ``shall not apply in the case of any action brought under, one, civil rights laws, and two, the Constitution.'' That second provision, the Constitution, means that the motion to recommit covers every single lawsuit brought in any United States court in the land and any Federal court, and so it goes well beyond what is the stated intent of the motion to recommit. A better way to look at this is to look at what the Federal Judicial Center found in its study when it looked at the imposition of the mandatory sanctions under rule 11 that existed from 1983 to 1993. It found that the imposition rate of sanctions in civil rights cases was not out of line with that in any other type of cases. Furthermore, when this bill was drafted for this Congress--a very narrowly drafted bill, just 1\1/3\ pages long--we added a rule of construction for specific protection for valid, legitimate civil rights lawsuits that are based in law or fact. It says in the rule of construction, as I said earlier: 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. That is the proper way to protect civil rights litigation. Meritorious civil litigation founded in law or in fact. That indeed is what the legislation does, and that is why the House should reject the motion to recommit and pass the Lawsuit Abuse Reduction Act. I yield back the balance of my time.

Mr. GOODLATTE. Madam Speaker, at this time, it is my pleasure to yield 5 minutes to the gentleman from Arizona (Mr. Franks), the chairman of the Subcommittee on the Constitution and Civil Justice.

Mr. GOODLATTE. Madam Speaker, it is my pleasure to yield 5 minutes to the gentleman from Texas (Mr. Smith), the former chairman of the House Judiciary Committee and the chief sponsor of this legislation.

Mr. GOODLATTE

Mr. GOODLATTE. Mr. Chairman, I continue to reserve the balance of my time.

Mr. GOODLATTE. The minority had the opportunity to have an asbestos victim testify if they wished to do so and chose instead to have a plaintiff's attorney who had already testified in a previous hearing do so. I reserve the balance of my time.

Mr. GOODLATTE. Mr. Chairman, I have the time.

Mr. GOODLATTE. In reclaiming my time, that is not accurate. The claimants were offered a process by which they could come and speak to the members of the committee.

Mr. GOODLATTE. I yield to the gentleman from Tennessee.

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume to respond to the mischaracterization of the process followed in the Judiciary Committee. The FACT Act and the problems it addresses have been the subject of three separate hearings: one before the Judiciary Subcommittee on the Constitution on September 9, 2011, on the issue generally, and two legislative hearings before the Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law--one during the 112th Congress and another this year on March 13. The minority used these opportunities to call witnesses who were representatives from the asbestos plaintiffs' trial bar to voice their concerns with the bill. In fact, the minority called the same witness for two out of the three hearings. Now they claim that asbestos victims were never provided an opportunity to testify. The Judiciary Committee provided ample opportunities to include asbestos victims' views on the legislation on the record, and there are many letters and statements from asbestos victims in the record as a result. Additionally, the committee offered a special procedure to asbestos victims in order to provide an occasion for the victims to personally inform Members and staff of their views, which they refused. It has become necessary to act with expediency and move this important legislation forward. Each day that passes is a day on which fraudulent claims can be prosecuted against the asbestos trusts, thereby reducing the recovery to legitimate asbestos victims. This legislation will benefit victims by reducing fraudulent claims and by ensuring that asbestos trusts provide the maximum recovery to future asbestos claimants.

Mr. GOODLATTE. Mr. Chairman, at this time, I yield 2 minutes to the gentleman from Texas (Mr. Farenthold).

Mr. GOODLATTE. Mr. Chairman, I yield myself such time as I may consume to respond to the mischaracterization of this legislation as it is somehow imposing burdens on the victims of asbestos. In fact, it is quite the opposite. First of all, the information disclosed under the FACT Act is very basic and is less information than would be disclosed during the normal course of a State court lawsuit, in which many asbestos bankruptcy claimants pursue simultaneous claims, but they don't tell the bankruptcy courts about that, so these trusts need to tell them that. Secondly, the FACT Act includes strong privacy protections, including prohibiting the disclosure of confidential medical records and full Social Security numbers. To be clear, the FACT Act does not require asbestos trusts to require or to disclose asbestos victims' Social Security numbers. The FACT Act also leverages existing privacy protections in the Bankruptcy Code to give the presiding bankruptcy judge broad discretion to prevent the disclosure of information that would result in identity theft or in any other unlawful activity. Indeed, a judge with 29 years of bench experience testified before the Judiciary Committee that the FACT Act provides more protection in terms of the confidentiality of asbestos claimants' records than the legal system is able to do. By requiring the disclosure of basic information regarding claims submitted to the asbestos trusts, the FACT Act will facilitate a reduction in fraud that will allow future asbestos victims to maximize their recovery, but they will not be able to do that if we continue to have money taken from these trusts for duplicative claims, fraudulent claims, and claims without merit. I reserve the balance of my time.