Congressional Meddling in Civil Justice is Misguided and Dangerous

16 March 2017

Nora Freeman Engstrom is a Professor of Law and the Associate Dean for Curriculum at Stanford Law School, where she writes and teaches about civil procedure, tort law, and legal ethics.

This article initially appeared in the Stanford Law School Legal Aggregate.

All eyes are on health care. We’re watching Congress take a hammer to the Affordable Care Act and threaten 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. It’s the civil justice system. And the threats it currently faces are serious.

At this moment, numerous bills that alter the civil justice system are speeding through the House of Representatives. Each bill 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 whether the laws on the books are adequately enforced or, instead, whether 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 get complicated. But, I’ll nevertheless explain one of the many bills now under consideration, to give you a sense of what’s at stake.

A measure that seems particularly likely to become law is called the Lawsuit Abuse Reduction Act, or LARA for short. This measure, which passed the House on Friday over the ABA’s strong objection, targets Federal Rule of Civil Procedure 11.

As lawyers well know, Rule 11 governs our court 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 and forces judges to mete out sanctions in particular instances (whereas now, the provision of sanctions rests within judges’ sound discretion). 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.

Back 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 worse 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, in fact, they generated mountains of wasteful satellite litigation. In less than ten years the Rule generated nearly 7000 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 over 3000 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, in fact, 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 generally, as Judge Jack Weinstein put it, “infuse[d] our court proceedings with a spirit of meanness and intolerance.”

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 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 that nearly all agree, failed spectacularly. Worse, it does so despite clear evidence that federal judges—the experts who oversee our civil justice system on a day-to-day basis—are quite satisfied with how things currently work. Specifically, in 2005, the Federal Judicial Center surveyed federal judges and found that the vast majority of them opposed returning to the 1983 version of the Rule. Furthermore, a full 85 percent of federal judges reported that groundless litigation—the very problem that LARA purports to address—was, in their experience, a small problem, a very small problem, or no problem at all.

In sum, when it comes to the civil justice system, as in the healthcare system, big changes are afoot. In both contexts, in their zeal to act, politicians are meddling in critically important, extremely delicate, and immensely complicated areas. In so doing, they are misdiagnosing certain problems. They are prescribing bizarre and sometimes discredited cures. And, they are risking enormous, unnecessary harm.