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Carter Continues to Fight for the Small Businessman

10/27/05

Washington, Oct 27, 2005 -

 
 

Washington, D.C. – Today U.S. Representatives John R. Carter (TX-31), and his colleagues continued to fight for the small businessman by passing H.R. 420, the Lawsuit Abuse Reduction Act of 2005.

            “As a state district Judge for over 20 years in Texas, I have presided over my fair share of frivolous lawsuits.  I have also seen first hand the effects they have on small businesses,” said Carter. “The current tort system is costing Americans well over $200 billion per year.”

            Small businesses rank the cost and availability of liability insurance as second only to the costs of health care as their top priority, and both problems are fueled by frivolous lawsuits. Carter said, “The small businessmen and women are the back bone of America – they shouldn’t have to go to work everyday with the fear they may be sued for what they were hired to do. Let’s put an end to the frivolous lawsuits that are ruining American Dreams. Let the small businessman conduct business without fear.”

Highlights of H.R. 420, the Lawsuit Abuse Reduction Act of 2005:

  • The Lawsuit Abuse Reduction Act of 2005 provides for appropriate sanctions against frivolous lawsuits. Specifically, the bill:

o       Restores mandatory sanctions on attorneys, law firms, or parties who file frivolous lawsuits;

o Abolishes the “free pass” provision that allows parties and their attorneys to avoid sanctions by withdrawing a suit within 21 days after a motion for sanctions has been filed;

o Permits monetary sanctions, including reimbursement of reasonable attorney’s fees and litigation costs in connection with frivolous lawsuits;

o Extends Rule 11’s provisions preventing frivolous lawsuits to apply to state cases in which a state judge finds the case substantially affects interstate commerce by threatening jobs and economic losses to other states; and

  • The bill also provides a national solution to prevent forum shopping by requiring personal injury cases only be brought only where the plaintiff resides, where the plaintiff was allegedly injured, where the circumstances of the injury occurred, or where the defendant’s principal place of business is located.