Smith and Grassley Author Bill to Combat Wasteful Lawsuits

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Litigation would punish frivolous lawsuits, protect jobs

Congressman Lamar Smith (R-TX) and Senator Chuck Grassley (R-IA), have authored legislation aimed at “Restoring Sanity to [the] Legal System,” according to their op-ed in Politico this week. In particular, the Lawsuit Abuse Reduction Act, introduced this week, targets lawsuit abuse which results in undue settlements and hurts private employers.

As Smith and Grassley note, frivolous lawsuits have become commonplace in America, citing examples such as a suit against Doritos potato chips for posing health hazards. Reluctantly, “companies are faced with the choice of years of litigation, high court costs and attorney’s fees- or a settlement.”

This forces defendants to essentially pay off the plaintiffs, as litigation costs frequently outweigh settlement costs. This means more than just a waste of time for businesses and companies which are sued under flimsy pretenses. These costs take money away from small businesses and employers and can cost jobs.

Under the Lawsuit Abuse Reduction Act, if a court determines that a suit fails to meet the basic standard of being “based on facts and reasonable interpretations of the law,” then the plaintiff’s attorney is either sanctioned or ordered to repay the defendant. Such penalties are disincentive for attorneys who attempt to earn profit by “extorting” businesses and individuals under our tort system.

What does this mean for Louisiana? According to the reform group Louisiana Lawsuit Abuse Watch, Louisiana harbors the second worst legal climate in the nation. This is further evidenced by a recent study which finds that lawsuits against Louisiana municipalities cost over $52 million annually.

All states, particularly Louisiana, would benefit from measures that restore integrity and discipline to our courts. The current setup rewards the few who know how to work the system of the well-being and prosperity of many more. The Lawsuit Abuse Reduction Act may be one step towards remedying a wasteful system.

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