To amend Rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for other purposes.

Summary: Lawsuit Abuse Reduction Act of 2005 - (Sec. 2) Amends Rule 11 of the Federal Rules of Civil Procedure (Signing of Pleadings, Motions, and Other Papers; Representations to Court; Sanctions) to: (1) require courts to impose sanctions on attorneys, law firms, or parties who file frivolous lawsuits (currently, discretionary); (2) disallow the withdrawal or correction of pleadings to avoid Rule 11 sanctions; (3) require courts to award parties prevailing on Rule 11 motions reasonable expenses and attorney's fees, if warranted; and (4) authorize courts to impose Rule 11 sanctions that include reimbursement of a party's reasonable litigation costs in connection with frivolous lawsuits.

(Sec. 3) Makes Rule 11 applicable to state civil actions where the state court determines, upon motion, that an action substantially affects interstate commerce.

(Sec. 4) Requires personal injury claims (defined to exclude class actions and personal injury claims brought against a debtor in bankruptcy proceedings) filed in state or federal court to be filed in the county or federal district in which: (1) the person bringing the claim resides at the time of filing or resided at the time of the alleged injury; (2) the alleged injury or circumstances giving rise to the Claim occurred; (3) the defendant's principal place of business is located; or (4) the defendant resides, if the defendant is an individual. Directs the trial court to determine which county or federal district is the most appropriate forum in those situations where the alleged injury occurred in more than one county or district.

(Sec. 6) Requires a federal district court to suspend from the practice of law for one year (or for an additional period at the court's discretion) an attorney who is found to have violated Rule 11 three or more times. Grants such attorney a right to appeal a suspension and permits reinstatement after suspension under procedures and conditions prescribed by the court.

(Sec. 7) Establishes a rebuttable presumption that an attempt to litigate, in any forum, a claim or defense involving the same plaintiff and defendant that has been litigated and lost on three consecutive prior occasions is a Rule 11 violation.

(Sec. 8) Imposes additional sanctions for the willful and intentional destruction of documents sought pursuant to the rules of, and highly relevant to, a federal court proceeding.

(Sec. 9) Requires public disclosure of the record of a Rule 11 proceeding unless the presiding judge determines that the interest justifying nondisclosure of the record outweighs any public health and safety interests served by disclosure. Exempts from disclosure records subject to the attorney-client or other recognized privilege, or state or federal laws that protect the confidentiality of crime victims, including victims of sexual abuse.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Lawsuit Abuse Reduction Act of 
2005''.

SEC. 2. ATTORNEY ACCOUNTABILITY.

    Rule 11(c) of the Federal Rules of Civil Procedure is amended--
            (1) by amending the first sentence to read as follows: ``If 
        a pleading, motion, or other paper is signed in violation of 
        this rule, the court, upon motion or upon its own initiative, 
        shall impose upon the attorney, law firm, or parties that have 
        violated this subdivision or are responsible for the violation, 
        an appropriate sanction, which may include an order to pay the 
        other party or parties for the reasonable expenses incurred as 
        a direct result of the filing of the pleading, motion, or other 
        paper, that is the subject of the violation, including a 
        reasonable attorney's fee.'';
            (2) in paragraph (1)(A)--
                    (A) by striking ``Rule 5'' and all that follows 
                through ``corrected.'' and inserting ``Rule 5.''; and
                    (B) by striking ``the court may award'' and 
                inserting ``the court shall award''; and
            (3) in paragraph (2), by striking ``shall be limited to 
        what is sufficient'' and all that follows through the end of 
        the paragraph (including subparagraphs (A) and (B)) and 
        inserting ``shall be sufficient to deter repetition of such 
        conduct or comparable conduct by others similarly situated, and 
        to compensate the parties that were injured by such conduct. 
        The sanction may consist of an order to pay to the party or 
        parties the amount of the reasonable expenses incurred as a 
        direct result of the filing of the pleading, motion, or other 
        paper that is the subject of the violation, including a 
        reasonable attorney's fee.''.

SEC. 3. APPLICABILITY OF RULE 11 TO STATE CASES AFFECTING INTERSTATE 
              COMMERCE.

    In any civil action in State court, the court, upon motion, shall 
determine within 30 days after the filing of such motion whether the 
action substantially affects interstate commerce. Such court shall make 
such determination based on an assessment of the costs to the 
interstate economy, including the loss of jobs, were the relief 
requested granted. If the court determines such action substantially 
affects interstate commerce, the provisions of Rule 11 of the Federal 
Rules of Civil Procedure shall apply to such action.

SEC. 4. PREVENTION OF FORUM-SHOPPING.

    (a) In General.--Subject to subsection (b), a personal injury claim 
filed in State or Federal court may be filed only in the State and, 
within that State, in the county (or if there is no State court in the 
county, the nearest county where a court of general jurisdiction is 
located) or Federal district in which--
            (1) the person bringing the claim, including an estate in 
        the case of a decedent and a parent or guardian in the case of 
        a minor or incompetent--
                    (A) resides at the time of filing; or
                    (B) resided at the time of the alleged injury;
            (2) the alleged injury or circumstances giving rise to the 
        personal injury claim allegedly occurred;
            (3) the defendant's principal place of business is located, 
        if the defendant is a corporation; or
            (4) the defendant resides, if the defendant is an 
        individual.
    (b) Determination of Most Appropriate Forum.--If a person alleges 
that the injury or circumstances giving rise to the personal injury 
claim occurred in more than one county (or Federal district), the trial 
court shall determine which State and county (or Federal district) is 
the most appropriate forum for the claim. If the court determines that 
another forum would be the most appropriate forum for a claim, the 
court shall dismiss the claim. Any otherwise applicable statute of 
limitations shall be tolled beginning on the date the claim was filed 
and ending on the date the claim is dismissed under this subsection.
    (c) Definitions.--In this section:
            (1) The term ``personal injury claim''--
                    (A) means a civil action brought under State law by 
                any person to recover for a person's personal injury, 
                illness, disease, death, mental or emotional injury, 
                risk of disease, or other injury, or the costs of 
                medical monitoring or surveillance (to the extent such 
                claims are recognized under State law), including any 
                derivative action brought on behalf of any person on 
                whose injury or risk of injury the action is based by 
                any representative party, including a spouse, parent, 
                child, or other relative of such person, a guardian, or 
                an estate;
                    (B) does not include a claim brought as a class 
                action; and
                    (C) does not include a claim against a debtor in a 
                case pending under title 11 of the United States Code 
                that is a personal injury tort or wrongful death claim 
                within the meaning of section 157(b)(5) of title 28, 
                United States Code.
            (2) The term ``person'' means any individual, corporation, 
        company, association, firm, partnership, society, joint stock 
        company, or any other entity, but not any governmental entity.
            (3) The term ``State'' includes the District of Columbia, 
        the Commonwealth of Puerto Rico, the United States Virgin 
        Islands, Guam, and any other territory or possession of the 
        United States.
    (d) Applicability.--This section applies to any personal injury 
claim filed in Federal or State court on or after the date of the 
enactment of this Act.

SEC. 5. RULE OF CONSTRUCTION.

    Nothing in section 3 or in the amendments made by section 2 shall 
be construed to bar or impede the assertion or development of new 
claims or remedies under Federal, State, or local civil rights law.

SEC. 6. THREE-STRIKES RULE FOR SUSPENDING ATTORNEYS WHO COMMIT MULTIPLE 
              RULE 11 VIOLATIONS.

    (a) Mandatory Suspension.--Whenever a Federal district court 
determines that an attorney has violated Rule 11 of the Federal Rules 
of Civil Procedure, the court shall determine the number of times that 
the attorney has violated that rule in that Federal district court 
during that attorney's career. If the court determines that the number 
is 3 or more, the Federal district court--
            (1) shall suspend that attorney from the practice of law in 
        that Federal district court for 1 year; and
            (2) may suspend that attorney from the practice of law in 
        that Federal district court for any additional period that the 
        court considers appropriate.
    (b) Appeal; Stay.--An attorney has the right to appeal a suspension 
under subsection (a). While such an appeal is pending, the suspension 
shall be stayed.
    (c) Reinstatement.--To be reinstated to the practice of law in a 
Federal district court after completion of a suspension under 
subsection (a), the attorney must first petition the court for 
reinstatement under such procedures and conditions as the court may 
prescribe.

SEC. 7. PRESUMPTION OF RULE 11 VIOLATION FOR REPEATEDLY RELITIGATING 
              SAME ISSUE.

    Whenever a party presents to a Federal court a pleading, written 
motion, or other paper, that includes a claim or defense that the party 
has already litigated and lost on the merits in any forum in final 
decisions not subject to appeal on 3 consecutive occasions, and the 
claim or defense involves the same plaintiff and the same defendant, 
there shall be a rebuttable presumption that the presentation of such 
paper is in violation of Rule 11 of the Federal Rules of Civil 
Procedure.

SEC. 8. ENHANCED SANCTIONS FOR DOCUMENT DESTRUCTION IN PENDING FEDERAL 
              COURT PROCEEDINGS.

    Whoever willfully and intentionally influences, obstructs, or 
impedes, or attempts to influence, or obstruct, or impede, a pending 
Federal court proceeding through the willful and intentional 
destruction of documents sought pursuant to the rules of such Federal 
court proceeding and highly relevant to that proceeding--
            (1) shall be punished with mandatory civil sanctions of a 
        degree commensurate with the civil sanctions available under 
        Rule 11 of the Federal Rules of Civil Procedure, in addition to 
        any other civil sanctions that otherwise apply; and
            (2) shall be held in contempt of court and, if an attorney, 
        referred to one or more appropriate State bar associations for 
        disciplinary proceedings.

SEC. 9. BAN ON CONCEALMENT OF UNLAWFUL CONDUCT.

    (a) In General.--In any Rule 11 of the Federal Rules of Civil 
Procedure proceeding, a court may not order that a court record not be 
disclosed unless the court makes a finding of fact that identifies the 
interest that justifies the order and determines that that interest 
outweighs any interest in the public health and safety that the court 
determines would be served by disclosing the court record.
    (b) Applicability.--This section applies to any record formally 
filed with the court, but shall not include any records subject to--
            (1) the attorney-client privilege or any other privilege 
        recognized under Federal or State law that grants the right to 
        prevent disclosure of certain information unless the privilege 
        has been waived; or
            (2) applicable State or Federal laws that protect the 
        confidentiality of crime victims, including victims of sexual 
        abuse.

            Passed the House of Representatives October 27, 2005.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.