September 09, 2004

On a party-line 18-10 vote, the House Judiciary Committee gave its approval to Rep. Lamar Smith's bill reviving serious sanctions against frivolous litigation (see Aug. 17, Jun. 21); strong Rule 11 sanctions were in effect between 1983 and 1993 in federal courts but were then gutted after a determined campaign by the litigation lobby. Some Democrats said they were sympathetic to sanctions but objected to another provision of the bill curbing forum-shopping. (Reuters; Business Insurance).

Elsewhere on Capitol Hill, Reuters also reports, Federal Reserve Chairman Alan Greenspan commented on the tort issue, which we don't remember his having done in the past. Greenspan "said in response to Republican questioning that excessive lawsuits were like a tax on business activity. 'It has the economic impact which is similar to a tax,' Greenspan said in the House Banking Committee when asked by Pennsylvania's Rep. Pat Toomey whether tort claims 'beyond what is appropriate and necessary' could be described as a tax."