Small Business Urges Mandatory Penalties for Frivolous Lawsuits

Date: March 17, 2015
For Immediate Release
Contact: Kelly Klass 609-713-4243
[email protected]
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Small Business Urges Mandatory Penalties for Frivolous Lawsuits

NFIB told
the House Judiciary Committee members today that there should be consequences
for waging baseless lawsuits

Washington, D.C.,
March 17, 2015
NFIB Small Business Legal Center Senior Counsel
Elizabeth Milito
told a key House subcommittee today that lawyers and their
clients who drag small business owners into court over frivolous or outrageous
claims should face mandatory penalties.

“For small-business
owners, even the threat of a lawsuit can mean significant time away from their
business; time that could be better spent growing their enterprise and
employing more people,” Elizabeth Milito said. “Three-quarters of all small business owners in America are concerned that
they might be the target of a frivolous or unfair lawsuit.”

Today the House Committee on the Judiciary’s
Subcommittee on the Constitution and Civil Justice heard testimony on the
“Lawsuit Abuse Reduction Act of 2015,” which is intended to improve the
accountability of civil claims made in federal court.   Rule 11 of the Federal Rules of Civil
Procedures governs sanctions in Federal Court. The Lawsuit Abuse Reduction Act
of 2015 would amend this rule making sanctions mandatory when an attorney or
other party files a lawsuit before making a reasonable inquiry into the claim.

“Frivolous lawsuits hurt small business owners, new
business formation, and job creation,” Milito continued. “The cost of lawsuits
for small businesses can prove disastrous, if not fatal, and threaten the
growth of our nation’s economy.  Congress
can help make our judicial system more just for small-business owners by
passing the Lawsuit Abuse Reduction Act of 2015.”

*** Beth Milito is available for comment

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