House Passes Tort Reform Measures
March 13, 2017 •
On March 9, the U.S. House of Representatives voted 224-194 to pass a tort reform bill, H.R. 725, the Innocent Party Protection Act. The measure takes aim at plaintiffs’ attorneys seeking to include unrelated in-state defendants in lawsuits to keep the cases in what bill supporters say are more plaintiff-friendly state courts.
The measure would permit federal courts to dismiss claims against defendants who have been “fraudulently joined” and to keep the remaining disputes in federal court.
H.R. 725 would make it easier for defense lawyers to move cases from state to federal courts if there isn’t a “plausible” claim against an in-state defendant. Current rules allow such cases to remain in state court without the option for removal to federal court if there is merely a “possibility” of a legitimate claim against the in-state defendant proceeding to recovery – this low threshold typically is met, thus foreclosing the out-of-state defendants from exercising the option.
Under the bill, removal to federal court would be prevented only when the plaintiff has a plausible, rather than merely possible claim against an in-state defendant; or if the plaintiff doesn’t demonstrate a good faith intention to seek a judgment against the joined party.
Courts could allow legal documents to be amended, and could consider pleadings, affidavits and other materials when a plaintiff attempts to move the case back to state court.
Also on March 9, the House passed H.R. 985, the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, by a 211-188 vote.
H.R. 985 would make sweeping changes to class action procedures, including requiring that all class members suffer the “same type and scope of injury”; mandating the disclosure of relationships between class counsel and class representatives; and stipulating that all class members be ascertainable as a prerequisite for class certification.
At this writing, neither bill had companion bills in the Senate, where passage will likely be less swift.
Contact ACA’s Tom Graves for more information.