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house Bill H.R. 725

Should it be Easier for Federal Courts to Deal With Misdirected Lawsuits?

Argument in favor

Federal judges should have more discretion in determining whether a defendant in a lawsuit has been fraudulently added to the suit in order to get a case remanded back to a state court. If the plaintiff doesn’t have a good-faith intent to seek a judgement against the defendant or there’s no plausible liability, the defendant should be released from the case.

DeanLA's Opinion
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03/09/2017
“When our small businesses are tied up in fraudulent lawsuits, their ability to create jobs and grow the economy is significantly reduced. The Innocent Party Protection Act guards the integrity of our judicial system by protecting small businesses from these bad-faith lawsuits.” I agree. The key words here are "small businesses." Liberals misrepresent this bill to be favoring their hated "corporations." President Trump and Congress are trying to help small businesses and grow our capitalist economy.
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Gigimitch's Opinion
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03/09/2017
The idea of throwing everything and everyone but the kitchen sink into a lawsuit is idiotic and a pathetic recourse used by people who do not have a solid or legitimate case. This should stop.
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Claude's Opinion
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03/08/2017
My first read of this bill lead me not to support it, but it is clear to me after a more careful read that I support this bill. The tactic of adding individuals to class action suits leads me support passing this bill. Yes it can be miss used to keep a case in state court but it makes since not to drag innocent individuals into lawsuit.
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Argument opposed

This legislation would make it easier for wealthy, corporate defendants to avoid being held liable for their wrongdoing by making litigation more time consuming and expensive. Federal courts shouldn’t be put in the position of deciding matters of state law and unnecessarily burdening plaintiffs to the point where future plaintiffs may not file suit.

Judith's Opinion
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03/09/2017
I'm sure this one will pass too down the wealthy Red line. The wealthy need a big dose of empathy in this country. All they know is greed and selfishness and making the rest of the country into a slave class.
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Aaron's Opinion
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03/09/2017
Stupid unnecessary change to help big corps get out of lawsuits . Vote no!
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Tracy's Opinion
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03/06/2017
This law is unnecessary and too vaguely worded. The law dealing with fraudulent joinder is perfectly fine and does not need to be changed. Having argued this issue for both plaintiffs and defendants, it is clear to me that the law that currently exists does not need to be altered in any way.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on the Judiciary
  • The house Passed March 10th, 2017
    Roll Call Vote 224 Yea / 194 Nay
      house Committees
      Committee on the Judiciary
      Constitution, Civil Rights and Civil Liberties
    IntroducedJanuary 30th, 2017

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What is House Bill H.R. 725?

This bill would change the process federal courts use to determine whether a case should be removed from a state court to a federal court because the parties to the suit are citizens of different states. It aims to make it easier for federal judges to release local defendants from a lawsuit that they’ve been added to through “fraudulent joinder” if it’s not plausible to conclude that state law would’ve held them liable or if the plaintiff doesn’t have a good-faith intention to seek a judgement against the defendant. Fraudulent joinder refers to the improper addition of defendants to a lawsuit in order to keep the case in state courts that may be more friendly to the plaintiffs claims.

The addition of a defendant would be classified as fraudulent joinder if the court finds that:

  • Actual fraud in the pleading of jurisdictional facts with respect to the defendant;

  • State law wouldn’t plausibly hold the defendant liable;

  • State or federal law bars all claims in the complaint against that defendant;

  • No good faith intention to prosecute the action against that defendant or to seek a joint judgment which includes that defendant.

In determining whether to grant or deny the motion to remand the case back to state court, the federal court may allow pleadings to be amended and must consider the pleadings, affidavits, and other evidence submitted by the parties to the case. A federal court finding that defendants have been fraudulently joined to the case must dismiss without prejudice claims against those defendants and deny the motion to remand.

Impact

Plaintiffs in lawsuits and defendants who have been fraudulently added to a lawsuit; state courts; and federal courts.

Cost of House Bill H.R. 725

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Ken Buck (R-CO) introduced this bill to protect innocent small businesses from being fraudulently added to a lawsuit by trial lawyers as a tactic to get a lawsuit sent back to a state court that may be more receptive to the plaintiff’s claims than the federal court its assigned to:

“When our small businesses are tied up in fraudulent lawsuits, their ability to create jobs and grow the economy is significantly reduced. The Innocent Party Protection Act guards the integrity of our judicial system by protecting small businesses from these bad-faith lawsuits.”

The Democrats on the House Judiciary Committee filed a joint dissent to this legislation in the bill’s committee report, which read in part:

“[This bill] is a blatant attempt to tilt the playing field in favor of corporate wrongdoers by making it far more burdensome, expensive, and time-consuming for injured people to obtain justice from such wrongdoers… These new requirements will create tremendous uncertainty and add unnecessary complexity into the remand process. They will also increase the length and cost of litigation, delaying adjudication of potentially meritorious claims and burdening plaintiffs to the point where future plaintiffs may even be dissuaded from filing suit.”

This legislation has the support of five Republican cosponsors and passed the House Judiciary Committee on a vote of 17-4.


Media:

Summary by Eric Revell

(Photo Credit: Jeff Kubina / Creative Commons)

AKA

Innocent Party Protection Act

Official Title

To amend title 28, United States Code, to prevent fraudulent joinder.

    “When our small businesses are tied up in fraudulent lawsuits, their ability to create jobs and grow the economy is significantly reduced. The Innocent Party Protection Act guards the integrity of our judicial system by protecting small businesses from these bad-faith lawsuits.” I agree. The key words here are "small businesses." Liberals misrepresent this bill to be favoring their hated "corporations." President Trump and Congress are trying to help small businesses and grow our capitalist economy.
    Like (17)
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    I'm sure this one will pass too down the wealthy Red line. The wealthy need a big dose of empathy in this country. All they know is greed and selfishness and making the rest of the country into a slave class.
    Like (222)
    Follow
    Share
    Stupid unnecessary change to help big corps get out of lawsuits . Vote no!
    Like (176)
    Follow
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    This law is unnecessary and too vaguely worded. The law dealing with fraudulent joinder is perfectly fine and does not need to be changed. Having argued this issue for both plaintiffs and defendants, it is clear to me that the law that currently exists does not need to be altered in any way.
    Like (145)
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    Yet another proposal with a misleading title designed to appeal on an emotional basis. I mean, who doesn't want to protect the innocent?? Congress, that's who. This bill is speaking on federal diversity jurisdiction - the ability to move a case from state court to federal court because the parties are residents of different states. This bill seeks to make that harder, forcing parties to state courts where the laws and/or community might offer better protections for big businesses being sued. Businesses notoriously use states favorable to them as legal insurance and protection; this bill prevents plaintiffs from using similar strategies. Yet another bit of power chipped away from David and given to Goliath. Please don't sell your vote to the corporations. Power to the people!
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    Just what I've come to expect from this corporate-owned GOP congress, another bill that purports to protect the innocent, but is really another corporate give away. 2018 can't come fast enough for me. Congress should be concentrating on Russia-trump gate, a perjured Attorney General and enacting universal Healthcare for all.
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    Lawsuits are a big problem, but this bill is pretty confusing and it sounds like it steps all over states and gives the federal government new power, which I will almost always vote against.
    Like (43)
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    The 11th amendment dealt with this when suing a state in federal court. The states did not want federal interference in their cases. This looks like another attempt.
    Like (30)
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    Beware of Federal Courts in sheep clothing.
    Like (25)
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    Apparently our representative likes to vote against the majority of opinions collected on this site?
    Like (21)
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    This is only a bill to help big business and insurance to escape lawsuits without a trial on the merits. This bill hurts the consumer.
    Like (19)
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    Enough is enough!!! Why is it that republicans want to strip all the laws and regulations that protrct the average person?!!
    Like (16)
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    Vote no on this bill, whose only intended "innocent" is the corporate sponsor behind it. They need no more "protection." If being able to hire million dollar attorneys is not adequate then they are not innocent.
    Like (16)
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    The idea of throwing everything and everyone but the kitchen sink into a lawsuit is idiotic and a pathetic recourse used by people who do not have a solid or legitimate case. This should stop.
    Like (15)
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    As an attorney for more than thirty years, I can tell you this is superfluous. Federal judges are the much smarter of the judge class, having garnered enough 'street cred' to be appointed for life---as opposed to state court judges. As federal judges, they already know how to get rid of frivolous suits and straw parties. They DO NOT want to be weighed down by bogus litigation that creates jurisdiction which is specious, at best. No judge that I have ever met want to keep cases without merit or proper jurisdiction. They already have the powers of Federal Rule of Civil Procedure 11, to punish fraudulent court filings, and they have the ability to grant summary judgment to get rid of bogus cases and claims. Why is the Republican Congress worried about something the federal judiciary already has well in hand? I would venture a guess that NO FEDERAL JUDGES WOULD EVER BACK THIS LEGISLATION, and that this legislation was never sought by any member of the federal judiciary. Republicans are currently in their "freedom mode", if you've been paying attention. Then, by all means, allow federal judges to run their courtrooms and 'do justice' as they see fit.
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    Sounds like a bill to protect companies when they screw people over. There are enough of those.
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    Joe Donnelly will vote yea frickin mindless puppet. Hope he enjoys dirty GOP hands up his arse.
    Like (8)
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    Vote no on this bill. Allows companies to weaken cases made against them and does nothing to protect the consumer.
    Like (8)
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    Why am I seeing another bill that hurts the consumer and that is pandering to corporations??
    Like (8)
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    More protections for big business and less for consumers and others? Nope.
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