PRIOR PRINTER'S NO. 418 PRINTER'S NO. 1248
No. 406 Session of 2001
INTRODUCED BY GERLACH, WAUGH, CORMAN, M. WHITE, TOMLINSON, THOMPSON AND EARLL, FEBRUARY 12, 2001
AS AMENDED ON THIRD CONSIDERATION, JUNE 21, 2001
AN ACT 1 Amending Title 42 (Judiciary and Judicial Procedure) of the 2 Pennsylvania Consolidated Statutes, providing for sanctions <-- 3 for dilatory, obdurate and vexatious pleadings. ESTABLISHING <-- 4 A CAUSE OF ACTION FOR FRIVOLOUS LITIGATION; FURTHER PROVIDING 5 FOR WRONGFUL USE OF CIVIL PROCEEDINGS; AND MAKING AN 6 EDITORIAL CHANGE. 7 The General Assembly of the Commonwealth of Pennsylvania 8 hereby enacts as follows: 9 Section 1. Section 2503 of Title 42 of the Pennsylvania <-- 10 Consolidated Statutes is amended to read: 11 § 2503. Right of participants to receive counsel fees. 12 (a) General rule.--The following participants shall be 13 entitled to a reasonable counsel fee as part of the taxable 14 costs of the matter: 15 (1) The holder of bonds of a private corporation who 16 successfully recovers due and unpaid interest, the liability 17 for the payment of which was denied by the corporation. 18 (2) A garnishee who enters an appearance in a matter 19 which is discontinued prior to answer filed.
1 (3) A garnishee who is found to have in his possession 2 or control no indebtedness due to or other property of the 3 debtor except such, if any, as has been admitted by answer 4 filed. 5 (4) A possessor of property claimed by two or more other 6 persons, if the possessor interpleads the rival claimants, 7 disclaims all interest in the property and disposes of the 8 property as the court may direct. 9 (5) The prevailing party in an interpleader proceeding 10 in connection with execution upon a judgment. 11 (6) Any participant who is awarded counsel fees as a 12 sanction against another participant for violation of any 13 general rule which expressly prescribes the award of counsel 14 fees as a sanction for dilatory, obdurate or vexatious 15 conduct during the pendency of any matter. 16 (7) Any participant who is awarded counsel fees as a 17 sanction against another participant for dilatory, obdurate 18 or vexatious conduct during the pendency of a matter. 19 (8) Any participant who is awarded counsel fees out of a 20 fund within the jurisdiction of the court pursuant to any 21 general rule relating to an award of counsel fees from a fund 22 within the jurisdiction of the court. 23 (9) Any participant who is awarded counsel fees because 24 the conduct of another party in commencing the matter or 25 otherwise was arbitrary, vexatious or in bad faith. 26 (10) Any other participant in such circumstances as may 27 be specified by statute heretofore or hereafter enacted. 28 (b) Dilatory, obdurate and vexatious pleadings.-- 29 (1) By presenting to the court, whether by signing, 30 filing, submitting or later advocating, a pleading, written 20010S0406B1248 - 2 -
1 motion or other paper, an attorney or unrepresented party is 2 certifying that to the best of the person's knowledge, 3 information and belief, formed after an inquiry reasonable 4 under the circumstances: 5 (i) it is not being presented for an improper 6 purpose, such as to harass or to cause unnecessary delay; 7 (ii) the claims, defenses and other legal 8 contentions therein are warranted by existing law or by a 9 good faith argument for the extension, modification or 10 reversal of existing law or the establishment of new law; 11 (iii) the allegations and other factual contentions 12 have evidentiary support or, if specifically so 13 identified, are likely to have evidentiary support after 14 a reasonable opportunity for further investigation or 15 discovery; and 16 (iv) the denials of factual contentions are 17 warranted on the evidence or, if specifically so 18 identified, are reasonably based on a lack of information 19 or belief. 20 If, after notice and a reasonable opportunity to respond, the 21 court determines a violation, the court may, subject to the 22 conditions stated in paragraphs (2) and (3), impose an 23 appropriate sanction upon the attorneys, law firms or parties 24 that are responsible for the violation. 25 (2) A motion for sanction under this subsection shall be 26 made separately from other motions or requests and shall 27 describe the specific conduct alleged to violate paragraph 28 (1). It shall be served as provided by rule, but shall not be 29 filed with or presented to the court unless, within 31 days 30 after service of the motion, or such other period as the 20010S0406B1248 - 3 -
1 court may prescribe, the challenged paper, claim, defense, 2 contention, allegation or denial is not withdrawn or 3 appropriately corrected. If warranted, the court may award to 4 the party prevailing on the motion the reasonable expenses 5 and attorney fees incurred in presenting or opposing the 6 motion. Absent exceptional circumstances, a law firm shall be 7 held jointly responsible for violations committed by its 8 partners, associates and employees. 9 (3) On its own initiative, the court may enter an order 10 describing the specific conduct that appears to violate 11 paragraph (1) and directing an attorney, law firm or party to 12 show cause why it has not violated paragraph (1) with respect 13 thereto. 14 Section 2. This act shall take effect in 60 days. 15 SECTION 1. CHAPTER 83 OF TITLE 42 OF THE PENNSYLVANIA <-- 16 CONSOLIDATED STATUTES IS AMENDED BY ADDING A SUBCHAPTER TO READ: 17 SUBCHAPTER E 18 FRIVOLOUS LITIGATION 19 SEC. 20 8350.1. FRIVOLOUS LITIGATION. 21 8350.2. ELEMENTS OF CAUSE OF ACTION. 22 8350.3. PROCEDURE. 23 8350.4. DAMAGES. 24 8350.5. OTHER REMEDIES. 25 8350.6. JOINT LIABILITY. 26 § 8350.1. FRIVOLOUS LITIGATION. 27 (A) CAUSE OF ACTION ESTABLISHED.--THERE IS ESTABLISHED A 28 SEPARATE CAUSE OF ACTION FOR DAMAGES ARISING OUT OF THE FILING 29 OF A FRIVOLOUS CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER 30 COMPLAINT BY AN ATTORNEY AND THE LAW FIRM OF WHICH THE ATTORNEY 20010S0406B1248 - 4 -
1 IS A MEMBER OR BY A PARTY WHO IS NOT REPRESENTED BY AN ATTORNEY. 2 THE INJURED PARTY MUST FILE THIS ACTION IN THE SAME COURT AND 3 DIVISION WHERE THE ORIGINAL ACTION OR MATTER WAS FILED. THIS 4 ACTION SHALL NOT BE COLLATERAL TO THE ORIGINAL ACTION AND SHALL 5 PROCEED WITHOUT REFERENCE TO ITS STATUS. 6 (B) TIME FOR FILING ACTION.--AN ACTION BROUGHT PURSUANT TO 7 THIS SUBCHAPTER MAY BE FILED BEFORE THE CHALLENGED PROCEEDING ON 8 THE CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER COMPLAINT IS 9 TERMINATED. 10 (C) RELATIONSHIP TO OTHER ACTION.--THE ACTION ESTABLISHED 11 UNDER THIS SUBCHAPTER IS A SEPARATE CAUSE OF ACTION THAN THAT 12 PROVIDED FOR UNDER SUBCHAPTER E.1 (RELATING TO WRONGFUL USE OF 13 CIVIL PROCEEDINGS). A PERSON MAY NOT BE PRECLUDED FROM BRINGING 14 AN ACTION PURSUANT TO SUBCHAPTER E.1 ON THE SOLE BASIS THAT THE 15 PERSON FIRST BROUGHT AN ACTION UNDER THIS SUBCHAPTER. 16 § 8350.2. ELEMENTS OF CAUSE OF ACTION. 17 A COMPLAINT, COUNTERCLAIM OR JOINDER COMPLAINT SHALL BE 18 PRESUMED TO BE NOT FRIVOLOUS UNLESS ONE OF THE FOLLOWING 19 ELEMENTS IS PROVEN BY A PREPONDERANCE OF THE EVIDENCE: 20 (1) THE CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER 21 COMPLAINT IS PRESENTED PRIMARILY FOR AN IMPROPER PURPOSE, 22 INCLUDING, BUT NOT LIMITED TO, HARASSMENT, BUSINESS 23 INTERRUPTION, INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS OR 24 UNWARRANTED PECUNIARY GAIN; 25 (2) THE CLAIMS SET FORTH IN THE CIVIL COMPLAINT, 26 COUNTERCLAIM OR JOINDER COMPLAINT ARE NOT WARRANTED BY 27 EXISTING LAW OR BY A REASONABLE ARGUMENT FOR THE EXTENSION, 28 MODIFICATION OR REVERSAL OF EXISTING LAW OR THE ESTABLISHMENT 29 OF NEW LAW; 30 (3) THE ALLEGATIONS AND OTHER FACTUAL CONTENTIONS HAVE 20010S0406B1248 - 5 -
1 NO REASONABLE EVIDENTIARY SUPPORT OR ARE NOT LIKELY TO HAVE 2 REASONABLE EVIDENTIARY SUPPORT, AFTER A REASONABLE 3 OPPORTUNITY FOR FURTHER INVESTIGATION OR DISCOVERY; OR 4 (4) THE COUNTERCLAIM OR JOINDER COMPLAINT HAS NO 5 REASONABLE EVIDENTIARY SUPPORT OR IS NOT LIKELY TO HAVE 6 REASONABLE EVIDENTIARY SUPPORT, AFTER A REASONABLE 7 OPPORTUNITY FOR FURTHER INVESTIGATION OR DISCOVERY. 8 § 8350.3. PROCEDURE. 9 (A) NOTICE TO DEFENDANT.--BEFORE FILING AN ACTION UNDER THIS 10 SUBCHAPTER, THE PLAINTIFF MUST NOTIFY THE DEFENDANT IN WRITING 11 OF THE INTENTION TO FILE THE ACTION AND ATTACH A COPY OF THE 12 PROPOSED COMPLAINT. EACH RECIPIENT OF THE COMPLAINT SHALL HAVE 13 20 DAYS IN WHICH TO WITHDRAW OR OTHERWISE CURE THE CIVIL 14 COMPLAINT, COUNTERCLAIM, OR JOINDER COMPLAINT GIVING RISE TO THE 15 CLAIM OF FRIVOLOUS LITIGATION. 16 (B) EFFECT OF WITHDRAWAL OR CURE.--IF THE CIVIL COMPLAINT, 17 COUNTERCLAIM, OR JOINDER COMPLAINT IS WITHDRAWN OR OTHERWISE 18 CURED, THERE SHALL BE NO BASIS FOR THE CAUSE OF ACTION, EXCEPT 19 THAT THE PLAINTIFF SHALL BE ENTITLED TO RECOVER COURT COSTS AND 20 REASONABLE ATTORNEY FEES IF THE PLAINTIFF FILES A MOTION FOR 21 SUCH RECOVERY WITHIN 30 DAYS OF A WITHDRAWAL. 22 (C) EFFECT OF RECOVERY.--RECOVERY BY AN INJURED PARTY UNDER 23 THIS CHAPTER SHALL NOT PRECLUDE THE INJURED PARTY FROM 24 RECOVERING DAMAGES, OTHER THAN REASONABLE ATTORNEY FEES AND 25 COURT COSTS, PURSUANT TO SUBCHAPTER E.1 (RELATING TO WRONGFUL 26 USE OF CIVIL PROCEEDINGS). 27 § 8350.4. DAMAGES. 28 WHEN ANY ELEMENT SET FORTH IN SECTION 8350.2 (RELATING TO 29 ELEMENTS OF CAUSE OF ACTION) HAS BEEN PROVEN BY A PREPONDERANCE 30 OF THE EVIDENCE, THE INJURED PARTY IS ENTITLED TO RECOVER THE 20010S0406B1248 - 6 -
1 FOLLOWING: 2 (1) THE HARM NORMALLY RESULTING FROM ANY ARREST OR 3 IMPRISONMENT OR ANY DISPOSSESSION OR INTERFERENCE WITH THE 4 ADVANTAGEOUS USE OF THE INJURED PARTY'S LAND, CHATTELS OR 5 OTHER THINGS SUFFERED BY THE INJURED PARTY DURING THE COURSE 6 OF THE PROCEEDING. 7 (2) THE HARM TO THE INJURED PARTY'S REPUTATION BY ANY 8 DEFAMATORY MATTER RELATING TO THE PROCEEDING. 9 (3) THE COST OF LITIGATION, INCLUDING, BUT NOT LIMITED 10 TO, ANY REASONABLE ATTORNEY FEES. 11 (4) LOST INCOME THAT THE INJURED PARTY HAS INCURRED IN 12 DEFENDING HIMSELF. 13 (5) ANY OTHER PECUNIARY LOSS THAT HAS RESULTED FROM THE 14 PROCEEDING. 15 (6) ANY OTHER NONECONOMIC LOSS CAUSED BY THE 16 PROCEEDINGS. 17 § 8350.5. OTHER REMEDIES. 18 NOTHING IN THIS SUBCHAPTER SHALL BE CONSTRUED TO PRECLUDE THE 19 COURT FROM EXERCISING ITS INHERENT SUPERVISORY POWER OR FROM 20 IMPOSING APPROPRIATE NONMONETARY OR MONETARY SANCTIONS UPON 21 ATTORNEYS, LAW FIRMS AND UNREPRESENTED PARTIES WHO HAVE ENGAGED 22 IN FRIVOLOUS OR BAD FAITH LITIGATION UNDER EXISTING LAW AND 23 RULES OF PROCEDURE. 24 § 8350.6. JOINT LIABILITY. 25 ABSENT EXCEPTIONAL CIRCUMSTANCES, A LAW FIRM SHALL BE HELD 26 JOINTLY RESPONSIBLE FOR A FRIVOLOUS CIVIL COMPLAINT, 27 COUNTERCLAIM OR JOINDER COMPLAINT FILED BY ATTORNEYS OF THE 28 FIRM. 29 SECTION 2. THE HEADING OF SUBCHAPTER E OF CHAPTER 83 OF 30 TITLE 42 IS AMENDED TO READ: 20010S0406B1248 - 7 -
1 SUBCHAPTER [E] E.1 2 WRONGFUL USE OF CIVIL PROCEEDINGS 3 SECTION 3. SECTION 8351 OF TITLE 42 IS AMENDED BY ADDING A 4 SUBSECTION TO READ: 5 § 8351. WRONGFUL USE OF CIVIL PROCEEDINGS. 6 * * * 7 (C) RELATIONSHIP TO OTHER ACTION.--THE ACTION ESTABLISHED 8 UNDER THIS SUBCHAPTER IS A SEPARATE CAUSE OF ACTION THAN THAT 9 PROVIDED FOR UNDER SUBCHAPTER E (RELATING TO FRIVOLOUS 10 LITIGATION). A PERSON MAY NOT BE PRECLUDED FROM BRINGING AN 11 ACTION PURSUANT TO THIS SUBCHAPTER ON THE SOLE BASIS THAT THE 12 PERSON FIRST BROUGHT AN ACTION UNDER SUBCHAPTER E. 13 SECTION 4. THE PROVISIONS OF THIS ACT ARE SEVERABLE. IF ANY 14 PROVISION OF THIS ACT OR ITS APPLICATION TO ANY PERSON OR 15 CIRCUMSTANCE IS HELD INVALID, THE INVALIDITY SHALL NOT AFFECT 16 OTHER PROVISIONS OR APPLICATIONS OF THIS ACT WHICH CAN BE GIVEN 17 EFFECT WITHOUT THE INVALID PROVISION OR APPLICATION. 18 SECTION 5. THIS ACT SHALL TAKE EFFECT IN 60 DAYS. A12L42SFL/20010S0406B1248 - 8 -