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History
- Committee discharged and committed to judiciary
- Referred to codes
Full text
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Sponsor's memo
Title of bill
An act to amend the civil practice law and rules, in relation to expenses, penalties and additional interest for frivolous actions or procedures and to repeal certain provisions of such law relating thereto
Purpose or general idea of bill
To establish clear statutory authority empowering the courts of the State to impose monetary sanctions in any action or proceeding under the civil practice law and rules as a deterrent to and penalty for unmeritorious, bad faith litigation, as encouraged by the Court of Appeals in its decision in A.G. SHIP MAINTENANCE CORP. V. LEZAK , 69 N.Y. 2d 1,4 (1986).
Summary of specific provisions
The bill would expand Section 8303-a of the civil practice law and rules, which currently applies only to certain specified tort actions, to authorize monetary sanctions in any civil action or proceeding (subd. (a)). However, the sanction provisions would not apply to proceedings in small claims courts, landlord-tenant proceedings and proceedings in the family court commenced under article three, seven, eight or ten of the family court act. Sanctions would be imposed only upon a written finding of the court that a party or attorney had brought a claim or employed procedures that were entirely without merit and in bad faith (subd. (b)). Available sanctions would include legal expenses, including attorney's fees, incurred by an adversary as a result of frivolous litigation (subd. (b) (3)); a court imposed penalty of up to $250 (subd. (d)); and additional interest at 150 percent of the legal rate in cases where frivolous delaying tactics had been interposed to avoid entry of a money judgment (subd. (e)). SEE , E.G. , Mass. Gen. Laws Ann., Ch. 231, Section 6F (West 1986). Sanctions could be imposed against either the responsible party, the party's lawyer, or both (subd. (c)). The bill provides for several significant procedural departures from the present section 8303-a. The courts' discretionary power in the imposition of sanctions would be reduced by the requirement of a hearing and written findings prior to issuance of any order awarding sanctions (subd. (f), (h)). SEE , E.G. , Cal. Proc. Civ. Code Section 128.5 (Deering 1987). The court would be required whenever possible before such hearing to give notice on the record of its tentative view that sanctions may be called for; if the party or attorney then promptly discontinued the action or procedures at issue, no sanctions could be imposed (subd. (g)). No prior notice would be required, however, before an award of sanctions would be authorized for the submission to the court of any false sworn statement ( ID .ct.). ANY ORDER GRANTING SANCTIONS WOULD BE APPEALABLE TO THE APPROPRIATE APPELLATE COURT, WHICH WOULD HAVE THE POWER TO DE NOVO REVIEW (SUBD. (I)). THE BILL PROHIBITS THE IMPOSITION OF ANY SANCTION FOR THE ASSERTION OF A NOVEL OR UNUSUAL PRINCIPLE OF LAW EVEN IF DEEMED BY THE COURT TO BE ENTIRELY WITHOUT MERIT (SUBD. (J)). SEE, E.G., Mass. Gen. Laws Ann., Ch. 231, Section 6F. If enacted, this bill will provide the exclusive remedy for frivolous action or procedure.
Read the full memo (1,205 words)
Effects of present law which this bill would alter
Section 8303-a of the Civil Practice Law and Rules is repealed and a new section 8303-a is added.
Justification
In its recent A.G. SHIP MAINTENANCE decision, the Court of Appeals urged the formulation of a "plenary rule" authorizing sanctions for bad faith civil litigation. According to the court, "frivolous court proceedings present a growing problem which must be deterred." Due to several developments in the court system since 1983, a well-designed rule authorizing financial sanctions is necessary. Over the past five years, the number of civil cases filed in the state courts has increased dramatically. Congestion in the Second Department, for example, has reached the point that appeals are frequently heard four to six months after the term for which they are officially calendared. From a practitioner's perspective, the courts' concerns about congestion are well-founded. Every practitioner can cite his/her frustration over false statements in adversaries' affidavits, misconduct in the representation of witnesses at depositions, baseless summary judgment motions, the assertion of meritless claims or defenses to induce settlements and similar misconduct to cause delay or for other improper purposes. In the past, the courts have issued sanction decisions without the explicit mandate of any statute or court rule based on the theory of "inherent powers" to regulate and control the conduct of litigants and counsel. However, the Court of Appeals in A.G. SHIP MAINTENANCE held that the absence of either a statute or a court rule authorizing sanctions precluded the imposition of a penalty for frivolous actions. The court did suggest that the judiciary may have the power through its rule-making procedures to create guidelines to permit the imposition of sanctions. Therefore, the office of Court Administration recently promulgated rules which authorize the imposition of sanctions for frivolous conduct in civil litigation. However, these rules are particularly troublesome given the breadth of unreviewable judicial discretion. The bill is a general deterrent to willful misconduct and gross negligence. The legislation provides a clear standard for defining sanctionable misconduct while meeting the minimum requirements of due process. While differences exist between the OCA rules and the bill in terms of the penalty ceiling ($10,000) and the available sanctions, procedural safeguards (e.g. preliminary notice and the prompt discontinuation of conduct resulting in no imposition of the sanctions) are conspicuously missing from the OCA rules. Since financial sanctions can be a substantial hardship on the person penalized, the legislation is designed to minimize the likelihood of arbitrary or erroneous determination. Under the legislation, the courts would be required to give notice on the record of its tentative view that sanction may be warranted. The prompt discontinuance of the action or procedures at issue would result in no imposition of the sanctions. Furthermore, unlike the OCA rules, any order granting sanctions would be subject to review. The right to appeal has been traditional in New York's judicial process. The order is reviewable DE NOVO as a matter of right, without deference to the lower court's discretion. Finally, the bill states explicitly that no sanction will be imposed on the ground that the party has advanced a novel or unusual argument. The common law courts of New York have historically served as a crucible in which new legal theories have been tested and from which important developments in the law have emerged. The legislation would repeal the current section 8303-a of the CPLR which was enacted in 1985. This section is limited to cases involving personal injury, medical malpractice and similar tort claims. The bill will expand that section to apply to all civil actions or proceedings, excluding proceedings in small claims court, landlord-tenant and in family court commenced under article three, seven, eight or ten of the family court act, as well as implement procedural or due process reforms (e.g. a hearing prior to a determination) that are lacking in the current statute.
Fiscal implications for state and local government
The state may realize some additional revenue.
Effective date
Immediately, and shall apply to any action or proceeding commenced on or after the effective date of this act.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.