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                                 HOUSE AMENDED
        PRIOR PRINTER'S NOS. 418, 1248, 1609          PRINTER'S NO. 1632

THE GENERAL ASSEMBLY OF PENNSYLVANIA


SENATE BILL

No. 406 Session of 2001


        INTRODUCED BY GERLACH, WAUGH, CORMAN, M. WHITE, TOMLINSON,
           THOMPSON AND EARLL, FEBRUARY 12, 2001

        AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
           DECEMBER 12, 2001

                                     AN ACT

     1  Amending Title 42 (Judiciary and Judicial Procedure) of the
     2     Pennsylvania Consolidated Statutes, establishing a cause of
     3     action for frivolous litigation; further providing for
     4     wrongful use of civil proceedings; and making an editorial
     5     change.

     6     The General Assembly of the Commonwealth of Pennsylvania
     7  hereby enacts as follows:
     8     Section 1.  Chapter 83 of Title 42 of the Pennsylvania         <--
     9  Consolidated Statutes is amended by adding a subchapter to read:
    10                            SUBCHAPTER E
    11                        FRIVOLOUS LITIGATION
    12  Sec.
    13  8350.1.  Frivolous litigation.
    14  8350.2.  Elements of cause of action.
    15  8350.3.  Procedure.
    16  8350.4.  Damages.
    17  8350.5.  Other remedies.
    18  8350.6.  Joint liability.

     1  § 8350.1.  Frivolous litigation.
     2     (a)  Cause of action established.--There is established a
     3  separate cause of action for damages arising out of the filing
     4  of a frivolous civil complaint, counterclaim or joinder
     5  complaint by an attorney and the law firm of which the attorney
     6  is a member or by a party who is not represented by an attorney.
     7  The injured party must file this action in the same court and
     8  division where the original action or matter was filed. This
     9  action shall not be collateral to the original action and shall
    10  proceed without reference to its status.
    11     (b)  Time for filing action.--An action brought pursuant to
    12  this subchapter may be filed before the challenged proceeding on
    13  the civil complaint, counterclaim or joinder complaint is
    14  terminated.
    15     (c)  Relationship to other action.--The action established
    16  under this subchapter is a separate cause of action than that
    17  provided for under Subchapter E.1 (relating to wrongful use of
    18  civil proceedings). A person may not be precluded from bringing
    19  an action pursuant to Subchapter E.1 on the sole basis that the
    20  person first brought an action under this subchapter.
    21  § 8350.2.  Elements of cause of action.
    22     A complaint, counterclaim or joinder complaint shall be
    23  presumed to be not frivolous unless one of the following
    24  elements is proven by a preponderance of the evidence:
    25         (1)  the civil complaint, counterclaim or joinder
    26     complaint is presented primarily for an improper purpose,
    27     including, but not limited to, harassment, business
    28     interruption, intentional infliction of emotional distress or
    29     unwarranted pecuniary gain;
    30         (2)  the claims set forth in the civil complaint,
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     1     counterclaim or joinder complaint are not warranted by
     2     existing law or by a reasonable argument for the extension,
     3     modification or reversal of existing law or the establishment
     4     of new law;
     5         (3)  the allegations and other factual contentions have
     6     no reasonable evidentiary support or are not likely to have
     7     reasonable evidentiary support, after a reasonable
     8     opportunity for further investigation or discovery; or
     9         (4)  the counterclaim or joinder complaint has no
    10     reasonable evidentiary support or is not likely to have
    11     reasonable evidentiary support, after a reasonable
    12     opportunity for further investigation or discovery.
    13  § 8350.3.  Procedure.
    14     (a)  Notice to defendant.--Before filing an action under this
    15  subchapter, the plaintiff must notify the defendant in writing
    16  of the intention to file the action and attach a copy of the
    17  proposed complaint. Each recipient of the complaint shall have
    18  20 days in which to withdraw or otherwise cure the civil
    19  complaint, counterclaim, or joinder complaint giving rise to the
    20  claim of frivolous litigation.
    21     (b)  Effect of withdrawal or cure.--If the civil complaint,
    22  counterclaim, or joinder complaint is withdrawn or otherwise
    23  cured, there shall be no basis for the cause of action, except
    24  that the plaintiff shall be entitled to recover court costs and
    25  reasonable attorney fees if the plaintiff files a motion for
    26  such recovery within 30 days of a withdrawal.
    27     (c)  Effect of recovery.--Recovery by an injured party under
    28  this chapter shall not preclude the injured party from
    29  recovering damages, other than reasonable attorney fees and
    30  court costs, pursuant to Subchapter E.1 (relating to wrongful
    20010S0406B1632                  - 3 -

     1  use of civil proceedings).
     2  § 8350.4.  Damages.
     3     When any element set forth in section 8350.2 (relating to
     4  elements of cause of action) has been proven by a preponderance
     5  of the evidence, the injured party is entitled to recover the
     6  following:
     7         (1)  The harm normally resulting from any arrest or
     8     imprisonment or any dispossession or interference with the
     9     advantageous use of the injured party's land, chattels or
    10     other things suffered by the injured party during the course
    11     of the proceeding.
    12         (2)  The harm to the injured party's reputation by any
    13     defamatory matter relating to the proceeding.
    14         (3)  The cost of litigation, including, but not limited
    15     to, any reasonable attorney fees.
    16         (4)  Lost income that the injured party has incurred in
    17     defending himself.
    18         (5)  Any other pecuniary loss that has resulted from the
    19     proceeding.
    20         (6)  Any other noneconomic loss caused by the
    21     proceedings.
    22  § 8350.5.  Other remedies.
    23     Nothing in this subchapter shall be construed to preclude the
    24  court from exercising its inherent supervisory power or from
    25  imposing appropriate nonmonetary or monetary sanctions upon
    26  attorneys, law firms and unrepresented parties who have engaged
    27  in frivolous or bad faith litigation under existing law and
    28  rules of procedure.
    29  § 8350.6.  Joint liability.
    30     Absent exceptional circumstances, a law firm shall be held
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     1  jointly responsible for a frivolous civil complaint,
     2  counterclaim or joinder complaint filed by attorneys of the
     3  firm.
     4     Section 2.  The heading of Subchapter E of Chapter 83 of
     5  Title 42 is amended to read:
     6                         SUBCHAPTER [E] E.1
     7                 WRONGFUL USE OF CIVIL PROCEEDINGS
     8     Section 3.  Section 8351 of Title 42 is amended by adding a
     9  subsection to read:
    10  § 8351.  Wrongful use of civil proceedings.
    11     * * *
    12     (c)  Relationship to other action.--The action established
    13  under this subchapter is a separate cause of action than that
    14  provided for under Subchapter E (relating to frivolous
    15  litigation). A person may not be precluded from bringing an
    16  action pursuant to this subchapter on the sole basis that the
    17  person first brought an action under Subchapter E.
    18     Section 4.  The provisions of this act are severable. If any
    19  provision of this act or its application to any person or
    20  circumstance is held invalid, the invalidity shall not affect
    21  other provisions or applications of this act which can be given
    22  effect without the invalid provision or application.
    23     Section 5.  This act shall take effect in 60 days.
    24     SECTION 1.  CHAPTER 83 OF TITLE 42 OF THE PENNSYLVANIA         <--
    25  CONSOLIDATED STATUTES IS AMENDED BY ADDING A SUBCHAPTER TO READ:
    26                            SUBCHAPTER E
    27                        FRIVOLOUS LITIGATION
    28  SEC.
    29  8350.1.  FRIVOLOUS LITIGATION.
    30  8350.2.  ELEMENTS OF CAUSE OF ACTION.
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     1  8350.3.  PROCEDURE.
     2  8350.4.  DAMAGES.
     3  8350.5.  OTHER REMEDIES.
     4  8350.6.  JOINT LIABILITY.
     5  § 8350.1.  FRIVOLOUS LITIGATION.
     6     (A)  CAUSE OF ACTION ESTABLISHED.--THERE IS ESTABLISHED A
     7  SEPARATE CAUSE OF ACTION FOR DAMAGES ARISING OUT OF THE FILING
     8  OF A FRIVOLOUS CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER
     9  COMPLAINT BY AN ATTORNEY, THE LAW FIRM OF WHICH THE ATTORNEY IS
    10  A MEMBER OR BY ANY PARTY WHO IS NOT REPRESENTED BY AN ATTORNEY.
    11  THE INJURED PARTY MUST FILE THIS ACTION IN THE SAME COURT AND
    12  DIVISION WHERE THE ORIGINAL ACTION OR MATTER WAS FILED. THIS
    13  ACTION SHALL NOT BE COLLATERAL TO THE ORIGINAL ACTION AND SHALL
    14  PROCEED WITHOUT REFERENCE TO ITS STATUS.
    15     (B)  TIME FOR FILING ACTION.--AN ACTION BROUGHT PURSUANT TO
    16  THIS SUBCHAPTER MAY BE FILED BEFORE THE CHALLENGED PROCEEDING ON
    17  THE CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER COMPLAINT IS
    18  TERMINATED.
    19     (C)  RELATIONSHIP TO OTHER ACTION.--THE ACTION ESTABLISHED
    20  UNDER THIS SUBCHAPTER IS A SEPARATE CAUSE OF ACTION THAN THAT
    21  PROVIDED FOR UNDER SUBCHAPTER E.1 (RELATING TO WRONGFUL USE OF
    22  CIVIL PROCEEDINGS). A PERSON MAY NOT BE PRECLUDED FROM BRINGING
    23  AN ACTION PURSUANT TO SUBCHAPTER E.1 ON THE SOLE BASIS THAT THE
    24  PERSON FIRST BROUGHT AN ACTION UNDER THIS SUBCHAPTER.
    25  § 8350.2.  ELEMENTS OF CAUSE OF ACTION.
    26     A COMPLAINT, COUNTERCLAIM OR JOINDER COMPLAINT IS FRIVOLOUS
    27  WHEN THE PARTY FILING THE COMPLAINT, COUNTERCLAIM OR JOINDER
    28  COMPLAINT HAS NOT PRODUCED ANY REASONABLE EVIDENCE ESTABLISHING   <--
    29  PROBABLE CAUSE TO SUPPORT THE FILING OF FACTS ESSENTIAL TO THE    <--
    30  ALLEGATIONS SET FORTH IN THE COMPLAINT, COUNTERCLAIM OR JOINDER
    20010S0406B1632                  - 6 -

     1  COMPLAINT OR HAS NOT PROPOSED ANY REASONABLE ACTION TO BE TAKEN   <--
     2  BY THAT PARTY TO PRODUCE OR PRESENT SUCH EVIDENCE AND ONE OF THE
     3  FOLLOWING ELEMENTS IS PROVEN BY A PREPONDERANCE OF THE EVIDENCE:
     4         (1)  THE CIVIL COMPLAINT, COUNTERCLAIM OR JOINDER
     5     COMPLAINT IS PRESENTED PRIMARILY FOR AN IMPROPER PURPOSE,
     6     INCLUDING, BUT NOT LIMITED TO, HARASSMENT, INTERRUPTION OF
     7     ANY LAWFUL BUSINESS ACTIVITY, INTENTIONAL INFLICTION OF
     8     EMOTIONAL DISTRESS OR UNWARRANTED PECUNIARY GAIN; OR
     9         (2)  THE CLAIMS SET FORTH IN THE CIVIL COMPLAINT,
    10     COUNTERCLAIM OR JOINDER COMPLAINT ARE NOT WARRANTED BY
    11     EXISTING LAW OR BY A REASONABLE ARGUMENT FOR THE EXTENSION,
    12     MODIFICATION OR REVERSAL OF EXISTING LAW OR THE ESTABLISHMENT
    13     OF NEW LAW.
    14  § 8350.3.  PROCEDURE.
    15     (A)  NOTICE TO DEFENDANT.--BEFORE FILING AN ACTION UNDER THIS
    16  SUBCHAPTER, THE PLAINTIFF IN THIS ACTION MUST NOTIFY THE
    17  DEFENDANT IN WRITING OF THE INTENTION TO FILE THE ACTION AND
    18  ATTACH A COPY OF THE PROPOSED COMPLAINT. EACH RECIPIENT OF THE
    19  PROPOSED COMPLAINT SHALL HAVE 20 DAYS IN WHICH TO WITHDRAW OR
    20  OTHERWISE CURE THE CIVIL COMPLAINT, COUNTERCLAIM, OR JOINDER
    21  COMPLAINT GIVING RISE TO THE CLAIM OF FRIVOLOUS LITIGATION.
    22     (B)  EFFECT OF WITHDRAWAL OR CURE.--IF THE CIVIL COMPLAINT,
    23  COUNTERCLAIM, OR JOINDER COMPLAINT IS WITHDRAWN OR OTHERWISE
    24  CURED, THERE SHALL BE NO BASIS FOR THE CAUSE OF ACTION, EXCEPT
    25  THAT THE PLAINTIFF SHALL BE ENTITLED TO RECOVER COURT COSTS,
    26  EXPENSES AND REASONABLE ATTORNEY FEES IF THE PLAINTIFF FILES A
    27  MOTION FOR SUCH RECOVERY WITHIN 30 DAYS OF A WITHDRAWAL.
    28     (C)  EFFECT OF RECOVERY.--RECOVERY BY AN INJURED PARTY UNDER
    29  THIS CHAPTER SHALL NOT PRECLUDE THE INJURED PARTY FROM
    30  RECOVERING ANY DAMAGES WHICH THE INJURED PARTY MAY BE ENTITLED
    20010S0406B1632                  - 7 -

     1  TO, PURSUANT TO SUBCHAPTER E.1 (RELATING TO WRONGFUL USE OF
     2  CIVIL PROCEEDINGS) AND WHICH HAVE NOT ALREADY BEEN RECOVERED
     3  PURSUANT TO THIS CHAPTER.
     4  § 8350.4.  DAMAGES.
     5     WHEN ANY ELEMENT SET FORTH IN SECTION 8350.2 (RELATING TO
     6  ELEMENTS OF CAUSE OF ACTION) HAS BEEN PROVEN BY A PREPONDERANCE
     7  OF THE EVIDENCE, THE INJURED PARTY IS ENTITLED TO RECOVER THE
     8  FOLLOWING:
     9         (1)  THE HARM NORMALLY RESULTING FROM ANY DISPOSSESSION
    10     OR INTERFERENCE WITH THE ADVANTAGEOUS USE OF THE INJURED
    11     PARTY'S LAND, CHATTELS OR OTHER THINGS SUFFERED BY THE
    12     INJURED PARTY DURING THE COURSE OF THE PROCEEDING.
    13         (2)  THE HARM TO THE INJURED PARTY'S REPUTATION.
    14         (3)  THE COST OF LITIGATION, INCLUDING, BUT NOT LIMITED
    15     TO, ANY REASONABLE ATTORNEY FEES.
    16         (4)  LOST INCOME THAT THE INJURED PARTY HAS INCURRED IN
    17     DEFENDING HIMSELF.
    18         (5)  ANY OTHER PECUNIARY LOSS THAT HAS RESULTED FROM THE
    19     PROCEEDING.
    20         (6)  ANY OTHER NONECONOMIC LOSS CAUSED BY THE
    21     PROCEEDINGS.
    22  § 8350.5.  OTHER REMEDIES.
    23     NOTHING IN THIS SUBCHAPTER SHALL BE CONSTRUED TO PRECLUDE THE
    24  COURT FROM EXERCISING ITS INHERENT SUPERVISORY POWER OR FROM
    25  IMPOSING APPROPRIATE NONMONETARY OR MONETARY SANCTIONS UPON
    26  ATTORNEYS, LAW FIRMS AND UNREPRESENTED PARTIES WHO HAVE ENGAGED
    27  IN FRIVOLOUS OR BAD FAITH LITIGATION UNDER EXISTING LAW AND
    28  RULES OF PROCEDURE.
    29  § 8350.6.  JOINT LIABILITY.
    30     ABSENT EXCEPTIONAL CIRCUMSTANCES, A LAW FIRM SHALL BE HELD
    20010S0406B1632                  - 8 -

     1  JOINTLY RESPONSIBLE FOR A FRIVOLOUS CIVIL COMPLAINT,
     2  COUNTERCLAIM OR JOINDER COMPLAINT FILED BY ATTORNEYS OF THE
     3  FIRM.
     4     SECTION 2.  THE HEADING OF SUBCHAPTER E OF CHAPTER 83 OF
     5  TITLE 42 IS AMENDED TO READ:
     6                         SUBCHAPTER [E] E.1
     7                 WRONGFUL USE OF CIVIL PROCEEDINGS
     8     SECTION 3.  SECTION 8351 OF TITLE 42 IS AMENDED BY ADDING A
     9  SUBSECTION TO READ:
    10  § 8351.  WRONGFUL USE OF CIVIL PROCEEDINGS.
    11     * * *
    12     (C)  RELATIONSHIP TO OTHER ACTION.--THE ACTION ESTABLISHED
    13  UNDER THIS SUBCHAPTER IS A SEPARATE CAUSE OF ACTION THAN THAT
    14  PROVIDED FOR UNDER SUBCHAPTER E (RELATING TO FRIVOLOUS
    15  LITIGATION). A PERSON MAY NOT BE PRECLUDED FROM BRINGING AN
    16  ACTION PURSUANT TO THIS SUBCHAPTER ON THE SOLE BASIS THAT THE
    17  PERSON FIRST BROUGHT AN ACTION UNDER SUBCHAPTER E.
    18     SECTION 4.  THE PROVISIONS OF THIS ACT ARE NONSEVERABLE. IN
    19  THE EVENT ANY PROVISION IN THIS ACT IS HELD LEGALLY OR
    20  CONSTITUTIONALLY IMPERMISSIBLE, SUSPENDED BY THE JUDICIARY,
    21  SUPERSEDED BY RULE OF COURT, RULED TO BE THE REGULATION OF THE
    22  PRACTICE OF LAW OR OTHERWISE RENDERED INOPERATIVE BY JUDICIAL
    23  ACTION THIS ENTIRE ACT SHALL BE VOID.
    24     SECTION 5.  THIS ACT SHALL TAKE EFFECT IN 60 DAYS.




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