John Mangum, Co-Chair, Legal, Regulatory, and Financial Services Committee
Steve Twist, Co-Chair, Legal, Regulatory, and Financial Services Committee
Glenn Hamer, President and C.E.O.
Arizona Chamber of Commerce and Industry
3200 N. Central Avenue
Suite 1125
Phoenix, AZ 85012
602-248-9172
[email protected] 015777 (inactive)
The Arizona Chamber of Commerce and Industry (“Arizona Chamber”) respectfully submits this Comment to supplement the language proposed by Petition R-15-0004 as amendments to Rule 11 of the Arizona Rules of Civil Procedure. The Arizona Chamber is a nonpartisan, nonprofit organization that is the leading statewide advocate for the Arizona business community. Our diverse membership employs 250,000 Arizonans in all business sectors from manufacturing to services and includes small, medium, and large employers. We are committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth, and protecting businesses from unnecessary and cumbersome legal and regulatory burdens.
The Arizona Chamber has closely followed the work of the Task Force on the Arizona Rules of Civil Procedure (“Task Force”) and its review of Rule 11. The Arizona Chamber has also completed an independent review of Rule 11 with a variety of stakeholders from the legal and business communities in Arizona and nationwide. The attached supplemental language proposed by this Comment incorporates some of the changes under review by the Task Force, along with changes suggested during the Arizona Chamber’s review.
Material changes include:
(1) requiring signers of documents served or filed with the court to make an independent reasonable inquiry into the facts of representations made by others, if the signer has reason to believe those representations were false or materially insufficient (proposed 11(b)(5));
(2) joining other states, including Nebraska, Oklahoma, Pennsylvania and Texas, in imposing mandatory sanctions for violations of Rule 11, along with a heightened standard of review for exceptions to mandatory dismissal sanctions where appropriate (proposed 11(c)(1)); and
(3) including the “independent reasonable inquiry into the facts” requirement in the verification provisions of Rule 11 (proposed 11(e)(1)).
The Arizona Chamber urges the Commission to adopt the recommendations included in this Comment and the attached, arrived at after considered discussion and research into Rule 11 abuses and various possible solutions. While the State Bar’s petition is a positive step toward curbing abusive Rule 11 practices, the Chamber’s proposed language includes additional changes that will provide even more robust protection. Indeed, the Chamber’s proposed revisions to Rule 11 ensure truthfulness in representations made to the court, fairly enforce the sanctions provisions of Rule 11, and protect not only businesses but all Arizonans from the untoward effects of frivolous litigation.