H 4458 General Bill, By Harrison, Delleney, W.D. Smith, Talley, Taylor, 
Clemmons, Cotty, Simrill, Walker and Kirsh
 A BILL TO AMEND CHAPTER 36, TITLE 15, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO SOUTH CAROLINA FRIVOLOUS CIVIL PROCEEDINGS SANCTIONS ACT, SO AS TO
 REPLACE THE EXISTING PROVISIONS OF THE CHAPTER WITH PROVISIONS REQUIRING THE
 SIGNATURE OF AN ATTORNEY OR PRO SE LITIGANT ON ALL PLEADINGS AND OTHER
 DOCUMENTS FILED IN A CIVIL OR ADMINISTRATIVE ACTION, TO PROVIDE THAT THE
 SIGNATURE CONSTITUTES CERTIFICATION THAT THE ACTION IS NOT FRIVOLOUS OR
 INTERPOSED FOR DELAY, AND TO PROVIDE SANCTIONS.

   12/17/03  House  Prefiled
   12/17/03  House  Referred to Committee on Judiciary
   01/13/04  House  Introduced and read first time HJ-82
   01/13/04  House  Referred to Committee on Judiciary HJ-82

TO AMEND CHAPTER 36, TITLE 15, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO SOUTH CAROLINA FRIVOLOUS CIVIL PROCEEDINGS SANCTIONS ACT, SO AS TO REPLACE THE EXISTING PROVISIONS OF THE CHAPTER WITH PROVISIONS REQUIRING THE SIGNATURE OF AN ATTORNEY OR PRO SE LITIGANT ON ALL PLEADINGS AND OTHER DOCUMENTS FILED IN A CIVIL OR ADMINISTRATIVE ACTION, TO PROVIDE THAT THE SIGNATURE CONSTITUTES CERTIFICATION THAT THE ACTION IS NOT FRIVOLOUS OR INTERPOSED FOR DELAY, AND TO PROVIDE SANCTIONS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION    1.    Chapter 36, Title 15 of the 1976 Code is amended to read:

Section 15-36-10.    (A)(1)    Any person who takes part in the procurement, initiation, continuation, or defense of any civil proceeding is subject to being assessed for payment of all or a portion of the attorney's fees and court costs of the other party if:

(1)    he does so primarily for a purpose other than that of securing the proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based; and

(2)    the proceedings have terminated in favor of the person seeking an assessment of the fees and costs.

As used in this chapter, "person" is defined to mean any individual, corporation, company, association, firm, partnership, society, joint stock company, and any other entity, including any governmental entity or unincorporated association of persons. A pleading filed in a civil or administrative action on behalf of a party who is represented by an attorney must be signed by at least one attorney of record who is an active member of the South Carolina Bar and must include the address and telephone number of the attorney signing the document.

(2)    A document filed in a civil or administrative action by a party who is not represented by an attorney must be signed by the party and must include the address and telephone number of the party.

(3)    The signature of an attorney or a pro se litigant constitutes a certificate to the court that the person:

(a)    has read the document;

(b)    reasonably believes that under the facts his claim may be warranted under the existing law or, if it is not warranted under the existing law, a good faith argument exists for the extension, modification, or reversal of existing law;

(c)    believes in good faith that his procurement, initiation, continuation, or defense of a civil cause is not intended merely to harass or injure the other party; and

(d)    believes that it is not frivolous, interposed for delay, or brought for any purpose other than securing proper discovery, joinder of parties, or adjudication of the claim upon which the proceedings are based.

(4)    An attorney or pro se litigant participating in a civil or administrative action or defense may be sanctioned for filing a frivolous pleading, motion, or document and for making frivolous arguments.

(5)    A party may be sanctioned if he fails in good faith to disclose fully facts necessary to put his attorney on notice that the claim or defense he seeks is frivolous.

(B)(1)If a document is not signed or does not comply with this section, it must be stricken unless it is signed promptly after the omission is called to the attention of the attorney or the party.

(2)    If a document is signed in violation of this section or a party has violated subsection (A)(4), the court, upon its own motion, or motion of a party, or by petition in collateral proceedings, may impose an appropriate sanction upon the person in violation.

(3)    Sanctions may include:

(a)    an order for the party or pro se litigant to pay the reasonable costs and attorney's fees;

(b)    an order for the attorney to pay a reasonable fine to the court; or

(c)    a directive of a nonmonetary nature designed to deter a future frivolous action or an action in bad faith.

(4)    In determining if an attorney, a party, or a pro se litigant has violated the provisions of this section, the court shall take into account:

(a)    the number of parties;

(b)    the complexity of the claims and defenses;

(c)    the length of time available to the attorney, party, or pro se litigant to investigate and conduct discovery;

(d)    information disclosed or undisclosed to the attorney, party, or pro se litigant through discovery and adequate investigation; and

(e)    other factors the court considers appropriate.

(C)    A person is entitled to notice and an opportunity to respond before the imposition of sanctions pursuant to this section. A court or party proposing a sanction pursuant to this section shall notify the court and all parties of the conduct constituting a violation of this section and explain the basis for the potential sanction imposed. Upon notification the attorney, party, or pro se litigant has thirty days to:

(1)    withdraw the document or argument constituting a violation of this section; or

(2)    respond to the allegations of the violation of this section; or

(3)    mitigate the effects of the violation of this section in a manner the court deems tantamount to withdrawal pursuant to subsection (C)(1); and

(4)    provide all parties and the court with:

(a)    written notification of withdrawal pursuant to subsection (C)(1); or

(b)    a copy of the response indicated in subsection (C)(2); or

(c)    an explanation of mitigation pursuant to subsection (C)(3).

(D)    If the court imposes a sanction on an attorney for a violation pursuant to this section, the court shall report its finding to the South Carolina Commission on Lawyer Conduct.

(E)    This act may not alter the South Carolina Rules of Civil Procedure or the South Carolina Appellate Court Rules.

(F)    The provisions of this section apply in addition to all other remedies available at law or in equity.

(G)    The amount requested for damages in a pleading may not be considered in a determination of a violation of this section.

Section 15-36-20.    Any person who takes part in the procurement, initiation, continuation, or defense of civil proceedings must be considered to have acted to secure a proper purpose as stated in item (1) of Section 15-36-10 if he reasonably believes in the existence of the facts upon which his claim is based and

(1) reasonably believes that under those facts his claim may be valid under the existing or developing law; or

(2) relies upon the advice of counsel, sought in good faith and given after full disclosure of all facts within his knowledge and information which may be relevant to the cause of action; or

(3) believes, as an attorney of record, in good faith that his procurement, initiation, continuation, or defense of a civil cause is not intended to merely harass or injure the other party.

Section 15-36-30.    When the essential elements of this chapter have been established as provided in Section 15-36-10, a person is entitled to recover his attorney's fees and court costs reasonably incurred in litigating the proceedings. The entitlement of the aggrieved person must be determined by the trial judge at the conclusion of a trial upon motion of the aggrieved party stating the manner in which the other party is alleged to have acted in violation of this statute. The court shall base its decision upon a review of the proceedings and affidavits submitted by each person affected.

Section 15-36-40.    In a motion filed pursuant to this chapter the aggrieved person has the burden of proving:

(1) the other party has procured, initiated, continued, or defended the civil proceedings against him;

(2) the proceedings were terminated in his favor;

(3) the primary purpose for which the proceedings were procured, initiated, continued, or defended was not that of securing the proper discovery, joinder of parties, or adjudication of the civil proceedings;

(4) the aggrieved person has incurred attorney's fees and court costs; and

(5) the amount of the fees and costs set forth in item (4).

Section 15-36-50.    Upon a finding that a person has violated the provisions of this chapter, the court shall determine the appropriate fees and costs and enter judgment accordingly."

SECTION    2.    The repeal or amendment by this act of any law, whether temporary or permanent or civil or criminal, does not affect pending actions, rights, duties, or liabilities founded thereon, or alter, discharge, release or extinguish any penalty, forfeiture, or liability incurred under the repealed or amended law, unless the repealed or amended provision shall so expressly provide. After the effective date of this act, all laws repealed or amended by this act must be taken and treated as remaining in full force and effect for the purpose of sustaining any pending or vested right, civil action, special proceeding, criminal prosecution, or appeal existing as of the effective date of this act, and for the enforcement of rights, duties, penalties, forfeitures, and liabilities as they stood under the repealed or amended laws.

SECTION    3.    This act takes effect upon approval by the Governor and applies to a cause of action arising on or after the effective date of this act.