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Thursday, July 18, 2024

GOP Senate Sets Limits to Class Action Lawsuits

In a major victory for President Bush and corporations, the Senate on Thursday voted 72-26 for a bipartisan bill that would restrict multimillion-dollar national class-action lawsuits by forcing them out of state courts and before federal judges.

In a major victory for President Bush and corporations, the Senate on Thursday voted 72-26 for a bipartisan bill that would restrict multimillion-dollar national class-action lawsuits by forcing them out of state courts and before federal judges.

Republicans said the legislation was a crushing defeat for a small group of greedy trial lawyers who round up plaintiffs, target rich corporate defendants, and file lawsuits in friendly local courts that have a pattern of awarding millions of dollars in damages, much of which siphons off to the lawyers in high fees.

“This will put an end to judicial blackmail” by which class-action lawyers force business defendants to settle rather than face lawsuits that tarnish their reputations and put them at risk of big payouts, said Sen. Jeff Sessions, R-Ala.

“When multimillion-dollar settlements are handed down and all the victims get are coupons for a free product, justice is not being served,” said Sen. Barack Obama of Illinois, a first-year Democrat who voted for the legislation. He said it would “provide a safeguard for the most blatant abuses of the system.”

Sen. Dianne Feinstein, D-Calif., who failed in an effort to amend the bill by requiring new federal court procedures in handling national class actions, voted for the legislation, saying it was “the best that can be done to solve what is a real problem in our legal system.”

Democratic opponents described the vote as a setback for consumers who if injured by a business product or action may find it harder in a federal court than in a state court to win a lawsuit for the harm done to them.

“Workers and civil rights are the losers,” said Sen. Edward M. Kennedy, D-Mass.

A leading opponent of the legislation, Sen. Richard Durbin, D-Ill., said the measure was “the highest priority” for the president and the business community that supported him in the 2004 campaign. He said class-action lawsuits filed in crowded federal courts are much less likely to be heard than those filed in state courts, and that the judgments are likely to be smaller.

Sen. Patrick Leahy, D-Vt., said the legislation would have prevented the plaintiffs in the Brown v. Board of Education school desegregation litigation in 1954 from getting their case before the U.S. Supreme Court.

All 53 Republicans who voted, 18 Democrats and one independent voted for the legislation. All 26 no votes were cast by Democrats.

Under the legislation, damage claims would have to total at least $5 million for the case to be heard in federal court. The cases would stay in state courts if the primary defendant and one-third of the plaintiffs were from the same state.

Sponsors said the legislation still would allow virtually all aggrieved plaintiffs to have their day in a local court.

“By this bill, we are reining in abuses,” Senate Majority Leader Bill Frist, R-Tenn., said, blasting what he called “predatory lawyers” who create classes of plaintiffs from across the nation. GOP advocates cited tobacco lawsuits as an example of class-action lawsuits filed in friendly local courts.

The three-day debate, brief by Senate standards on a controversial measure, largely avoided one of the underlying issues _ the fact that trial lawyers as a group are one of the Democratic Party’s biggest contributors, while the business interests that supported the measure are among the Republicans’ biggest campaign givers.

The outcome reflected the more conservative bent in the Senate now that Republicans have a 55-44-1 majority, making it much harder for opposition Democrats to launch a filibuster. The class-action legislation was the first major bill voted on in Congress this year.

The legislation now goes to the House, where the Republican majority is expected to approve it quickly _ perhaps as soon as next week _ and send it to Bush for his signature.

The Senate action was hailed by the business community and attacked by groups representing trial lawyers and consumers.

“The Senate has taken a critical step toward granting families, consumers and employers relief from the heavy burden of lawsuit abuse,” said Thomas Donohue, president of the U.S. Chamber of Commerce. He said the legislation would “take back our civil justice system from plaintiffs’ lawyers seeking jackpot justice.”

But Todd A Smith, president of the Association of Trial Lawyers, declared that “every American’s legal rights are diminished by this anti-consumer legislation.” He said that the insurance, tobacco, drug, chemical and other industries waged a costly campaign to win support for the legislation.

Consumers Union, in the forefront of groups opposing the legislation, said the Senate “closed off citizens’ ability to join together and have their claims heard by their own judges in their own state courts under their own state laws.”