February 17, 2005 12:28 PM
House Vote Sends Measure On Class-Action Suits to Bush
Excerpt: Congress on Thursday passed legislation that would transfer most large, multistate class action lawsuits to federal court, fulfilling one of President Bush's second-term goals.
Congress on Thursday passed legislation that would transfer most large, multistate class action lawsuits to federal court, fulfilling one of President Bush's second-term goals.
The aim of the bill was to protect businesses and stop lawyers from reaping huge profits by filing suits in carefully selected state courts.
The legislation, given final congressional approval by the House on a 279-149 vote, would bar state courts from hearing large multistate class-action lawsuits. Such courts have been known for issuing multimillion-dollar verdicts like they did against tobacco companies.
After the bill becomes law, cases against corporations and businesses accused of wrongdoing against large groups of people will be heard by federal judges. Critics have said these jurists aren't as amenable as are their state counterparts to these cases, which often involve millions of dollars.
The Senate passed the bill Feb. 10. It now goes to Mr. Bush for his signature, which is expected.
Mr. Bush and other Republicans have been pushing for changes in the legal system for years. They argue that greedy lawyers have taken advantage of the state class-action lawsuit system by filing frivolous lawsuits in certain state courts where they know they can win big dollar verdicts. Meanwhile, those lawyers' clients get only small sums or coupons giving them discounts for the products of the company they just sued, lawmakers said.
"Frivolous lawsuits are clogging America's judicial system, endangering America's small businesses, jeopardizing jobs and driving up prices for consumers," said House Majority Whip Roy Blunt (R., Mo.). Moving those cases to federal court will ensure that state judges will no longer "routinely approve settlements in which the lawyers receive large fees and the class members receive virtually nothing," he added.
Companies in response have had to cut back on their activities to defend those lawsuits, and have had to raise prices on products to recoup their costs, Republicans claim. "These out-of-control class action lawsuits are killing jobs, they're hurting small-business people who can't afford to defend themselves and they're hurting consumers who have to pay more for products," said Rep. Ric Keller (R., Fla.).
Democrats argued that the main goal of Republicans was to hurt trial lawyers who donate heavily to the Democratic Party and to help big business escape multimillion-dollar verdicts from state courts. "This bill is the Vioxx protection bill, it is the Wal-Mart protection bill, it is the Tyco protection bill and it is the Enron protection bill," said Rep. Jay Inslee (D., Wash.).
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