Senate Passes Overhaul of Rules for Class-Action Lawsuits

By DAVID STOUT

New York Times

February 11, 2005

WASHINGTON, Feb. 10 - The Senate voted overwhelmingly today to shift many class-action lawsuits from state courts to federal courts, handing President Bush and his supporters in the business world a major legislative triumph.

The 72-to-26 vote sends the bill to the House of Representatives, where it will probably be quickly passed and sped on its way to the desk of the president, who is eager to sign it.

Passage in the House seems assured, since that chamber overwhelmingly endorsed similar legislation last year, before it stalled in the Senate. This time, though, the idea was backed by enough senators, Democrats as well as Republicans, that passage was not in doubt.

The Senate vote this afternoon followed repeated attempts by some Democrats to enact amendments curbing the effects of the measure. They were beaten back in part because some Democrats had also seen problems in the current state of the law.

All 26 votes against the measure were cast by Democrats. But though trial lawyers as a group are often described as a Democratic constituency, and trial lawyers opposed the measure, 18 Democrats joined 53 Republicans and the Senate's independent, James Jeffords of Vermont, in voting yes. (Two Republicans, Rick Santorum of Pennsylvania and John Sununu of New Hampshire, did not vote.)

One Democrat who voted yes, Dianne Feinstein of California, said afterward that the bill was "not perfect" but that it addressed problems in the legal system.

The Senate majority leader, Bill Frist, Republican of Tennessee, said the bill was intended to stop lawsuit abuses, "and it does just that."

But one of the Democrats voting no, Edward M. Kennedy of Massachusetts, disagreed. "The consumers are the big losers in this," he said.

A class-action lawsuit can be defined roughly as one brought by a large group of people who are affected by the same questions of law and fact. The bill passed by the Senate this afternoon would give the federal courts the authority to hear class-action suits in which the money at issue is more than $5 million and at least one member of the "class" is from a state different from the defendant.

Business groups that support the bill contend it will help stamp out suits that enrich lawyers at the expense of businesses and ordinary people. The bill's supporters say many plaintiffs' lawyers in class actions "shop around" among various state courts to find a friendly venue.

Critics of the bill have said it will deprive civil rights groups, consumers and labor organizations of a valuable weapon, and that it will help big companies, like makers of tobacco products, escape financial consequences for their wrongdoing.

President Bush said repeatedly during the 2004 campaign that too many "frivolous lawsuits" were shackling American business and driving good doctors out of their practices. One of his favorite targets was the Democratic vice presidential candidate, Senator John Edwards of North Carolina, who made millions as a trial lawyer.

Mr. Bush sounded a similar message in a discussion on Wednesday at the Commerce Department.

"A litigious society is one that makes it difficult for capital to flow freely," Mr. Bush said. "And a capitalist society depends on the capacity for people willing to take risk and to say there's a better future, and I want to take a risk toward that future. And I'm deeply concerned that too many lawsuits make it too difficult for people to do that."

But critics of the bill have said it may effectively create an impossible situation for many plaintiffs, since federal courts are barred under a 1985 Supreme Court ruling from considering class actions in which there are "material" differences in the laws among the affected states.

Thus, the critics say, the law may create a "Catch-22" in which class-action plaintiffs find both federal and state courthouse doors locked.

"This bill is one of the most unfair, anticonsumer proposals to come before the Senate in years," Senator Harry Reid, Democrat of Nevada, the minority leader, said just before the vote. "It slams the courthouse doors on a wide range of injured plaintiffs." Many deserving cases will be dismissed, he predicted, and those that are not may have to go "to the back of a very long line in the overburdened federal court system."

"Before I came to Congress, I was proud to call myself a trial lawyer," he said. "Lawyers are often the voice of people who cannot otherwise be heard."

The Association of Trial Lawyers of America issued a statement calling the bill "a shameful attack on Americans' legal rights."

"Every American's legal rights are diminished by this anticonsumer legislation which establishes greater procedural hurdles for consumers, workers, homeowners and shareholders," said the group's president, Todd A. Smith.

Besides Senators Reid and Kennedy, the Democrats who voted no were Senators Hillary Rodham Clinton of New York, Barbara Boxer of California, Russell D. Feingold of Wisconsin, Debbie Stabenow of Michigan, Patty Murray of Washington, Max Baucus of Montana, Robert C. Byrd of West Virginia, Mark Dayton of Minnesota, Mark Pryor of Arkansas, Patrick J. Leahy of Vermont, Byron Dorgan of North Dakota, Joseph R. Biden Jr. of Delaware, Tom Harkin of Iowa, Carl Levin of Michigan, Frank Lautenberg and Jon Corzine, both of New Jersey, Richard Durbin of Illinois, John Kerry of Massachusetts, Daniel Inouye and Daniel Akaka, both of Hawaii, Paul Sarbanes and Barbara Mikulski, both of Maryland, Ron Wyden of Oregon and Bill Nelson of Florida.