Senate Bill To Limit Class-Action Lawsuits Reintroduced
A "landmark bill" that would transfer many class-action lawsuits seeking more than $5 million in damages from state to federal courts in an effort to limit damage awards "is likely to pass soon," according to congressional leaders from both parties, the Wall Street Journal reports (Rogers, Wall Street Journal, 1/25). Senate Majority Leader Bill Frist (R-Tenn.) said the bill -- which was reintroduced on Monday and mirrors a bipartisan compromise measure that stalled in Senate committee last year -- is one of the GOP's 10 highest legislative priorities and would be the first Senate bill considered following action on President Bush's Cabinet nominations (Peterson, CongressDaily, 1/25).
The measure is part of Bush's campaign to implement medical malpractice reform and reduce litigation costs. The House last year passed class-action reform legislation sponsored by Republican legislators. The legislation was amended in the Senate but defeated in part because lawmakers could not agree on certain unrelated amendments. The new bill would move more class-action lawsuits from state courts to federal courts, which are governed by more stringent rules. Awards in federal court also typically are smaller (California Healthline, 1/7).
Frist agreed to allow the Senate Judiciary Committee to debate amendments on the bill, which was first proposed in the mid-1990s, and said he expected to bring the bill to the floor the week of Feb. 7.
Compromises reached in the bill that could help speed the legislation's passage include measures that would exempt "genuine home-grown cases and local controversies" from being moved to federal courts, the Journal reports. That move would cause the bill to affect less than half of pending class-action lawsuits in state courts, according to a business-funded study of litigation in six Northeast states. According to the Journal, Senate Democrats "show little desire to delay the legislation any longer," in part because they are "[m]indful" of "fights ahead" on broader tort reforms that could include bills on asbestos claims and medical malpractice.
Certain procedural aspects of the class-action bill are still under consideration, but House Republicans say they will accept whatever proposal is passed by the Senate, and Bush is expected to sign the measure. While supporters of tort reform said they believe the class-action bill's passage would provide momentum for other malpractice legislation, Senate Minority Leader Harry Reid (D-Nev.) noted that there are "major distinctions" between the class-action measure and other proposed tort reform legislation, the Journal reports.
Additionally, business attorneys acknowledged that the Senate bill is the result of a "series of compromises over time [that] have built bipartisan support," the Journal reports. Stan Anderson, executive vice president of the U.S. Chamber of Commerce, said he thinks "passage of class action bodes well for other legal reforms. If you can be successful here and build momentum, you may be able to move more quickly on others." Anderson added that he hoped to see a breakthrough on asbestos legislation as early as May.
Reid said that while he does not like the bill, he is not going to "waste a lot of time on the floor on something that is a waste of time," adding, "I don't know how many votes that bill has (in the Senate), but it is approaching 70 now" (Wall Street Journal, 1/25).
While the bill previously stalled because of disputes over unrelated amendments, a Frist spokesperson said leaders from both parties are "working towards an understanding that if the bill goes through the committee, then floor action will be limited to germane amendments" (CongressDaily, 1/25).
Civil rights advocates say the bill would have unintended consequences that could limit civil rights cases. In addition, consumer groups say the bill would establish a "federal dead end for multistate class-action suits," according to the Journal. Richard Seymour, who has raised numerous class-action suits, said federal judges are more likely to decline multistate cases to keep their dockets clear, adding, "A state-law case is the lowest animal on a federal judge's totem pole. It will hurt consumers by moving consumer cases to federal court, where they will not be certified" (Wall Street Journal, 1/25).
Public Citizen President Joan Claybrook said that the Judiciary Committee should hold hearings on the measure before clearing it. "They haven't had any hearings on (class-action legislation) in a couple of years," Claybrook said, adding, "It's very complicated, and there are a lot of new members of Congress who haven't had any exposure to this bill. Consumers haven't had a chance to speak to it in a long, long time" (CongressDaily, 1/25).