Legal System Makeovers Fill the GOP’s Briefcase

Republican lawmakers pushed ahead Thursday on efforts to remake the legal system, with the House adopting a bill to place new limits on class-action lawsuits and senators voting to move a long-debated overhaul of bankruptcy laws to the floor.

The class-action bill, which easily passed the House, 279 to 149, is the first of half a dozen measures on the GOP’s wish list for restructuring the legal system. The Senate passed the bill last week; President Bush was expected to sign it into law as early as today.

The legislation would move large, multi-state class actions -- such as those on behalf of smokers against tobacco companies -- out of state courts and into federal courts, where judges have been more conservative with decisions and damages.

“This bill is an important step forward in our efforts to reform the litigation system and to continue creating jobs and growing our economy,” Bush said in a statement after the House vote. “I look forward to signing the bill into law.”

As in the Senate, a significant number of House Democrats joined with Republicans to pass the bill.

The legislation is designed to end abuses such as “venue shopping” for lenient state courts to hear class-action lawsuits and settlements in which consumers get little or nothing but lawyers collect huge fees.

Those who voted against the bill complained that it would shift the scales of justice in favor of large corporations with high-priced lawyers.

The legislation is “a payback to big business at the expense of consumers,” said House Democratic leader Nancy Pelosi (D-San Francisco).

All of California’s 20 GOP House members voted for the bill, as did three of the state delegation’s 32 Democrats -- Jim Costa of Fresno, Jane Harman of Venice and Ellen O. Tauscher of Walnut Creek. All of the other Democrats opposed it except for Reps. Anna Eshoo of Atherton and Sam Farr of Carmel, who were absent.

The bankruptcy bill that is the second measure on the Republican legal makeover agenda would make it harder for Americans to erase their debts. It was approved Thursday by the Senate Judiciary Committee.

Republican leaders said the measure -- first introduced in 1998 and scuttled several times by side issues -- was scheduled to be the first piece of legislation debated on the floor of the Senate when Congress returned from its weeklong Presidents Day recess.

“This bill has passed over and over again, and I expect it will pass again on the floor this time,” said Sen. Orrin G. Hatch (R-Utah), who chaired the Judiciary meeting in the absence of Chairman Sen. Arlen Specter (R-Pa.), who was undergoing treatment for Hodgkin’s disease.

But Democrats, many of whom generally supported the bill, threatened a showdown over what they described as a loophole that would permit antiabortion protesters who break laws to escape fines or damages by declaring bankruptcy.

“I think it’s a big enough issue on our side to frankly stop this bill,” said Sen. Dianne Feinstein (D-Calif.).

Feinstein has supported the bill in the past, but said she had not decided whether she would do so again.

The measure would force more debtors -- those making more than the median household income in their state -- to agree to a repayment plan instead of having their debts erased.

According to the U.S. census, California’s median household income in 2003 was $50,220; for the nation, the figure was $43,564.

The bill is strongly backed by banks and credit card companies, which would be able to collect more debts if it becomes law.

Sen. Charles E. Schumer (D-N.Y.), who has repeatedly sponsored an amendment to prevent antiabortion protesters from avoiding fines by filing for bankruptcy protection, said he planned to offer his amendment again.

“Nobody ever intended the bankruptcy law to be used as a shield for people who use violence or threaten violence,” Schumer said.

Schumer suggested that he would filibuster the bill if necessary. It is unclear whether the Senate’s Republican leadership could muster the 60 votes necessary to cut off debate and bring the bill to a vote.

Schumer said that other groups that used aggressive protest techniques, such as animal rights groups and labor unions, also opposed the amendment for the same reason as antiabortion groups.

“What I resent most is people saying, ‘Why are we bringing abortion into this?’ We’re not. This is an abuse of bankruptcy,” Schumer said. “I will do my best to hold this bill up in every way until this amendment is supported.”

During the judiciary panel’s debate, Republicans accepted several changes proposed by Democrats, including one offered by Sen. Edward M. Kennedy of Massachusetts to include ongoing medical and insurance costs in repayment calculations.

To expedite moving the bill to the floor, Hatch also said he would support changes suggested by Kennedy and others and would work with senators after the vote to modify the bill’s language to answer their concerns.

He acknowledged that Democrats were likely to offer more amendments during the floor debate.

“We know the floor [debate] is going to be an ordeal, and that’s just the way it is,” Hatch said.