House OKs Shift in Venue for Many Class-Action Suits

Republicans on Wednesday pushed through the House legislation to move many class-action lawsuits out of state courts and into federal courts, where businesses say they are more likely to get a fair trial.

The bill, which the Bush administration supports, sparked a sharp partisan debate.

Republicans said it would discourage frivolous lawsuits by plaintiffs’ attorneys chasing deep-pocket defendants; most Democrats charged that it would tilt the justice system in an effort to shield corporate wrongdoers.

The 233-190 House vote moved the bill to the Democratic-controlled Senate, where it faces steep hurdles. Senate Majority Leader Tom Daschle (D-S.D.) said he has not yet reviewed the legislation.

Similar legislation narrowly passed the House in 1999 but died in the Senate.

Business lobbyists hailed the House action as a step toward curbing what they view as excessive class-action settlements negotiated in local courts in such states as California, Mississippi, Illinois and Texas.

“There are a number of states now that have become nearly lawless in their civil justice systems,” said Jim Wooton, president of the U.S. Chamber of Commerce’s Institute for Legal Reform. “They’re essentially acting like pirates and waylaying national corporations and taking property away from them without due process of law.”

But trial lawyers and consumer and environmental groups deplored the bill. They said that without the threat of class-action suits--in which plaintiffs can seek damages on behalf of large groups--businesses would not have been forced to put seat belts in cars or child-safety caps on medicine bottles.

Public-interest litigation against tobacco and pharmaceutical companies, they said, also would be damaged if the bill were to become law. The groups vowed to fight to ensure the bill never reaches President Bush’s desk.

“It’s not going to get out of the Senate,” said Carlton Carl, spokesman for the Assn. of Trial Lawyers of America. “This is outrageous special-interest legislation.”

Bush is a strong advocate of pro-business legal reforms. A White House statement issued Tuesday described the bill as “an important step in reforming class-action litigation.”

The bill, sponsored by Rep. Bob Goodlatte (R-Va.), would attempt to steer most class-action lawsuits with plaintiffs and defendants from different states into the federal court system if damages totaling $2 million or more are alleged.

Exceptions would be made for cases that deal almost exclusively with plaintiffs and defendants from one state.

The bill also contained provisions that Republicans said would prevent abuses in which lawyers earn enormous fees while plaintiffs get only noncash benefits, such as coupons, from a settlement.

Advocates said the bill would prevent lawyers from scouring the country for venues favorable to plaintiffs to file their cases.

“They can put their thumb on the scale of justice and skew the results,” said Rep. Christopher Cox (R-Newport Beach).

But critics said the bill would overload an already crowded federal court system and effectively deny plaintiffs the ability to pursue their claims.

“This bill is a bailout for corporate wrongdoers,” said Rep. Alcee L. Hastings (D-Fla.).

The bill was supported by 215 Republicans, 17 Democrats and one independent.

Among California’s 52 House members, only two crossed party lines. Reps. Calvin M. Dooley (D-Visalia) and Jane Harman (D-Venice) voted for the measure.