Senate Class-Action Lawsuit Bill Stalls

A dispute over potential amendments appeared Wednesday to have derailed a Senate bill that would restrain class-action lawsuits.

All but one Republican senator and at least 12 Democrats have declared support for the bill, which would require most such lawsuits to be filed in federal courts. Compared to state courts -- which often hand out large damage awards -- the federal courts have set a higher bar for hearing class-action cases.

Senate Majority Leader Bill Frist (R-Tenn.) resorted to a rare procedure to prevent lawmakers on both sides of the aisle from offering amendments unrelated to the bill. The amendments would have, among other things, proposed raising the minimum wage, addressing climate change and establishing a guest-worker program for undocumented farm laborers.

Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) said that some of the amendments, if successful, would turn the bill’s core Republican supporters against it and doom the legislation. “Anybody with brains” knows that the Democrats are trying “to score political points in an election year,” Hatch said of those backing the amendments.

Frist filed a motion, to be voted on Friday, to cut off debate and bring the bill to a vote, although all sides predicted that the motion would fail. Several of the bill’s supporters, including most Democrats, said they would oppose the motion.

A version of the bill has passed the House.

Proponents of the Senate measure argue that it is needed to limit what they see as abuses of the system. “Many class-action settlements only benefit the lawyers -- with little or nothing going to class members,” said Sen. Charles E. Grassley (R-Iowa), the bill’s chief author.

Opponents said the bill would limit access to the court system for aggrieved Americans. “This is an effort to close the courthouse door,” said Sen. Richard Durbin (D-Ill.).

Class-action lawsuits -- typically involving employment disputes, defective products, safety violations or pollution damage -- usually are filed on behalf of many potential plaintiffs by a few who allege they have been wronged. The rewards for individual plaintiffs in such a suit often are small, but lawyers can sometimes make millions of dollars in fees.

In one example that was cited, the settlement of a 1995 lawsuit against the BancBoston Mortgage Corp. ended with the plaintiffs actually losing money, while their lawyers were paid legal fees of $8.5 million.

“What really happened was that the class-action lawyers picked my pocket,” one of the plaintiffs, Martha Preston of Wisconsin, said at a news conference in support of the Senate legislation. She said she lost $91.

Supporters of the bill said it would limit the practice of shopping for hearings in courts known to be favorable to plaintiffs. As an example, supporters cited a case in state court in Madison County, Ill., in which lawyers reportedly gained $22 million from a settlement with Thomson Consumer Electronics of Carmel, Ind., over allegedly faulty television sets. The plaintiffs received $60 for each TV set or coupons for $50 worth of Thomson products.

Opponents listed cases that they said illustrated why it was important for state courts to continue having jurisdiction over many class-action cases.

Residents of Anniston, Ala., filed suit against Monsanto, a Missouri-based chemical corporation, for allegedly hiding its dumping of PCBs, lead and other harmful chemicals. Solutia Inc., formerly called Monsanto, reportedly has agreed to pay $600 million to settle the claim. But under the bill, which would require there to be at least one in-state defendant for a large class-action lawsuit to remain in state court, that case would have been sent to federal court instead.

Opponents said pushing most of the cases to the already swamped federal system would mean longer waits for courts less likely to be favorably disposed.