Senate Passes Class-Action Overhaul

The measure would require many cases to be brought in federal courts rather than in state courts, which are generally considered more favorable to plaintiffs.

In a vote widely seen as a victory for President Bush, the Senate passed a bill late last week that would make it more difficult to file class-action lawsuits against companies. The measure would require many cases to be brought in federal courts rather than in state courts, which are generally considered more favorable to plaintiffs.

The bill, which last year failed by a single vote, passed the Senate this year by 72 to 26, according to published reports. The House of Representatives is expected to pass a similar bill as early as this week.

Pending cases are not affected, according to The New York Times. As for future cases, the newspaper pointed out that many may not be brought to court at all because federal judges have been restricted by legal precedents from hearing large class actions that involve varying laws of different states.

In general, reported the Times, the final version of the law is expected to allow a state court to hear a class-action case if the defendant and more than one-third of the plaintiffs are from that state. Otherwise, provided that claims exceed $5 million, the case would be heard in federal court. This is significant since plaintiffs’ lawyers typically file their cases in states they believe are friendly to their cause.

“Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy, costing jobs and threatening small businesses,” President Bush reportedly said in a statement. “The class-action bill is a strong step forward in our efforts to reform the litigation system and keep America the best place in the world to do business.”

Most businesses, naturally, are applauding the legislation. If signed into law, it would probably most affect cases involving accusations of defects in products like drugs and cars.

“This bill is one of the most unfair, anti-consumer proposals to come before the Senate in years,” said minority leader Harry Reid (D-Nev.), according to the Times. “It slams the courthouse doors on a wide range of injured plaintiffs. It turns federalism upside down by preventing state courts from hearing state law claims. And it limits corporate accountability at a time of rampant corporate scandals.”

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