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Senate Takes Up Class-Action Restrictions

Consumer Groups Try to Soften Measure Forcing Lawsuits Into Federal Courts

By John F. Harris
Washington Post Staff Writer
Tuesday, February 8, 2005; Page A04

The Senate began debate yesterday on a measure that would revise rules on class-action lawsuits -- a longtime goal of President Bush and his business supporters -- as consumer groups urgently tried to garner support for amendments they said would make an objectionable bill somewhat more palatable.

Consumer groups, plaintiffs' lawyers and many state attorneys general said they would prefer to defeat the Class Action Fairness Act, which would send many class-action cases out of state courts and into the federal system, which historically is less sympathetic to the claims.


Sen. Patrick J. Leahy: "Class actions allow the little guys to band together." (Chris Kleponis -- Bloomberg News)



But solid support by the Republican leadership in both chambers, combined with backing from several influential Democrats in the Senate, has opponents' backs against the wall. Acknowledging that the bill is on a fast track for passage, opponents said yesterday that they are lobbying for amendments to help ensure that class-action cases are not dismissed by federal judges.

While the bill has garnered the attention of powerful interests, with potentially large consequences for business and consumers, this week's debate is turning on somewhat arcane provisions of law.

Supporters, including the U.S. Chamber of Commerce, have long maintained that class-action lawsuits are waged amid a patchwork of state laws. The result, they said, is an irrational system in which lawyers shop for sympathetic local venues, regardless of whether that is the most logical place for a case to be heard, and in which there is little consistency in awards. The bill would send cases with plaintiffs in multiple states into the federal system.

The problem, opponents say, is that federal courts are overburdened, and often disinclined to hear such cases. Frequently, when presented with a case in which laws from different states might apply and in some cases contradict one another, judges will refuse to "certify" that a valid class-action claim exists and the case is thrown out.

A planned amendment by Sen. Jeff Bingaman (D-N.M.) would address this by requiring federal judges to hear the case by selecting one state's law and applying it to the case. The amendment, according to backers, would test whether the real point of changing the rules is to hear more cases in federal court, or to guarantee that far fewer cases are ever heard.

Late yesterday, Senate aides said Bingaman was working with Sen. Dianne Feinstein (D-Calif.), who has been a backer of the bill, on a possible compromise aimed at ensuring that class-action cases do get heard by federal courts, rather than dismissed. Feinstein is concerned that federal courts might apply state laws from states other than California, which has strong consumer protections.

The fate of the Bingaman amendment may prove pivotal to the bill's fate. The House in recent years has backed a stronger version of the legislation that would tighten rules on class-action lawsuits even more than the Senate.

Last week, however, the House GOP leadership said that in the interest of speedy passage it would accept the Senate version of the bill -- provided it passes with no amendments.

Senate Judiciary Chairman Arlen Specter (R-Pa.) said he supports the bill, but also the amendment to ensure that federal courts actually hear the cases. The committee's ranking Democrat, Sen Patrick J. Leahy (Vt.), is opposed to the bill in general.

Class-action cases often involve small grievances -- people who feel they have been victims of credit card rip-offs, for instance -- that are worth pursuing as legal actions only if multiple claims can be lumped together.

"Cheating thousands of people just a little is still cheating," Leahy said on the Senate floor. "Class actions allow the little guys to band together, allow them to afford a competent lawyer and allow them to redress wrongdoing."

But Stan Anderson, a U.S. Chamber of Commerce official leading a business coalition in support of the bill, said that zeal for large damage awards often leads lawyers to lump together claims that do not logically belong in one suit, making federal judges justified in preferring to dismiss the cases. "Trial lawyers are lazy," Anderson said. "They could style their cases to get around these problems," but doing so would mean trying several small cases instead of one potentially lucrative big one, he said.


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