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2003 News and Press
Releases |
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HEADLINE:
House
Expected To Pass Bill To Rewrite The Rules On Class-Action Lawsuits
By: Richard A. Oppel Jr.
The New York Times. June 12, 2003
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EXCERPT: The House is poised to pass a
bill that would give corporate lobbyists one of their most
sought-after goals on Capitol Hill: a sweeping rewrite of the rules
governing class-action lawsuits. Business groups, which have been
pushing for the legislation for years, want to force many large
class-action suits into federal courts and out of the state courts
favored by plaintiffs' lawyers. A broad array of industry groups
that have been socked by big class-action lawsuits, including health
insurance companies and life insurers, argue that the system is
being abused by lawyers who increasingly file major cases in a few
out-of-the-way jurisdictions that have sympathetic judges and
juries. Trial lawyers, as well as some environmental and consumer
groups, contend the proposals would weaken a tool for protecting the
interests of consumers, and they argue that companies want the
legislation so they can push big cases into courts that tend to be
friendlier to corporate defendants. The real battle over the bill is
in the Senate, where many Democrats have ties to the powerful trial
lawyers' lobby. But backers of the legislation are more optimistic
than in years past, saying they are only a few votes short of
obtaining the 60 needed to force a vote on the Senate floor, a tally
that partly reflects Republican gains in elections last year. The
House, which has approved similar legislation before, is scheduled
to vote on Thursday. Because the legislation applies retroactively
to many lawsuits and also includes a provision granting mandatory
appeals of class-action certification rulings, the bill could cause
delays in pending federal-court cases that seek to recover money
lost through the corporate scandals at Enron and other large
companies. The legislation is also promoted as a remedy for what
critics on both sides describe as collusive settlements between
lawyers and companies. In these pacts, the lawyers get big fees, but
only a few dollars or worthless coupons are provided to each
plaintiff. At the same time, the settlements allow corporate
defendants to wipe out liabilities they face for fraud, defective
products and other claims. But whether this legislation will curb
collusive settlements has become a hotly contested point. Business
groups say the provisions they favor will subject settlements to new
scrutiny, but critics call the provisions weak and say that
lobbyists are resisting a more serious repair to the problem because
corporations want to continue using coupons in settlements.
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