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2003 News
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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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