New York Times March 14, 2002 Class-Action Bill Favorable to Business Passes House
By ROBERT PEAR
ASHINGTON, March 13 - A partisan battle over the nation's civil justice system reached the floor of the House of Representatives today as Republicans pushed through a bill explicitly intended to protect corporations against the high cost of class- action lawsuits in state courts.
The bill was approved tonight, 233 to 190, with support from 215 Republicans, 17 Democrats and 1 independent. The measure was opposed by 184 Democrats, 5 Republicans and 1 independent.
Opponents of the bill, including some consumer groups and plaintiffs' lawyers, said they believed that they would be able to block it in the Senate.
In theory, class actions provide an efficient way for courts to resolve similar claims filed against the same defendants by dozens or hundreds of plaintiffs.
But Republicans say the device has been misused by lawyers who file nationwide class actions in state courts known to be favorable to plaintiffs. In some of the lawsuits, they say, individual plaintiffs receive little money while their lawyers make millions in fees.
The bill would make it easier for defendants to shift such lawsuits from state courts to federal courts, where rules of evidence and procedure are often viewed as more favorable to defendants. It would give federal courts jurisdiction over any class-action lawsuit with claims totaling more than $2 million if at least one plaintiff and one defendant were from different states.
One purpose of the bill, according to the legislation, is "to protect responsible companies and other institutions against interstate class actions in state courts." But Democrats said the legislation would protect corporate wrongdoers who had defrauded consumers, spoiled the environment or sold dangerous, defective products.
Representative Robert W. Goodlatte, Republican of Virginia, the author of the bill, said, "Class actions of national importance should be heard in federal court by a federal judge, not by a state or county court judge in one region of the country."
Another Republican, Representative Christopher Cox of California, said that a handful of local courts were making law for the nation even though they "harbor prejudice against out-of-state defendants."
Mr. Cox cited Jefferson County, Miss., one of the poorest counties in one of the nation's poorest states. The county has become a popular venue for lawyers suing makers of prescription drugs, cigarettes, lead paint and asbestos products.
The House Judiciary Committee's report on the bill said that "state courts typically resolve most class actions" today.
Senator Patrick J. Leahy, Democrat of Vermont, chairman of the Senate Judiciary Committee, has resisted similar legislation, expressing concern that it could interfere with lawsuits against tobacco companies and polluters.
House Democrats repeatedly cited the collapse of Enron as an example of why class actions were needed.
Representative Martin Frost, Democrat of Texas, said the Republicans had shown a "peculiar sense of timing" in trying to limit class actions. "America has just witnessed the worst corporate robbery in history," Mr. Frost said. "Now Republican leaders are pushing a bill to protect big corporate wrongdoers."
Republicans insisted that the bill had nothing to do with Enron. Class- action suits against Enron have already been filed in federal court, they said, and their bill would not apply to claims based on state laws regulating "the internal affairs or governance of a corporation."
In voting for the bill, Republicans sided with customary allies like the United States Chamber of Commerce and the National Association of Manufacturers. In opposing it, Democrats sided with consumer groups like Public Citizen, founded by Ralph Nader, and with plaintiffs' lawyers, who tended to favor Democratic candidates in their campaign contributions.
"Trial lawyers are pulling out all the stops to kill this bill because it will end their financially lucrative `forum shopping' in state courts," said Michael E. Baroody, executive vice president of the association of manufacturers.
Democrats said the Republicans were casting aside their usual respect for states' rights to protect the financial interests of businesses.
"What happened to states' rights?" asked Representative Max Sandlin, Democrat of Texas. "What happened to local control?"
The Judicial Conference of the United States, representing federal judges, opposed similar legislation in 1999, saying it would increase their caseload and conflict with "long-recognized principles of federalism." The National Conference of State Legislatures said the proposal would undermine the authority of state judges and state lawmakers by mandating "a wholesale federal takeover of class-action litigation."