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GOP Looks to Limit Class-Action Suits

After trying to curb class-action suits for years, Republicans finally have enough support to ram legislation through the Senate to limit what they call an overabundance of frivolous cases against American businesses.

But a decision by Senate Majority Leader Bill Frist (search) to push forward immediately on that legislation instead of finishing work on a defense bill may have the effect of forcing the GOP to wait even longer before claiming a victory that big business has sought for years.

The Senate will vote Tuesday on whether to act immediately on the bill to move more class-action suits from state to federal courts instead of continuing work on the Defense Department's $422 billion authorization bill. That was the pending business when the Senate recessed for its holiday break on May 21.

Several Democrats have promised to join with the GOP to give Republicans the 60 votes they need to move the class-action bill to passage. But those same Democrats are expected to refuse to vote to abandon the defense legislation to do it.

"They believe in class-action reform a lot, but they are not going to vote" to skip over the defense bill, said Assistant Democratic leader Harry Reid, D-Nev. "We believe we should finish the defense bill and then go to class action."

Frist wanted to put the defense bill off because Democrats are refusing to agree to a limit on amendments, and Frist wants extra time to negotiate. Moving to class action would give Frist that time.

"The class-action bill does have strong bipartisan support, and we would like to finish that bill in a reasonable period of time," Frist said.

The GOP bill would move more class-action lawsuits — where one person or a small group represents the interests of an entire class of people in court — out of state courts where juries are often more generous to plaintiffs, and into federal courts where awards typically are smaller.

Senate Republicans and the corporate community, for whom curbing class-action lawsuits is a major priority, say businesses are drowning in frivolous lawsuits while trial lawyers profit handsomely by sometimes just threatening legal action.

"We are extremely pleased that after six years the United States Senate will finally have the opportunity to debate and vote on legislation to fix the country's broken state court class-action system," said Stanton Anderson, executive vice president of the U.S. Chamber of Commerce (search), who called the bill "moderate and reasonable."

But many Senate Democrats and other opponents say the legislation only helps businesses escape judgments for wrongdoing. Huge damage awards are needed to ensure corporations play by the rules, they say.

Federal judges, opponents say, will either throw many of the cases out or be less likely to issue multimillion-dollar judgments against corporations if the bill is passed.

"The Senate proposal is designed to kill the use of class-action lawsuits, which have resulted in decisions that not only provide refunds to consumers and others injured by corporate wrongdoing, but also require changes to business practices that have cheated consumers, workers and even local and state governments," said a statement from USAction (search), a liberal, pro-consumer activist group.

GOP senators fell one vote short of achieving a filibuster-proof, 60-vote majority in October. But now several Democrats, including Christopher Dodd of Connecticut and Charles Schumer of New York, have agreed to support the legislation.

Democrats feared some of their state constituents would lose their right to sue in their own courts. Under the deal, Democrats get additional exceptions in the bill that they say will preserve class-action lawsuits that belong in state court.