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Senate Panel Approves Class Action Suit Changes

Efforts to curb class action lawsuits (search) advanced Thursday as backers of legislation pushed by the Bush administration and the business community foiled initial attempts to alter a carefully crafted compromise.

The Senate Judiciary Committee (search) left intact language that would send many class action lawsuits from state courts into federal court, despite an attempt by Democrats to use the bill as a vehicle to raise federal judges' pay.

The committee approved the overall bill on a 13-5 vote, and the Republican-controlled Senate will take it up next week. Supporters will try to get the legislation to a GOP-dominated House that has agreed to support the bill if it is not substantially changed.

"We have a very sensitive agreement with the House of Representatives on this bill, and if there are amendments it may jeopardize the acquiescence of the House on our bill," said Senate Judiciary Chairman Arlen Specter, R-Pa.

Senators who support the bill say greedy lawyers make more money from class-action lawsuits than the actual victims and that attorneys sometimes threaten companies with lawsuits just to extort quick financial settlements.

"That system is broken and it needs fixing," said Sen. Tom Carper, D-Del. "There are too many instances where consumers are getting very little or nothing from their settlements, while companies are not being forced to change the way they do business."

Supporters already are pressing senators to leave the bill alone, and Senate Majority Leader Bill Frist, R-Tenn., and Senate Minority Leader Harry Reid, D-Nev., have agreed to not support major changes. And House Republican leaders, including House Judiciary Chairman James Sensenbrenner, R-Wis., will make sure the legislation receives a warm welcome there if it is not substantially changed, lawmakers said Thursday.

But just in case something happens to the Senate compromise, House Republicans reintroduced their own bill Wednesday, which they say is tougher than the Senate version. "If the Senate compromise agreement falls though, then the House is ready to move forward with its legislation," said Rep. Bob Goodlatte, R-Va.

Opponents of the bill, which would shunt the majority of class-action suits to federal instead of state courts, said it was aimed at helping businesses escape multimillion-dollar judgments for their wrongdoing and would hurt lawyers trying to litigate those cases.

"It benefits the special interests, but I don't see how it benefits the citizens of individual states," said Sen. Patrick Leahy of Vermont, D-Vt., who tried to get the committee to add the judges' pay provision.

Federal courts are assumed to be less likely to issue multimillion-dollar verdicts against big corporations.

Opponents have acknowledged that the legislation will likely be approved by Congress this year, despite their complaints. "This is a bad idea whose time has apparently come," said Sen. Joseph Biden, D-Del.

Under the Senate proposal, class-action lawsuits in which the primary defendant and more than one-third of the plaintiffs were from the same state would still be heard in state court. But if fewer than one-third of the plaintiffs were from the same state as the primary defendant, the case would go to federal court.

Also, at least $5 million would have to be at stake for a class-action lawsuit to be heard in federal court.

Under that configuration, it has more than enough support to beat a filibuster (search) in the Senate, with Democrats such as Carper, Charles Schumer of New York and Herb Kohl of Wisconsin serving as sponsors.

The House legislation is retroactive, which means it would knock into federal court every pending case that meets criteria set by the legislation.

Rep. Lamar Smith, R-Texas, said the retroactivity provision would prevent trial lawyers from rushing into court to try to beat the effective date of the legislation.