- The Washington Times - Sunday, February 13, 2005

In its first legislative vote of the new session, the Senate easily passed a much-needed tort reform bill on Thursday. Since President Bush supports it and the House has been passing similar bills for years, the Class Action Fairness Act is already as good as law. It’s also heartening to see the new Senate, under a strengthened Republican majority, pass a truly conservative bill with plenty of Democrats (18) breaking ranks — not that it would have been a wise maneuver for Democrats to waste whatever political capital they have left on the trial lawyers. And make no mistake, the lawyers took it on the chin on this one.

Class-action lawsuits have been in need of reform ever since the lawyers figured out how to game the system: By “shopping” their cases around state courts in search of a sympathetic judge and jury, the lawyers would draw whatever business was in their cross-hairs into a zero-sum game, since the targeted business would usually just settle out of court rather than face bankruptcy. Over the last 10-year period, this little scheme averaged billions of dollars per year in payouts, much of it going straight into the lawyers’ bank accounts. And all the while the lawyers had the gall to uphold the facade of helping out the “little guy,” a la Erin Brockovich.

The bill just passed by the Senate would take class actions with plaintiffs from multiple states out of state courts into federal courts, essentially stripping the lawyers of their “shopping” advantage. Any case that exceeds claims of $5 million would go directly to the federal system. Raising the status of class actions to the federal level will hopefully limit the number of suits, as well, since federal judges are often constrained from deciding cases which involve several state laws. Perhaps most encouraging is that the bill allows for greater scrutiny of settlements in which the plaintiff might receive nothing more than a buyer’s coupon, while their lawyer walks away with a fat payday.

The bill’s wide bipartisan support, however, is also the leading indicator of its shortcomings. Considering the number of Democrats that did defect, Republicans might have been able to get a tougher reform package through — one, for instance, that tightens the all-too-lenient standards that allows class-action claims to reach juries in the first place. With the approval of the House leadership, concessions were made and a weaker bill was the result.

Nevertheless, it’s a significant first victory in Mr. Bush’s second term, and one which we hope augurs well for some of the president’s more controversial proposals. Still on the legislative table are medical-liability reform and a contentious asbestos-settlement bill, an issue the president highlighted in his State of the Union address.



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