Senate working on compromise bill to curb class-action lawsuits

WASHINGTON -- A fragile compromise that would curb class-action lawsuits and achieve one of President Bush's second-term goals survived its first test Thursday when senators foiled attempts to alter the legislation.

But Democrats are hoping to make changes to a bill that many of them would not mind seeing fail.

"This is a bad idea whose time has apparently come," said Sen. Joseph Biden, D-Del.

By a 13-5 vote, the Senate Judiciary Committee approved the overall bill, which would send the majority of class-action suits to federal court rather than state courts. The Republican-controlled Senate will consider the measure next week.

Federal courts are assumed to be less likely than state courts to award multimillion-dollar verdicts to people suing big companies.

Supporters will try to get the legislation to the GOP-dominated House, which 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 the chairman of the Senate Judiciary Committee, Sen. Arlen Specter, R-Pa.

Democrats, however, already are preparing amendments, including proposals to raise judges' salaries and let federal judges decide which state's law would apply in multistate suits. Making those changes will break the agreement with the House and kill the bill, Republicans said.

"That would be a poison pill on this bill," said Sen. Jon Kyl, R-Ariz.

The president has said that curbing class-action cases is a second-term priority. Senators who support the bill say greedy lawyers make more money from these cases than do the actual victims, and that lawyers sometimes threaten companies with legal action just to get 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."

As written, the bill has enough Democratic and Republican support to survive a filibuster attempt in the Senate. Senate Majority Leader Bill Frist, R-Tenn., and Senate Minority Leader Harry Reid, D-Nev., have agreed not to support major changes.

"If we can succeed in passing a clean bill through the Senate, it is my expectation that the House will act quickly and we can send a bill to the president," Frist said.

House Republican leaders, including Judiciary Chairman James Sensenbrenner, R-Wis., will make sure the legislation receives a warm reception if it is not substantially changed, lawmakers said Thursday.

Opponents of the bill 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, D-Vt., who tried to get the committee to add the judges' pay provision.

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

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On the Net:

Information on the bill, Senate bill is S. 5, can be found at http://thomas.loc.gov