Without a vote to spare, Senate Democrats blocked a business-backed effort yesterday to limit class action lawsuits — and the huge legal fees that lawyers often receive from them — by moving many such suits from state courts to the federal judiciary, reports the Washington Post.
The paper said it was the second recent defeat for President Bush’s “tort reform” initiative, following a similarly successful Democratic effort in July to derail a bill to limit damages in medical malpractice cases. A third proposal, which would set up a trust fund to compensate asbestos victims, is also stalled in the Senate.
The latest setback came on a 59-39 vote to proceed with the class action bill, one vote short of the 60 needed to end a Democratic filibuster and put the measure on track for approval.
Under class action lawsuits, a complaint alleging harm from a defendant’s wrongdoing can be expanded to include as plaintiffs other individuals who may have been affected in the same way, such as victims of discrimination or buyers of defective products. Lawyers usually take such cases on a contingency basis, which can result in huge fees if they win.
The bill would shift many of these cases from state courts, some of which are known for their huge awards and fees, to the federal system, which is usually tougher in its approach to plaintiffs in such suits.
Under the bill, class actions involving at least 100 plaintiffs and stakes of $5 million or more could be moved to federal court when the primary defendant and no more than one-third of the plaintiffs are from the same state. Cases would remain in state court when two-thirds of the plaintiffs are from the same state as the defendant. For cases that fall in between, judges would decide where the cases would be tried.