Bush gets bill limiting class-action lawsuits

WASHINGTON — Got a beef with big business? If you and enough of your fellow consumers are mad enough to sue, be aware that state courts — where many of the biggest payouts in class-action lawsuits have been made — may now be closed to you.

After years of complaints from business about the generosity of state judges and juries toward plaintiffs, lawmakers on Thursday sent President Bush legislation aimed at discouraging such multistate, multiplaintiff suits by sending many of them to the traditionally more stingy federal courts.

No longer will precedent-setting, multimillion-dollar lawsuits like the ones against the tobacco industry be heard in cramped state courthouses, ushered forward by judges chosen on the local level and decided by juries likely to live in the town where the lawsuit was filed.

Instead, the GOP-controlled Congress decided it would be better for judges picked by the president and confirmed by the Senate to work on those cases, saying greedy lawyers have turned state class-action lawsuits into a system in which no one profits but themselves.

The legislation will help reduce the “frivolous lawsuits that clog our courts, hurt the economy, cost jobs and burden American businesses,” said Bush, who was to sign the bill into law Friday.

The legislation the House passed, 279-149, is the first of Bush’s 2005 legislative priorities to win congressional approval. The Senate voted 72-26 for the bill Feb. 10.

The president has described class-action suits as often frivolous, and businesses complain that state judges and juries have been too generous to plaintiffs.

But Democrats say the legislation is aimed at protecting GOP business donors and hurting trial lawyers, a traditional part of their base. They also warn that Republican changes to the legal system will only make it harder for people to sue over injuries caused by corporations.

The legislation is “a payback to big business at the expense of consumers,” said House Minority Leader Nancy Pelosi, D-Calif.

Changing the legal system — including class-action, medical malpractice and asbestos injury lawsuits — has been a priority for Bush, the GOP and the business community. They have criticized what they see as a litigation crisis that enables lawyers to reap huge profits while businesses and consumers are stuck with the bill.

“This is the beginning of meaningful efforts by the Congress to curb lawsuit abuse,” said House Judiciary Committee Chairman James Sensenbrenner, R-Wis.

The legislation would ban state courts from hearing large multistate class-action lawsuits. Such courts have been known for issuing multimillion-dollar verdicts like they did against tobacco companies. Critics of the current situation have said federal jurists are not as likely to let multimillion-dollar class-action lawsuits move forward.

Bush and other Republicans say lawyers have taken advantage of the state class-action lawsuit system by filing frivolous lawsuits in certain states where they know they can win big dollar verdicts. Meanwhile, those lawyers’ clients get only small sums or coupons giving them discounts for products of the company they just sued, GOP lawmakers contend.

In response, Republicans said, companies have had to raise prices on products to recoup their costs.

House Majority Whip Roy Blunt, R-Mo., said moving those cases to federal court will ensure that state judges will no longer “routinely approve settlements in which the lawyers receive large fees and the class members receive virtually nothing.”

But Democrats say Republicans just want to protect corporations from taking responsibility for their wrongdoing, and warned that Republicans will try the same thing with other types of suits.