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Washington-On the day the U.S. Senate debated class action restrictions, senators were called into the Capitol’s “secret room” and were told about a possible terrorist attack inside the United States. On the day the Senate debated class action restrictions, a homeland security appropriations bill and a rail security bill lay dormant on the Senate schedule. “Why are we piddling with this political bill, this class action bill?” asked Senator Robert Byrd, D-W.Va., during the debate last week. So-called tort reform has never been easy in the Senate, primarily because of the dominance of the trial lawyers’ lobby. But last week’s battle over class action legislation showed just how difficult it can be in the current Senate. Heading into the floor debate on July 7, supporters of the class action bill S. 2062 believed they had more than enough votes to stop debate and to pass the measure. But 24 hours after debate began, the whole effort fell apart. A vote on a motion to end debate was 44-43, far short of the 60 votes needed. With that vote, the Senate retained its reputation as the “round file” for tort reform legislation. But this time, the result had less to do with the traditional battle between trial lawyers and business, or trial lawyers versus doctors and insurers. It had more to do with senators’ frustrations over their lack of legislative accomplishments during the session and the political polarization that has marked just about every major legislative effort of the past two years. Senate Majority Leader Bill Frist, R-Tenn., said that if the vote on cloture, to end debate, failed, there would be no further consideration of class action legislation this year because time was running out on the legislative session. But what about next year? “Who knows?” said Larry Fineran of the National Association of Manufacturers, which supported the class action bill in the Senate. “Usually the rule is three Congresses and you’re out,” he explained, adding that the issue has been before three Congresses. “I think it depends on what happens in November. If Bush wins, people would have to do some vote counting in the Senate. If Kerry-Edwards wins, well.” Preparing for battle For Fineran, the U.S. Chamber of Commerce and other supporters of S. 2062, the floor scenario at the start of the week was simple: They had the votes as long as everybody stuck to the agreement. The “agreement” was the revised version of the class action bill that fell just one vote short of cloture last October in the Senate. After that vote, Senate Republican leaders began courting Democrats who showed some inclination to support a bill. A month later, in November, three Democrats agreed to support class action changes in exchange for certain accommodations in the bill. The Democrats who would place it over the top on the next vote were senators Mary Landrieu of Louisiana, Christopher Dodd of Connecticut and Charles Schumer of New York. “This compromise was carefully negotiated, carefully crafted,” said Fineran, adding that even a change in a comma was likely to give someone a reason to walk away. As drafted, the bill was “very much tilted toward business concerns as opposed to competing consumer, civil rights and plaintiffs’ concerns,” said Edward Sherman of Tulane University Law School, who chaired an American Bar Association task force on the legislation. The ABA, he added, had not taken a position on the bill. Some exceptions were made, he noted, in order to get the three Democrats on line, but, he added, “They were fairly small concessions.” The bill represented “quite a change in our notion of federalism,” said Sherman. It would have pulled a very large number of class actions out of state courts and removed them to federal courts, he said. It was a change that had not been embraced by the Judicial Conference of the United States or by the Conference of Chief Justices (of state high courts). Going into the debate, opponents had only one strategy: revise the bill with germane amendments to make it less restrictive, and/or add on nongermane amendments that would make it difficult to be approved finally, said Joy Howell, a consultant to the Coalition to Preserve Access to Justice, a group of about 70 civil rights, consumer and environmental organizations. Jackson Williams, legislative counsel to Public Citizen’s Congress Watch, said his organization’s litigation group met before the debate and decided to try to get one amendment to narrow the bill, “to make it something we could live with.” That amendment became the Bingaman amendment, named after Jeff Bingaman, D-N.M. It was designed to deal with a problem pointed out to Senate leaders recently in a letter opposing S. 2062 by 14 state attorneys general, led by New York’s Eliot Spitzer. Spitzer explained that many federal courts refuse to certify multistate class actions because they have to apply the law of different jurisdictions to different plaintiffs, and so they find that questions of law common to the members do not predominate. The Bingaman amendment would have allowed federal judges to apply the law of a single state with a sufficient nexus to the controversy, and would have prohibited judges from denying class certification on the basis of conflicting state laws. “That was the absolute bottom line necessity to keep the bill from being a complete disaster for consumers,” said Williams. Other amendments were in the works as well to carve out of the bill and keep in state courts certain employment, civil rights, wage and hour and environmental class actions. But the amendments never got to first base and didn’t have to get there. Last train out At the debate’s outset, Majority Leader Frist announced that only a limited number of germane amendments would be allowed and only one nongermane amendment having to do with changing the minimum wage. That decision irritated some members on both sides of the aisle. With only about 30 days left in the legislative session, the class action bill was widely viewed as the last train out of the station. Members of both parties had hoped to amend it with long-pending proposals relating to immigration, global warming, agriculture, drug importation and other issues. Before long, even some members who supported the bill threatened to vote against cloture if the Senate short-circuited its procedures in this way. But Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, said to his colleagues that a vote against cloture on S. 2062 “means you care more about helping unscrupulous plaintiffs’ lawyers.” He said further: “There are jurisdictions in this country, state jurisdictions and local jurisdictions, that border on corruption, that literally don’t care what the facts are, don’t care what the law is. They are just going to give the plaintiffs’ attorneys whatever they want. The plaintiffs’ attorneys have caught on to it, so they forum shop to these outrageous jurisdictions.” Under the bill, the threshold amount in controversy for federal jurisdiction would have been $5 million. Federal jurisdiction would have been affected in the following ways: If one-third or fewer of the plaintiffs are from the same state, there is federal court removal jurisdiction over the class action. When two-thirds of the plaintiffs and the primary defendants are from the same state, there is state court jurisdiction. There also is state court jurisdiction in this category when at least one defendant is from the same state as the plaintiffs, significant relief is sought from the defendant and that defendant contributed significantly to the harm; when the principal injuries occurred in the state where the action was filed; and when no other class action asserting the same or similar allegations against any of the defendants on behalf of the same or other persons has been filed in the last three years. In the third set of cases, in which between one-third and two-thirds of plaintiffs were from the same state as the primary defendant, a federal judge could accept removal or remand the case to state court based on a number of specific factors. The bill also would have limited “coupon settlements” and payments to counsel. But Senator Patrick Leahy, D-Vt., minority chairman of the Judiciary Committee, disagreed, saying, “Some special interest groups are distorting the state of class action litigation by relying on a few anecdotes in an ends-oriented attempt to impede plaintiffs bringing class action cases.” Leahy said the Senate should fix “actual” problems in class action litigation where they occur. “But simply shoving most suits into federal court will not correct the real problems faced by plaintiffs and defendants. We have done something like this by taking a whole lot of criminal matters that should easily be handled in state courts and put them into the federal courts, and the federal courts are so overloaded they don’t get to either the criminal or civil cases.” Frist called for an early cloture vote and it went down. Members’ complaints about an abbreviated process were “disingenuous,” said Fineran. “This bill has been before the Senate and Congress for six years. It has been the subject of 10 hearings. It has been amended on the Senate floor in the past; amended on House floor in the past, and it has been amended off of the floor to accommodate other concerns,” he said. But Howell countered, “This particular bill, which has many peculiarities, never even had a public hearing. Maybe you’d say fine; the issue generally has been around. But law and legislation is written very specifically and each bill has to be examined word for word. When you get a piece of legislation that overturns the way the judicial system works and is opposed by the very people administering the system, that’s a kicker.” Efforts to change the tort system are not likely to get any easier in the Senate, say many lobbyists and other observers. Asbestos negotiations among business, insurers, labor and trial lawyers are continuing. “I think asbestos may actually have more support for change but the question is whether it has gotten to the point where it is so complicated that it can’t be worked out,” Fineran said. The business and insurance communities are still divided among themselves over how to approach the asbestos problem, noted Bill Samuel, director of legislation for the AFL-CIO. “It may be the negotiations could get close and something would be ready next year, but you could have an entirely different Congress,” he said. And a different president, added others. Coyle’s e-mail address is [email protected].

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