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The fight over tort reform is taking shape, and the clash over the granddaddy of them all — measures to restrict class actions — is already heating up. Business advocates at the American Tort Reform Association (ATRA) and the U.S. Chamber of Commerce are handicapping their chances at advancing the half-dozen tort reform bills that died with the end of the last Congress, while their entrenched opponents — trial lawyers — are meeting with allies on the Hill to plot a defense. Neither side has much time to contemplate strategy: Tort reform is already a major component of the new Patients’ Bill of Rights Act introduced last week by Sen. John McCain, R-Ariz., and Sen. Edward Kennedy, D-Mass. And other measures, targeted at limiting liability in fields as far-flung as education and high-tech, are just around the corner. It won’t be an easy fight for either side. Although the tort reformers have gained a Republican president, they lost a number of their staunchest supporters in the Congress in the last election cycle, including Sens. John Ashcroft, R-Mo., Spencer Abraham, R-Mich., and Slade Gorton, R-Wash. With a closely divided house and evenly split Senate, not to mention a slate of higher priorities, President George W. Bush doesn’t seem willing to risk his political capital on the issue anytime soon. But that has not deterred tort reform supporters, who have already begun to take incremental steps toward their goal of systemwide reform. Mark Gitenstein, a D.C. partner at Chicago’s Mayer, Brown, & Platt who advises the Chamber of Commerce and companies like the Hewlett-Packard Co. on tort reform, says the close margins in the 107th Congress may have kept the political climate from improving significantly. “Despite Republican control of the White House and Congress, I think it will be difficult to pass meaningful legislation,” Gitenstein says. James Wootton, president of the U.S. Chamber of Commerce’s Institute for Legal Reform, says, “The real action won’t start until some consensus emerges in the business community.” Wootton is forming a business coalition to push tort reform. To get a bill passed in the current political environment, “it would have to be focused, bipartisan, and perceived to be fixing a specific problem that hurts consumers,” says Mayer Brown’s Gitenstein. During the Clinton years, Congress approved a slew of tort reform bills — among them, the Y2K Information and Readiness Act. The buzz on Capitol Hill is that the high-tech industry, partly because of its bipartisan appeal, could be the next benefactor of liability-reducing legislation. Joseph Rubin, director of congressional and public affairs at the Chamber of Commerce, says high-tech executives are increasingly concerned about being sued by consumers over privacy concerns or junk mail. “A lot of trial lawyers target deep-pocketed industries,” says Rubin. A CLASSY ACT But a bill limiting the liability of software-makers and other high-tech companies would be small potatoes compared to what business advocates really hope to achieve: class action overhaul. The most dramatic change proposed last year, class action legislation is expected to be introduced again this session by Sen. Orrin Hatch, R-Utah, and Rep. R. James Sensenbrenner Jr., R-Wis. “We are pretty optimistic,” Rubin says. “We are working with a number of senators on both sides of the aisle.” The legislation would stop class action plaintiffs in multiple jurisdictions from bringing suit in state courts, referring those cases to the federal judiciary, where the proponents of the bill say the cases can be better handled. Trial lawyers who poured $1.6 million into former Vice President Al Gore’s presidential campaign aren’t about to let their guard down. They speculate that Bush, to whom they gave $378,524 during the election cycle, may be saving tort reform for later in his term. ATRA President Sherman “Tiger” Joyce points to a class action brought in an Illinois court against the State Farm Insurance Co., which charged the company with replacing crash parts with lower-valued auto parts. The plaintiffs, who came from all over the United States, won a $1.6 billion verdict, which is now on appeal. “The case was too big and outsized for that judge,” says Joyce, adding that the judge didn’t seem to take into account that rules governing auto part replacement differ from state to state. But the trial attorneys say the drive to move class actions into federal court is not aimed at finding a more fair or better equipped venue. Rather, they believe, the proposal would make class actions more costly and difficult, since the federal courts are already clogged and understaffed. “It’s vitriolic, mean-spirited, and disingenuous,” says Fred Baron, president of the Association of Trial Lawyers of America (ATLA). Of course, trial lawyers have traditionally also achieved better results in state courts, where juries tend to be more sympathetic and where lawyers are able to donate money to the campaigns of elected judges. The trial attorneys have been calling on the recipients of their campaign largess to discuss defensive measures. A spokesman for ATLA says the group is meeting with lawmakers on both sides of the aisle and conferring with environmental, women’s, and seniors groups about what they can expect this session of Congress. A Democratic staffer on the Senate Judiciary Committee says the Senate will act as a “fire wall” to any of the major tort reform efforts, even if Republican backers of bills are able to get the votes of Sen. Joseph Lieberman, D-Conn., and Sen. John Rockefeller, D-W.Va., two senior lawmakers with histories of breaking with the party on tort reform. “There are a number of things that the Democrats would be anxious to talk about if [the Republicans] should open the issue,” says the staffer, hinting at a filibuster — the likely recourse for Democrats should one of the tort reform bills make it to the Senate floor. A filibuster is not the likely scenario for Kennedy’s and McCain’s new version of the Patients’ Bill of Rights, which aims to satisfy both trial lawyers and health care companies. The new bill sets up a bifurcated system that would let patients who are denied medical service bring malpractice suits in state courts. Patients who want to sue their health maintenance organizations over coverage issues will be able to take their cases to federal courts. The coverage disputes will be capped at $5 million and governed by contract law — not tort law — so that the cap does not set a precedent for awards made for denial of services. PROTECTING DOCTORS AND TEACHERS There may be a bigger fight over the Teachers Protection Act, which would limit the liability of teachers and principals who undertake “reasonable actions” to maintain order in the classroom. The legislation would also force plaintiffs who lose suits against schools to pick up their opponents’ legal bills. During his bid for the White House, Bush ran ads calling for a so-called Teachers Protection Act, which would aim to protect teachers from spurious suits. This provision, although mentioned in his report to Congress last month outlining his education agenda, will not be proposed as part of the legislation that the administration plans to send to the Hill. “I must say that I was surprised to see that it was not part of the package,” says Bush ally Sen. Judd Gregg, R-N.H., who is planning to introduce a slightly tweaked version of the Teachers Protection bill that Sen. Paul Coverdell, R-Ga., sponsored last year in hopes of amending it to Bush’s education package. What worries ATLA’s Baron about the Teachers Protection Act is that the legislation isn’t intended so much to correct a problem as to advance the federalization of tort laws. He says there is no evidence of the education system being overwhelmed by lawsuits. “Tort law should be dealt with by the states,” says Baron, adding that tort reform proponents “are creating a record of federal tort protection so that, next time when they want federal legislation, they’ll be able to say, ‘Well, look what we did for the teachers.’ “ But Victor Schwartz, a lobbyist with Crowell & Moring and general counsel of ATRA, says the problem of teachers being dogged by lawsuits is a real one. Many of the cases, says Schwartz, are settled out of court because schools figure they aren’t worth the risk or time to fight. “It’s a nickel-and-dime operation that really adds up,” he says. According to a survey of secondary and elementary school principals conducted by ATRA, the percentage of respondents who claimed to have been involved in a lawsuit or settlement in the past two years jumped from 9 percent in 1989 to 25 percent in 1999. “In my discussions with teachers in New Hampshire,” says Gregg, “they have told me that the only reason they become members of a union is because they want liability coverage.” Diane Shust, chief lobbyist for the National Education Association — the largest education organization in the country — says her group isn’t taking a position on the issue. The NEA doesn’t believe suits against teachers and school officials are a widespread problem requiring a federal law and does not feel threatened by a possible membership drop should the federal bill become law. Besides, adds Shust, “this issue is already covered by state law.” Some states, however, are debating whether current laws provide enough protection for teachers. Versions of the legislation have been introduced in Arizona and New Hampshire and are being considered in Oklahoma and North Carolina. Karen Miller of the American Legislative Exchange Council, a bipartisan association of 2,400 state legislators, says that she has sent out the Teachers Protection model legislation to lawmakers all over the country. “In the couple years that I’ve been doing this,” she says, “this bill is moving faster and more furiously than any of the other bills that we’ve been working on.”

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