February 18, 2005
PAINTING THE TARGETS ON THEIR OWN FOREHEADS:
Congress gives Bush win on class-action suit limits (Jesse J. Holland, February 18, 2005, Associated Press)
Congress on Thursday sent President Bush legislation to discourage multimillion-dollar class-action lawsuits by having federal judges take them away from state courts. Conservatives hope it will lead to other lawsuit limits. [...]But Democrats say the legislation is aimed at protecting GOP business donors and hurting trial lawyers, a traditional part of their base.
Is it really wise to advertise your own powerlessness and ties to the loathsome?
MORE:
Bush Enacts U.S. Law Placing Limits on Class-Action Lawsuits (Bloomberg, 2/18/05)
President George W. Bush signed a bill to curb multi-state class-action lawsuits by shifting most of them from state to federal courts, a victory for business that also fulfills one of Bush's second-term goals.Posted by Orrin Judd at February 18, 2005 1:00 PMThe new law is ``a critical step toward ending the lawsuit culture in our country,'' Bush said at a White House signing ceremony. The law ``will ``begin restoring common sense and balance to America's legal system,'' he said.
The ``Class Action Fairness Act'' makes it tougher for lawyers to go ``forum shopping,'' choosing to file cases in state courts such as Madison County, Illinois, that are known for awarding plaintiffs large judgments. Class-action claims of more than $5 million will be shifted to federal courts, where legal precedents are more uniform and judges are appointed for life, compared with many state court judges who are elected. [...]
Stanton Anderson, chief lobbyist for the U.S. Chamber of Commerce, said he expects the lawsuit restrictions will lead to higher profits for corporations and lower costs for consumers.
``The impact is going to be immediate because many of these cases are going to stop being filed in these local county courts,'' Anderson said in an interview after the House vote yesterday. ``Companies are going to see over the next couple of quarters that they don't have to settle these cases in these problematic jurisdictions.''
Gee, that was quick.
Posted by: Mike Morley at February 18, 2005 1:02 PMIn other words, every other part of the Democratic base should start thinking very seriously about the consequences. The Democrats obviously can't help them anymore...
Posted by: Timothy at February 18, 2005 1:14 PMNational version of the "drop and shop" lawsuit prohibition Bush passed while governor in Texas -- for example, someone would fall down in a Wal-Mart in Waco, and lawyers could file suit in any of the other 253 counties in the state where the company operated. Of course, the counties with histories of awarding the biggest plaintiff judgments were the ones where all the suits were filed.
Texas trial lawyers who reaped reems of cash in the 1980s and early 90s with those types of suits fought it tooth and nail but lost, because it had widespread public support. Democrats who think the national mood is going to be any different on this law are in for a rude awakening.
Posted by: John at February 18, 2005 1:19 PMIt's almost impossible to fairly defend forum shopping with a straight face. The trial lawyers and Democrats would be better off trying to defend against things like limits on punitive damages, where they actually can make a defensible case.
Posted by: John Thacker at February 18, 2005 1:36 PMStanton Anderson, chief lobbyist for the U.S. Chamber of Commerce, said he expects the lawsuit restrictions will lead to higher profits for corporations and lower costs for consumers.
That should be fairly easy to track. My personal view is that this is more of an emotional issue than one of real economics, so I doubt it will have a major effect on profits or on prices. There may be a difference on the margin, particularly because it will permit some federal control of punitive damages. People will still be able to bring single state class actions, which can be just as egregious as the multi-state ones due to the possibility of punitive damages. Some of the consumer credit class actions in places like Mississippi and Alabama have literally driven most consumer lenders out of the state.
Posted by: Steve at February 18, 2005 2:26 PM