Rules For Class Action Suits Top Senate Agenda

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, Jan. 25, 10:45 a.m. EST?The Republican Senate majority established class action reform yesterday as a top legislative priority for this Congress and said it would be the first such legislation taken up on the Senate floor.[@@]

Property/casualty insurance industry representatives praised the move even as they worried that GOP agreement to a procedural move could sink or cripple such legislation.

In a bow to Democrats, Sen. William Frist, R-Tenn., Senate majority leader, agreed to let the bill be handled first by the Judiciary Committee. Insurance industry representatives said this could be a potential hurdle to prompt congressional action.

The legislation, to be called the Class Action Fairness Act, would mandate the removal of litigation with defendants and plaintiffs from several states from state courts to federal court. The insurance industry and defendants have long sought such action because they feel certain state jurisdictions favor plaintiffs and their lawyers.

Having picked up four seats in the last election to raise their majority to 55 seats, and with such legislation having support from a number of moderate Democrats, supporters of the legislation believe they can garner at least 62 votes in the Senate for such a bill. Sixty votes are needed to win cloture in the Senate, which is necessary to prevent a filibuster on the Senate floor.

A compromise bill, that had 62 votes, failed last year when Sen. Frist balked at giving Democrats permission to offer non-germane amendments on the floor.

But, as insurance industry lobbyists cautioned, sending the bill to the Judiciary Committee could delay action because the Bush administration and congressional Republican leadership had talked about having the bill on the president's desk by April.

That's because Judiciary Committee ranking member Patrick J. Leahy, D-Vermont, requested the bill be placed on the committee's agenda first. Both Sen. Frist and Minority Leader Harry Reid, D-Nev., said Monday in separate press conferences that they supported sending the bill to the committee instead of directly to the floor.

"One thing I think is so important?and I've expressed this many times to Sen. Frist?is that we go through the regular order," Sen. Reid said at a news conference announcing Democratic legislative priorities.

Sen. Reid indicated no agreement has been reached regarding the type or number of amendments that might be offered. But, he said he has discussed limiting amendments in return for a guarantee that the House approves the Senate version of the bill.

"One of the things I am concerned about is that what the Senate does isn't torn to pieces in the conference with the House," Sen. Reid said, implying that could derail the bill.

Dennis Kelly, director of federal media relations for the American Insurance Association, lauded Sen. Frist for establishing class action reform legislation as a Senate priority.

But, Mr. Kelly noted, "We would have preferred to avoid having the legislation referred to the Judiciary Committee because it gives Democratic opponents an additional opportunity to attach weakening amendments." He added, "We will work with supporters of the bill to fight off such amendments."

Joel Wood, senior vice president of federal government affairs with the Council of Insurance Agents and Brokers, said, "We couldn't be any happier that Sen. Frist has established class action reform as a legislative priority, and we will work with the leadership to win prompt action on this bill."

However, he cautioned, "You can never underestimate the ability of a group of determined senators to disrupt that chamber's floor activity. And defeating this bill or watering it down is the number one priority of the trial bar."

"We are very pleased about the reintroduction of class action reform legislation," added Charles E. Symington Jr., senior vice president of federal government affairs for the Independent Insurance Agents & Brokers of America.

He said that, "The existing class action system needs serious reforms to prevent venue shopping and to restore fundamental responsibility and fairness for businesses and consumers alike. We strongly support necessary changes to the class action system, and we will work hard to help secure the support of members of both parties in Congress for this legislation and other much-needed legal reforms."

Brendan Reilly, director of federal government affairs for the Big I, called this an "important step forward." Mr. Reilly said that the "legislation will go a long way toward restoring fairness and timeliness to class action legislation by weeding out a number of frivolous lawsuits and moving legitimate cases through the system more quickly. It is a ?win-win,' both for businesses and for consumers."

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Rules For Class Action Suits Top Senate Agenda

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