Industry Basks In Class-Action Victory

|

Congress finally limits venue-shopping, but frivolous suit billhits dead end

|

For eight long years, the insurance industry battled on CapitolHill to put a lid on what they considered to be an out-of-controltort system. With Republicans firmly in control of both houses ofCongress and the White House, they finally were able to see atleast one of their dream bills passed.

|

Insurers were positively giddy when President George W. Bushsigned the Class Action Fairness Act of 2005 into law. After all,the law moves a lot more cases into the more predictable federalcourts, limits "venue shopping" by trial lawyers seeking friendlyjurisdictions (called "judicial hellholes" by the industry), andplaces limits on state class actions.

|

However, the jury is still out as to the law's long-term impact.For one, many lobbyists warned that the law's constitutionalitymight be challenged (although that might be less of a threat withthe Supreme Court's recent turnover). Other analysts said it wouldtake time to see how the law actually played out in the oftensurreal world of judicial interpretation–federal courts might notdeliver the level of relief expected, for example.

|

In addition, insurers were pleased to see Washington limit theliability of gun manufacturers with passage of the "Protection OfLawful Commerce In Arms Act." However, other federal tort reformefforts have stalled.

|

In October, the House approved two bills–the "PersonalResponsibility In Food Consumption Act" (which would end suitsagainst those selling foods plaintiffs claim promote obesity),along with the "Lawsuit Abuse Reduction Act" (which would imposesanctions against those filing "frivolous" suits).

|

However, both bills hit a dead end in the Senate, where gettingthe 60 votes required to avoid a potential filibuster by Democratsproved impossible. Insurers–as Brooklyn Dodger fans used tolament–will have to "wait 'till next year!"

|

Caption for cover image of Uncle Sam holding a gavel from Feb.21 edition:

|

While insurers were giddy to get a tort reform bill passed aftereight years of lobbying, its impact remains unclear.

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

  • All PropertyCasualty360.com news coverage, best practices, and in-depth analysis.
  • Educational webcasts, resources from industry leaders, and informative newsletters.
  • Other award-winning websites including BenefitsPRO.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.