Congress Keeps A Tort Measure Alive

If the four Democrats do support the legislation, S. 1751, it would give class action reform advocates more than enough votes to prevent a filibuster and bring the legislation to the floor of the Senate for a vote.

On Oct. 22, a motion to invoke cloture on S. 1751 failed by just one vote.

The Democrats signing the letter are Sens. Mary L. Landrieu, D-La.; Chris Dodd, D-Conn.; Charles E. Schumer, D- N.Y.; and Jeff Bingaman, D-N.M.

Gary Karr, a representative of the Washington-based American Insurance Association, expressed hope that Senate negotiators can reach an agreement that represents true reform while having enough votes to clear the Senate.

The letter, he said, indicates continuing interest among key Democrats in getting a class action bill.

Class action reform, Mr. Karr noted, already has strong bipartisan support, and only one vote is needed to prevent a filibuster.

In their letter, the four Democratic senators said that there are a number of instances of unjustified forum-shopping and other abuses of the legal process.

However, they said, in some areas, S. 1751 goes too far.

One issue, they said, is the formula for determining when a class action lawsuit is heard in federal court, which needs to be reconsidered.

Another concern is mass tort actions. The senators said that S. 1751 should contain specific language that assures that mass torts that are not brought as class actions are not subject to the legislation.

The senators also said that the legislation should allow individual plaintiffs who face higher risk or have higher damages than other plaintiffs to receive higher compensation, upon approval of the trial judge. Currently, S. 1751 requires that all plaintiffs receive the same compensation.

In addition, the senators said, the legislation should contain stronger provisions regarding abusive coupon settlements. Abusive coupon settlements are those in which the only compensation received by the class plaintiffs is a coupon to buy a product at a discount, while the plaintiffs' attorneys receive large monetary fees.

"While time is short in this session, there is no reason why the Senate cannot consider this legislation in a bipartisan spirit," the senators said.

Under S. 1751, federal courts would have jurisdiction over class actions in which the plaintiffs are seeking more than $5 million in damages and in which any member of the plaintiff class is from a different state from any defendant, with certain exceptions.

Specifically, federal courts would not have jurisdiction over class actions in which two-thirds or more of the plaintiff class and the primary defendants are citizens of the state where the action is filed.

In addition, federal courts would not have jurisdiction in cases where the plaintiff class numbers less than 100.

The legislation also gives federal court judges discretion to decline jurisdiction over class actions in which between one-third and two-thirds of the plaintiff class and the primary defendants are from the state where the action was filed.

In addition to the jurisdictional issue, S. 1751 establishes a "class action bill of rights" for class members, including judicial review of non-cash settlements and plain English notification to individuals that they are members of the class.