US Congress Approves Clampdown On Class Action Lawsuits

WASHINGTON, Feb 17 (AFP) - The US Congress on Thursday passed a law to clampdown on class-action lawsuits, which critics say are costly and abused by attorneys who pocket enormous fees.
The House of Representatives passed The Class Action Fairness Act by 279-149 votes, reforming rules governing lawsuits mainly filed by groups of citizens against powerful corporations.
The first major piece of legislation approved by Congress this year, the bill was approved last week by the Senate and now goes to the White House for President George W. Bush's signature.
The president, a strong supporter of the legislation, applauded its approval by Congress Thursday.
"I commend the House for passing a class action reform bill that will help protect people who are wrongfully harmed while reducing the frivolous lawsuits that clog our courts, hurt the economy, cost jobs, and burden American businesses," he said in a statement.
The White house said a lawsuit is started every two seconds in the United States, and that the Class Action bill is an important first step in slowing the pace of litigation.
"Junk lawsuits have helped drive the cost of Americas tort system to more than 240 billion dollars a year -- greater than any other major industrialized nation.
"This bill is an important step forward in our efforts to reform the litigation system and to continue creating jobs and growing our economy," he said.
Tom DeLay, leader of the Republican majority in the House, called the vote "a major victory in the Republicans' decade-long fight to curb the rampant lawsuit abuse that rewards predatory lawyers more than victims."
"Consumers and businesses alike have been victimized by lawsuit abuse. Court dockets are backed up, companies are paying lawyers instead of employees, and our economy is suffering for it all," DeLay said.
Class-action lawsuits group together plaintiffs who consider themselves victims of the same business procedure -- consumers, employees or stockholders. Awards in such mass lawsuits can reach hundreds of millions of dollars.
One tobacco action in Florida, which is now before the state's Supreme Court, ordered major cigarette companies to pay 145 billion dollars to hundreds of thousands of cigarette smokers. The award was cancelled on appeal in 2003.
Among the most famous was a case fought by Erin Brockovich, which was turned into a Hollywood movie starring Julia Roberts. She won 333 million dollars from a chemical company that polluted land around a town.
Critics argue however that the plaintiffs rarely ever see much that money, which usually go to cover attorney fees.
The bill transfers the jurisdiction of most class-action lawsuits from state to federal courts to prevent lawyers from choosing a venue based on the generosity of the local jury.
Opponents of the bill, mostly Democrats, have said the changes would lead to the unfair dismissal of many worthy lawsuits by federal judges.
The leader of House Democrats, Nancy Pelosi, decried the legislation as "payback to big business at the expense of consumers."
"It is an extreme bill that is an injustice to consumers and a windfall for irresponsible corporations," she said.