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Tort Reform Passes, But Groups Still Oppose

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Feb. 17, 2005 -- President Bush and business groups earned a victory Thursday, as the Senate overwhelmingly passed legislation limiting class-action lawsuits.

In a 72-26 vote, the Senate passed the Class Action Fairness Act of 2005, a bill introduced by Senator Chuck Grassley (R-IA) in the last week of January. The bill aims to move class-action suits with plaintiffs from multiple states from state courthouses to the federal system, as well as making it more difficult for companies to pay settlements with coupons for goods or services, as opposed to cash.

Proponents of the bill argue that the new system will free up the court system and lead to more consistent rulings. Opponents, on the other hand, fear the legislation weakens consumers' rights to compensation, while protecting corporations from costly and damaging lawsuits.

The bill now heads to the House, where passage is expected, and then onto the White House, where President Bush is likely to sign it into law. Bush has called the effort "a strong step forward in our efforts to reform the litigation system and keep America the best place in the world to do business."

"Our country depends on a fair legal system that protects people who have been harmed without encouraging junk lawsuits that undermine confidence in our courts while hurting our economy, costing jobs, and threatening small businesses," President Bush said.

Groups like Public Citizen, the AARP, the American Cancer, Lung and Heart Societies, plus eleven state attorney generals outwardly oppose the bill. When the bill was first introduced in January, Nan Aron, President of the Alliance for Justice, called it "a sad day for American workers and consumers."

During the bill's debate, Senator Kennedy (D-MA) called it an example of the Bush "administration's misguided priorities-- putting the interests of big companies ahead of America's working families."

The likely passage of the Class Action bill eases the way for President Bush's plan to overhaul medical malpractice and asbestos litigation. The president wants to cap pain and suffering awards to $250,000 in malpractice cases and establish a public fund paid for by asbestos defendants to resolve asbestos injury claims.

Last updated: Feb 17, 2005

JONATHAN STEIMAN

Jonathan was an early hire at TalkTo, a Matrix Partners portfolio company acquired by Path. Jonathan is currently Path's Director of Operations. You can find additional writings at www.jonathansteiman.com.




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