Democrats block class action suit legislation

WASHINGTON - Senate Democrats on Wednesday derailed Republican-backed legislation designed to limit class action lawsuits and large damage awards against corporations, likely killing the bill for this year.

The 59-39 vote to avoid a filibuster, which followed a fierce last-minute lobbying campaign on both sides, left the measure's supporters one vote shy of the 60 needed to advance the measure. The legislation's supporters needed only the Republican-controlled Senate's approval to enact the measure, with the GOP-controlled House and President Bush already on board.

Senate Majority Leader Bill Frist, R-Tenn., had lined up enough support from Democrats like Sen. Tom Carper, D-Del., to pass the legislation. But Senate Democratic leader Tom Daschle of South Dakota persuaded his senators to filibuster the bill and, after some last-second jockeying on the Senate floor, got enough support to kill the legislation.

"I'm clearly disappointed," Frist said.

The legislation says class-action lawsuits in which the primary defendant and more than one-third of the plaintiffs are from the same state would still be heard in state courts. If less than one-third of the plaintiffs are from the same state as the primary defendant, the case would go to federal court.

Also, at least $5-million would have to be at stake for a class-action lawsuit to be heard in federal court.

The bill was one of the priorities this year of the business community, which has poured millions into lobbying Congress to limit class-action lawsuits. Corporations and small businesses - which tend to favor the Republican party - say greedy lawyers make more money from class action lawsuits than the actual victims, and said attorneys sometimes threaten companies with lawsuits in order to get quick financial settlements.

Moving the cases to federal court would curb frivolous lawsuits and keep trial lawyers from getting millions of dollars in fees while their clients get little compensation, GOP senators said.

"This is all about benefiting a few people at the expense of the many," said Sen. John Cornyn, R-Texas. "Consumers end up with the short end of the stick while entrepreneurial lawyers who file this litigation benefit by reaping millions of dollars."

Federal courts are assumed to be less likely to issue multimillion-dollar verdicts against big corporations.

Democrats - who get campaign support from trial lawyers - say the legislation is aimed at helping businesses escape multimillion-dollar judgments for their wrongdoing and hurting the lawyers who litigate those cases.

Democrats say they will allow the bill to be resurrected only if major changes are made to its provisions. Sen. John Breaux, D-La., has offered an alternative that would still allow large groups of people from the same state to sue corporations in their state court, even if the defendant is based in another state.

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