Class action and asbestos reform: what you need to know

Steve Gonzalez Jan. 27, 2005, 6:08am


Sen. Arlen Specter

Legal reform in Illinois may be a longshot, but federal legislators are poised to take action on asbestos and class action reform soon. Read on about the proposed Class Action Fairness Act and The Fairness in Asbestos Injury Resolution.

What is it?
The measure would require class action cases with plaintiffs and defendants from multiple states be filed in federal court. It would take the burden off state judges ruling on other states' laws.

Why is legislative action needed?

Business owners, which are frequent targets in class action lawsuits, have long sought remedy because they believe some state jurisdictions favor plaintiffs.

Most class action lawsuits are filed in state courts--as it should be in our state-based tort litigation system--provided plaintiff class members reside in the state where the case is filed. It makes sense for state courts to apply state statutes and common law to cases involving their own state's residents.

However, a growing number of class actions have plaintiffs in many different states, making it difficult for judges to make fair decisions for all involved.

The class action reform bill, backed by President Bush and congressional leadership, would not change this. Instead, the bill is aimed at fixing the handful of state courts--such as Madison County--which routinely certify and decide multi-state class actions. In some local cases the plaintiff class is drawn from many states.

How will it affect the way suits are filed?

The Class Action Fairness bill would allow multi-state class action litigants to move their cases from state to federal court. Many defendants would favor such a removal.

What are the chances of passage?

Senate Republicans believe they can garner 62 votes in the Senate for the bill with help from moderate Democrats. The general election now gives them a mandate to pass such a bill. Sixty votes are needed to win cloture in the Senate, which is necessary to prevent a filibuster on the Senate floor.

When will it pass?

U.S. Sen. Arlen Specter (R-Pa.), chairman of the Senate Judiciary Committee, says a vote on the bill to change the rules on class action lawsuits could come as early as Feb. 3.

Who is driving its passage?

In his State of the Union speech, President Bush will urge Congress to pass the Class Action Fairness Act, a critical element of his agenda for civil justice reform.

The president made a visit to Madison County earlier this year to push reform legislation stating, “The number of class-actions filed here increased by over 5,000 percent between 1998 and 2003, even though the vast majority of defendants named in those suits are not actually from Madison County. Think about that, these massive interstate class-actions clog your local courts.

"They hurt the honest workers and communities of the businesses targeted by the class-action lawyers. The proper place for large interstate class-actions to be tried is not in a local court, but rather in a federal court, which are designed to handle them.”

The bill passed the House last year, but died in the Senate when supporters failed by one vote to overcome a filibuster on various amendments to the bill.

The Fairness in Asbestos Injury Resolution?

After lengthy negotiations among asbestos stakeholders, U.S. Sen. Arlen Specter (R-Pa.) is expected to introduce the Fairness in Asbestos Injury Resolution this week. Specter says the time for passage is "now or never." Here's a look at the proposal.

What is the Fairness in Asbestos Injury Resolution?

Sen. Specter proposes legislation establishing a $140 billion trust fund to compensate victims of asbestos-related illnesses. Claimants give up their right to sue and businesses and insurers pay into the fund.

The size of the trust fund and the amount of up-front financing are issues being debated by the stakeholders: businesses, insurers, labor and trial lawyers. $140 billion is the most business interests are willing to contribute, while the trial bar and labor argue the amount is insufficient to pay claims and risks collapse.

Why is legislative action needed?

For bankruptcy concerns, businesses want finality to asbestos litigation

What will the local impact be?

Thirty percent of all asbestos litigation in the country is filed in Madison County. The county's large asbestos docket would cease to exist.

What are the chances of passage?

President George W. Bush's reelection and Republican congressional gains has a lot do with the prospect of the bill's passage. The president has made legal reforms--including the establishment of an asbestos trust fund--a top domestic agenda priority.

There is division between manufacturers and insurers on some issues, which could lead to a tough Senate debate. Without a unified front, business will have a hard time defeating the energy of labor and trial lawyers.

When will the bill be introduced?

Specter, who was expected to introduce the bill the week of Jan. 24, said it has been delayed for a week while senators discuss how to handle silica injury claims. A hearing is scheduled Feb. 2 to try to establish medical criteria for silica claims.

The concern is over compensating claimants "twice."

What are the positions of stakeholders?

Business interests would not favor proposals that would allow the return to the tort system, if the fund should run dry.

Trial lawyers claim the cost of compensation is greater than $140 billion.

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