Ed Vulliamy
Goodbye, Erin Brockovich, as class actions end
Wed Jun 18 03:56:27 2003
208.152.73.91

Goodbye, Erin Brockovich, as class actions end

Ed Vulliamy in Washington
Sunday June 15, 2003
The Observer
http://www.observer.co.uk/international/story/0,6903,977761,00.html

It was the kind of legal action that made a heroine out of beauty-queen-turned-crusader Erin Brockovich, pitting the little people against the might of corporate America. But now the US Congress is set to hand business chiefs the greatest gift since the advent of the Bush administration: an end to so-called 'class action' suits.

In 1996 Brockovich won damages of $333 million from the Pacific Gas and Electric Company for the people of Hinkley, California, over pollution of the water supply.

Brockovich - played by Julia Roberts in the film - is suing again: this time against district and oil companies who have drilled beneath a school, allegedly causing Hodgkin's disease and cancer. If measures now being pushed through Congress succeed, her career as a champion of local people against big industry is over.

In the past, most class action suits were filed through state courts. In some of the better-known cases, against cigarette and later gun manufacturers, actions swept across states to become a tidal wave of litigation.

A case has recently been won in Madison, Illinois, against Philip Morris, where a judge awarded plaintiffs $12 billion after finding that the cigarette-maker failed to inform consumers that 'light' brands were no less harmful than full-tar cigarettes.

But the House of Representatives has voted by 253 to 170 to thwart the vast majority of class action suits in state courthouses, limiting all but the smallest claims to federal courts, where the big companies, say citizens' groups, find it easier to delay the progress of suits and 'shop' for courts more favourable to their interests.

'It's the biggest thing for years,' said a jubilant Lawrence Fineran, vice-president at the Association of Manufacturers. 'Just about every industry group is on this bandwagon, because every industry is affected.'

The battle over the future of class actions, in which consumer and environmental groups face some of the Bush administration's most powerful financial backers, now goes to the Senate, where Republicans won a powerful majority during last winter's mid-term elections.

Big firms and their lobbying groups in Washington - led by the insurance, energy and private health giants - have been pushing for years to achieve a shift away from state benches, to which judges are usually elected, to the politically appointed federal judiciary.

In Texas, Bush's political home, business interests - mostly oil and chemical companies, under pressure from environmental groups for wholesale polluting - poured money into Bush campaigns.
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Action on Class Actions
http://www.fool.com/News/mft/2003/mft03061605.htm

By Bill Mann (TMF Otter)
June 16, 2003

Ask and ye shall receive, apparently. A few months back, I discussed how the abomination that was the Illinois class action suit against Philip Morris USA, a division of Altria (NYSE: MO), could have been avoided if class action suits were heard in federal, not state, courts.

The trouble lies in the vast difference between application of law from state venue to venue, whereas federal courts and their distance from local issues and politics offer the hope of some uniformity. In tobacco, medical, and asbestos cases, plaintiffs' attorneys have tended to look for the most sympathetic jurisdiction to file class action cases in such places as Mississippi or Madison County, Ill.

And why wouldn't they? It's the job of the plaintiffs' attorneys to try to win cases. But Thursday's passing of a bill in the U.S. House of Representatives seeks to end the practice of forum shopping. Under the bill, class action lawsuits will be heard in federal courts rather than state courts when fewer than one-third of the plaintiffs are from the same state. The bill puts a floor on the total claims at $5 million.

Other components of the House bill include a prohibition of settlements in which class members lose money after paying attorneys' fees and elimination of coupons and other non-cash compensation for class members, while their attorneys receive cash.

Such a bill will have a much more difficult time passing the Senate, where trial lawyers seem to have a much stronger pull. The whole issue is a bit of a double-edged sword. On the one hand, one would not want to see a situation where companies that are rotten to the core like WorldCom or Enron would be able to hide from the lawsuits they so richly deserve. On the other hand, the current situation -- where R.J. Reynolds (NYSE: RJR), USG (NYSE: USG), and countless others are cowering in fear of the next suit from a poorly defined class in a plaintiff-friendly jurisdiction -- is an enormous drain on our economy as a whole.

Bill Mann has beneficial interest in RJR.
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• GROSS INDENCENCY — Joe grossout again, Wed Jun 18 09:21