Victory at Hand for GOP Tort Reform? Tort reform and a national asbestos settlement might top the GOP agenda, but some conservatives worry that limits on lawsuits will weaken the rights of states

0 Comments | Insight on the News, Feb 2, 2004

Byline: Christopher Whalen, SPECIAL TO INSIGHT

There are few issues that generate as much political heat in Washington as tort reform, both pro and con, and equally few on which so little progress occurs year after year. During 2003 the Republican leadership promised action on several proposals, including legislation to limit medical-malpractice claims, curb the authority of state courts to hear class-action lawsuits, and negotiate a national settlement to billions of dollars in asbestos claims. None of this was passed.

The Senate also failed to act to overcome a threatened Democratic filibuster of a House-passed measure to limit liability of gun manufacturers and dealers for misuse of firearms by criminals. With strong backing from the White House, Senate Republicans came within one vote of the necessary 60 needed to overcome Democratic threats to filibuster the Class Action Fairness Act (S 1751) in October. But Senate Democrats, said by critics to be in thrall to the trial lawyers and big labor, blocked both initiatives. A similar effort to conclude a national settlement of asbestos claims was blocked by big labor in the waning days of 2003.

Since none of these proposals moved through Congress last year, there has been considerable doubt among their advocates that any progress would be made during 2004, an election year. But reports of a bipartisan compromise fashioned by Senate Majority Leader Bill Frist (R-Tenn.) on class-action lawsuits may have put tort reform at the top of the Republican list. Indeed, the Bush White House wants to make tort reform a top "achievement" to boost its 2004 fund-raising efforts.

According to Sen. Jon Kyl (R-Ariz.), chairman of the Senate Judiciary Committee's subcommittee on Terrorism, Technology and Homeland Security, legislation on class-action lawsuits and the national asbestos settlement have a good chance of passage before the 2004 election-year frenzy begins.

But Kyl says the issue of reforming medical malpractice lawsuits remains problematic. "We believe that there are now sufficient votes to pass the class-action-lawsuit legislation," he told Insight before Christmas, referring to a bill that would limit the amount of damages paid in such lawsuits and make it harder for plaintiffs to forum shop for favorable judges. "The Class Action Fairness Act would protect the legal rights of all citizens while ensuring that court awards and settlements go to those who are wrongfully injured rather than to a few wealthy trial lawyers," said a White House insider after the 59-39 Senate vote on Oct. 22, 2003.

Democrats and their supporters generally are opposed to tort reform - with a few key exceptions. The Wall Street Journal reported in November that Senate Democrats Jeff Bingaman of New Mexico, Christopher Dodd of Connecticut, Mary Landrieu of Louisiana, and Charles Schumer of New York wrote to Frist saying that "there is no reason" the bill cannot be revived. Landrieu's had been the holdout vote that prevented passage last October.

"The Republican-written bill would have taken most class-action lawsuits out of the hands of state courts - which often award multimillion-dollar judgments - and would have given jurisdiction to federal courts, seen as less likely to grant such lucrative sums," the Journal reported. "The Democratic senators said that many class-action lawsuits are best addressed in federal court, but that 'truly single-state cases' should be left under state-court jurisdiction."

Laurie McLeery of Public Citizen confirms that limits on class-action lawsuits is the tort-reform legislation most likely to pass Congress in 2004. "The Class Action Fairness Act is a profoundly anticonsumer law," she says. "We offered a compromise proposal that would have addressed some of the legitimate concerns about abuses, but it was not considered."

Critics say the tort-reform law subordinates the constitutional rights of individuals to seek redress from the courts to the interests of large corporations, but Senate Republicans hardly can disguise their glee that victory is at hand. "We are going to get tort reform done," Kyl tells Insight. The Arizona conservative goes on to predict that the Senate will get the asbestos settlement agreed upon as well, expressing a degree of confidence not heard from other senators involved in these negotiations.

Sources on Capitol Hill tell this magazine that Kyl privately was critical of the asbestos deal reportedly in prospect, arguing with his peers that they were giving away too much to the Democrats and the unions. But Kyl betrayed none of those concerns while talking to Insight from Arizona, though he admitted the huge economic damage to companies and communities caused by asbestos litigation is driving the settlement effort.

It has been almost two decades since asbestos manufacturers, distributors and their insurers publicly recognized the legal and economic significance of asbestos claims. Yet the asbestos problem seems to be growing based on the number of claims pending - claims totaling into the tens of billions of dollars. Familiar names including Owens Corning, USG, W.R. Grace & Co., Armstrong World Industries and Federal-Mogul Global are among dozens of public and private companies that have been forced into bankruptcy by asbestos claims.