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Bush Signs Class Action Bill

February 18, 2005
President Bush today signed legislation restricting consumers' rights to file class action suits against corporations, the first of a series of business-backed bills intended to put consumers in their place.

Signing the bill into law at the White House, President Bush called it "a practical way to begin restoring common sense and balance to the U.S. legal system."

The measure will "help protect people who are wrongfully harmed while reducing the frivolous lawsuits that clog our courts, hurt the economy, cost jobs and burden American businesses," Bush said.

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The measure was opposed by the U.S. Judicial Conference, the organization of all federal judges, who said it would further clog federal courts.

While big business is jubilant, consumer organizations are outraged. A tobacco industry analyst put it bluntly: "The practical effect of the change could be that many cases will never be heard."

House Democratic leader Nancy Pelosi of California called it "an injustice to consumers, and a windfall for irresponsible corporations."

"When Americans are injured or even killed by Vioxx or Celebrex or discriminated against by Wal-Mart, they may never get their day in court," Pelosi said. "Those cases that do go forward will take significantly longer because the federal courts are overburdened and unequipped for this caseload. That is why the bill is opposed by federal judges, including the Judicial Conference of the United States."

"Special interests have even admitted that the real intent of this bill is to clog the federal courts and therefore stop the cases," she said.

The Bush Administration and its big-business backers hope to follow up with legislation that would cap damages for pain and suffering in medical malpractice cases. Another bill would shut down asbestos litigation, as Rep. John Conyers (D-Mich) noted in arguing against the class action measure.

"Today we will attempt to pre-empt state class action," Conyers said. "Next month we will take up a bankruptcy bill that massively tilts the playing field in favor of credit card companies and against ordinary consumers and workers alike.

“On deck are equally one-sided medical malpractice bills and asbestos bills that both cap damages and eliminate liability to protect some of the most egregious wrongdoing in America," said Conyers, the top-ranking Democrat on the House Judiciary Committee.

The U.S. Chamber of Commerce has been leading the charge to curb citizens' right to sue. It spent $24.5 million last year lobbying the issue. Credit-card issuer MBNA, which last year passed Enron as the Bush campaign's biggest contributor, also backed the measure.

Consumer Reaction

Congressional passage of the class action bill is "a significant vote against consumers' rights," said Consumer Federation of America Assistant General Counsel Rachel Weintraub.

"This legislation essentially denies consumers access to a uniquely important legal tool against corporate wrongdoing. Class actions enable consumers who were harmed in similar ways to aggregate their claims into one case," Weintraub said.

"The bill also undermines the ability of state courts to hear cases primarily concerned with their own citizens. S. 5 is unfair to consumers and we applaud those courageous 149 Representatives who opposed this inequitable bill," Weintraub said.

She said that although the bill purports to curtail "class action abuses," it "virtually wipes out state class actions, thereby removing what is sometimes the only venue for redress of injury or fraud for consumers."

Weintraub said the bill makes it more difficult for consumers to obtain effective and efficient judicial relief for injuries, for example, caused by defective products, fraud in the marketplace, or discrimination. The jurisdictional changes mandated by S. 5 are "designed solely to impede class actions, not to make them fairer or more efficient," she said.

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