US House Passes Lawsuit Bill

The US House of Representatives today followed the Senate’s lead and passed legislation that proponents hope will protect businesses from large-scale class action lawsuits, writes Tire Review. The House approved the same measure that won Senate approval on 10 February by a 279-149 vote. The new law will ban state courts from hearing multi-state class action suits, forcing those actions into the federal court system. The aim is to prevent plaintiff attorneys from “shopping” for sympathetic state courts to file lawsuits, and reap huge fees from multi-million dollar verdicts.

“A long-fought battle to make our nation’s legal system more fair has been won,” said RMA president and CEO Don Shea in reaction to the law’s passage. “The class action system has been broken for years. Trial lawyers were reaping million and millions in legal fees while consumers were often left with nothing but paltry coupons. Enactment of this legislation will end this trial lawyer bonanza. RMA and its members congratulate President Bush and the congressional leadership for making this reform legislation a reality.”

Since the Bridgestone/Firestone recall in August 2000, tyre manufacturers have been a primary target for product liability lawsuits, some legitimate but many that have been questionable. The cost for a company to defend itself became so great that manufacturers often took the course of least resistance – and lower cost – and settled out of court, regardless of the technical merits of the cases. Bridgestone/Firestone itself has written tens of millions of dollars of settlement cheques since that recall, often in suits filed in state courts that have become well-known as being plaintiff-friendly, Tire Review reports.