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Last Updated: Thursday, 17 February, 2005, 21:52 GMT
Congress curbs class-action suits
Wal-Mart greeter
Wal-Mart has been at the centre of a big sex discrimination case
The US Congress has passed legislation aimed at curbing class-action lawsuits against big companies.

Most such suits, in which people join together to sue the same defendant, will move from the state to the often less sympathetic federal courts.

Famous examples of class-action suits include those against the maker of painkiller Vioxx, retailer Wal-Mart and energy giant Enron.

The curb was one of President George W Bush's pledges for his second term.

As such, the vote is seen as a personal victory for Mr Bush, who is expected to sign the bill into law on Friday.

Supporters of the measure, passed by the US House of Representatives in a 279-149 vote, say state courts would often impose large settlements on businesses accused of wrongdoing and based in a different state.

Once the bill is signed into law, class-action suits involving over $5m will only be heard in a state court if the primary defendant and two-thirds of the plaintiffs are from the same state.

Federal courts are considered traditionally less sympathetic to such cases.

"Frivolous lawsuits are clogging America's judicial system, endangering America's small businesses, jeopardising jobs and driving up prices for consumers," said house majority whip Roy Blunt.

But the Democrats said the legislation would be beneficial for big businesses while preventing citizens from suing corporate giants such as pharmaceutical companies, retailer chains or the tobacco industry.

They argue that some cases might never be heard.

"When Americans are injured or even killed by (painkillers) Vioxx or Celebrex or discriminated against by (retailer) Wal-Mart, they may never get their day in court," the House's top democrat, Nancy Pelosi of California, said.

Trials currently under way will not be affected by the new law.

Wal-Mart has been at the centre of a massive sex discrimination class action lawsuit.

In the case of energy giant Enron, which went bust in 2001, shareholders managed to recover hundreds of millions of dollars in settlements by filing class action suits.


SEE ALSO:
Wal-Mart faces huge sex-bias case
22 Jun 04 |  Business
Enron bosses agree $168m payout
09 Jan 05 |  Business
Tobacco firms face damages fight
12 May 04 |  Business


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