Tort Deform: While W.R. Grace is Indicted, Senate Votes to Curb Lawsuits
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http://www.workingforchange.com/article.cfm?ItemID=18550 A lawyer with a Montana firm that has been trying to help families of the dead and dying for years said: "The prosecution cannot eliminate the death and disease in Libby. But there is comfort in the hope that criminal convictions will say to corporate America: Managers will be held criminally accountable if they lie and watch workers die." According to an article in the St. Louis Post-Dispatch, W.R. Grace filed for Chapter 11 bankruptcy in 2001 because of a "sharply increasing number of asbestos claims." However, in 2002, the Justice Department intervened in a bankruptcy proceeding for the first time ever, alleging that before Grace asked for Chapter 11, it concealed money in new companies it bought. The Justice Department said it was a "fraudulent transfer" of money to protect itself from civil suits.
Just before the bankruptcy trial was to begin, Grace returned almost $1 billion to the bankruptcy court. The company currently has annual sales of about $2 billion, more than 6,000 employees and operations in nearly 40 companies. On Feb. 2, President Bush again referred to "frivolous asbestos claims." Against this timely reminder of what the tort system is designed to deter or punish, the Senate voted for the "Class Action Fairness Act" (love those cute names they keep giving rotten bills) 72 to 26. There is no "flood of frivolous lawsuits" -- in fact, tort claims are declining and only 2 percent of injured people ever sue for compensation to begin with. Public Citizen did a study showing that corporations themselves file four times as many lawsuits as do individuals, and they are penalized much more often by judges for pursuing frivolous litigation. "Corporations think America is too litigious only when they are on the receiving end of a lawsuit," said Joan Claybrook, president of Public Citizen. "But when they feel aggrieved, businesses are far more likely to take their beef to court than are consumers." The administration came up with a weird fix for this nonexistent problem (so reminiscent of nonexistent WMDs, the "crisis" in Social Security and other non-problems): It severely limited the right of individuals to file class-action suits against corporations by moving such cases from state courts to federal courts. If the aggregate claim is over $5 million or the defendants and the plaintiffs are in separate states, the suit goes into the federal system -- and that definition pretty well encompasses all class-action suits. And federal judges are less likely to certify a group of aggrieved consumers as "a class" because such cases often involve conflicting state laws -- victims of a bad product can live in any state, and the company that made the product is often in another state. On top of that, in case you haven't talked to any federal judges lately, the whole federal system is under-funded and overburdened now. The net effect is less accountability for corporations that violate health, safety, consumer and civil rights, and environmental laws. Happy Enron, WorldCom, Tyco and W.R. Grace to all. This abominable bill was also much-sought by Republicans for nasty political reasons, which makes their rhetoric about justice all the more nauseating. It's a big win for the insurance industry and for big business, both heavy donors to Republicans. It also strips potential cases from trial lawyers, a group notoriously given to supporting the Democrats. How clever of Karl Rove. Frankly, I think both the trial lawyers and big business can take care of themselves -- it's the rest of us I worry about. Molly Ivins is the former editor of the liberal monthly The Texas Observer. She is the bestselling author of several books includin ** POSTED FEBRUARY 15, 2005 ** |