Business Insurance
Monday, August 14, 2000

Class-action reform debated

WASHINGTON -- Federal and state judges need to be more willing to throw out frivolous lawsuits, a plaintiffs attorney contended during a discussion of class-action law last week.

Few judges "have the guts" to dismiss frivolous cases, said John P. Coale, partner in the Washington law firm Coale, Cooley, Lietz, McInerny & Broadus P.C.

"It's their job. They're the ones who should slap down the lawyers, and they don't do it," Mr. Coale said during the discussion, which was sponsored by the National Assn. of Manufacturers. He also criticized the recent class-action suit against tobacco companies in Florida, in which a jury levied $145 billion in punitive damages (BI, July 24; July 17).

The verdict "will never be upheld," said Mr. Coale, who himself has participated in high-profile cases against tobacco companies. He said "an error a week" had been made in the case as the judge consistently ruled against the defendants. "If you win a clean case," the verdict will stand, he said. "There's no way in hell that verdict is ever going to be upheld."

Mr. Coale debated class-action lawsuit reform last week with Victor Schwartz, senior partner in the Washington law firm Crowell & Moring L.L.P. and general counsel to the American Tort Reform Assn. Mr. Schwartz suggested so-called know-your-lawyer legislation -- expected to be introduced by Rep. Chris Cox, R-Calif. -- as one way to curb abuses in class-action litigation. Such legislation calls for attorneys in class-action suits to get permission to represent everyone in the class being formed and to notify all members of the class what the plaintiffs -- and the attorney -- will receive if the suit is successful.