San Francisco Chronicle, "Lawyers size up new law; Both sides ponder effect of new federal class-action act"

          Business groups rejoiced when a sweeping change in the rules governing class-action suits was signed by President Bush over the protests of opponents who warned that the new law would seriously erode consumer protections. But in California, the Class Action Fairness Act may not turn out to be a guaranteed advantage for all company defendants or a crushing blow for plaintiff groups that sue for alleged wrongdoing, lawyers say.
          As Bush signed the law Feb. 18, he said it was an important step in his ongoing campaign to discourage lawsuits of a type he sees as frivolous, expensive hindrances to business. The act will force many large class-action suits out of state courthouses and into the federal courts, where conditions are seen as more favorable to companies. It also limits compensation to plaintiffs' attorneys in certain cases. Consumer and environmental groups say the Bush administration is trying to hamper a legal mechanism that has been used to take on polluters, the tobacco industry, energy firms, drug companies and other businesses that can harm large numbers of people.
          While each individual allegedly harmed by a business practice might not have the resources to sue, the reasoning goes, a single suit on behalf of all affected parties can efficiently try their common claims, provide a remedy and discourage future misconduct. The net effect is to augment the work of government prosecutors and regulatory agencies, said Barry Himmelstein, a partner at Lieff Cabraser Heimann & Bernstein LLP, a firm of class-action specialists.
          "There are a limited number of lawyers who work for the government, and they have traditionally relied on private lawyers to help rein in the abuses, '' said Himmelstein, who worked on a state class-action suit on behalf of California energy consumers against the natural gas pipeline company El Paso Corp. The private claims, supported by state Attorney General Bill Lockyer, ended in a settlement of nearly $1.7 billion.
Whether federal courts will provide as hospitable an environment for class-action suits is a crucial question, Himmelstein said. Judges must give permission for a suit to be certified as a class action, and federal courts have been more restrictive than state courts, he said. "If there's no class certification, frequently it means the end of a case because it's not worth litigating,'' he said.
          Class-action attorneys invest their own money to pursue cases and receive fees only if they win a settlement or a verdict. Their fees, which must be approved by a judge, often hinge on the amount recovered for plaintiffs, as well as the hours and expenses advanced by the class attorneys. A complex lawsuit on behalf of one person who lost a small sum wouldn't make financial sense, but a combined suit by all similarly injured parties nationwide could yield substantial judgments.