Return to Transcripts main page
CNN Live Today
Malpractice Insurance; Class-Action Action; Negroponte Speaks
Aired February 18, 2005 - 11:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And now in the news, Russian President Vladimir Putin says he's convinced that Iran is not trying to develop nuclear weapons. That's according the Interfax News Agency. It says Putin plans to visit Iran soon and vows cooperation with the country's nuclear program. The Russian leader met with Iran's security chief at the Kremlin today.
Former Presidents Bush and Clinton are due in Thailand this hour. They're starting a four-nation your of tsunami-devastated areas. The two presidents will highlight the rebuilding effort and try to keep donors focused on victims.
Prosecutors won't be charges filed against entertainer Bill Cosby. A woman claims Cosby drugged, then groped her at his Pennsylvania home. But the D.A. says there wasn't enough evidence. Cosby's attorney called the claim utterly preposterous.
And Secretary of State Condoleezza Rice is meeting this hour with her Dutch counterpart in Washington. The Netherlands is considering more military instructors for Iraq to help train Iraqi security forces.
Keeping you informed, CNN, the most trusted name in news.
DARYN KAGAN, CNN ANCHOR: Just a few minutes from now, President Bush will talk up a first step in major goal of his presidency, tort reform. The president is set to sign into law the Class Action Fairness Act of 2005 to dramatically curb what many see as a cottage industry of liability lawsuits. Congress granted final passage yesterday, despite sharp disagreement over the law's impact.
REP. JAMES SENSENBRENNER (R), JUDICIARY CHAIRMAN: We have to restore sanity to the justice system by dealing with the abuses that a small group of lawyers have turned to class action system into.
REP. NANCY PELOSI (D), MINORITY LEADER: Republicans are seeking yet another way to protect irresponsible corporations.
KAGAN: We will bring you the bill signing live when it begins.
Right now we want to take a closer look at another legal area the president is eager to reform, medical malpractice lawsuits.
CNN's senior legal analyst Jeffrey Toobin examines the issues from both sides, examining and beginning with the dilemma of family physicians in New Jersey.
(BEGIN VIDEOTAPE)
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST (voice-over): Caroline Berardo doctor is the same one who delivered her three years ago.
UNIDENTIFIED MALE: That was the year you were born, yes.
TOOBIN: Dr. Arnold Pallay is a family physician. He treats the kids. He treats the parents. He even delivered babies -- delivered, past tense.
DR. ARNOLD PALLAY, PHYSICIAN: I have been doing obstetrics as part of my family practice for the better part of about 17, 18 years of those years, and last year I had to stop delivering babies because of the current medical malpractice climate that is happening in the United States.
TOOBIN: After 13 years and five births, Caroline Berardo and her family have grown for trust Dr. Pallay.
CAROLINE BERARDO, PATIENT: It made me sad. I was comfortable with him because he knew our family history.
TOOBIN: Here in Montville, New Jersey, Dr. Pallay and his partner were paying $7,000 a year for medical malpractice insurance three years ago. He says if they kept delivering babies, this year it would be $60,000. They couldn't just charge their patients more, because the rates are fixed by the insurance companies, so they decided to give up one of the best parts of being a family doctor.
PALLAY: We didn't want to do that, but we had to.
TOOBIN (on camera): I mean, what was that like emotionally?
PALLAY: It was one of the most enjoyable things we did. We went to the hospital, and you know, it might take all night long to succeed with a good delivery. I would go home the next day and I'd feel like a million bucks. I'd feel great, I'd feel fantastic, and I'd feel ready to go to work and enjoy what I was doing, and that can't happen anymore because we could not pay the premium dollar to the obstetrical portion of our practice.
TOOBIN: Were you ever sued for something you did in the delivery room?
PALLAY: Never, no, never.
TOOBIN (voice-over): Medical malpractice cases generally come down to a question of whether it was bad treatment or just bad luck.
PALLAY: People die. People get sick. That's the way the good Lord made us. And when that happens, many times what will occur is the family sometime later will decide, you know, we wish mom or dad didn't have that happen, let's go find lawyer and sue. And suddenly You're hit with a lawsuit. Whether it's successful or not, and you look back and you say to yourself, but I did the best that I could do. I did the right things. I was there at 2:00 in the morning. I held their hands. I explained what had to be done, but sometimes they'll sue any way. That's not the cost of doing business. That's a devastation personally.
TOOBIN: If a patient is hurt by malpractice, a jury can make two kinds...
(END VIDEOTAPE)
KAGAN: And we go live now to the White House, President Bush on tort reform.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The bill I am about to sign is a model of effective bipartisan legislation. By working together over several years, we have agreed on a practical way to begin restoring common sense and balance to America's legal system. The Class Action Fairness Act of 2005 marks a critical step toward ending the lawsuit culture in our country.
The bill will ease a needless burden of litigation on every American worker, business and family. By beginning the important work of legal reform, we are meeting our duty to solve problems now and not to pass them on to future generations.
I appreciate so very much the leadership that Senator Frist and Senator McConnell have shown on this bill in the United States Senate. I want to thank Senator Chris Dodd and Senator Tom Carper and Senator Craig Thomas, as well, for working in a bipartisan fashion to get this good bill to my desk. I appreciate Congressman Jim Sensenbrenner, as well as Congressman Lamar Smith, joining us today.
I particularly want to pay tribute to the bill sponsors. Senator Grassley and Senator Kohl, as well as Bob Goodlatte and Congressman Rick Boucher -- are with us here today. This Congress showed what is possible when we set aside partisan differences and focus on what's doing right for Congress -- I mean, for the country -- and you all are to be credited for your good work. Thank you very much.
I welcome our new attorney general. How quickly they forget in Washington. Al Gonzales. Proud you're up here, Al. Hector Barreto, the SBA. Thank you, all of the business leaders, community leaders, consumer groups, who care about this issue. Thanks for your hard work, thanks for being patient. Thanks for not becoming discouraged and thanks for witnessing the fruits of your labor as I sign this bill.
Class actions can serve a valuable purpose in our legal system. They allow numerous victims of the same wrongdoing to merge their claims into a single lawsuit. When used properly, class actions make the legal system more efficient and help guarantee that injured people receive proper compensation. That is an important principle of justice. So the bill I sign today maintains every victim's right to seek justice and assures that wrongdoers are held to account.
Class actions can also be manipulated for personal gain. Lawyers who represent plaintiffs from multiple states can shop around for the state court where they expect to win the most money. A few weeks ago I visited Madison County, Illinois, where juries have earned a reputation for awarding large verdicts. The number of class actions filed in Madison County has gone from two in 1998 to 82 in 2004, even though the vast majority of the defendants named in those suits are not from Madison County. Trial lawyers have already filed 24 class actions in Madison County this year. We're in February -- including 20 in the past week, after Congress made it clear their chance to exploit the class action system would soon be gone.
Before today trial lawyers were able to drag defendants from all over the country into sympathetic local courts, even if those businesses had done nothing wrong. Many businesses decided it was cheaper to settle the lawsuits rather than risk a massive jury award. In many cases lawyers went home with huge payouts, while the plaintiffs ended up with coupons worth only a few dollars. By the time the settlement in at least one case was finished, plaintiffs actually owed their lawyers money.
A newspaper editorial called the class action system an extortion racket that only Congress can fix. This bill helps fix the system. Congress has done its duty, and I'm proud to sign it into law. Over the past few years, I've met people from all over the country who know the importance of class action reform firsthand and three of them are with us today.
Mary Lou Regat (ph) lives in Connecticut, yet a class action involving her faulty roof was resolved by a judge in Alabama. The award covered only a fraction of the cost of new shingles, but that wasn't Mary Lou's biggest problem. She had no idea she was part of the class action in the first place. No one contacted her about her award. She only learned by accident when she called the company about her warranty and then she found out there was nothing more she could to.
Hilda Bankston (ph) is with us. Her late husband used to own a drugstore in Fayette, Mississippi. Their business was doing well until the store got swept up in massive litigation just because it dispensed prescription drugs for a certain drug -- prescriptions for certain drugs. She had to sell the pharmacy six years ago, but she's still getting dragged into court again and again. Here's what she said: "My husband and I lived the American dream until we were caught up in what has become an American nightmare."
Alita Dakowksi (ph) is with us. She was part of a class action against a company that made faulty televisions. When the case was settled in Madison County, Illinois, Alita's lawyer took home a big check while she got a $50 rebate on another TV built by the same company that had ruined the first TV. Here's what she said: "I'm still left with a broken TV. He got $22 million. Where is the justice in this?"
I want to thank you all for letting me use your stories, not only here but during different events we've had, in highlighting the need for class action reform. This act will help ensure justice by making two essential reforms. First, it moves most large interstate class actions into federal courts. This will prevent trial lawyers from shopping around for friendly local friendly venues. The bill keep out-of-state businesses, workers and shareholders from being dragged before unfriendly local juries or forcing unfair settlements. And that's good for our system and it's good for our economy.
Second, the bill provides new safeguards to ensure that plaintiffs in class action lawsuits are treated fairly. The bill requires judges to consider the real monetary value of coupons and discounts so that victims can count on true compensation for their injuries. It demands settlements and rulings to be explained in plain English so that class members understand their full rights.
These are needed reforms. It is an important piece of legislation. It shows we're making important progress toward a better legal system. There is more to do. Small business owners across America fear that one junk lawsuit could force them to close their doors for good. Medical liability lawsuits are driving up the cost for doctors and patients and entrepreneurs around the country. Asbestos litigation alone has led to the bankruptcy of dozens of companies and cost tens of thousands of jobs, even though many asbestos claims are filed on behalf of people who aren't actually sick.
Overall junk lawsuits have driven the total cost of America's tort system to more than $240 billion a year, greater than any other major industrialized nation. It creates a needless disadvantage for America's workers and businesses in a global economy and poses unfair costs on job creators and raises prices to consumers. We have a responsibility to confront frivolous litigation head on. I will continue to working with Congress to pass meaningful legal reforms, starting with reform in our asbestos and medical liability systems.
Once again, I want to thank you all for the hard work on this important legislation. Class action reform will help keep America the best place in the world to do business. It will help ensure justice for our citizens and I am confident that this bill will be the first of many bipartisan achievements in the year 2005. And now it is my honor to sign the Class Action Fairness Law.
KAGAN: President Bush signing what's being dubbed the Class- Action Fairness Law. It is one of the top concerns he had since as he started his second term. And as we point out, this is the first bill he's signed in 2005. This is some tort reform, not everything the president wants to accomplish. Basically it gives class action lawsuits seeking $5 million or more -- there are certain situations where they have to go to federal court than to the state court. President Bush and the proponents saying it reduces frivolous lawsuits. Consumers advocates upset that they say it takes away protection for people like citizens and low-wage citizens.
Let's bring in our Elaine Quijano, standing by at the White House with more on this -- Elaine.
ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Daryn.
That's right, this is part of President Bush's larger effort to try to curb lawsuits nationwide. The president we heard him talk about this specific piece of legislation, but the president has also focused his attention on medical-liability reform and asbestos litigation reform.
Now apparently the president having his first step toward that larger goal. You are heard the president talking, though, addressing some of the concerns by some consumer groups, consumer advocates who say that this law will limit people's ability to sue companies. The president, though, maintaining that that right will be preserved with this law, but also saying that this law is necessary to curb what he believes are a lot of the frivolous lawsuits out there that clog up, he believes, the nation's courts.
But opponents again remaining very firm on this, Daryn. They are not happy at all about this piece of legislation. Nevertheless, President Bush signing it just a short time ago -- Daryn.
KAGAN: Elaine Quijano at the White House, thank you.
With more, here's Tony.
HARRIS: And just a moment ago before the president came out, Jeffrey Toobin as speaking with a doctor in New Jersey who certainly hopes the president moves to take on medical-malpractice lawsuits, but there is another side of the story that needs to be examined. One proposal on medical-malpractice lawsuits would cap awards at $250,000. Now that might sound like a lot of money to most people, but to families with huge medical bills, it is not nearly enough.
Once again, here is Jeff Toobin with the other side of the tort- reform debate.
(BEGIN VIDEOTAPE)
JEFFREY TOOBIN, CNN ANCHOR (voice-over): For 5 years, Tony and Susie Zionkowski tried to have a baby. Then they got a surprise, twins. Susie's pregnancy was normal and so was the delivery of their daughter Lucy, not so the other twin Lily.
TONY ZIONKOWSKI, FATHER OF LILY ZIONKOWSKI: To witness what happened when Lily, when they could not get Lily out, it was as if the world had collapsed.
SUSIE ZIONKOWSKI, MOTHER OF LILY ZIONKOWSKI: I don't think most people have doctors in there screaming for help. And they were all pushing. I could feel elbows in my throat. They were all pushing so hard. People were on the table. And I can hear nurses crying. So I think that you definitely -- there's no doubt, it was chaos. It was mass chaos.
TOOBIN: Lily was finally delivered by emergency C-section. Her brain was deprived by oxygen for so long that she had to be revive.
S. ZIOKOWSKI: Truly and honestly, they sent us home planning a funeral.
TOOBIN: Today the girls are 4 and a half years old, Lucy and Lily. S. ZIONKOWSKI: No,, no,. Let me see how tall you are. Let's see how tall you are. Let's pick you back up. Oh, you need some help? Can you bend your knee?
TOOBIN: Lily has seizures every day.
S. ZIONKOWSKI: Little seizures. It's all right. Hey, hey.
TOOBIN: She must be carefully fed.
S. ZIONKOWSKI: Good job.
TOOBIN: The cost of her daily care is astonishing, her medication alone is $1,000 a month. When the girls were still infants, Tony and Susie struggled to figure out what happened to Lily. After they looked at the medical records, they felt that many mistakes had been made. Then they made a difficult decision, to sue for damages.
S. ZIONKOWSKI: As a mother, you just -- it changes your whole mindset. You know, before I may have been a person that said, you know, if anybody had asked me if I was going to sue someone in my lifetime, I would have said slim to none. I don't believe in it.
TOOBIN: Their lawyers say the hospital played hardball.
MARK TATE, ATTORNEY FOR THE ZIONKOWSKIS: This particular expert testified that Lily had the consciousness of a dog. And so that while she may appear to be suffering and while she may appear to be in pain that, in fact, she has no cognitive ability to actually understand that pain.
TOOBIN: But just before the trial was to begin, the Zionkowskis won a sizable and confidential settlement far more than the $250,000 cap on noneconomic pain and suffering damages proposed by the president's tort reform.
(on camera): Do you think the ability to sue and the amount you can sue for should be limited?
T. ZIONKOWSKI: Cases like Lilies would warrant, where there was evidence of many, many mistakes that were made that could have been rectified and because the mistakes weren't rectified, Lily suffers the rest of her life. No, I don't think there should be limits.
TOOBIN (voice-over): The Zionkowskis are devoted to both of their daughters.
(on camera): Lucy is a gorgeous, outgoing, intelligent child. Does that make it more painful to see lily's limitations?
S. ZIONKOWSKI: Some days, yes. I think that, you know, the hard part is we can't dwell on what should have been, because you just wouldn't get through every day that way. And Lily has her own special way about her. And, yes, it's just different. It's in a different way. TOOBIN (voice-over): Like any parent, Susie has dreams for Lily.
S. ZIONKOWSKI: I want her as independent as she possibly can be, whatever that may be. It may not include walking or talking, but my goal is to get her to do everything that she physically can.
We take baby steps forward and we take gigantic leaps backwards, so it just -- we have to take those baby steps as though they're little miracles.
TOOBIN: CNN made numerous attempts to contact the hospital and the doctor that delivered Lily, but they made no comment.
(END VIDEOTAPE)
KAGAN: Now we get back to a story that started just about this time yesterday. John Negroponte, the former U.N. ambassador for the United States, currently the U.S. ambassador to Iraq and about to be the nominee, or is about to be the nominee, for director of national intelligence. That announcement made by President Bush yesterday.
Well, Ambassador Negroponte at the United Nations today, making his first public comment since the announcement yesterday. Let's listen in.
JOHN NEGROPONTE, NATL. INTEL DIR. NOMINEE: I'm not going to talk about the new appointment pending my confirmation. It's good to be back here at the United Nations. I had a meeting with my former colleagues from the P-5 (ph) this morning to brief them on the situation in Iraq as I saw it and now I'm going to have a meeting with the secretary-general. But it's all about Iraq.
UNIDENTIFIED MALE: Sir, how much support do you want from the U.N. in Iraq?
NEGROPONTE: I think -- without getting into specifics, I think the election on the 30th of January was a real watershed and I think it presents an opportunity to the international community to take another look at what it can do to be helpful to Iraq at this critical juncture in their political development. So it may be a turning point.
Obviously the more assistance that can be generated from the rest of the international community, I think, the better for the people and government of Iraq and I think they deserve the help and support of the international community so I hope everyone takes a hard look at what the possibilities are.
UNIDENTIFIED FEMALE: How concerned are you, though, about this recent upsurge in violence, particularly today on the Shiite holiday?
NEGROPONTE: Well, you know, there are -- regrettably, there are acts of violence in Iraq every day. But hopefully with the election of a new government and the efforts that are being made to train and equip and motivate the Iraqi armed forces, that situation will improve over time. I'm hopeful that will happen. But in the meanwhile, I think it would be extremely helpful if all of the members of the international community could join us, join the coalition in providing whatever assistance is possible to the government of people of Iraq.
(CROSSTALK)
NEGROPONTE: Excuse me.
UNIDENTIFIED FEMALE: In your new capacity, sir, when you meet with the secretary-general, what framework will you basing your call for confirmation on? Is it the (UNINTELLIGIBLE), is it something else that you are going to be...
NEGROPONTE: No, I'm just going to be -- I'm paying a courtesy call to the secretary-general and I'm going to be talking to him in about the situation in Iraq as I see it.
UNIDENTIFIED FEMALE: Are we allowed to say congratulations?
NEGROPONTE: Well, thank you very much. Of course.
UNIDENTIFIED FEMALE: Sir, what do you think you bring to the job?
NEGROPONTE: Well, listen, I'm not going to talk about that. I've got to wait until the confirmation process arises. OK, thank you.
KAGAN: Ambassador Negroponte making a good point. He has been nominated to be the first director of national intelligence to the United States, the U.S. Senate must confirm that nomination. Meanwhile, as he stops by the United Nations -- interesting to point out, there's that job is still open since he left it. There is no U.S. ambassador right now to the United Nation. That needs to be filled full-time. And now they'll have to fill the position of U.S. ambassador to Iraq, as well.
HARRIS: And Daryn, just a short time ago, secretary of state Condoleezza Rice wrapped up a question and answer session with the press. She's been meeting with the Dutch foreign minister, Bernard Bot, and the two have been talking security issues, particularly in Iraq and the possibility that the Netherlands might send some more trainers to Iraq to help with the training of Iraqi police. And just a little FYI here, the Netherlands currently holds the European Union's rotating presidency.
KAGAN: There you go.
We're going to take a quick break and we'll be back right after this.
(COMMERCIAL BREAK)
(STOCK MARKET REPORT)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired February 18, 2005 - 11:31 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And now in the news, Russian President Vladimir Putin says he's convinced that Iran is not trying to develop nuclear weapons. That's according the Interfax News Agency. It says Putin plans to visit Iran soon and vows cooperation with the country's nuclear program. The Russian leader met with Iran's security chief at the Kremlin today.
Former Presidents Bush and Clinton are due in Thailand this hour. They're starting a four-nation your of tsunami-devastated areas. The two presidents will highlight the rebuilding effort and try to keep donors focused on victims.
Prosecutors won't be charges filed against entertainer Bill Cosby. A woman claims Cosby drugged, then groped her at his Pennsylvania home. But the D.A. says there wasn't enough evidence. Cosby's attorney called the claim utterly preposterous.
And Secretary of State Condoleezza Rice is meeting this hour with her Dutch counterpart in Washington. The Netherlands is considering more military instructors for Iraq to help train Iraqi security forces.
Keeping you informed, CNN, the most trusted name in news.
DARYN KAGAN, CNN ANCHOR: Just a few minutes from now, President Bush will talk up a first step in major goal of his presidency, tort reform. The president is set to sign into law the Class Action Fairness Act of 2005 to dramatically curb what many see as a cottage industry of liability lawsuits. Congress granted final passage yesterday, despite sharp disagreement over the law's impact.
REP. JAMES SENSENBRENNER (R), JUDICIARY CHAIRMAN: We have to restore sanity to the justice system by dealing with the abuses that a small group of lawyers have turned to class action system into.
REP. NANCY PELOSI (D), MINORITY LEADER: Republicans are seeking yet another way to protect irresponsible corporations.
KAGAN: We will bring you the bill signing live when it begins.
Right now we want to take a closer look at another legal area the president is eager to reform, medical malpractice lawsuits.
CNN's senior legal analyst Jeffrey Toobin examines the issues from both sides, examining and beginning with the dilemma of family physicians in New Jersey.
(BEGIN VIDEOTAPE)
JEFFREY TOOBIN, CNN SR. LEGAL ANALYST (voice-over): Caroline Berardo doctor is the same one who delivered her three years ago.
UNIDENTIFIED MALE: That was the year you were born, yes.
TOOBIN: Dr. Arnold Pallay is a family physician. He treats the kids. He treats the parents. He even delivered babies -- delivered, past tense.
DR. ARNOLD PALLAY, PHYSICIAN: I have been doing obstetrics as part of my family practice for the better part of about 17, 18 years of those years, and last year I had to stop delivering babies because of the current medical malpractice climate that is happening in the United States.
TOOBIN: After 13 years and five births, Caroline Berardo and her family have grown for trust Dr. Pallay.
CAROLINE BERARDO, PATIENT: It made me sad. I was comfortable with him because he knew our family history.
TOOBIN: Here in Montville, New Jersey, Dr. Pallay and his partner were paying $7,000 a year for medical malpractice insurance three years ago. He says if they kept delivering babies, this year it would be $60,000. They couldn't just charge their patients more, because the rates are fixed by the insurance companies, so they decided to give up one of the best parts of being a family doctor.
PALLAY: We didn't want to do that, but we had to.
TOOBIN (on camera): I mean, what was that like emotionally?
PALLAY: It was one of the most enjoyable things we did. We went to the hospital, and you know, it might take all night long to succeed with a good delivery. I would go home the next day and I'd feel like a million bucks. I'd feel great, I'd feel fantastic, and I'd feel ready to go to work and enjoy what I was doing, and that can't happen anymore because we could not pay the premium dollar to the obstetrical portion of our practice.
TOOBIN: Were you ever sued for something you did in the delivery room?
PALLAY: Never, no, never.
TOOBIN (voice-over): Medical malpractice cases generally come down to a question of whether it was bad treatment or just bad luck.
PALLAY: People die. People get sick. That's the way the good Lord made us. And when that happens, many times what will occur is the family sometime later will decide, you know, we wish mom or dad didn't have that happen, let's go find lawyer and sue. And suddenly You're hit with a lawsuit. Whether it's successful or not, and you look back and you say to yourself, but I did the best that I could do. I did the right things. I was there at 2:00 in the morning. I held their hands. I explained what had to be done, but sometimes they'll sue any way. That's not the cost of doing business. That's a devastation personally.
TOOBIN: If a patient is hurt by malpractice, a jury can make two kinds...
(END VIDEOTAPE)
KAGAN: And we go live now to the White House, President Bush on tort reform.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The bill I am about to sign is a model of effective bipartisan legislation. By working together over several years, we have agreed on a practical way to begin restoring common sense and balance to America's legal system. The Class Action Fairness Act of 2005 marks a critical step toward ending the lawsuit culture in our country.
The bill will ease a needless burden of litigation on every American worker, business and family. By beginning the important work of legal reform, we are meeting our duty to solve problems now and not to pass them on to future generations.
I appreciate so very much the leadership that Senator Frist and Senator McConnell have shown on this bill in the United States Senate. I want to thank Senator Chris Dodd and Senator Tom Carper and Senator Craig Thomas, as well, for working in a bipartisan fashion to get this good bill to my desk. I appreciate Congressman Jim Sensenbrenner, as well as Congressman Lamar Smith, joining us today.
I particularly want to pay tribute to the bill sponsors. Senator Grassley and Senator Kohl, as well as Bob Goodlatte and Congressman Rick Boucher -- are with us here today. This Congress showed what is possible when we set aside partisan differences and focus on what's doing right for Congress -- I mean, for the country -- and you all are to be credited for your good work. Thank you very much.
I welcome our new attorney general. How quickly they forget in Washington. Al Gonzales. Proud you're up here, Al. Hector Barreto, the SBA. Thank you, all of the business leaders, community leaders, consumer groups, who care about this issue. Thanks for your hard work, thanks for being patient. Thanks for not becoming discouraged and thanks for witnessing the fruits of your labor as I sign this bill.
Class actions can serve a valuable purpose in our legal system. They allow numerous victims of the same wrongdoing to merge their claims into a single lawsuit. When used properly, class actions make the legal system more efficient and help guarantee that injured people receive proper compensation. That is an important principle of justice. So the bill I sign today maintains every victim's right to seek justice and assures that wrongdoers are held to account.
Class actions can also be manipulated for personal gain. Lawyers who represent plaintiffs from multiple states can shop around for the state court where they expect to win the most money. A few weeks ago I visited Madison County, Illinois, where juries have earned a reputation for awarding large verdicts. The number of class actions filed in Madison County has gone from two in 1998 to 82 in 2004, even though the vast majority of the defendants named in those suits are not from Madison County. Trial lawyers have already filed 24 class actions in Madison County this year. We're in February -- including 20 in the past week, after Congress made it clear their chance to exploit the class action system would soon be gone.
Before today trial lawyers were able to drag defendants from all over the country into sympathetic local courts, even if those businesses had done nothing wrong. Many businesses decided it was cheaper to settle the lawsuits rather than risk a massive jury award. In many cases lawyers went home with huge payouts, while the plaintiffs ended up with coupons worth only a few dollars. By the time the settlement in at least one case was finished, plaintiffs actually owed their lawyers money.
A newspaper editorial called the class action system an extortion racket that only Congress can fix. This bill helps fix the system. Congress has done its duty, and I'm proud to sign it into law. Over the past few years, I've met people from all over the country who know the importance of class action reform firsthand and three of them are with us today.
Mary Lou Regat (ph) lives in Connecticut, yet a class action involving her faulty roof was resolved by a judge in Alabama. The award covered only a fraction of the cost of new shingles, but that wasn't Mary Lou's biggest problem. She had no idea she was part of the class action in the first place. No one contacted her about her award. She only learned by accident when she called the company about her warranty and then she found out there was nothing more she could to.
Hilda Bankston (ph) is with us. Her late husband used to own a drugstore in Fayette, Mississippi. Their business was doing well until the store got swept up in massive litigation just because it dispensed prescription drugs for a certain drug -- prescriptions for certain drugs. She had to sell the pharmacy six years ago, but she's still getting dragged into court again and again. Here's what she said: "My husband and I lived the American dream until we were caught up in what has become an American nightmare."
Alita Dakowksi (ph) is with us. She was part of a class action against a company that made faulty televisions. When the case was settled in Madison County, Illinois, Alita's lawyer took home a big check while she got a $50 rebate on another TV built by the same company that had ruined the first TV. Here's what she said: "I'm still left with a broken TV. He got $22 million. Where is the justice in this?"
I want to thank you all for letting me use your stories, not only here but during different events we've had, in highlighting the need for class action reform. This act will help ensure justice by making two essential reforms. First, it moves most large interstate class actions into federal courts. This will prevent trial lawyers from shopping around for friendly local friendly venues. The bill keep out-of-state businesses, workers and shareholders from being dragged before unfriendly local juries or forcing unfair settlements. And that's good for our system and it's good for our economy.
Second, the bill provides new safeguards to ensure that plaintiffs in class action lawsuits are treated fairly. The bill requires judges to consider the real monetary value of coupons and discounts so that victims can count on true compensation for their injuries. It demands settlements and rulings to be explained in plain English so that class members understand their full rights.
These are needed reforms. It is an important piece of legislation. It shows we're making important progress toward a better legal system. There is more to do. Small business owners across America fear that one junk lawsuit could force them to close their doors for good. Medical liability lawsuits are driving up the cost for doctors and patients and entrepreneurs around the country. Asbestos litigation alone has led to the bankruptcy of dozens of companies and cost tens of thousands of jobs, even though many asbestos claims are filed on behalf of people who aren't actually sick.
Overall junk lawsuits have driven the total cost of America's tort system to more than $240 billion a year, greater than any other major industrialized nation. It creates a needless disadvantage for America's workers and businesses in a global economy and poses unfair costs on job creators and raises prices to consumers. We have a responsibility to confront frivolous litigation head on. I will continue to working with Congress to pass meaningful legal reforms, starting with reform in our asbestos and medical liability systems.
Once again, I want to thank you all for the hard work on this important legislation. Class action reform will help keep America the best place in the world to do business. It will help ensure justice for our citizens and I am confident that this bill will be the first of many bipartisan achievements in the year 2005. And now it is my honor to sign the Class Action Fairness Law.
KAGAN: President Bush signing what's being dubbed the Class- Action Fairness Law. It is one of the top concerns he had since as he started his second term. And as we point out, this is the first bill he's signed in 2005. This is some tort reform, not everything the president wants to accomplish. Basically it gives class action lawsuits seeking $5 million or more -- there are certain situations where they have to go to federal court than to the state court. President Bush and the proponents saying it reduces frivolous lawsuits. Consumers advocates upset that they say it takes away protection for people like citizens and low-wage citizens.
Let's bring in our Elaine Quijano, standing by at the White House with more on this -- Elaine.
ELAINE QUIJANO, CNN CORRESPONDENT: Hello to you, Daryn.
That's right, this is part of President Bush's larger effort to try to curb lawsuits nationwide. The president we heard him talk about this specific piece of legislation, but the president has also focused his attention on medical-liability reform and asbestos litigation reform.
Now apparently the president having his first step toward that larger goal. You are heard the president talking, though, addressing some of the concerns by some consumer groups, consumer advocates who say that this law will limit people's ability to sue companies. The president, though, maintaining that that right will be preserved with this law, but also saying that this law is necessary to curb what he believes are a lot of the frivolous lawsuits out there that clog up, he believes, the nation's courts.
But opponents again remaining very firm on this, Daryn. They are not happy at all about this piece of legislation. Nevertheless, President Bush signing it just a short time ago -- Daryn.
KAGAN: Elaine Quijano at the White House, thank you.
With more, here's Tony.
HARRIS: And just a moment ago before the president came out, Jeffrey Toobin as speaking with a doctor in New Jersey who certainly hopes the president moves to take on medical-malpractice lawsuits, but there is another side of the story that needs to be examined. One proposal on medical-malpractice lawsuits would cap awards at $250,000. Now that might sound like a lot of money to most people, but to families with huge medical bills, it is not nearly enough.
Once again, here is Jeff Toobin with the other side of the tort- reform debate.
(BEGIN VIDEOTAPE)
JEFFREY TOOBIN, CNN ANCHOR (voice-over): For 5 years, Tony and Susie Zionkowski tried to have a baby. Then they got a surprise, twins. Susie's pregnancy was normal and so was the delivery of their daughter Lucy, not so the other twin Lily.
TONY ZIONKOWSKI, FATHER OF LILY ZIONKOWSKI: To witness what happened when Lily, when they could not get Lily out, it was as if the world had collapsed.
SUSIE ZIONKOWSKI, MOTHER OF LILY ZIONKOWSKI: I don't think most people have doctors in there screaming for help. And they were all pushing. I could feel elbows in my throat. They were all pushing so hard. People were on the table. And I can hear nurses crying. So I think that you definitely -- there's no doubt, it was chaos. It was mass chaos.
TOOBIN: Lily was finally delivered by emergency C-section. Her brain was deprived by oxygen for so long that she had to be revive.
S. ZIOKOWSKI: Truly and honestly, they sent us home planning a funeral.
TOOBIN: Today the girls are 4 and a half years old, Lucy and Lily. S. ZIONKOWSKI: No,, no,. Let me see how tall you are. Let's see how tall you are. Let's pick you back up. Oh, you need some help? Can you bend your knee?
TOOBIN: Lily has seizures every day.
S. ZIONKOWSKI: Little seizures. It's all right. Hey, hey.
TOOBIN: She must be carefully fed.
S. ZIONKOWSKI: Good job.
TOOBIN: The cost of her daily care is astonishing, her medication alone is $1,000 a month. When the girls were still infants, Tony and Susie struggled to figure out what happened to Lily. After they looked at the medical records, they felt that many mistakes had been made. Then they made a difficult decision, to sue for damages.
S. ZIONKOWSKI: As a mother, you just -- it changes your whole mindset. You know, before I may have been a person that said, you know, if anybody had asked me if I was going to sue someone in my lifetime, I would have said slim to none. I don't believe in it.
TOOBIN: Their lawyers say the hospital played hardball.
MARK TATE, ATTORNEY FOR THE ZIONKOWSKIS: This particular expert testified that Lily had the consciousness of a dog. And so that while she may appear to be suffering and while she may appear to be in pain that, in fact, she has no cognitive ability to actually understand that pain.
TOOBIN: But just before the trial was to begin, the Zionkowskis won a sizable and confidential settlement far more than the $250,000 cap on noneconomic pain and suffering damages proposed by the president's tort reform.
(on camera): Do you think the ability to sue and the amount you can sue for should be limited?
T. ZIONKOWSKI: Cases like Lilies would warrant, where there was evidence of many, many mistakes that were made that could have been rectified and because the mistakes weren't rectified, Lily suffers the rest of her life. No, I don't think there should be limits.
TOOBIN (voice-over): The Zionkowskis are devoted to both of their daughters.
(on camera): Lucy is a gorgeous, outgoing, intelligent child. Does that make it more painful to see lily's limitations?
S. ZIONKOWSKI: Some days, yes. I think that, you know, the hard part is we can't dwell on what should have been, because you just wouldn't get through every day that way. And Lily has her own special way about her. And, yes, it's just different. It's in a different way. TOOBIN (voice-over): Like any parent, Susie has dreams for Lily.
S. ZIONKOWSKI: I want her as independent as she possibly can be, whatever that may be. It may not include walking or talking, but my goal is to get her to do everything that she physically can.
We take baby steps forward and we take gigantic leaps backwards, so it just -- we have to take those baby steps as though they're little miracles.
TOOBIN: CNN made numerous attempts to contact the hospital and the doctor that delivered Lily, but they made no comment.
(END VIDEOTAPE)
KAGAN: Now we get back to a story that started just about this time yesterday. John Negroponte, the former U.N. ambassador for the United States, currently the U.S. ambassador to Iraq and about to be the nominee, or is about to be the nominee, for director of national intelligence. That announcement made by President Bush yesterday.
Well, Ambassador Negroponte at the United Nations today, making his first public comment since the announcement yesterday. Let's listen in.
JOHN NEGROPONTE, NATL. INTEL DIR. NOMINEE: I'm not going to talk about the new appointment pending my confirmation. It's good to be back here at the United Nations. I had a meeting with my former colleagues from the P-5 (ph) this morning to brief them on the situation in Iraq as I saw it and now I'm going to have a meeting with the secretary-general. But it's all about Iraq.
UNIDENTIFIED MALE: Sir, how much support do you want from the U.N. in Iraq?
NEGROPONTE: I think -- without getting into specifics, I think the election on the 30th of January was a real watershed and I think it presents an opportunity to the international community to take another look at what it can do to be helpful to Iraq at this critical juncture in their political development. So it may be a turning point.
Obviously the more assistance that can be generated from the rest of the international community, I think, the better for the people and government of Iraq and I think they deserve the help and support of the international community so I hope everyone takes a hard look at what the possibilities are.
UNIDENTIFIED FEMALE: How concerned are you, though, about this recent upsurge in violence, particularly today on the Shiite holiday?
NEGROPONTE: Well, you know, there are -- regrettably, there are acts of violence in Iraq every day. But hopefully with the election of a new government and the efforts that are being made to train and equip and motivate the Iraqi armed forces, that situation will improve over time. I'm hopeful that will happen. But in the meanwhile, I think it would be extremely helpful if all of the members of the international community could join us, join the coalition in providing whatever assistance is possible to the government of people of Iraq.
(CROSSTALK)
NEGROPONTE: Excuse me.
UNIDENTIFIED FEMALE: In your new capacity, sir, when you meet with the secretary-general, what framework will you basing your call for confirmation on? Is it the (UNINTELLIGIBLE), is it something else that you are going to be...
NEGROPONTE: No, I'm just going to be -- I'm paying a courtesy call to the secretary-general and I'm going to be talking to him in about the situation in Iraq as I see it.
UNIDENTIFIED FEMALE: Are we allowed to say congratulations?
NEGROPONTE: Well, thank you very much. Of course.
UNIDENTIFIED FEMALE: Sir, what do you think you bring to the job?
NEGROPONTE: Well, listen, I'm not going to talk about that. I've got to wait until the confirmation process arises. OK, thank you.
KAGAN: Ambassador Negroponte making a good point. He has been nominated to be the first director of national intelligence to the United States, the U.S. Senate must confirm that nomination. Meanwhile, as he stops by the United Nations -- interesting to point out, there's that job is still open since he left it. There is no U.S. ambassador right now to the United Nation. That needs to be filled full-time. And now they'll have to fill the position of U.S. ambassador to Iraq, as well.
HARRIS: And Daryn, just a short time ago, secretary of state Condoleezza Rice wrapped up a question and answer session with the press. She's been meeting with the Dutch foreign minister, Bernard Bot, and the two have been talking security issues, particularly in Iraq and the possibility that the Netherlands might send some more trainers to Iraq to help with the training of Iraqi police. And just a little FYI here, the Netherlands currently holds the European Union's rotating presidency.
KAGAN: There you go.
We're going to take a quick break and we'll be back right after this.
(COMMERCIAL BREAK)
(STOCK MARKET REPORT)
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
