Oregon, the state that brought us land-use planning, public beaches and the bottle bill, loves to consider itself at the public policy cutting edge.

But there are certain "first-and-only" lists Oregon belongs to that should shame the state, Senate President Peter Courtney said Thursday in emotional testimony before the Senate Judiciary Committee.

Senate President Peter Courtney

Courtney urged the committee and the rest of the Senate to pass HB 4143, a measure that would end Oregon's status as just one of two states in the nation that directs unclaimed class-action lawsuit proceeds back to the corporation that was sued in the first place.

The bill, which sailed through the House earlier this week, would instead use the money to fund the state's struggling legal aid programs. Courtney, himself a former legal aid lawyer, said providing a funding mechanism for legal assistance to Oregon's poor has never been more vital.

"There are extraordinary business interests in this room," Courtney said at Thursday's hearing. "There are extraordinary legal minds in this room. But in the end we're talking about people who are struggling in their every-day lives. This is so Oregon. We don't let people suffer needlessly in this state."

HB 4143 has exploded into a contentious showdown that has divided the state's legal community.

Dave Frohnmayer

On one side are the some of Oregon's most respected business lawyers, including former Oregon Attorney General David Frohnmayer, who claim the bill is unconstitutional and violates the rights of their corporate clients. On the other are Courtney, current Attorney General Ellen Rosenblum and a long list of other high-profile proponents who argue it's time to put unclaimed class-action lawsuits to a higher and better use than simply giving it back to defendant corporations.

Portland's normally collegial legal community was still buzzing Thursday after events at Wednesday's annual awards lunch thrown by the Campaign for Equal Justice. The group, whose primary purpose is funding legal services for the poor, had invited Rep. Tobias Read, D-Beaverton, and Rep. Jennifer Williamson, D-Portland, to update the luncheon crowd on their bill and its prospects.

Read and Williamson got excused from their busy legislative obligations and arrived at the Governor Hotel ballroom looking forward to a sympathetic and informed audience. They were stunned to then learn they'd been bumped from the agenda. Certain members of the Campaign for Equal Justice board opposed to the bill objected to providing Read and Williamson a forum, said Mark Wada, a Portland attorney and chair of the Campaign for Equal Justice board of directors. He declined to name names.

Rep. Tobias Read

Read said he assumed the objections came from lawyers who work for oil giant BP or other defendants in pending class actions. Susan Marmaduke and Henry Hewitt, lawyers from Harrang Long and Stoel Rives, respectively, serve on the nonprofit's board. Both firms work for BP in a pending class action. Harrang Long also works for Philip Morris, one of the world's largest tobacco firms, in another pending Oregon class action.

Frohnmayer said HB 4143 runs roughshod over long-accepted courtroom procedures. He said after Thursday's hearing the proposed bill represents "the wholesale trashing of the current decades-old court procedures" that protect the rights of defendants.

But the furor over the bill is also about money, lots of it.

A look at the numbers in the BP case explains what is at stake and why the business lobby has launched an aggressive drive against HB 4143.

Portland attorney David Sugerman led the case claiming that BP had violated the state's unfair trade practices act when its gas stations and convenience stores charged an extra 35 cents to customers who paid with a credit card.

A Multnomah County Circuit Court jury ruled in the customers' favor in January.

Under the terms of verdict, an estimated 2.9 million customers of ARCO stations and AM-PM convenience stores would each be entitled to damages of $200.

If each and every class member files the necessary paperwork, BP faces total losses of $580 million. That won't happen. The court won't be able to find some of the eligible customers and in this case it has recently come to light that BP destroyed transaction records. It may prove impossible to even determine the full universe of eligible BP customers.

So if historical norms apply, BP will end up paying a fraction of the $580 million, perhaps in the ballpark of 50-80 percent. The balance, perhaps hundreds of millions of dollars, will go back to BP.

At Thursday's hearing, Read likened Oregon's current arrangement to the police apprehending a burglar with 50 stolen televisions. Under current class-action rules, if the police couldn't find the owners of 20 of the televisions, they would give the TVs back to the burglar.

BP is mounting a vigorous offensive. Besides trotting out Frohnmayer and others to testify the bill, the company was offering $5,000 to lobbyists in Salem earlier this week willing to work against it, according to multiple sources in the Capitol.

-- Jeff Manning