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The Class Action Fairness Act


Proponents of the Class Action Fairness Act, which would have moved many lawsuits from state to federal courts, failed to get the 60 votes needed to proceed, effectively killing it for this legislative year. The vote was 44-43. The bill itself had strong backing, but hit an impasse when Republican leaders denied Democrats attempts to link it to several of their major legislative priorities.
It should be noted, that legislation on this topic, and with these general provisions has been introduced in every session of Congress for a number of years and will undoubtedly be reintroduced in the 109th Congress.

Like many Americans, Congress looks forward to a summer vacation. Congress watchers say that right now, only weeks away from the congressional recess, is the point in the session that citizens most need to pay attention — as priority bills are pushed through, killed, or amended and passed before the break. One of these priority pieces of legislation could fundamentally change the way large groups seek legal redress.

The Class Action Fairness Act, due to be taken up by the Senate in the second week of July, 2004, has been receiving renewed attention due to John Kerry's choice of a former trial lawyer John Edwards as running mate. The Act, which would put limits on class-action suits, has turned into a bitter partisan battle with business and consumer groups arrayed on both sides. Sponsored by Republican Senator Charles Grassley, the bill that would move many major class-action lawsuits from state courts to federal courts is officially described as follows:

A bill to amend the procedures that apply to consideration of interstate class actions to assure fairer outcomes for class members and defendants, and for other purposes. - Read the full text of the Class Action Fairness Act
Critics of this bill, Attorneys General of 13 states, say that while some reform is needed, the bill would undercut the strong consumer protection laws passed in many states. Below, read the arguments on both sides and tell us what you think on the message boards.

"This improved bill embodies a carefully balanced legislative solution that responds to some of the most outrageous abuses of the class action litigation device in some of our state courts... Among other things, it eliminates the opportunity that exists in the current system for unscrupulous lawyers to profit by victimizing injured parties with sham settlements. And it takes away the opportunity for those lawyers to exploit legitimate businesses for their own personal financial gain."

- Senator Orrin Hatch, R-UT

"I'm disturbed the bill may deny justice to consumers involving multiple state laws. I hear so many speeches about how we have to protect our states and keep the heavy hand of government from them. But basically we're saying a group of people from I don't know, let's say Iowa wanted to band together to protect themselves against violations of state civil rights or consumer or environmental protections and do it just in their own state courts. They can't do it because the U.S. Senate figures we know a lot better than the people of Iowa or Tennessee or Vermont."

- Senator Patrick Leahy, D-VT

"Interstate class actions are increasingly being brought in certain state courts known to favor plaintiffs in cases against out-of-state companies. While some of these suits have merit, far too many are frivolous. Class action lawyers know, however, that it often makes business sense for defendants to settle rather than litigate. S. 2062 would curb trial lawyer "forum shopping" by shifting most major class action suits to federal court. The bill includes a plaintiff's "Bill of Rights" and would not limit the ability of anyone to file a class action lawsuit. It merely helps to ensure that the case is heard in a more appropriate, and often a far more unbiased, venue."

- National Association of Manufacturers

"S.2062 is fundamentally flawed because under legislation, most class actions brought against a defendant who is not a "citizen" of the state will be removed to federal court, no matter how substantial a presence the defendant has in the state or how much harm the defendant has caused in the state... Equal access to the American system of justice is a foundation of democracy. S.2062 would effect a sweeping reordering of our nation's system of justice that will disenfranchise individual citizens from obtaining redress from harm, and thereby impede efforts against egregious corporate wrongdoing."

- Letter from New York Attorney General Eliot Spizer, W.A. Drew Emondson, Attorney General of Oklahoma and 11 other Attorney Generals
Contact your state Attorney General

"Class action filings have increased tenfold in the last decade, and our nation's tort system—of which class actions constitute a significant portion—costs our economy more than $180 billion a year. Companies spend millions of dollars each year to defend against class action lawsuits—money that should be used to expand, develop new products, and create jobs. And high class action legal defense costs for businesses translate into higher priced goods and services for consumers... The Class Action Fairness Act that will be considered by the Senate in the next few weeks is a moderate, well-measured bill that will ensure a simpler, fairer, and faster legal system."

- Thomas J. Donohue, President & CEO, U.S. Chamber of Commerce

""If S. 2062 becomes law, since consumers will no longer have the option of bringing a multi-state case in state court, we must preserve their right to be heard in federal court. The Bingaman Consumer Amendment will ensure that S. 2062 accomplishes its intended goal, to move nationwide class actions into one federal forum. Without this amendment, harmed consumers will be forced to bring single-state class actions in federal court, recreating the “copy cat lawsuit” problem that proponents of S. 2062 have criticized. Moreover, consumers who live in relatively small states may never get relief, because there simply may not be enough injured consumers in their states to justify litigating a costly and complex class action lawsuit.""

- Consumers Union in opposition to the bill in its present form and supporting an amendment by Senator Jeff Bingaman of New Mexico.

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