Yesterday (6/12), the House of Representatives passed the Class Action Fairness Act, a bill designed to move most class actions from state to federal court, where, it is perceived, judges will be less receptive to the rights of plaintiffs. (See Washington Post article.) The vote in the House was 253-170, generally but not exclusively along party lines, with a few Democrats joining the majority and two Republicans opposing the bill.
The bill now moves to the Senate, where a similar proposal, S 274, already has significant support, including endorsements from some Senate Democrats such as Sens. Dianne Feinstein of California, Blanche Lincoln of Arkansas, Herb Kohl of Wisconsin, Zell Miller of Georgia and Thomas Carper of Delaware. (See AP article.). While there have been efforts over the last several years to pass such legislation, and similar bills have passed the House three times, they have traditionally stalled in the Senate. If the Senate coalesces around a proposal this time, especially considering the support of the moderate Senate Democrats, then it is increasingly unlikely that this proposal can be stopped.
President Bush supports the proposal, and is expected to sign the bill if the two chambers can resolve the differences between the two bills. AP reports that the White House said Thursday that “[t]he bill will remove significant burdens on class-action litigants and provide greater protections for the victims whom the class-action device originally was designed to benefit.” The bill is also part of the President’s tort-reform agenda, driven by adviser Karl Rove (see Washington Post article) which includes medical malpractice reform and other measures designed to limit lawsuits and reduce the influence of trial lawyers.
The key differences between the House and Senate versions of the bill involve retroactivity. The House version is retroactive, and would apply to all class action lawsuits, even those already being heard. The Senate version is not retroactive, and only applies to class action lawsuits, and not to similar actions, including lawsuits consolidated into one case or state attorney general actions. House Republicans say the legislation needs to apply to all class action lawsuits, even the ones already being heard. That “language eliminates any incentive to rush to the courthouse to avoid the reforms contained in the legislation,” said Rep. Lamar Smith, R-Texas. “It also prevents individuals from being made part of a frivolous suit that has been filed before enactment of the new laws.” Both versions of the bill would require that class-action lawsuits in which the primary defendant and fewer than one-third of the plaintiffs were from the same state be heard in federal court.
As previously discussed in the April 1 blog entry, the Class Action Fairness Act is anything but fair to class action plaintiffs. The proponents of this bill have an interest in moving class actions to federal court, as federal court litigation can be more complex and costly. There are a number of rules applicable in federal courts that most states have not yet adopted that make litigation in federal court more time-consuming and expensive, and juries tend to be more conservative in federal court. The bill also contains a number of other provisions all designed to make it hard for employment and civil rights plaintiffs, as well as other groups of individuals who are taking on big business, to file a group lawsuit.
While it might not be possible to stop this proposal from charging forward, it is very important that your Senators hear from you. Let them know that your concept of “fairness” does not include proposals that make it much more difficult for those wronged by widespread and discriminatory practices to fight back in court.
More Information on the Class Action Fairness Act:
Public Citizen’s Unfairness Incorporated: The Corporate Campaign Against Consumer Class Actions