Issue (6/5/00): The Senate Judiciary Committee plans to consider S. 353, the Class Action Fairness Act, on June 8, 2000. Final action is expected on June 15. S. 353 clarifies that federal courts should hear cases where a class action lawsuit involves plaintiffs or defendants from multiple states or foreign countries. Thus, it will help to limit "forum shopping," whereby trial lawyers use creative means to certify a class in plaintiff-friendly jurisdictions. Federal courts more consistently decide when class actions should be allowed and these courts are better equipped to deal with complex cases fairly and efficiently.

Background: S. 353 is strongly opposed by the American Trial Lawyers Association. Currently, trial lawyers attempt to certify class actions in friendly state courts and then coerce settlements. All too often, these settlements do little for the claimants who allegedly suffered harm, but generate huge fees for the lawyers who are supposed to represent their clients’ interests. One method for getting certified in a state court is to sue a local supplier or retailer who may have had little or nothing to do with the alleged incident. This forces often innocent co-defendants to incur unnecessary but large legal fees. The Class Action Fairness Act would help mitigate the current situation by giving federal courts original jurisdiction over class action lawsuits where diversity of citizenship occurs and the amount in controversy exceeds $75,000. S. 353 would also allow any defendant or plaintiff to seek the removal to federal court of a class action lawsuit filed in state court. The Class Action Fairness Act ensures that truly local cases remain in state courts, that notices be written in plain English, that state attorneys general be notified of class action lawsuits that sanctions are available for attorneys filing frivolous lawsuits. It does not alter any substantive law.

Action Needed: The trial lawyers are pulling out all of the stops to kill S. 353. NAM members are urged to contact Senate Judiciary Committee members – all of whom can be reached by calling the Capitol switchboard at (202) 224-3121. Faxes may be addressed to The Honorable________  , U.S. Senate, Washington, DC  20510. For a list of Senate Judiciary Committee members, visit the http://www.nam.org/.

Message:

• S. 353 is bipartisan and does not alter any substantive law.
• The Class Action Fairness Act clarifies the intent of the Founders that lawsuits involving plaintiffs and defendants from multiple states and foreign countries belong in federal courts.
• Federal courts more consistently decide when class actions should be allowed and can more easily consolidate overlapping claims.
• The large fees awarded class action lawyers through coerced settlements all too often do not adequately compensate those who may have been harmed. Companies offer these settlements to decrease the cost of nuisance suits. In the end, all consumers pay higher prices due to the settlement of cases with little merit.