• Interstate class actions are increasingly being brought in certain state courts because those courts tend to favor local lawyers in cases against out-of-state companies or because those courts are ill-equipped to handle such cases. Many state courts don't have either the support staff and other resources or the complex litigation experience to handle interstate class actions, which often involve thousands (and sometimes millions) of purported class members.
  
• In addition to forum-shopping, lawyers frequently exploit major loopholes in federal jurisdiction statutes to block the removal of class actions that belong in federal court. For example, plaintiffs' counsel may name parties that are not really relevant to the class claims in an effort to destroy diversity. In other cases, counsel may waive federal law claims or reduce the amount of damages claimed to ensure that the action will remain in state court.

• Some state courts use very lax class certification criteria, making virtually any controversy subject to class action treatment and allowing state courts to hear purely interstate class actions. The result is that state courts are increasingly deciding out-of-state residents' claims against out-of-state companies under other states' laws. When state courts preside over class actions involving claims of residents of more than one state (especially nationwide class actions), they end up dictating the substantive laws of other states, sometimes over the protests of those other states.
  
• For example, The New York Times recently reported that in a nationwide class action, one Illinois state court may effectively "overturn insurance regulations or state laws in New York, Massachusetts, and Hawaii, among other places," notwithstanding the protests of officials in those other states. According to the Times, that Illinois state court (elected by the residents of one county) was on the verge of "making what amounts to a national rule on insurance."
  
• Similarly, after a federal court found itself without jurisdiction over the matter, a county court in Alabama is now handling a nationwide class action brought on behalf of 20 million people nationwide alleging that the federally-mandated air bags in their vehicles are faulty. This situation raises serious federalism-related policy questions. Why should an Alabama court (elected by the 11,000 residents of one county) be telling 20 million people in all 50 states what kind of air bag is appropriate for their vehicles? What business does an Alabama state court have in presiding over such a case when fewer than 20 percent of the claims are by Alabama residents and none of the out-of-state defendants even do business in the county where the court sits?

• In an editorial, the San-Diego Union-Tribune criticized the settlement of a state court class action in which the author had received 93 cents and her lawyers got $140,000.
  
• According to Business Today, class members in another case got free cereal coupons (good if they bought more cereal), while their lawyers were paid $2 million - $2,000 per hour.
  

Worse yet, the Chicago Tribune reported that one state court class action settlement yielded an $8.5 million payment to the class attorneys, but each class member ended up having to pay $91.13. That's right, the consumers lost money!

• At present, our federal diversity jurisdiction statutes essentially provide that interstate disputes involving significant sums of money may be heard in a federal court. But because class actions (as we now know them) did not exist when those statutes were initially framed, class actions were omitted, leading to unintentional results.
  

For example, under current law, a citizen of one state usually may bring in federal court a simple $75,001 slip-and-fall claim against a party from another state. But if a class of 25 million product owners living in all 50 states bring claims collectively worth $15 billion against the product manufacturer, that lawsuit usually must be heard in a state court!

• The Interstate Class Action Jurisdiction Act offers a solution to the class action crisis by making it easier for plaintiff class members and defendants to remove class actions to federal court, where multiple state laws are more appropriately heard.
  
• The Act doesn't limit the ability of anyone to file a class action lawsuit. It doesn't change anybody's rights to recovery. It merely allows federal courts to hear big lawsuits involving truly interstate issues, while ensuring that purely local controversies remain in state courts. This is exactly what the framers of the Constitution had in mind when they established federal diversity jursidiction.