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Special
Report--Class Action
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The judicial Power [of the United States] shall
extend to all Cases, in Law and Equity, arising
under this Constitution, the Laws of the United
States, and Treaties made, under their authority;
. . . to controversies . . . between Citizens of
different States.
United States Constitution, Article III,
Section 2.
Many attorneys are filing interstate class
actions in state courts. Often, they sue in state
court on behalf of thousands and, sometimes, even
millions of people who are not citizens of their
state. This legislation would allow a plaintiff or
a defendant to move such multistate lawsuits to
federal court.
Representatives Bob Goodlatte, Rick Boucher,
Jim Moran, and Ed Bryant, have introduced H.R.
1875 to address the growing problem of abusive
state court class action suits. The bill would resolve the
problems encountered when state court judges hear
interstate class action cases by
allowing
claims
involving parties from multiple states to be heard
in federal court. This will ensure that all
parties are treated equally and
fairly.
Why do we need to change the class action
system?
The class action device is a necessary and very
important part of our legal system to bring
efficiency and fairness in situations involving
many people with similar claims; however, it is
being used with an increasing frequency and in
ways that were never envisioned by its creators.
In recent years, there has been an explosion of
class action cases in state courts. States with
lax and unusual standards and different laws make
specific decisions that set the rules for citizens
of all of the other states. All too often, massive
nationwide class actions involving the citizens
and laws of all 50 states are heard in a single
state court. This has led to a race to the bottom
that too frequently results in quick, controlled
settlement of cases where lawyers win large fees
while the class members receive little
benefit.
The framers of the Constitution intended that
certain interstate cases should be in federal
court to prevent "hometowning" and to protect the
rights of the parties. The current system,
however, prevents many large interstate class
action suits from being heard in federal court,
where they appropriately belong, while many small
simple cases are still heard in state court.
Moreover, under the current system, class members
have little to no control over the cases and are
often forced into binding class settlements
despite their rights not being adequately
represented.
H.R. 1875 would fix the class action mechanism
in order to make it a more effective tool for
providing justice in fair and equal measure. The
bill would allow parties to move class actions
involving litigants from multiple states to
federal court.
The bill does not prevent any claim from being
heard and does not close the courthouse door to
any plaintiff. The bill affects only where the
case would be heard.
This legislation will improve the efficiency of
the judicial system because federal courts have
special procedural tools for dealing with complex
litigation and are better able to manage claims
involving parties from multiple states. The
workload of our courts will be reduced by allowing
interstate class actions to be heard in federal
court because of the consolidation of duplicative,
competing and overlapping cases. |
| NAM STAFF CONTACT: Lawrence
Fineran, (202) 637-3174, lfineran@nam.org,
Resources, Environment & Regulation Policy
Department
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