Public Citizen | Congress Watch | Congress Watch - Letter to Members of the House Judiciary Committee from Joan Claybrook and Frank Clemente Urging Opposition to H.R. 1875, the Interstate Class Action Jurisdiction Act

JOIN US! |Take Action | Publications | About Congress Watch | Contact Us

Letter to Members of the House Judiciary Committee from Joan Claybrook and Frank Clemente Urging Opposition to H.R. 1875, the Interstate Class Action Jurisdiction Act

July 26, 1999

Member, U.S. House of Representatives
House Committee on the Judiciary
Washington, DC 20515

Dear Representative:

We write to strongly oppose H.R. 1875, the Interstate Class Action Jurisdiction Act of 1999, which the Committee is scheduled to markup on Tuesday. Class action litigation is an area in which Public Citizen has considerable expertise: we have intervened in more than 30 class action cases over the past five years at both the state and federal level to ensure that consumers receive fair treatment in class action settlements. While we agree that there are cases where class plaintiffs do not receive adequate compensation, this problem occurs in both the federal and state courts. However, nothing in this bill does anything to address this problem.

Consumer class actions are filed when many individuals are similarly damaged -- whether for economic loss due to fraud or injury due to defective products. They compensate individuals for the harms they suffer at the hands of corporate wrongdoers. They deter dangerous business conduct where individual consumers, acting alone, would not have the means to sue to force product changes or recalls. They also encourage reform of deceptive or fraudulent manufacturing and sales practices that cost consumers billions of dollars a year. For these reasons we believe that it is perilous for Congress to tamper with a system that has served consumers well.

We have four principal objections to the bill:

H.R. 1875 would trample on the rights of states to manage their legal systems.
H.R. 1875 will allow the removal of the vast majority of state-based class actions to the federal courts. The principal exception is the occasional circumstance when the "substantial majority" of plaintiffs are citizens of the state where the case was filed, as are all of the "primary" defendants, and the claims will be governed by the laws of that state. Most class actions with corporate defendants will not meet this exception because corporations are often "citizens" of two states: the state where they are incorporated and the state where they have their principal place of business. As a result, most state-court consumer class actions would be eliminated, even in cases where most class members are from one state and the case only involves issues of state law.

We see no overriding need for such a massive intrusion on matters traditionally handled at the state court level. For example, in Spielholz et. al. v. Los Angeles Cellular Telephone Company, Bellsouth Cellular Corporation, and AT&T Wireless Services, Inc., a group of California residents sued the defendants, claiming that they made inaccurate, misleading, and intentionally deceptive representations about their provided coverage. Even though the overwhelming number of plaintiffs reside in California and the suit is based entirely on California state law, under H.R. 1875 the defendants would have the choice of removing this case to federal court since at least some of the defendants are out-of-state corporations. There is no federal interest in resolving such a dispute because it doesn't involve federal law; it is not even national in character.

H.R. 1875 unfairly tilts the playing field and provides an advantage to defendant corporations.
Should the Interstate Class Action Jurisdiction Act become law, a significant majority of state court class actions will either have to be filed in federal court or will be removable by defendants to federal court, should defendants decide that it is in their best interest to do so. This is counter to the ordinary presumption that the plaintiff gets to choose his or her own forum. In some cases, federal courts have refused to certify classes; under this bill, states could no longer provide any remedy through their own courts to their citizens in these cases. Tobacco companies, HMOs, auto makers, insurance companies, securities firms, and drug companies that injure the public should not have the power to choose the legal forum they believe will benefit them most.
H.R. 1875 will slow the continued interpretation of state law. The bill affects only class actions that involve solely issues of state law. State judges are more familiar and expert in interpreting state law, applying it as new factual situations arise and community standards of responsible behavior change. Federal judges, however, are less apt to extend state law in new areas, believing it is the province of state, not federal courts. Moving class actions based on state law to federal court could have a direct negative impact on evolving legal areas like tobacco and HMO litigation.

H.R. 1875 will result in considerable delay for injured consumers.
The bill will result in many more cases being tried in federal court, despite the fact that many federal jurisdictions are already overburdened by their current caseload and the continuing high vacancy rate in the federal judiciary. Class actions are often complex and resource-intensive cases that require enormous amounts of time to litigate. Forcing them to be heard in federal court will result not only in extended delays for class action plaintiffs, but also for individual plaintiffs with civil cases in the clogged federal courts.

In a free-market system increasingly dominated by large corporations, the class-action device is an essential free-market tool to tame harmful corporate behavior. Please do not support H.R. 1875, which will only weaken this important means of consumer protection.

Sincerely,

Joan Claybrook
President, Public Citizen

Frank Clemente
Director, Public Citizen's Congress Watch

| | | | |