June 26, 2000
Judiciary Committee Members
United States Senate
Washington, DC
20515
Dear Senator:
Re: Opposition to Class Action Fairness Act - S.
353
Consumers Union, publisher of Consumer Reports magazine, is
opposed to S. 353, the "Class Action Fairness Act." We agree that it is
important to curtail abuse of class action litigation, but unfortunately we
do not believe this bill will achieve that goal. Instead, S. 353 could make
it more difficult for consumers to obtain effective and efficient judicial
relief for injuries caused by defective products, fraud in the marketplace,
and discrimination, without addressing the true source of class action
abuse. In curtailing Americans’ right to pursue class actions in state
courts, we believe this legislation could be detrimental to consumers for
the following reasons:
- Consumers may be subject to legal "ping-pong"and ultimately left
without a remed
y. Under S. 353’s scheme for easing the removal of
class actions from state to federal court, a class action that otherwise
qualifies for certification by a state may be lacking the necessary
requirements to be certified in federal court. If so, the case could be
dismissed by the federal court, and then dismissed again if re-filed as a
class action in state court. This legal "Ping-Pong" could well deprive
consumers of access to their own state courts, and ultimately deny them
their day in court through the class action process- in many cases their only effective remedy. Without
the opportunity to join with similarly situated consumers in one combined
lawsuit, many consumers wouldn’t be able to afford legal representation.
- State courts have served as important forums for consumers.
Consumers have brought state class actions to remedy injuries stemming
from fraud, defective and dangerous products, discrimination prohibited
under state law, and negligence causing widespread public health or
environmental damage. States remain an important forum for consumers
attempting to obtain a remedy for an injury or other harm.
- Class actions economize on judicial resources.
Class actions are
an efficient and practical method of bringing action since they combine
similar claims; they also reduce the number of inconsistent judgments and
lower court costs.
- The Chief Justice, along with the Judicial Conference of the United
States and the Conference of Chief Justices have expressed concerns about
burdens that S. 353 could create on the federal courts.
United States
Supreme Court Chief Justice William Rehnquist has expressed concern that
this bill will result in further overloading an already backlogged Federal
docket. Class actions are among the most resource-intensive cases before
the Federal judiciary and this bill would require the Federal courts to be
interpreting cases involving solely State law.
- Greater judicial scrutiny of settlements is a better approach to abuse
of the class action process.
Consumers Union has spoken out against
instances of collusive agreements between lawyers and defendants that were
detrimental to members of the class. We believe the response to those
abuses must be greater judicial scrutiny of settlement agreements. We
simply do not see how removing class actions from state to federal court
addresses these problems. Indeed, one of the settlements that proponents
of this bill cite as proof of the problems with class actions is a
settlement in Federal court. (The case involves a settlement where
plaintiffs receive coupons for airline flights.)
Consumers Union fears that S. 353’s provisions, instead of curtailing
collusive class action settlements, may instead result in depriving
consumers of an important forum- in many cases
their only forum- for remedying genuine wrongs
suffered as a result of negligence, fraud, public health or environmental
damage. We urge you to oppose this legislation during the Senate Judiciary
Committee mark-up on June 15.
Sincerely,
Sally J. Greenberg
Senior Product Safety
Counsel
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