February 4, 2003

Chamber Urges Class Action Reform

WASHINGTON, D.C., Feb. 5 – The United States Chamber of Commerce today welcomed the introduction of class action reform legislation in the U.S. Senate that would allow complex national class actions to be tried in federal instead of state courts.

“The current class action system no longer guarantees justice to defendants or plaintiffs, and a legislative remedy is desperately needed to restore the kind of fairness, balance and consistency our Founding Fathers intended,” said U.S. Chamber President and CEO Thomas J. Donohue.

The Class Action Fairness Act of 2003 (S-274) was introduced by Senators Charles Grassley (R-IA), Orrin Hatch (R-UT), Herb Kohl (D-WI), Tom Carper (D-DE), Lincoln Chafee (R-RI), Arlen Specter (R-PA), Richard Lugar (R-IN) and Zell Miller (D-GA).

A key provision of the bill would make it easier to move large, multi-state class action lawsuits from state to federal court, preventing the widespread practice of “venue shopping” by trial lawyers. Important reforms that protect consumers include: requiring class action settlement notices to be written in “Plain English”; prohibiting settlements in which class members actually lose money to pay attorneys’ fees; ensuring the fair and even distribution of damage awards to all plaintiffs; and helping protect class members from getting coupons of little or no value while attorneys make millions of dollars.

“The Class Action Fairness Act is one of the most important legislative priorities of the American business community,” Donohue said.

Since 1997, the Chamber’s Institute for Legal Reform has been working vigorously to urge congressional passage of the Class Action Fairness Act. Last year, the U.S. House of Representatives approved its version of the bill (H.R. 2341). The Senate Judiciary Committee held one hearing, but never had the chance to send the measure to the full Senate for consideration.

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