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February 4, 2016

House Judiciary Passes Fraudulent Joinder Bill; Senate Judiciary Holds FACT Act Hearing

“This bill would keep legal claims in federal court that properly belong there by allowing federal judges to decide whether a local party is truly a legitimate defendant and not put there solely to keep the case in a trial lawyer-friendly state court,” said ILR President Lisa A. Rickard in commending the U.S. House Judiciary Committee for passing the “Fraudulent Joinder Prevention Act of 2015,” reports Legal Newsline.

The committee voted 13-10 to pass the legislation, which would replace the existing common law fraudulent joinder test with a statutory test. Under the new test, the plaintiff would have to show that his or her claims are “plausible” and that they were brought in “good faith.”

On the other side of the Hill, the Senate Judiciary Committee held a hearing on the Furthering Asbestos Claim Transparency (FACT) Act, passed by the U.S. House last month.

“We commend the Senate Judiciary Committee for exercising its oversight authority,” said Rickard in a statement, adding that the bill “will reduce ‘double dip’ claims against asbestos bankruptcy trusts and in the tort system, by requiring the trusts to report quarterly on who files claims, while protecting individuals’ personal information just the same as the courts do.”

Read the full statement here.

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