Washington, D.C., July 31, 2002 — The United States Chamber of Commerce today urged the Senate Judiciary Committee to pass the Class Action Fairness Act (S. 1712), a bipartisan bill that would reform the out-of-control state class action lawsuit system.
“The rise of frivolous class action cases over the past decade has resulted in higher prices for consumers, lower stock values for investors and an uncertain future for businesses and employees,” said James M. Wootton, president of the Chamber’s Institute for Legal Reform. “The U.S. economy could use some good news right now, and passage of S. 1712 would be a booster shot benefiting all Americans.”
The Class Action Fairness Act would help curb “venue shopping” in state courts by making it easier for federal courts to hear cases in which at least one plaintiff and one defendant are from different states and the amount in dispute is more than $2 million. It would also prevent a single county court from setting national policy. In many national class action lawsuits that were settled in state courts, consumers received awards of little or no value, while their lawyers walked away with millions in legal fees.
The bill also contains a “Plaintiffs’ Bill of Rights,” which calls for:
* Judicial scrutiny of class action settlements in which class members get coupons or discounts and their lawyers get millions in legal fees
* A ban on settlements in which class members lose money to pay attorney’s fees
* A requirement that all settlements be written in “plain English”
* A requirement that all damage awards be distributed fairly among class members.
The U.S. House passed its version of the Class Action Fairness Act, H.R. 2341, in March.
“The Class Action Fairness Act will restore balance and fairness to our civil justice system while enhancing and protecting the rights of consumers and businesses alike,” Wootton added. “I urge the Judiciary Committee to pass this bill without delay so that the full Senate may act on it before this Congress adjourns.”