Class Action News

Controversies In State Court Removal Of Class Actions That Are Truly Interstate In Character To Federal Court

WASHINGTON,D.C. - Alaska Sen. Lisa Murkowski today welcomed Senate passage of bipartisan legislation, the Class Action Fairness Act of 2005  to bring more fairness to the class action rules, and to help curb frivolous class action lawsuits.

“I am pleased that the Senate took action today to help end frivolous lawsuits and the litigation tax that affects us all due to the manipulation of class action rules,” said Murkowski. “It is a good step toward solving some of the real problems we currently have with our legal system.”

“This bill directly and effectively addresses the recent explosion of frivolous class action lawsuits in our country that have caused excessive attorney fee awards, unprecedented costs to our national economy and a declining respect for our judicial system,” Murkowski noted after the Senate passed the class action reform bill 72 -26. “It is court reform, not tort reform.”

The major provisions of the Class Action Fairness Bill are:

Federal District Court Jurisdiction for Interstate Class Actions - The legislation creates federal jurisdiction over class actions in which the aggregate amount in controversy exceeds $5 million and any member of a plaintiff class is a citizen of a different state from any defendant. The bill also treats certain mass actions with more than 100 plaintiffs as class actions for purposes of jurisdiction (as long as each plaintiff seeks $75,000 in relief).

Consumer Class Action Bill of Rights - This provision is designed to ensure that class members are the primary beneficiaries of the class actions process. The bill requires that judges carefully review all coupon settlements and limit attorney's fees paid in coupon settlements to the value actually received by class members; requires careful scrutiny of "net loss" settlements in which class members end up losing money; bans settlements that award some class members a larger recovery because they live closer to the court; and allows federal courts to maximize the benefit of class action settlement.

Notice to Public Officials - This provision requires a notice of proposed settlements be provided to appropriate state and federal officials such as attorney generals.

Local Class Action Exception - This provision keeps local controversies in state court and allows removal of class actions that are truly interstate in character to federal court. Under this provision, cases would stay in state court if the plaintiffs have sued at least one in-state defendant whose conduct forms a significant basis of their claims; if the principal injuries occurred in the state where the suit is brought; and if no class action has been filed

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	Did You Know?
	Class action lawsuits has many advantages. Class action lawsuits may offer a number of advantages because they aggregate a large number of individualized claims into one representational lawsuit. First, aggregation may increase the efficiency of the legal process, and lower the costs of litigation. Second, a class action ensures that a defendant who engages in widespread harm -- but does so minimally against each individual plaintiff -- must compensate those individuals for their injuries. Third, in "limited fund" cases, a class action ensures that all plaintiffs receive relief and that early-filing plaintiffs do not raid the fund of all its assets before other plaintiffs may be compensated. Finally, a class action avoids the situation where different court rulings could create "incompatible standards" of conduct for the defendant to follow.