Class Action Fairness Act of 2005
The U.S. Class Action Fairness Act of 2005, 28 U.S.C. Sections 1332(d), 1453, and 1711-1715, shifts most large class-action lawsuits involving parties from state to federal courts. A major victory for the Bush Administration, industry lobbyists and "tort reform" groups like the American Tort Reform Association, this Act removes many class action lawsuits from the jurisdiction of state courts that historically have been more receptive to plaintiffs. Business groups had lobbied for the legislation, arguing that class-action lawsuits enriched trial lawyers. [1] Bush had vowed to support legislation that limited liability, and curbed medical malpractice, class-action and asbestos lawsuits.
The Act accomplished two key goals of tort reform advocates:
1. Reduces the likelihood that out-of-state defendants will be subject to excessive verdicts, by reducing settlements that may occur in plaintiff-friendly local venues.
2. Enacts procedures for the review of coupon settlements, to reduce attorney's fees that are deemed "excessive" relative to the benefits actually afforded class members.
The Act gives federal courts sole jurisdiction to certain class actions in which the amount in controversy exceeds $5 million, and in which any of the members of a class of plaintiffs is a citizen of a state different from any defendant, unless at least two-thirds or more of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the state in which the action was originally filed.
Critics
Critics charged that the legislation would deprive Americans of legal recourse when they were wronged by powerful corporations. Rep. Ed Markey (D-Mass.) called the bill "the final payback to the tobacco industry, to the asbestos industry, to the oil industry, to the chemical industry at the expense of ordinary families who need to be able go to court to protect their loved ones when their health has been compromised."[2]
Critics charge that this bill will make it far more difficult to bring class action suits, and drag out the litigation, clogging the federal courts. It also gives the Federal government the ability to somewhat control, through judicial appointments, outcomes that were previously under state control. It will increase the size and control of the federal government at the expense of state's rights, something Republicans have historically protested. Democrats pointed out that no Republicans voted against the bill. [3]
See also
Further reading
- Salon: "Erin Brockovich, drop dead"
- American Law Media: "A Class Act"?
- Class Action Fairness Act - Dkosopedia
- "They’re Making a Federal Case Out of It ... In State Court" Manhattan Institute, Issue #3, September 2001
- "$5 million Class Action Controversy?--Go to Federal Court", Court Watch, November 8, 2005 (Also, links to the Act)
- Kamilewicz v. Bank of Boston Corp., 100 F.3d 1348 (7th Cir. 1996)
- McGlinchey Stafford CAFA Law Blog provides information, cases and insights regarding CAFA of 2005