State AGs Oppose Class Action Reforms

by Glen Shapiro, LawAndTax-News.com, New York

11 February 2005

Following the rejection by 60 votes to 39 of an amendment to the Class Action Fairness Act put forward by Sen. Mark Pryor (D-Ark) which would have made state attorneys-general exempt from the legislation's restrictions, the AGs have opposed the Bush-sponsored reforms.

It emerged last week that the Republican effort to advance the class action reforms was continuing apace, as in a 13-5 vote, the Senate Judiciary Committee rejected Democrat efforts to slow the progress of the legislation by piggy-backing a provision raising the pay levels of federal judges onto it.

Under the terms of the proposed Act (which House Republicans have pledged to push through as long as it enters the lower chamber relatively unchanged), class action suits in which less than one-third of the plaintiffs are resident in the same state as the defendant would be heard in federal rather than state court. This is intended to prevent plaintiffs or their legal teams from 'shopping around' for state courts known for awarding large amounts to successful claimants.

Attorneys-general from California, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Vermont and West Virginia argued in a letter sent this week that the proposed reforms "would result in far more harm than good", echoing the stance assumed on the matter by a federal judges' association in 2003.

The attorneys-general reportedly took particular exception to a provision in the proposed reforms which would reduce their ability to take legal action on behalf of consumers in their state, arguing that the legislation, if enacted, would interfere "with one means of protecting our citizens from unlawful actions".

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