WASHINGTON (April 12, 2002)—A bill to reform the U.S. class action system has passed the House, but tire industry representatives are less certain the legislation can get safely through the Senate.
“The Class Action Fairness Act of 2002 will ensure that frivolous lawsuits will no longer find refuge in state courts,” said Donald B. Shea, president of the Rubber Manufacturers Association, in an April 2 letter to Senate Majority Leader Tom Daschle, D-S.D.
The brainchild of two Virginia congressmen, Republican Bob Goodlatte and Democrat Rick Boucher, the Class Action Fairness Act would move national class action lawsuits into federal courts and limit the share of jury awards that plaintiffs' attorneys could claim. State-by-state inequities in class action rules, according to the bill's supporters, encourage “venue-shopping” on the part of lawyers.
“The trial lawyers of class-action lawsuits know which state courts and jurisdictions will tilt the level playing field in favor of their clients,” Mr. Shea wrote. “However, their clients do not receive the bulk of any award. The lawyers often wind up with millions of dollars while those who allegedly needed the relief get little more than coupons.”
The bill establishes a consumer class-action bill of rights, including judicial review of non-cash settlements, protection against loss by class members because of payments to class counsel and prohibition of higher payments to plaintiffs who live closer to the court.
Other tire associations also have spoken in support of the Class Action Fairness Act. A new lawsuit is filed every two seconds in the U.S., and class actions in state courts have increased more than 1,000 percent in the last decade, noted Becky MacDicken, director of government affairs for the Tire Association of North America.
The bill passed the House in the last Congress, and passed again March 13 on a 233-190 vote. The House approved amendments to sharply limit the sealing of court orders, opinions or records; require the disclosure of attorneys' fees in a class action judgment or settlement; and order the Judicial Conference of the U.S. to prepare a report on class action settlements in federal courts.
However, the industry has predicted all along that the legislation will be a tough sell in the Democrat-controlled Senate. The bill was assigned March 14 to the Senate Judiciary Committee, but no action has yet been taken.