WASHINGTON - Sen. Chuck Grassley today said that he has introduced his bipartisan legislation to bring more fairness to the class action rules, and to help curb frivolous class action lawsuits. Class action filings have exploded in certain "magnet" state courts where lawyers can game the system by manipulating the class action rules.
Many times in class action cases, plaintiffs get notice and settlement documents in hard to understand legalese, and they are unaware of their rights. Worst of all, lawyers receive large fee awards, while class members may be lucky to get a coupon.
"In the 109th Congress we once again have the opportunity to stop class action lawyers from being able to snag millions of dollars while class action members receive a worthless coupon or even nothing," Grassley said. "Many class actions are just frivolous lawsuits filed by crafty lawyers who want to make a quick buck, and do little or nothing for the consumers these cases are allegedly supposed to help. We need to put an end to the frivolous litigation tax that everyone ends up paying."
Grassley said that he hopes members of the Senate will judge the bill on its merits and not the political rhetoric that surrounded the bill during the last Congress.
Here are the major provisions of the Class Action Fairness Bill.
Federal District Court Jurisdiction for Interstate Class Actions - The Class Action Fairness Bill 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 Class Action Fairness 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 attorneys general.
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 alleging the same claims against any of the defendants in the last three years.
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