Friedman [Case Western]: Class Action Fairness Act

Peter Friedman, Case Law School:

"I'm disappointed in Diane Feinstein's and Barak Obama's support of the Class Action Fairness Act of 2005, which the Senate approved yesterday (with House approval and presidential signature anticipated) and which provides that large multistate class action lawsuits like the ones that have been brought against tobacco companies could no longer be heard in small state courts. My disappointment is founded in my conviction that the "problem" of tort litigation is a product of hype. Moreover, the criticism of tort litigation sorely neglects its effectiveness as regulation. I cannot imagine, for example, that state consumer protection legislation would be anything more than wishful thinking if its enforcement were left to state regulators. Instead, businesses comply with such regulation in the myriad of day-to-day transaction because of the threat of tort liability. Nevertheless, maybe the legislation is mild enough, if it isn't the first of a stream of similar laws, to justify Feinstein's statement that "[th]is bill, like most, is not perfect. But I believe that it represents the best that can be done to solve what is a real problem in our legal system," Under the Act, plaintiffs in class actions seeking in excess of $5 million would have to bring their cases in a federal court if less than one-third of the plaintiffs are from the same state as the primary defendant. While common wisdom has it that state court juries are vastly more generous to plaintiffs than are federal court juries, presumably federal courts will give a fair hearing to class action plaintiffs. But I'm afraid the whole affair is just more of the politics of appearances." [February 11, 2005; RAWDATA has the post]

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