House Passes Class Action Reform Bill; AAI Calls for Swift Senate Action

March 15, 2002

The U.S. House of Representatives approved the Class Action Fairness Act of 2001 (HR 2341) by a vote of 233 to 190 March 13. The Alliance of American Insurers called it a bipartisan show of statesmanship that will benefit consumers and businesses alike.

“The only ones who won’t benefit from this bill are trial lawyers who make millions on class action suits that gain only coupons or a few dollars for the plaintiffs,” Kenneth Schloman, Alliance Washington counsel, said. “There are a number of strong consumer protections in this act, while it eliminates some of the worst abuses present in the current system. If this bill becomes law, forum shopping, nuisance suits, class certification and settlements not in the best interest of plaintiffs will be a thing of the past.

“Now is the time for the Senate to act on the companion bill, S 1712. It is currently in the Judiciary Committee awaiting consideration. We urge Chairman Patrick Leahy (D-VT) to schedule a hearing soon and move the bill forward, allowing the full Senate to work its will,” Schloman added.

The Class Action Fairness Act would ease the transfer of national class action suits from state courts to federal courts. Provisions include requiring that notices sent to class action members must be in plain English, mandating that coupon settlements be judicially scrutinized and barring attorneys from making settlements that cause members to suffer a net loss.

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