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House to Take Up Anti-Consumer Class Action Bill on Wednesday

March 12, 2002

House to Take Up Anti-Consumer Class Action Bill on Wednesday

Legislation a Priority of Insurance, Tobacco, Drug and Auto Industries

WASHINGTON, D.C. ? Legislation to be considered Wednesday by the U.S. House of Representatives would make it harder for consumers to hold corporate wrongdoers accountable for inflated co-payments to HMOs, padded cell phone bills, mysterious credit card “surcharges,” fraudulent “late fees,” mortgage loan kickbacks, automobile defects, prescription drug safety problems and illnesses caused by tobacco.

The legislation (H.R. 2341), the so-called “Class Action Fairness Act,” is being pushed by the U.S. Chamber of Commerce, the National Association of Manufacturers, and the insurance, tobacco, auto and prescription drug industries. It is opposed by a coalition of consumer, environmental, health and labor groups including Public Citizen, the Consumer Federation of America, Clean Water Action, Earthjustice Legal Defense Fund, U.S. PIRG, Service Employees International Union, Communication Workers of America, the National Senior Citizens Law Center, the American Lung Association, the American Heart Association and the Campaign for Tobacco-Free Kids.

The measure would give defendants   usually large corporations   the right to move class actions filed in state court to federal court, even though the basis for the case would still be state law. Two corporate class action lawyers recently wrote in Litigation how this hurts consumers: “As a general rule, defendants are better off in federal court . . . there is generally a greater body of federal law precedent favorable to defendants.” The groups opposed to the bill believe that corporate defendants should not have the power to choose the legal forum that they believe most benefits them. Moreover, state judges are much more familiar with the numerous laws that are the basis for state class actions, making them more likely than federal judges to feel comfortable interpreting state law in class action cases.

This legislation also will exacerbate the federal courts? current caseload crisis, delaying the resolution of all civil cases. That is why the Judicial Conference of the United States, chaired by Chief Justice William Rehnquist, opposes the legislation.

“Since the dawn of the consumer movement in the 1960s, perhaps consumers? most important tool has been the class action lawsuit,” said Joan Claybrook, president of Public Citizen. “That is why corporate wrongdoers are fighting hard to take away this right.”

For fact sheets, opposition letters and other information about this bill, click here.