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NY Attorney General Spitzer and 12 Other State AGs Announce Opposition to Senate’s Class Action Bill

July 6, 2004

NY Attorney General Spitzer and 12 Other State AGs Announce Opposition to Senate’s Class Action Bill

Attorneys General and National Association of Consumer Agency Administrators Call

For Passage of Pro-Consumer Bingaman Amendment

WASHINGTON, D.C. – A warning letter sent recently to congressional leaders from New York Attorney General Eliot Spitzer and Oklahoma Attorney General W.A. Drew Edmondson on behalf of 11 other attorneys general underscores the grave threat to consumer rights posed by the so-called “Class Action Fairness Act.”

The act, which is now pending before the U.S. Senate, will deny millions of consumers the ability to hold companies accountable for unscrupulous business practices and should be amended to provide for nationwide class action lawsuits, the letter said.

The bill, S. 2062, would remove from state courts and place instead in the federal courts the power to adjudicate many consumer lawsuits against company wrongdoing. Many of those cases would be delayed, if not completely denied certification, by federal judges, resulting in no justice for consumers. A coalition of corporations and business groups has lobbied relentlessly for passage of the controversial court jurisdiction overhaul.

Led by New York’s Spitzer, attorneys general from 13 states (California, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Montana, New Mexico, New York, Oklahoma, Vermont and West Virginia) recently announced opposition to the bill and endorsed a consumer amendment to S. 2062 that U.S. Sen. Jeff Bingaman (D-N.M.) will offer to expand the authority of federal judges to certify nationwide class action suits.

Without the amendment, “injured plaintiffs in each state could bring a separate class action lawsuit, but that defeats one of the main purposes of class actions, which is to conserve judicial resources,” Spitzer and Edmondson wrote on behalf of their fellow attorneys general in a letter to Senate Majority Leader Bill Frist and Minority Leader Tom Daschle.

“Moreover, while the population of some states may be large enough to warrant a separate class action involving only residents of those states, it is very unlikely that similar lawsuits will be brought on behalf of the residents of many smaller states” without the protections of Bingaman’s amendment, Spitzer and Edmondson said.

The National Association of Consumer Agency Administrators, a non-profit association for government consumer protection agency administrators representing more than 160 consumer agencies, also endorsed the Bingaman amendment at its recent annual convention in San Diego.

“Nationwide class actions based on uniform state laws, which have brought millions of dollars to consumers for defective products, overcharges and other illegal practices, have heretofore been processed by state courts but would no longer be subject to state court jurisdiction after passage of S. 2062,” the consumer administrators wrote in their resolution.

“Federal courts to which most consumer cases would be diverted by S. 2062 have declined to certify nationwide class actions based on state laws, deeming them ‘unmanageable,’ ” they noted.

To read the consumer administrators’ resolution, click here.

To read the letter from Spitzer and Edmondson, click here.