Senate Bill To Halter Class Actions Introduced

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By Steven Brostoff, Washington Editor

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NU Online News Service, Feb. 6, 10:39 a.m. EST,Washington?The battle to enact class action legal reform,a top industry legislative objective, began yesterday with theintroduction of bipartisan legislation that would have major classaction lawsuits heard in federal, rather than state, courts.

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The legislation, called the Class Action Fairness Act of 2003,was introduced by Sens. Chuck Grassley, R-Iowa; Herb Kohl, D-Wisc.;and Orrin Hatch, R-Utah, who chairs the Senate JudiciaryCommittee.

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Sen. Grassley said the legislation is necessary to help peopleunderstand their rights in class action lawsuits and to protectthem from unfair settlements.

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"The class action system is full of problems," Sen. Grassleysaid. "We need to protect the rights of consumers and not allowattorneys to gain huge fees when their clients are left withlittle."

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"Right now," Sen. Kohl added, "people across the country can bedragged into class action lawsuits unaware of their rights andunarmed on the legal battlefield."

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The legislation would allow class actions, which normally areheard in state courts, to be heard in federal courts if totaldamages exceed $2 million and the parties include citizens frommultiple states.

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Advocates of class action legal reform contend that some statecourts are biased against defendants and federal court jurisdictionis necessary to ensure fairness.

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In addition, the legislation calls for judicial scrutiny ofsettlements to assure fairness to plaintiffs, and "plain English"notification to plaintiffs of the fact the class action has beenfiled and of any proposed settlements.

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Carl Parks, senior vice president of government relations withthe Des Plaines, Ill.-based National Association of IndependentInsurers, praised the legislation, saying it will restore basicprinciples of fairness in national class action lawsuits.

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