House Committee Moves Class-Action Bill
By Steven Brostoff
Washington
The House Judiciary Committee approved legislation, by a 20-14 vote, that would put federal court jurisdiction over major class-action lawsuits.
The legislation, H.R. 1115, now goes to the floor of the House for a final vote. The Senate Judiciary Committee approved a similar bill in April, which currently is pending before the full Senate.
Under the legislation, federal district courts would have jurisdiction over any class action in which the plaintiffs are asking for at least $2 million in damages and any member of the plaintiff class is from a different state from any defendant. The legislation also establishes a "class-action bill of rights" which includes judicial review of non-cash settlements, standardized settlement notification and a prohibition on settlements in which the class members suffer a net loss due to payments to the plaintiffs attorneys.
"NAMIC applauds the House and Senate for moving so quickly on class-action reform," said Monte Ward, vice president of federal affairs for the Indianapolis-based National Association of Mutual Insurance Companies. "Congress must pass this legislation in order to stop the current class-action crisis," he said.
Melissa Shelk, vice president for federal affairs with the Washington-based American Insurance Association, added that national, multi-state class-action lawsuits belong in federal courts. The need for reform is urgent, she said.
Kenneth D. Schloman, Washington counsel for the Downers Grove, Ill.-based Alliance of American Insurers, said the legislation hits at some of the worst problems in the class-action system, such as forum shopping, nuisance lawsuits, class certification and settlements that are not in the best interests of plaintiffs. He believes H.R. 1115 will receive strong bipartisan support when it is considered by the full House.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, May 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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