Larry E. RibsteinLarry Ribstein makes the typical federalist “state laboratory” argument for keeping class actions within the states. However, he qualifies his position by stating,

[T]he federal government may have to act, as by welcoming defendants into its courts. I view this as a last resort. State competition provides the freedom in which efficient rules can evolve. But with freedom always comes a need for responsibility, including from plaintiffs’ lawyers and judges. Unfortunately, that responsibility might have to be imposed by the federal government.

Certainly this may seem to be the case, however, a study by D.C. attorneys John Beisner and Jessica Davidson Miller indicates that similar proprosed statutes may allow for both the federal government stepping in to enforce responsibility and a federalist “state laboratory” scheme.

The Class Action Fairness Act seeks to diminish class action abuse and restore the intention of the Framers by allowing large interstate class actions to be heard in federal court. However, the bill would not result in the removal of all class actions from state court, as some critics have charged. Indeed, in the states surveyed in this study, most class actions would remain in state courts. Moreover, the survey clearly indicates that the jurisdictional elements of S. 2062 are quite discriminating. The legislation would allow most large interstate and nationwide class actions to be heard in federal court, while ensuring that local disputes continue to be litigated in the state court forums where they properly belong. To be sure, the bill will move nearly all of Madison County’s class actions to federal court because the cases filed there almost all involve large interstate disputes; but in Connecticut, Delaware, Maine, Massachusetts, New York, Rhode Island and numerous other jurisdictions that are not magnets for nationwide class actions, most class actions would remain right where they are — in state court. Thus, the Class Action Fairness Act would “demagnetize” magnet state courts, while allowing other state courts to continue adjudicating local disputes and smaller class actions, which have a real nexus to the forum in which they are brought.

In other words, the feds will only step in in the most egregious of circumstances, while leaving states considerable room for experimentation.

According to Roll Call,(sorry no link…via Lexis-Nexis) this bill is very close to passing.

[The Class Action Fairness Act] is likely to receive approval by the Senate when it comes to the floor next week or the week after. But it’s the debate in the interim – between sponsors of the bill and opponents, including a significant number of Democrats and their allies in the consumer rights and trial lawyer lobbies – that has the potential to delay, and possibly even scuttle, the measure.

By admin