The Class Action Fairness Act
June 13, 2003
Class-action abuses are difficult to stop because large classes of plaintiffs with members in multiple districts across the country enable suing attorneys to "shop" for the most favorable court. Quite predictably, the best forum winds up being a state "magnet court" well known for its hospitable treatment of class-action lawsuits, says Jim Copland (Manhattan Institute).
- For instance, Madison County, Ill. -- recently made famous by handing out a $10.1 billion verdict against Philip Morris for allegedly insinuating that its "light" cigarettes were "safer" -- has seen a tremendous upsurge in class-action filings in recent years, as the Center for Legal Policy has documented in three recent studies.
- From 1998 to 2000, class-action filings in Madison County increased over 1,800 percent. Over 80 percent of these suits were brought on behalf of proposed nationwide classes.
The magnet court phenomenon not only costs our economy billions by generating increased settlement values for often tenuous claims; "magic jurisdictions" present a serious threat to the democratic and federalist principles underlying our constitutional design.
Fortunately, Congress has the power to act, reclaim its constitutional powers, and stop the madness, says Copland.
- The Class Action Fairness Act would remove to federal court any large national class-action cases (those over $5 million in the Senate version and those over $2 million in the House version).
- Decisions to certify a national class of plaintiffs could be immediately appealed -- to the Supreme Court if necessary -- to prevent rogue judges from abusing their positions.
While not eliminating the "tort tax" or its harmful effects on the economy, the Class Action Fairness Act would thus stop some of the worst abuses in our increasingly wacky system of justice, says Copland.
Source: Jim Copland, "The Tort Tax," Wall Street Journal, June 11, 2003.
For text (WSJ subscription required)
Browse more articles on Government Issues