Center for America

Speaker's Resource: 7. Class Actions, p 6

 

 

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Key Reference Citations (KRC)

 

Reform at the Federal Level

  • "The Class Action Fairness Act . . . would constitute a helpful, but largely modest reform.  Moving class actions involving significant different-state parties from state to federal courts will help but is unlikely to solve the problems created by modern class action litigation.  Real tort reform requires fundamental rethinking and redesign of both our substantive and procedural rules of law.”  (George L. Priest, “What We Know and What We Don’t Know About Modern Class Actions:  A Review of the Eisenberg-Miller Study”, Manhattan Institute for Policy Research, Civil Justice Report No. 9, February 2005)

  • Because class-action reforms tend to set strict criteria for the certification of a class and reduce attorneys’ incentives to file, they reduce the number of class actions and lead to fewer defendants settling in order to avoid potentially devastating losses.  (KRC: TLT, Substantive-Law Rules and Reforms,
    page 20)
      

     

 

The Class Action Fairness Act of 2005

The Class Action Fairness Act  ("CAFA") was signed into law by President George W. Bush in February  2005.  Briefly, the new law:

  • Moves interstate class action lawsuits into federal courts.

  • Gives Federal courts jurisdiction over class action lawsuits in which the aggregate amount in controversy is $5 million; there are more than one hundred plaintiffs; and that involve individuals who are residents of different states.

  • Provides that a court can approve coupon settlements only after holding a hearing and making a written find that the settlement is fair, reasonable and adequate for class members; and,

  • Prohibits charitable contributions and bases class counsel fees on the number of hours spent on the case or, where coupons make up a portion of the settlement, on the value of the coupons that the class members redeem.

For a detailed discussion of CAFA, please see the Class Action Fairness Act Resource Center on the Center for America website.  This resource consists of five PDFs about the law, including a thorough analysis and practice guide to CAFA by John Beisner and Jessica Davidson Miller.  You can also order a free DVD discussion of the law featuring Beisner, Miller and Sheila Birnbaum.  These CAFA materials were developed through the sponsorship of the Civil Justice Reform Group ("CJRG") and the Institute for Legal Reform ("ILR").

CAFA Resource Center

 

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