Court Watch

Hawai'i trial attorneys and appellate court attorneys


Tuesday, November 08, 2005

A $5 Million Class Action Controversy? Go to Federal Court

For all trial Attorneys who practice or even brush up against class action lawsuits, be prepared to be in federal court--most of the time. The Class Action Fairness Act of 2005 amends both Rule 23 of the Federal Rules of Civil Procedure and 28 U.S.C. § 1332. The Act applies to all actions commenced after February 18, 2005.

The American Law Institute claims the Act "dramatically changes class actions" by:

  • Vastly expanding diversity jurisdiction, thus encompassing most class actions and some mass actions;
  • Authorizing removal of class actions filed in state court, limiting the federal courts' authority to remand them and authorizing the acceleration of appellate review;
  • Changing the procedure for settling class actions in federal courts; and
  • Regulating settlements involving coupons and barring geographically-disparate consideration to class members.

Among the findings by Congress in Section 2(a) of the Act is the finding that:

Class-actions lawsuits are an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.

Bush said, when signing the Act into law:

When used properly, class-actions make the legal system more efficient and help guarantee that injured people receive proper compensation. That is an important principle of justice. [The new federal class action law] maintains every victim's right to seek justice, and ensures that wrong-doers are held to account

Finally, the Act itself states that the purpose of the Act, in part, is to "assure fair and prompt recoveries of legitimate claims." Section 2(b)(1).

Are prompt recoveries really in the future unless more federal judges are appointed in most Districts? Will Hawaii be able to process the class action cases quickly enough? If so, can many be filed in Hawai'i?


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