Senate Failure to End Class Action Reform Debate Disappoints NAMIC

By a count of 59-39 – one short of the 60 votes necessary – members of the Senate this week blocked efforts to end a filibuster on S. 1751, “The Class Action Fairness Act of 2003.”

As written, the act would reportedly limit the amount of damages paid in class action lawsuits and also allow for the removal of certain interstate class action lawsuits to federal court from state courts, if requested by either plaintiffs or defendants.

“NAMIC is very disappointed that the Senate was unable to garner the 60 votes necessary to invoke cloture (end debate) on the motion to proceed with consideration of the Class Action Fairness Act,” said Marliss Browder, federal affairs representative for the National Association of Mutual Insurance Companies (NAMIC). “Despite yesterday’s setback, NAMIC will continue its strong commitment to the reform of class action lawsuit legislation,” she stated.

Browder continued, “The Class Action Fairness Act is a balanced, sensible bill that addresses the worst abuses of the class action process and rationalizes class action procedures, while preserving plaintiffs’ legal rights and providing additional protections for consumers.”

“Due to the dramatic increase in filing class action lawsuits in the United States in the last decade – many of which would be considered frivolous – our member companies, as well as businesses in many other industries, have been forced to use more of their valuable financial and human resources that would otherwise be available to grow their business and employ more American workers,” said Browder.

The Class Action Fairness Act would reportedly provide federal district courts with original jurisdiction of any civil action where the amount in controversy exceeds $5 million and the members of the class meet set requirements. Additionally, the Act would establish a consumer class action bill of rights with provisions for judicial review of non-cash settlements, protection against loss by class members, and clearer settlement information reform.

“NAMIC remains optimistic that Congress will pass legislation this year to stop the current class action crisis and put interstate actions in federal court, where they logically belong,” added Browder.