Class Actions and Proposed Reform in the 107th Congress: Class Action Fairness Act of 2002

Publication Date: March 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Economics; Justice

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Abstract:

The principal provisions of H.R. 2341 are concentrated on what sponsors characterize as the more serious abuses of the class action process. These provisions reminiscent of proposals in the last Congress, are intended to make class action procedures more responsive to business community concerns and to provide additional protections for consumers.

The bill reflects a preference for class actions to be adjudicated in federal courts and would enlarge U.S. district courts original jurisdiction over class actions with claims aggregating $2,000,000 or more (even if each of the members of the class had not sustained damages in excess of $75,000 as is now required). Consumer protection features would include, inter alia: (1) notices to class members written in "Plain English," (2) judicial scrutiny of settlements in which class members receive minimal benefits or actually incur losses, (3) elimination of inequitable discrimination in favor of class agents at the expense of other class members, (4) prompt consideration of interstate class actions, and (5) application of the principles of federal diversity jurisdiction to interstate class actions.