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« Class Action Fairness Act: perspective | New class action study »

February 10, 2005

Class Action Fairness Act: reflection

The following, from my June 2003 Wall Street Journal column, continues to represent a good summary of my views on today's Senate action:

One reason why class-action abuses have been so difficult to stop is that 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. 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%. Over 80% of these suits were brought on behalf of proposed nationwide classes.

Plaintiffs' lawyers admit the existence of magnet courts. Dickie Scruggs, one of the nation's foremost plaintiffs' lawyers, who pocketed hundreds of millions in the tobacco settlements, described it best at a conference last June: "[W]hat I call the 'magic jurisdiction' . . . [is] where the judiciary is elected with verdict money. The trial lawyers have established relationships with the judges that are elected . . . . They've got large populations of voters who are in on the deal . . . . And so, it's a political force in their jurisdiction, and it's almost impossible to get a fair trial if you're a defendant in some of these places . . . . Any lawyer fresh out of law school can walk in there and win the case, so it doesn't matter what the evidence or the law is."

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. County court judges -- elected by and accountable to only the several thousand residents of their home communities -- are making decisions that have a huge impact on the American economy as a whole, which clearly infringes on the power our Constitution's framers gave Congress to regulate interstate commerce.

Fortunately, Congress has the power to act, reclaim its constitutional powers, and stop the madness. 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.

Posted by James R. Copland at 08:25 PM | TrackBack (1)

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Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.