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Attorneys General Oppose Class Action Bill

July 7, 2004
A group of state attorneys general are cautioning Congress about a bill that would limit class action lawsuits on behalf of consumers.

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New York Attorney General Eliot Spitzer and Oklahoma Attorney General W.A. Drew Edmondson, on behalf of 11 other attorneys general, said the "Class Action Fairness Act" poses a "grave threat" to consumers.

The bill, now pending before the U.S. Senate, would deny millions of consumers the ability to hold companies accountable for unscrupulous business practices and should be amended to provide for nationwide class action lawsuits, the letter said.

The bill would remove most consumer class actions lawsuits from state courts and place them instead in the federal courts, where they would be more likely to be delayed or denied. A coalition of corporations and business groups has lobbied relentlessly for passage of the controversial court jurisdiction overhaul.

Besides Spitzer and Edmondson, hte letter was signed by attorneys general from California, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Montana, New Mexico, Vermont and West Virginia. Instead, the state attorneys endorsed a consumer amendment that U.S. Sen. Jeff Bingaman (D-N.M.) will offer to expand the authority of federal judges to certify nationwide class action suits.

Without the amendment, "injured plaintiffs in each state could bring a separate class action lawsuit, but that defeats one of the main purposes of class actions, which is to conserve judicial resources," Spitzer and Edmondson wrote in a letter to Senate Majority Leader Bill Frist and Minority Leader Tom Daschle.

"Moreover, while the population of some states may be large enough to warrant a separate class action involving only residents of those states, it is very unlikely that similar lawsuits will be brought on behalf of the residents of many smaller states" without the protections of Bingaman's amendment, Spitzer and Edmondson said.

The National Association of Consumer Agency Administrators, a non-profit association for government consumer protection agency administrators representing more than 160 consumer agencies, also endorsed the Bingaman amendment at its recent annual convention in San Diego.

"Nationwide class actions based on uniform state laws, which have brought millions of dollars to consumers for defective products, overcharges and other illegal practices, have heretofore been processed by state courts but would no longer be subject to state court jurisdiction after passage of S. 2062," the consumer administrators wrote in their resolution.

"Federal courts to which most consumer cases would be diverted by S. 2062 have declined to certify nationwide class actions based on state laws, deeming them 'unmanageable,' " they noted.

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