Reform at the Federal
Level
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"The Class Action Fairness Act . . . would constitute a
helpful, but largely modest reform. Moving class
actions involving significant different-state parties
from state to federal courts will help but is unlikely
to solve the problems created by modern class action
litigation. Real tort reform requires fundamental
rethinking and redesign of both our substantive and
procedural rules of law.”
(George
L. Priest, “What We Know and What We Don’t Know About
Modern Class Actions: A Review of the Eisenberg-Miller
Study”, Manhattan Institute for Policy Research,
Civil Justice Report No. 9, February 2005)
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Because class-action reforms tend to set strict criteria
for the certification of a class and reduce attorneys’
incentives to file, they reduce the number of class
actions and lead to fewer defendants settling in order
to avoid potentially devastating losses.
(KRC:
TLT, Substantive-Law Rules and Reforms,
page 20)
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The Class Action
Fairness Act of 2005
The Class Action Fairness Act ("CAFA") was
signed into law by President George W. Bush in
February 2005. Briefly, the new law:
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Moves interstate class action lawsuits into
federal courts.
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Gives Federal courts jurisdiction over class
action lawsuits in which the aggregate amount in
controversy is $5 million; there are more than
one hundred plaintiffs; and that involve
individuals who are residents of different
states.
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Provides that a court can approve coupon
settlements only after holding a hearing and
making a written find that the settlement is
fair, reasonable and adequate for class members;
and,
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Prohibits charitable contributions and bases
class counsel fees on the number of hours spent
on the case or, where coupons make up a portion
of the settlement, on the value of the coupons
that the class members redeem.
For a detailed discussion of CAFA, please see
the Class Action Fairness Act Resource Center on the
Center for America website. This
resource consists of five PDFs about the law,
including a thorough analysis and practice guide to
CAFA by John Beisner and Jessica Davidson Miller.
You can also order a free DVD discussion of the law
featuring Beisner, Miller and Sheila Birnbaum.
These CAFA materials were developed through the
sponsorship of the Civil Justice Reform Group
("CJRG") and the Institute for Legal Reform ("ILR").
CAFA Resource Center |
Class Actions Contents
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