Class Actions and Proposed Reform in the 108th Congress: Class Action Fairness Act of 2003 Page: 2 of 11
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Class Actions and Proposed Reform in the 108th
Congress: Class Action Fairness Act of 2003
Summary
The House has passed H.R. 1115 and the Senate Judiciary Committee has
reported out S. 274 (both styled the Class Action Fairness Act of 2003). Each (1)
creates a consumer class action bill of rights, and (2) allows the federal courts to try
a greater number of large class action law suits (100 plaintiffs or more) arising out
of state law where the parties come from diverse states. Current law requires that
each plaintiff have suffered $75,000 in damages and that there be complete diversity
before a state lawsuit maybe filed in or removed to federal court, that is to say all of
the plaintiffs must be citizens residing in different states than all of the defendants.
The bills ease the complete diversity requirement and eliminate the requirement of
individual damages of $75,000 as long as the damages suffered by the class as a
whole is $5 million or more.
The consumer class action bill of rights in each proposal contains safeguards
which provide for judicial scrutiny of coupon and other noncash settlements,
protection against a proposed settlement that would result in a net loss to a class
member, protection against discrimination based upon geographic location, and
prohibition on a class representative receiving a greater share of the award.
S. 274 alone includes within its bill of rights explicit provisions for "plain
English" settlement notices and settlement notifications for state and federal
authorities. H.R. 1115 instead defers to the notice reforms recommended in the
amendments to Rule 23 of the Federal Rules of Civil Procedure forwarded to
Congress by the Supreme Court on March 27, 2003. H.R. 1115 alone permits pre-
trial review of a lower federal court's grant or denial of class certification and makes
its provisions retroactively applicable to suits filed before the date of enactment (but
prior to class certification).
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Wallace, Paul Starett, Jr. Class Actions and Proposed Reform in the 108th Congress: Class Action Fairness Act of 2003, report, June 23, 2003; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metacrs5117/m1/2/: accessed July 18, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.