Letter to the United States Senate on the Class Action Fairness Act

July 6, 2004

TO MEMBERS OF THE UNITED STATES SENATE:

On behalf of the U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector and region, I write to strongly urge you to support the "Class Action Fairness Act."

The Class Action Fairness Act is an important piece of legislation that directly addresses the issue of abusive class action lawsuits in state courts where the rights of class members and defendants are frequently trampled. The compromise reached late last year and memorialized in S. 2062 is a reasonable approach to class action reform that preserves the essential elements of earlier version of the legislation (such as continuing to allow large interstate class actions to more easily be heard in federal court) while making sure that truly local cases remain in state court. In addition, the compromise provides enhanced protections for consumers and class members, particularly in the area of coupon settlements. It is important to note that neither the original Class Action Fairness Act nor S. 2062 changes the substantive rights of either plaintiffs or class members to proceed with a lawsuit.

The U.S. Chamber supports this compromise and strongly urges you to vote in favor of it. Furthermore, we oppose all amendments to S. 2062 and strongly urge you to oppose them as well.

This legislation is needed because of the significant increase in national class action lawsuits filed in state courts – particularly magnet court jurisdictions such as Madison County, Illinois. These cases have significant adverse effects on our economy such as higher prices for goods and services, increased insurance premiums, lowered earnings, and reduced innovation. It is also important to note that small businesses suffer under the current class action system because local suppliers, agents, retailers, dealers and other small businesses are brought into the litigation to prevent removal of the cases to federal court. In short, small businesses are named as defendants and must defend themselves, even though they have nothing to do with the case.

Because of the importance of class action reform to consumers, businesses, and employees across the country, the U.S. Chamber of Commerce strongly urges you to vote in favor of S. 2062, the Class Action Fairness Act, as well as to vote for cloture and against all amendments. The Chamber will include votes on or in relation to the Class Action Fairness Act as a key vote in its annual "How They Voted" ratings for 2004.

Sincerely,

R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce