“Yesterday, the President signed into law the Class Action Fairness Act of 2005.  Major changes included having federal courts hear cases that exceed $5 million dollars, and limiting lawyer’s fees in certain cases.


S.5 is likely to only be the beginning of more far reaching changes that will
be proposed by Republican lawmakers.  The
President also made remarks about what he would envision as the next phases of
his plans
:


BUSH: There’s more to do. Small business owners across
America fear that one junk lawsuit could force them to close their doors for
good. Medical liability lawsuits are driving up the cost for doctors and
patients and entrepreneurs around the country. Asbestos litigation alone has led
to the bankruptcy of dozens of companies and cost tens of thousands of jobs,
even though many asbestos claims are filed on behalf of people who aren’t
actually sick.


Quite often the widow’s victims of corporate misbehavior are the ones
pursuing malpractice or class-action suites.  Of course in these
circumstances, they are not actually sick themselves.  Will they no longer
qualify?  What is the value of a life needlessly lost to corporate
greed?


Conflict of interests with Cheney’s connections to Halliburton (KBR,
asbestos) aside, the administration does not seem too receptive to any
alternatives.  For years, Democrats have suggested the creation of a truly
objective panel to assess the validity of malpractice and class-action
cases. 


The summary transcript text of S.5 is included below.  The Class Action
Fairness Act of 2005’s full text can be found on the senate’s
website
.


SUMMARY AS OF:
2/10/2005–Passed Senate,
without amendment.    (There are 2 other summaries)


(This measure has not been amended since it was introduced. The expanded
summary of the Senate reported version is repeated here.)
Class Action
Fairness Act of 2005 – (Sec. 3) Amends the Federal judicial code to specify the
calculation of contingent and other attorney’s fees in proposed class action
settlements that provide for the award of coupons to class members.


Prohibits a Federal district court from approving: (1) a proposed coupon
settlement absent a finding that the settlement is fair, reasonable, and
adequate; (2) a proposed settlement involving payments to class counsel that
would result in a net monetary loss to class members, absent a finding that the
loss is substantially outweighed by nonmonetary benefits; or (3) a proposed
settlement that provides greater sums to some class members solely because they
are closer geographically to the court.


Specifies requirements for serving notices of proposed settlements on
appropriate State and Federal officials. Prohibits issuance of an order giving
final approval to a proposed settlement earlier than 90 days after such service.
Allows class members to refuse compliance with settlement agreements or consent
decrees absent notice.


(Sec. 4) Grants district courts original jurisdiction of any civil action in
which the matter in controversy exceeds $5 million, exclusive of interest and
costs, and that is between citizens of different States, or citizens of a State
and a foreign State or its citizens or subjects.


Lists those factors pursuant to which a district court may, in the interests
of justice and based on the totality of the circumstances, decline to exercise
jurisdiction over a class action in which more than one-third but less than
two-thirds of the members of the proposed plaintiff classes in the aggregate and
the primary defendants are citizens of the State in which the action was
originally filed, based on consideration of whether: (1) the claims involve
matters of national or interstate interest; (2) the claims will be governed by
laws of the State where the action was originally filed or by the laws of other
States; (3) the class action has been pleaded in a manner that seeks to avoid
Federal jurisdiction; (4) the action was brought in a forum with a distinct
nexus with the class members, the alleged harm, or the defendants; (5) the
number of citizens of the State of original filing in all proposed plaintiff
classes in the aggregate is substantially larger than the number of citizens
from any other State and the citizenship of other proposed class members is
dispersed; and (6) during the three-year period preceding filing, one or more
other class actions asserting the same or similar claims on behalf of the same
persons have been filed.


Specifies those circumstances in which a district court must decline
jurisdiction, including those class actions in which: (1) more than two-thirds
of the members of the proposed plaintiff classes in the aggregate are citizens
of the State where the action was originally filed, at least one defendant is a
defendant from whom significant relief is sought, whose alleged conduct forms a
significant basis for the claims asserted, and who is a citizen of the State
where the action was originally filed, and principal injuries resulting from the
alleged or related conduct were incurred in such State; and (2) during the
three-year period preceding filing, no other class action has been filed
asserting the same or similar factual allegations against any of the defendants
on behalf of the same or other persons; or (3) two-thirds or more of the members
of all proposed plaintiff classes in the aggregate, and the primary defendants,
are citizens of the State where the action was originally filed.


Makes provisions of this Act concerning the application of Federal diversity
jurisdiction applicable to any class action before or after entry of a class
certification order.


(Sec. 5) Sets forth provisions governing the removal of interstate class
actions to Federal district court and the review on appeal of remand orders.


(Sec. 6) Directs the Judicial Conference of the United States to report on
class action settlements, incorporating recommendations for best court practices
to ensure fairness for class members and appropriate fees for counsel.


(Sec. 7) States that amendments to Federal Rule of Civil Procedure 23
(governing class actions) set forth in the Supreme Court order entered on March
27, 2003, shall take effect on the date of enactment of this Act or on December
1, 2003, whichever occurs first.


(Sec. 8) Retains the authority of the Supreme Court and Judicial Conference
to propose and prescribe general rules of practice and
procedure.