Supreme Court rebukes class action abuse case

U.S. Chamber of Commerce

U.S. Chamber Commends Supreme Court for Limiting Class Action Abuses
Unanimous Ruling Preserves Key Provision of Class Action Fairness Act

The U.S. Chamber of Commerce today praised a decision by the U.S. Supreme Court that preserves a key provision of the landmark Class Action Fairness Act (CAFA).

In its ruling in the case of Standard Fire Insurance Company vs. Knowles (available here), the Court unanimously rejected a scheme by plaintiffs’ lawyers to circumvent CAFA’s $5 million amount-in-controversy requirement and prevent major class actions from being tried in federal court. The purpose of CAFA was to ensure that major class actions are tried in neutral federal courts rather than certain plaintiff-friendly state courts.

“Since its passage eight years ago, the Class Action Fairness Act has done much to curb class action abuses, such as forum shopping,” said Lisa Rickard, President of the U.S. Chamber Institute for Legal Reform. “The Court’s unanimous ruling preserves one of the most crucial provisions of the law and ensures that CAFA’s reforms live on.”

“Today’s unanimous ruling is a victory for everyone supporting fairness and justice in our court system,” said Lily Claffee, General Counsel of the U.S. Chamber of Commerce. “We are pleased that the Court listened to the views of America’s business community and preserved this important protection against class action abuse.”

Enacted in 2005, the Class Action Fairness Act aimed to improve the treatment and scrutiny given to large, interstate class actions. It gave litigants new tools to move such cases to federal courts and required greater scrutiny of class certification and settlement terms. Since the law’s passage, the number of class actions filed in plaintiff-friendly jurisdictions like Madison County, Illinois has dropped precipitously.

The U.S. Chamber Institute for Legal Reform campaigned strongly for CAFA’s passage. In addition, the Chamber’s National Chamber Litigation Center filed amicus curiae briefs, both in support of certiorari and on the merits, in the Knowles case (available here and here).

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.

NCLC is the public policy law firm of the U.S. Chamber of Commerce that advocates fair treatment of business in the courts and before regulatory agencies.

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