Many mass tort cases – lawsuits which combine the cases of number of victims suffering similar physical damage from the same defective product or negligent practice – would also be moved to federal court. The bill also sets up a number of procedural rules for class action cases, restricting settlements in which a member of the class of people filing the suit must pay his or her lawyer more than the class member received under the settlement and banning settlements that would provide more money to some class members based on their geographic proximity to the court would also be banned. Finally, the Act calls for judicial scrutiny of so-called “coupon settlements,” in which plaintiffs receive only low-value coupons in compensation for their injuries.
Why CAFA was a bad bill:
While moving lawsuits from state to federal courts may seem harmless enough, in effect it will prevent many middle-class Americans injured by defective products, manipulated by deceptive marketing, or discriminated against by unfair employment practices from ever being able to hold corporate wrongdoers accountable. As a result, the threat of lawsuits will be less of a deterrent to corporations that engage in deceptive or discriminatory practices or seek to cut corners by skimping on product safety. Moving state cases to the federal courts is particularly harmful because it is state judges, not the federal judiciary, that are most familiar with the state consumer protection laws under which wrongdoers are sued. As a result, federal judges usually won’t certify cases based on state law, which effectively prevents even the most legitimate cases from ever being heard if they are forced into federal court.
That means ordinary citizens have lost an important means of getting recourse to the laws their democratically-elected state legislators passed. To make matters worse, the federal courts are increasingly stacked with judges hostile to consumer and workers’ rights. What’s more, the federal courts are already overburdened, struggling to cope in a timely manner with the caseload already before them. Further clogging the federal system with state cases may slow down everyone’s access to justice.
Here's what a group of State Attorney Generals had to say about it (AGs from California, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Oklahoma, Oregon, Vermont and West Virginia):
Equal access to the American system of justice is a foundation of our democracy. S.5
would effect a sweeping reordering of our nation’s system of justice that will disenfranchise
individual citizens from obtaining redress for harm, and thereby impede efforts against egregious corporate wrongdoing.”
The National Conference of State Legislatures didn't like it either. Here's Why:
“S. 5 undermines our system of federalism, disrespects our state court system, and clearly preempts carefully crafted state judicial processes which have been in place for decades regarding the treatment of class action lawsuits… State laws in the areas of consumer protection and antitrust which were passed to protect the citizens of a particular state against fraudulent or illegal activities will almost never be heard in state courts. Ironically, state courts, whose sole purpose is to interpret state laws, will be bypassed and the federal judiciary will be asked to render judgment in these cases.”
What should be done instead of this bill:
The American system of civil justice provides a crucial means for ordinary middle-class citizens to hold powerful corporations and government agencies responsible for their actions. Congress should work to strengthen and preserve this system of accountability rather than seeking to limit corporate liability, restrict victims’ compensation, and obstruct access to the courthouse, as this bill and other legislation pending in 2006 seeks to do.
