Lawyer Article
Client Alert: The Class Action Fairness Act of 2005
March 1, 2005
On Thursday, February 17, 2005, Congress passed the Class Action Fairness Act, S.5. President Bush signed the Act into law the next day. This Act continues a trend of addressing abuses of national class action litigation through procedural reforms. In particular, both Congress and the President were concerned about multi-state litigation in state court jurisdictions where juries award large verdicts and where judges regularly approve large settlements in which the lawyers receive large fees and the class members receive little of the value (President Bush cited Madison County, Illinois as an example). The Act remedies this problem by permitting many class actions that previously could be heard only in state court to be heard in federal court.
The Act substantially changes the law governing class actions in the following ways:
- It expands the jurisdiction of federal courts so that they may hear most national class action lawsuits;
- It allows the removal of more class actions filed in state court to federal court and it limits the ability of the federal courts to remand those actions to state court;
- It adopts new procedures for settling class actions in federal court; and
- It limits or prohibits settlements in which the lawyers receive greater benefits than individual class members.
Click here to read the entire client alert in PDF format.
This document is intended as an informational reminder and does not constitute legal advice. If you have any questions or would like to discuss a particular situation, please contact Womble Carlyle Sandridge & Rice, LLP. The purpose of this article is to provide general information about significant legal developments and should not be construed as legal advice on any specific facts and circumstances.