NAMIC Responds to Senate Class Action Vote

July 12, 2004

After the Senate failed to reach an agreement on so-called non-germane amendments that would have permitted the class action reform legislation, S. 2062, the Class Action Fairness Act, to be considered in the Senate last week, the National Association of Mutual Insurance Companies (NAMIC) released a statement expressing disappointment in the outcome.

According to the NAMIC statement, the motion to shut off debate (invoke cloture) failed by a vote of 44-43 or 16 votes short of the 60-vote requirement. The legislation would have allowed for the removal of certain interstate class action lawsuits to federal court from state courts if requested by either plaintiffs or defendants.

“We are deeply disappointed that the Senate failed to proceed with the class action legislation. This bill had the support of 62 senators and this is an incredible opportunity lost,” said David A. Winston, NAMIC federal affairs senior vice president, in the statement. “The legislation is a balanced, common-sense solution that addresses the worst abuses of the class action process and rationalizes procedures, while preserving plaintiffs’ legal rights and providing additional protections for consumers,” Winston stated.

“While a compromise on the consideration on non-germane amendments remains possible, as a practical matter, this is unlikely. We realize that time is now running out; however, NAMIC remains committed to passing class action reform legislation this year. We will continue to press our case with Members of Congress and we are cautiously optimistic that the bill will be considered again prior to adjournment,” Winston continued in the statement.

According to NAMIC, plaintiffs and their attorneys take advantage of a loophole in jurisdictional rules in order to keep large, nationwide class actions out of federal courts where they are more appropriate. The class-action measure would require that most such multi-plaintiff lawsuits be filed in federal court, shifting them away from state courts, some of which have become famous for large settlements with little for class members and big fees for the trial lawyers that filed the cases.

On June 12, 2003, the House of Representatives passed the companion bill H.R. 1115 by a vote of 253-170.

The vote summary on the motion to invoke cloture on S. 2062 can be viewed by clicking here.

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