AIA Fights for Passage of Strong Class Action Reform Bill Introduced by Senate Republicans

January 26, 2005

Senate Republican leaders have introduced vital class action litigation reform legislation, and the move was immediately praised by the American Insurance Association (AIA).

“We are very encouraged that Senate Republican leaders are making the Class Action Fairness Act (S. 5) one of their top ten legislative priorities,” stated Melissa Shelk, AIA vice president of federal affairs.

However, Shelk acknowledged that getting the bill passed into law will not be easy. “We are going to have to fight off amendments that have the potential to weaken the bill,” she said. “Our immediate goal is to get this through the Senate Judiciary Committee quickly and cleanly.”

S. 5 would curb many current class action abuses by re-establishing federal authority over interstate cases in which plaintiffs’ claims are over $5 million in the aggregate, while maintaining exclusive state authority over truly intrastate cases, so that the rights of consumers in all states are protected; S. 5 also limits “venue shopping” to prevent litigants from seeking out favorable court jurisdictions, requiring that claims be brought in a venue with a substantial connection to the injury.

The House of Representatives has passed class action reform on three separate, previous occasions; the legislation fell one vote short the last time it was considered by the full Senate.

This year, as in the past, AIA said it is committed to working alongside class action reform supporters in the business community, who have been harassed by frivolous class action suits to end this abuse of the civil justice system.

“The current system has been a losing proposition for everyone involved, except the trial attorneys who bring these lawsuits,” noted Shelk. “We feel the climate this year is particularly favorable for passage of this long-overdue fix for the badly broken class action system.”

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