NAMIC Reacts to President’s Call for Enactment of Class Action Reform Legislation

February 7, 2005

The National Association of Mutual Insurance Companies (NAMIC) issued the following statement from Senior Vice President-Federal Affairs, David Winston, concerning President Bush’s call recently for federal class action reform legislation:

“NAMIC wholeheartedly agrees with President Bush’s statement in his State of the Union address Wednesday night that ‘Justice is distorted, and our economy is held back by irresponsible class actions and frivolous asbestos claims, and I urge Congress to pass legal reforms this year.’

“Class action reform legislation currently pending before Congress would restrict ‘forum shopping’ for plaintiff-friendly jurisdictions with little connection to the parties, or to the defendant’s alleged misconduct, by shifting such cases from state to federal court.

“Under the current system, a single state court that certifies and decides a multi-state class action—where the plaintiff class is drawn from a multitude of states—can effectively make law for as many as 49 states in addition to its own. Such ‘regulation through litigation’
turns the concept of federalism on its head. Instead of state sovereignty being threatened by an overreaching federal government, multi-state class actions allow a single state court to impose its regulatory preferences on the rest of the country. Permitting litigants to transfer multi-state class actions to federal court would solve this problem. Federal judges would still apply the relevant state law, but their national perspective would enable them to do so in a way that respects the prerogatives of the various states represented by class members.

“NAMIC joins the President in asking the Congress to pass class action and other legal reforms this year.”

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