AIA Praises Signing of Class Action Reform Bill

February 18, 2005

“President Bush’s signature puts class action reform across the finish line, making winners of businesses held hostage by frivolous lawsuits and consumers who have received nothing more than worthless settlement coupons,” said Melissa Shelk, vice president of federal affairs for the American Insurance Association (AIA).

With the President’s signature this week, the Class Action Fairness Act (S. 5) goes into effect immediately. “This also means the integrity of the class action litigation system is bolstered,” said Shelk.

Business and consumers will reportedly gain the benefit of this reform bill’s curbing of many current class action abuses. S. 5 would re-establish federal authority over interstate cases in which plaintiffs’ claims are more than $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,” where litigants seek favorable court jurisdictions by requiring that claims be brought in a venue with a substantial connection to the injury.

“We appreciate that President Bush has made class action reform a cornerstone of his national tort reform agenda,” stated Shelk. “Republican congressional leaders also should be commended for making this a top priority. In addition, the co-sponsors on both sides of the aisle should be applauded for working in bipartisan fashion on this crucial legislation.”

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