House Passage of Class Action Bill Signals Loss for Consumers

FOR IMMEDIATE RELEASE
February 17, 2005
CONTACT:
Rachel Weintraub (202) 387- 6121

Consumer Federation of America expresses its deep disappointment about the House of Representatives' passage of S. 5, the so- called "Class Action Fairness Act." The House passed S. 5 today by a vote of 279- 49, while last week the Senate passed S. 5 by a vote of 72-26. The President is expected to sign the bill into law as early as tomorrow. Tragically, the votes in favor of the bill signal, not only a vote in favor of a broad and dangerous change to our civil justice system, but also a significant vote against consumers' rights.

This legislation essentially denies consumers access to a uniquely important legal tool against corporate wrongdoing. Class actions enable consumers who were harmed in similar ways to aggregate their claims into one case. For many consumers, litigating their case individually is neither practicable nor possible. The bill also undermines the ability of state courts to hear cases primarily concerned with their own citizens. S. 5 is unfair to consumers and we applaud those courageous 149 Representatives who opposed this inequitable bill today.

While purporting to curtail "class action abuses," S. 5 virtually wipes out state class actions, thereby removing what is sometimes the only venue for redress of injury or fraud for consumers. The bill makes it more difficult for consumers to obtain effective and efficient judicial relief for injuries, for example, caused by defective products, fraud in the marketplace, or discrimination. The jurisdictional changes mandated by S. 5 are designed solely to impede class actions, not to make them fairer or more efficient.

Congress should seek to hold negligent wrongdoers accountable for their actions, not offer the special interests more protections. Sadly, this is not what the House of Representatives ultimately did today nor what the Senate did last week. S. 5 makes it more difficult for consumers to obtain redress, to hold bad actors accountable for the harms they cause, and to deter future misconduct. We are profoundly concerned that when this bill becomes law, the consequences for consumers will be dire and overwhelmingly negative.

###

Consumer Federation of America is a non-profit association of 300 consumer groups, with a combined membership of more than 50 million people. CFA was founded in 1968 to advance the consumers' interest through advocacy and education.