Ralph Nader, Consumer Advocate, calls on Senators to Reject So Called “Compromise” Class Action Legislation Slated to hit the Senate Floor Next Week

The “Compromise” Class Action Legislation is Nothing More Than a Chamber of Commerce wish list. Senators Dodd, Schumer and Landrieu Cave to Business Interests, Ignore State Judges, and Defy Judicial Council Suggestions with Legislation That Will Wrestle Power Away From State Judiciaries. This Legislation Would Greatly Diminish the Prescribed Checks and Balances of American Government.

Contact: Ralph Nader, (202) 387-8034

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Washington, DC, January 20, 2004

Today, Ralph Nader sent a letter to members of the United States Senate regarding the proposed “compromise” Class Action legislation. The letter outlines the manner in which this proposed legislation would create additional impediments to filing class action suits, and would thereby erect further judicial access barriers for injured parties seeking compensation for repetitive harms committed against numerous plaintiffs. Mr. Nader expressed outrage that such corporate immunization from culpability would be brought to the Senate floor in the middle of a corporate crime wave.

As an active citizen in his home state of Connecticut, Mr. Nader has spoken with many Connecticut State judges over the past 15 years. None of these judges’ counsel was solicited by bill co-sponsor, Christopher Dodd, with respect to whether federal legislation should pre-empt state judicial practices.

The text of Ralph Nader’s letter follows:

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January 20, 2004

Dear Senator,

I am writing to urge you to reject the so-called “compromise” Class Action legislation that was recently agreed to by the United States Chamber of Commerce, and co-sponsored by Senators Dodd, Schumer, and Landrieu.

The proposed compromise does little to mitigate the drastic impact of the original bill on U.S. consumers and individuals seeking corporate accountability through class action lawsuits in our courts of law — already a very difficult task.

Class action lawsuits were created as a vehicle to offer a degree of fairness and efficiency to citizens collectively when pitted against the comparatively limitless resources of a predatory giant corporation. Multiple plaintiffs are allowed a more level playing field by pooling together their grievances because each taken alone may not warrant an individual lawsuit. A collective injury and established pattern of fraudulent or harmful behavior displayed by a wrongdoing corporation as a whole may be quite substantial and often merits significant damages. This serves to fulfill the goal of deterring future infliction of injury while properly compensating affected individuals as determined by state judges and juries who are the only ones who hear, see and evaluate the evidence and law for such cases. No case has been made that state judges are unwilling or unable to control their courtrooms to a degree warranting this radical pre-emption of state jurisdiction.

The class action “compromise” would move state class action lawsuits to the much more business-friendly and congested federal court system. Federal and state judges, legal scholars, and public interest organizations roundly oppose the prospect of such a change. The Federal Judicial Conference led by Chief Justice Rehnquist opposes the “Class Action Fairness Act” because “of concerns that the provisions would add substantially to the work load of the federal courts and are inconsistent with principles of federalism.”

Corporate wrongdoers favor this legislation out of pure economic avarice. They prefer the federal courts because the federal rules to certify a class suit are often more onerous, making it procedurally even more difficult for plaintiffs to file suit. In fact, many federal courts will simply dismiss class action lawsuits on the grounds that the case is “unmanageable” whenever the class is made up of citizens of many different states suing under different state laws. Under the proposed bill, state class actions would be removed to federal court and then consolidated for pretrial motions, such as class certification. Many of these cases will then be dismissed because adjudication would call for applying the laws of numerous states, making the case “unmanageable.” Innocent victims of fraud, labor law violations, civil rights abuses, unsafe products and environmental harm will be left without any remedy at all and the corporations responsible will be let off the hook entirely. You should care about this.

Moreover, federal judges are often reluctant to interpret state laws in ways that expand liability or provide additional remedies for plaintiffs. The U.S. Court of Appeals for the Seventh Circuit noted, “when we are faced with opposing plausible interpretations of state law, we generally choose the narrower interpretation which restricts liability, rather than the more expansive interpretation which creates substantially more liability.” These very same denials and rejections proffered by federal courts are usually claims recognized by state courts that better understand local issues.

Congress should follow the suggestion of the Judicial Conference by crafting legislation to: better define a corporation’s “citizenship” by extending it to states where the company has a significant presence, and to grant federal judges discretion to remand cases in which state courts have yet to decide whether certain misconduct violates that state’s laws.

I wonder whether you and your colleagues in the senate spent as much time discussing this bill with your own state judges as you have with the promoters and lobbyists behind the legislation? Don’t you think that your state judges should be heard on this pre-emptive legislation? After all, they do know more about this subject than do legislators.

You should also heed the advice of groups like the Alliance for Justice, Center for Justice and Democracy, Civil Justice, Inc., Consumer Federation of America, Consumers for Auto Reliability and Safety, Earthjustice, Lawyers’ Committee for Civil Rights Under Law, Leadership Conference on Civil Rights, Legal Aid Society of Texas, Maryland Consumer Rights Coalition, National Association of Consumer Advocates, North Carolina Justice Center, Public Citizen, US PIRG, USAction, Violence Policy Center, and others who oppose this legislation because it would “undermine consumer, labor and civil rights in class action lawsuits.”

The egregious provisions contained in the compromised version of the so-called Class Action Fairness Act are certainly not fair to the many individuals harmed by corporate wrongdoers every year (especially during a corporate crime wave). Do the right thing and reject this weakening of the civil justice rights of consumers and taxpayers in our country and in your state.

Sincerely,

Ralph Nader

P.O. Box 19312

Washington, DC 20036