House Letter Regarding the Class Action Fairness Act


Honorable William Frist Majority Leader
461 Dirksen Senate Office Building
United States Senate
Washington, DC 20510
Honorable Tom Daschle Minority Leader
509 Hart Senate Office Building
United States Senate
Washington, DC 20510
June 3, 2003
Dear Senators Frist and Daschle:
We are professors of constitutional law, civil procedure, and other subjects, at law schools across the nation. We are writing this letter because of grave concerns over the so-called “Class Action Fairness Act” (S. 274) and its House counterpart (H.R. 1115), specifically the effect these bills would have on the administration of justice in the United States and on the ability of American consumers, small businesses, and others to obtain relief for injuries done to them. We also have serious questions about the constitutionality of the Act. We urge the Senate to reject this legislation.
Practical Effect of Enacting the Bill into Law
As approved by the Senate Judiciary Committee, S. 274 would result in transferring to the federal courts jurisdiction over most class actions filed in state courts, under state law. The Federal courts do not have the resources to administer justice to both their present dockets and the large number of complex state-court cases that would be added if S. 274 or its House counterpart were to become law. Passage of the bill would lead to significant delays in all the business of the federal courts, harming the ability of the federal courts to decide cases that only they can decide, or in which there is a strong federal interest.
Enactment of the Bill Would Harm the Ability of Plaintiffs to Obtain Justice
We believe that several specific provisions in the bill would be very unwise. The federal courts have responded to claims of abuse in class-action procedures by studying the claims, inviting comments from bar associations, attorneys and others, carefully considering the comments, proposing Medicare Modernization Act rules, receiving comments on the Medicare Modernization Act s, and fine-tuning their proposals. If a reform is inadequate to meet the need, they can propose refinements. A substantial set of changes to Rule 23, the class action rule, are expected to go into effect on December 1, 2003, in the event that Congress does not direct otherwise. All of these changes were made pursuant to the Rules Enabling Act, the process Congress created to try to keep politics out of the process of setting rules for the judiciary. Sec. 3 of S. 274 would override some of these changes, and eliminate the ability of the Advisory Committee on the Civil Rules to deal with others. If it is enacted in its present form, the rulemaking process would become politicized, and lobbyists’ demands would replace the careful consideration now given to these matters. In the event that Congress deems it necessary to legislate as to areas traditionally covered by court rules, we urge that the legislation be as limited as possible, that this part of the legislation be in the form of rules rather than freestanding statutes, and that the legislation expressly preserve the ability of the Advisory Committee on the Federal Rules, the U.S. Judicial Conference, and the Supreme Court to amend the new rules or procedures to the extent necessary to accomplish their purposes more effectively or to cure any unanticipated problems. Congress would, as always, have the final say under the Rules Enabling Act.
The administration of justice would also be harmed by removing much of the ability of state courts to construe their own laws. Many important questions are most likely to arise when the stakes make it worthwhile to litigate them, i.e., in class actions or other large cases. When the case is removed to federal court, the federal court cannot give a definitive interpretation of state law, but can only predict what the state supreme court would find state law to be, if the state supreme court had the same case. If there are other cases from other parts of the country against the same defendant, even without any overlapping classes, the Judicial Panel on Multidistrict Litigation may assign the case—and the task of interpreting state law—to a federal court thousands of miles away. Not every state has adopted procedures allowing a federal court to certify state-law questions so there may be no practical means by which a federal court in Topeka, for example, may be able to obtain guidance as to the law of California.
A further unwarranted provision in S. 274 would allow a defendant to remove state-law cases filed against it in the courts of its own home state, where it chose to be incorporated or chose to have its principal place of business. This type of removal has long been considered an abuse, and is forbidden by current law.
Equally troubling is a provision in S. 274 that allows removal of a case at any time. This would give a defendant the power to yank a case away from a state-court judge who has properly issued pretrial rulings the defendant does not like, and would encourage a level of forum-shopping never before seen in this country. Moreover, this provision would allow an unscrupulous defendant, anxious to put off the day of judgment so that more assets can be hidden, to remove a case on the eve of a state-court trial, resulting in an automatic delay of months or even years before the case can be tried in federal courts. The House bill creates an even further opportunity for delay, by overruling Rule 23(f)’s provision for obtaining permission from a court of appeals to appeal a class certification ruling, and providing for a right to trigger an automatic appeal and for an automatic stay of discovery while the appeal is pending, even if there is no legal basis for an appeal.
Lack of Justification for a Remedy This Sweeping
We understand that the supporters of the bill base its justification on assertions that the courts in one or two counties in the United States have too freely granted class certifications in some cases. The bill is not limited to curing claimed abuses in one or two counties, but applies equally to the 3,066 counties(1)in which there is not even a claimed problem. In general, courts have been very responsive to complaints of abuses, and have instituted corrective measures, such as allowing petitions for interlocutory appeal from orders granting or denying class certification. The Federal courts have adopted Rule 23(f) of the Federal Rules of Civil Procedure, and many State courts have followed suit.
The need for a state court to interpret the law of a different state has never been seen as an adequate justification for removal. Article III of the Constitution does not recognize this as a basis for federal-court jurisdiction and the Full Faith and Credit clause already requires state courts to accord respect to the laws of their sister states. As a practical matter, state courts frequently have to interpret the law of different states even in individual cases properly brought in state courts. This is part of the normal business of the state courts, not a reason for federal jurisdiction.
Constitutional Issues
There is substantial cause to doubt the constitutionality of a massive transfer of state-court cases to federal courts. This transfer would effectively substitute federal-court Rule 23 class certification standards for the class certification standards set forth in the statutes, court rules, and case law of the various states. Unbelievably, such a substitution would provide for dismissal of cases that do not meet the federal standards even though they may meet the standards of the states, and even though the standards of the states may meet every requirement of due process. The Supreme Court has not devoted nearly as much attention to construing the Tenth Amendment to the Constitution as it has devoted to the Eleventh Amendment, but passage of S. 274 or its House counterpart may change that comparative lack of attention.
Similarly, the “minimal diversity” trigger for removal under S. 274 and its House counterpart creates an untested and unprecedented expansion of diversity jurisdiction under Article III of the Constitution. Congress certainly has the power to expand diversity jurisdiction to reach cases in which one party on one side of a case is diverse from any adverse party, see 28 U.S.C. ยง 1335(a)(1) (the interpleader statute). There is, however, substantial cause to doubt the constitutionality of these bills’ approach, in which diversity is based on the citizenship of any potential class members. We say “potential” because the bill allows removal of a case before the state court has even decided that the case should go forward as a class action, or what the scope of the class should be. While class members are to be protected by the court, and while their rights may be determined by the class action, they are not full parties to the action. Prior to the determination of liability and a proceeding on class members’ individual remedies, unless they intervene and become parties, they do not individually have the right to take discovery from the defendants, to file motions in court, to question witnesses, to introduce evidence, or even to take an appeal from an adverse ruling. Yet, under this legislation they would be allowed to remove a complex state law class action into federal court.
At the very least, litigation over the constitutionality of the bill is likely to embroil the courts for years and is yet a further reason to oppose the enactment of this misguided legislation. We urge you to consider our concerns about the unwarranted changes this legislation mandates as well as the very troubling aspects of the legislation that undermine fair administration of justice in the federal and state judicial systems in the United States.
Respectfully submitted,
Richard L. Abel
Connell Professor of Law
UCLA School of Law
James Francis Bailey, III
Professor of Law and Director of the Ruth Lilly Law Library
Indiana University School of Law
James Alfini
Professor of Law
Northern Illinois University College of Law
Tom Baker
Connecticut Mutual Professor of Law and Director, Insurance Law Center
University of Connecticut School of Law
Anthony G. Amsterdam
University Professor and Professor of Law
New York University School of Law
Clinton Bamberger
Emeritus Professor of Law
University of Maryland
Thomas Andrews
Professor of Law
University of Washington
Linda M. Beale
Assistant Professor of Law
University of Illinois College of Law
Frances L. Ansley
Professor of Law
University of Tennessee College of Law
George Bell
Clinical Professor
University of Illinois College of Law
Jennifer Arlen
Ivadelle and Theodore Johnson Professor of Law and Business
New York University School of Law
Peter A. Bell
Professor of Law
Syracuse University College of Law
Lewis Burke
Professor of Law and Director of Clinics
University of South Carolina School of Law
Paul Schiff Berman
Professor of Law
University of Connecticut School of Law
Robert Calhoun
Professor of Law
Golden Gate Law School
Jerome Borison
Associate Professor of Law
University of Denver College of Law
Janet M. Calvo
Associate Professor of Law
CUNY School of Law
William E. Boyd
Chester H. Smith Professor and Senior Lecturer
The University of Arizona College of Law
John J. Capowski
Associate Professor of Law
Widener University School of Law
Melinda Branscomb
Associate Professor of Law
Seattle University School of Law
Susan Carle
Associate Professor
Washington College of Law
Ralph L. Brill
Professor of Law
Chicago-Kent College of Law
Erwin Chemerinsky
Sydney M. Irmas Professor of Public Interest Law, Legal Ethics and Political Science
University of Southern California Law School
Robert Brookins
Professor of Law
Indiana University School of Law-Indianapolis
Margaret Chon
Associate Professor of Law
Seattle University School of Law
Darryl Brown
Associate Professor and Alumni Faculty Fellow
Washington & Lee University School of Law
Nancy L. Cook
Director and Senior Lecturer, Legal Aid Clinic
Cornell Law School
Jerome Bruner
University Professor
New York University School of Law
Lynn E. Cunningham
Professor of Clinical Law
George Washington University Law School
Peggy Cooper Davis
Shad Professor of Law
New York University
Sally Frank
Professor of Law
Drake University Law School
Richard A. Daynard
Professor of Law
Northeastern University School of Law
Ellen E. Deason
Associate Professor of Law
University of Illinois College of Law
Monroe H. Freedman
Howard Lichtenstein Distinguished Professor of Legal Ethics
Hofstra University School of Law
Connie de la Vega
Professor of Law
University of San Francisco School of Law
Craig B. Futterman
Assistant Clinical Professor of Law
University of Chicago Law School
Connie de la Vega
Professor of Law
University of San Francisco School of Law
Mary Ellen Gale
Professor of Law
Whittier Law School
Dan Dobbs
Regents and Rosenstiel Distinguished Professor of Law
University of Arizona College of Law
Joseph Glanon
Suffolk University Law School
Suffolk University Law School
Norman Dorsen
Counselor to the President of New York University and Stokes Professor of Law
New York University School of Law
Michael J. Goldberg
Vice Dean and Professor of Law
Widener University School of Law
Christopher M. Fairman
Assistant Professor of Law
Ohio State University College of Law
Stephen E. Gottlieb
Professor of Law
Albany Law School
Martin Guggenheim
Clinical Professor
New York University School of Law
Neal Feigenson
Professor of Law
Quinnipiac University School of Law
William D. Henderson
Visiting Associate Professor of Law
Indiana University School of Law-Bloomington
Matthew W. Finkin
Professor of Law
University of Illinois College of Law
Randy Hertz
Professor of Clinical Law
New York University School of Law
Brian K. Landsberg
Professor of Law
University of the Pacific
McGeorge School of Law
Katherine Hessler
Associate Professor of Law
Case Western Reserve University Law School
Hugh M. Lee
Director Elder Law & Student Legal Clinics
University of Alabama School of Law
Steven J. Heyman
Professor of Law
Chicago-Kent College of Law
Shirley Lung
Adjunct Associate Professor of Law CUNY School of Law
Betsy Hollingsworth
Clinical Professor and Acting Director, Law Clinic
Seattle University Law School
H. C. Macgill
Professor of Law
University of Connecticut School of Law
Oliver Houck
Professor of Law
Tulane University School of Law
Holly Maguigan
Professor of Clinical Law
New York University School of Law
Sherrilyn A. Ifill
Associate Professor of Law
University of Maryland School of Law
Joan Mahoney
Dean and Professor of Law
Wayne State University Law School
Thomas G. Kelch
Professor of Law
Whittier Law School
Karl Manheim
Professor of Law
Loyola Law School
Lewis Kurlantzick
Professor of Law
University of Connecticut School of Law
Mari Matsuda
Professor of Law
Georgetown University Law Center
James A. Kushner
Professor of Law
Southwestern University School of Law
Connie Mayer
Clinical Professor and Associate Dean, Student Affairs
Albany Law School, Union University
Miguel A. Mendez
Adelbert H. Sweet Professor of Law
Stanford Law School
Jamin Raskin
Professor and Co-Director, Law and Government Program
American University College of Law
Saul Mendlovitz
Professor of Law Emeritus
Rutgers School of Law-Newark
Clifford Rechtschaffen
Professor and Co-Director, Environmental Law and Justice Clinic
Golden Gate University School of Law
Nancy Morawetz
Professor of Clinical Law
New York University School of Law
Laurie Morin
Associate Professor of Law
University of the District of Columbia School of Law
Paula R. Rhodes
Associate Professor & Director LLM in American & Comparative Law Program
University of Denver College of Law
Reta Noblett-Feld
Clinical Law Professor
University of Iowa College of Law
Jon Romberg
Associate Professor of Law
Seton Hall University School of Law
Kimberly E. O’Leary
Associate Professor of Law
Thomas Cooley Law School
Howard I. Rosenberg
Professor of Law
University of Denver College of Law
David B. Oppenheimer
Professor of Law and Associate Dean for Academic Affairs
Golden Gate University School of Law
James V. Rowan
Professor of Law
Northeastern University School of Law
M. Kathleen Price
Director of the Law Library and Professor of Law
New York University Law Library
Charles Shafer
Professor of Law
University of Baltimore Law School
William P. Quigley
Professor of Law
Loyola University New Orleans School of Law
Peter Shane
Professor of Law
University of Pittsburgh School of Law
Morgan Shipman
John W. Bricker Professor of Law
Ohio State University College of Law
Ralph Michael Stein
Professor of Law
Pace University School of Law
Marjorie Silver
Associate Professor
Touro University
Joan Steinman
Distinguished Professor of Law
Chicago-Kent College of Law
Andy Silverman
Joseph M. Livermore Professor and Director, Clinical Programs
University of Arizona College of Law
Joseph L. Stone
Director, Business Law Center
Loyola University Chicago School of Law
John Strait
Associate Professor of Law
Seattle University School Of Law
Steve Simon
Clinical Professor and Director, Judicial Trial Skills Training Program
University of Minnesota Law School
George Strickler
Professor of Law
Tulane University School of Law
David Slawson
Torrey H. Webb Professor of Law
University of Southern California
Beth Thornburg
Professor of Law
Southern Methodist University Dedman School of Law
Peter J. Smith
Associate Professor
George Washington University Law School
Paul L. Tractenberg
Alfred C. Clapp Public Service Professor and Board of Governors Distinguished Service Professor
Rutgers School of Law-Newark
James H. Stark
Professor of Law
University of Connecticut School of Law
Joseph B. Tulman
Professor of Law
University of the District of Columbia School of Law
Norman Stein
Douglas Arant Professor
University of Alabama School of Law
Georgene Vairo
Professor and William M. Rains Fellow
Loyola Law School
Dominick Vetri
B.A. Kliks Professor of Law
University of Oregon Law School
Louise Weinberg
William B. Bates Chair for the Administration of Justice and Professor of Law
University of Texas School of Law
Donald E. Wilkes, Jr.
Professor of Law
University of Georgia School of Law
Charles E. Wilson
Associate Professor of Law
Ohio State University College of Law
Stephen Wizner
William O. Douglas Clinical Professor of Law
Yale Law School
Richard W. Wright
Professor of Law
Chicago-Kent College of Law
*Institutional affiliation is for identification purposes only.
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1. National Association of Counties web site, http://www.naco.org/PrinterTemplace.cfm?Section=About_Counties, April 28, 2003.