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Regulation and Compliance > Legislation

House Approves Class-Action Jurisdiction Bill

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NU Online News Service, March 14, 10:03 a.m. — Washington

By a 233-190 vote, the House of Representatives has approved industry-backed legislation that grants federal district courts jurisdiction over major class-action lawsuits.

The legislation, H.R. 2341, calls for federal court jurisdiction in most class actions in which the claim for damages exceeds $2 million and in which any member of the plaintiffs’ class is a citizen of a different state from any defendant.

In addition, the legislation establishes a “consumer class action bill of rights.” This provision of H.R. 2341 calls for judicial approval of noncash settlements, standardized settlement notification information and protection against loss by class members because of payments to the plaintiffs’ counsel.

Similar legislation is pending in the Senate.

Jack Dolan, a representative of the Washington-based American Council of Life Insurers, praised the House action.

“The evidence is clear that the civil justice system needs reform,” he said, “and this legislation is a step in the right direction.

“We will be fighting very hard to overcome the trial lawyers’ stranglehold over efforts to enact reform in the Senate, where it is much easier to stop or delay legislation,” Dolan added.