Big Changes Could be coming to Class Action Practice, Courtesy of Congress

Class actions, especially those with nationwide scope and the specter of huge payouts, have long been the stuff of nightmares for in-house counsel and corporate executives. The press regularly report on settlements where plaintiffs’ counsel walked away with millions in attorney fees while the aggregate recovery by the class was much smaller.

The Class Action Fairness Act of 2005 (the 2005 CAFA) significantly changed how class actions were litigated. Advocates of the legislation said it would reduce forum shopping by expanding federal jurisdiction over certain class actions and allowing greater court scrutiny of class action settlement agreements (including settlements with so-called “coupon” components).

But the 2005 CAFA did not solve all the problems that class action critics wanted Congress to address.  In response, the U.S. House of Representatives passed H.R. 985 in March of this year, with the relevant section of the bill titled the “Fairness in Class Action Litigation Act of 2017.”. For simplicity's sake, we will call this bill the 2017 CAFA. The bill has now moved on to the Senate, and in late March was referred to the Senate Judiciary Committee. Given the current political situation in Washington, it's anyone’s guess as to when the bill will be reported out of committee (if at all) much less come to a full vote. More ›