Miscellaneous

O-CAFA

By Anne Skove, Esq.

The WSJ says "We can't find a single issue on which Mr. Obama has broken with his party's left-wing interest groups." They must not be looking back too far. One of the first bills he voted for was the Class Action Fairness Act of 2005 (CAFA), which passed on February 10, 2005. (Pay attention to that date, please.)

Is CAFA any good? Let's not doubt the fine work of the U.S. Chamber of Commerce. We love commerce! Viva las Target! So what if the Chamber is spending our tax dollars to keep us out of court. The benefits we reap in low-cost goods and services outweigh any stifling arbitration agreement we may sign. We were probably crazy before eating the lead paint anyway.

The Federal Judicial Center (aka FJC) studied CAFA with all due seriousness. The FJC has a long history of examining class actions and other mass torts. They literally wrote the book on this topic, having published several editions of the near-biblical Manual for Complex Litigation. So when the FJC says CAFA isn't such a great idea, finding "little support to the view that state and federal courts differ greatly in how they resolve class actions," uhhhm, what's a Congress to do?

Like Cher, they decided to turn back time! An Empirical Examination of Attorneys' Choice of Forum in Class Action Litigation was published in 2005. It was supposed to be released in January, before CAFA was passed. Instead, the damning report was released post-CAFA.

Maybe it doesn't matter. CAFA and other reforms are based on the perception, however misguided, that state courts are a worse choice of forum for class action defendants than federal courts.

The FJC data bears out those perceptions, but says there is no reality to back them up. The perceptions may be as permanent as Sharpie marks on a tablecloth (sorry, grandma!). Most of us went to law school because we're horrible at math, so tossing all those stats and reports at lawyers might not change anyone's mind.

Passing CAFA was not the best answer. State courts didn't want it, the overwhelmed federal courts didn't need it, plaintiffs may suffer, and defendants will fare no better or worse (save for the possible delay due to the understaffed federal bench) after all their effort.

Follow-up reports on the effect of this legislation have determined that "CAFA has caused an increased number of class actions based on diversity of citizenship jurisdiction to be filed in the federal courts."

We love Obama, too, but it's time someone who isn't Tortellini (see Obama's Anti-consumer Vote, December 7, 2006) noticed this vote.

Full post as published by court-o-rama.org on June 04, 2008 (boomark / email).