EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
STATEMENT OF ADMINISTRATION POLICY
(THIS STATEMENT HAS BEEN COORDINATED BY OMB WITH THE CONCERNED AGENCIES.)
October 5, 1998
H.R. 3789 - Class Action Jurisdiction Act of 1998
(Hyde (R) Illinois and 10 cosponsors)
The Administration strongly opposes House passage of H.R. 3789, and if it were presented to the President, the Attorney General would recommend that he veto the bill.
H.R. 3789 would grant Federal district courts jurisdiction in almost all class action cases where any class member is a citizen of a State different from the State of any defendant. This would have the effect of transferring a significant number of class actions into Federal court and "federalizing" class action standards. States should be permitted to manage their own courts unless it can be demonstrated that there is a nationwide problem interfering with the fair adjudication of cases. Since this has not been demonstrated, the responsibility for handling class action litigation should continue to be shared between the State and Federal systems.
Class action litigation provides an important mechanism for vindicating the rights of plaintiffs whose individual claims would not warrant separate litigation and for resolving large numbers of related claims in a single action. H.R. 3789 also would require class action cases that are not certified in Federal court to be remanded to State courts and stripped of their class allegations, even if such a class could have been certified under applicable State standards. This provision would eliminate a viable remedy for individuals suffering injuries who could not otherwise afford to bring suit on their own and would significantly infringe on State courts' ability to offer redress to their citizens.
H.R. 3789 would move substantial numbers of State class actions to Federal courts at a time when the Chief Justice, among others, has expressed serious concerns about the workload of the Federal courts. A study by the Federal Judicial Center demonstrated that class actions are much more resource-intensive than other kinds of civil litigation. Particularly at a time when so many vacancies on the Federal bench exist, moving virtually all class actions to Federal courts would be counterproductive.