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.)

September 23, 1999 (House)

H.R. 1875 - Interstate Class Action Jurisdiction Act of 1999 (Goodlatte (R-VA) and 37 cosponsors)

The Administration strongly opposes House passage of H.R. 1875. If the bill were presented to the President, his senior advisors would recommend that he veto it. Class actions play an important role in making the courts available to all Americans. When a company profits by violating the rights of or injuring thousands of individuals, but the harm to each is small, a class action may be the only practical way to vindicate their rights and deter similar behavior. State class actions have been brought to remedy injuries stemming from fraud, defective and dangerous products, discrimination prohibited under State law, and negligence causing widespread public health or environmental damage. A class action is the most efficient and practical way to resolve the common issues in these cases. Class actions also can reduce inconsistent judgments and lower judicial costs - benefits to our system of justice and all its participants. H.R. 1875 would mean that a large number of class actions would be transferred from State to Federal court. Transferred class actions that do not meet Federal class certification standards not only would be dismissed from Federal court, but would also be forever subject to removal and dismissal if re-filed as class actions in State court. Those plaintiffs would be denied class relief - in many cases their only effective remedy. As a result, many State residents would effectively be denied access to their own State courts. And State policy choices about class action litigation would be preempted - a dramatic break from our Federal system's traditional deference to State choices about the procedures to be used in their courts. Moreover, H.R. 1875 would move substantial numbers of State class actions to Federal courts at a time when the Chief Justice, among others, has repeatedly expressed serious concerns about the increasingly burdensome workload of the Federal courts. Class actions are among the most resource-intensive cases before the Federal judiciary. H.R. 1875 would unnecessarily overburden the Federal courts with cases that often deal solely with State law. Proponents argue that H.R. 1875 is needed to stop abuses of class actions. But removing these cases to federal court is no solution because class action abuses can occur regardless of venue. In short, while passage of H.R. 1875 will not end the alleged problem of class action abuses, it will impose a high cost on injured plaintiffs, our system of federalism, and the resources of the Federal judiciary. It will limit the availability of class actions as a viable remedy for those with bona fide claims who are unable to afford a suit of their own; it will infringe significantly on State courts' ability to offer redress and provide a convenient forum for their citizens; and it will expand the already overloaded Federal docket, thus threatening the ability of the Federal courts to provide anything resembling swift justice to civil litigants.