Archived Issues

U.S. legal reform to keep class actions out of states

U.S. lawmakers have passed the Class Action Fairness Act of 2005, a bill that requires class-action lawsuits be filed in federal courts rather than in state courts. Proponents of the change contend that it will lead to more rational and consistent rulings, while opponents argue that the federal court will be overloaded with cases, leading it to dismiss many of the suits.

Tobacco class-action cases have littered state courts for many years. Bonnie Herzog, a tobacco analyst with Smith Barney, says, “Although this news is positive in general for the tobacco industry, we do not necessarily believe that class actions pose a big threat to the industry. Furthermore, this type of legislation would have been a bigger help to the industry if it was passed 10 years ago.”

The new rules won’t affect pending anti-tobacco class-action suits, including the notorious “lights” class-action cases that have been filed in several state courts.