A state’s legal environment is a major contributing
factor in its attractiveness to business. If you’re in the job creation
business, you don’t want your state to show up on the American Tort Reform Foundation’s
list of Judicial Hellholes.
The Arizona Chamber this session has joined with Sen.
Kimberly Yee on Senate Bill 1452, an effort to make significant improvements in
the area of class action lawsuits. It’s a move that will definitely keep Arizona
off the hellholes list. SB 1452 is now a strike everything amendment on SB
1346 offered by Rep. Eddie Farnsworth in the House Judiciary Committee this morning.
Class action lawsuits can be useful vehicles for large
groups of plaintiffs with identical claims, but over the last 20 years there
has been a startling increase in the number of class action lawsuits filed in
the United States. You can’t turn on the TV without seeing a commercial asking
you whether you’ve used a certain product or device that was taken off the
market, and you’ve probably gotten a postcard letting you know you’re eligible
for a few bucks because at some point you did business with a company that was
subject to a class action.
The cost of defending a class action suit and the
possibility, no matter how remote, of losing against a sizeable class of
plaintiffs, is enough to discourage a defendant from going to trial, even if they
have a legitimate defense. The suits are just too expensive and too time-consuming.
Often times, multi-state class action suits are taxing on state resources as
well.
Sen. Yee’s bill (and the Rep. Farnsworth striker) would
require the court to enter written findings after a hearing about whether the
action should be maintained as a class. The bill will also permit an immediate
appeal of class certification decisions and would establish that all
proceedings would be stayed while the appeal is pending. This change would
allow for defendants to obtain review of class certification decision, which
are often the most important legal ruling in the case. The bill will let
plaintiffs seek immediate review of a decision against class certification.
Currently, 12 states, including Alabama, Arkansas,
Connecticut, Florida, Georgia, North Dakota, Ohio, Oklahoma, Tennessee and
Texas allow appeals from a class certification determination by a trial court,
seven others and the federal system provide for appeals with leave of the
appeals court.
We’ve got a very jobs-friendly legal environment
in Arizona, but we should never stop looking for ways to improve. Implementing
the changes in this reform legislation would help to ensure that only those
actions properly suited to the class action mechanism would proceed and would
continue to burnish Arizona’s reputation for a pro-business legal environment.
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