Congress Passes Legislation transferring Class Action Lawsuits to Federal Courts
WASHINGTON, D.C. – Congress approved legislation this week, The Class Action Fairness Act, that would transfer most large, multi-state class action lawsuits to federal court. The Building Owners and Managers Association (BOMA) International applauds lawmakers in passing this legislation as the commercial real estate industry has been advocating for years that federal lawmakers rewrite the rules for class-action lawsuits to prevent those who strategically target state legal systems.
A class-action case allows plaintiffs to combine their claims against a common defendant into one specific case. Under the legislation, class action suits seeking $5 million or more would be argued in state courts if the primary defendant and more that one third of the plaintiffs are from the same state. If fewer than one third of the plaintiffs are from the same state as the primary defendant, the case would go to federal court where more stringent rules govern cases.
“Class action reform legislation is needed to address the damaging effect of frivolous lawsuits,” said BOMA International Chairman and Chief Elected Officer Steven W. Ford, senior managing director, facilities management, Cushman & Wakefield, Inc. “There must be corporate accountability and a forum for citizens with legitimate grievances, but consumers are ultimately paying the high price of excessive legal claims.”
This legislation benefits building owners and managers due to their fiscal returns being directly linked to the profitability of their tenants, and the full occupancy of their buildings. Those who lease office building space are forced to downsize their businesses or default on their leases as they continually combat unwarranted lawsuits.
Congress gave final approval of the legislation this week, with the Senate voting 72-26 and the House approving it with a 279-149 vote. President Bush was extremely satisfied as he signed the bill into law today for class-action reform has been one of his priority agenda items for his second term.
Founded in 1907, the Building Owners and Managers Association (BOMA) International is a dynamic international federation of over 100 local associations. The 19,000-plus members of BOMA International own or manage over 9 billion square feet of downtown and suburban commercial properties and facilities in North America and abroad. BOMA’s mission is to enhance the human, intellectual and physical assets of the commercial real estate industry through advocacy, education, research, standards and information. For more information, please visit the BOMA International Web site at www.boma.org.
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Contact: T.J. Sandvig, (202) 326-6354, tsandvig@boma.org.