By Harold Kim
Executive Vice President, U.S. Chamber Institute for Legal Reform
Today, the U.S. Chamber Institute for Legal Reform (ILR) filed comments at the Mississippi Supreme Court against a petition to allow class action lawsuits in the state’s courts. Quite simply, the proposal is a solution in search of a problem.
As the Chamber’s comments point out, under federal law, Mississippians can already file class action lawsuits in the state’s federal courts. Since Congress enacted the Class Action Fairness Act in 2005, virtually all interstate class actions disputing more than $5 million must be heard in federal court, so allowing state-level class actions in Mississippi would serve little purpose.
The main argument in the petition favoring state-level class actions falls flat. It claims that without them, most class actions will end up in federal court forcing judges basically to guess at how state courts would interpret the law. This fails to acknowledge that most class actions would end up in federal court anyway, and that our system requires federal courts to interpret state law, both in class actions and other cases. ILR’s comments point out that established law guides most federal court decision making in such cases, and that the Mississippi Supreme Court has invited federal courts to refer difficult questions on state law to it.
Additionally, ILR’s comments cite that the current federal class action system promotes abusive lawsuits that enrich lawyers instead of benefitting consumers. It notes numerous recent examples of class action lawsuits that led to big pay days for the lawyers who brought them, but little or no money for consumers in the class. ILR points out that importing class actions into state courts would only expand a system that plaintiffs’ lawyers already widely abuse.
Finally, allowing state-level class actions would be bad for Mississippi’s economic competitiveness. According to 2017 Lawsuit Climate Survey: Ranking the States, conducted by Harris Poll and recently released by ILR, Mississippi’s lawsuit climate ranks number 44 out of 50 nationally. This matters because an all-time high 85 percent of business executives in the survey said they take a state’s lawsuit climate into consideration when deciding where to locate or expand. While Mississippi has taken some positive steps in recent years to improve, it can’t afford to step backward.
Hopefully the Mississippi Supreme Court will realize that state-level class actions are all downside and no upside.