The “Class Action Fairness Act of 2005,” signed into law in early 2005, is unfair to consumers and workers. It will take most class actions out of state courts and force them into the already overcrowded and overburdened federal court system. This class-action bill, weighed down with special-interest benefits, will make it much more difficult for those who have been harmed by corporate and other wrongdoers to obtain compensation.

Personal trust class action
The following personal trust class-action case settled in 2004 illustrates the potential value of class-action lawsuits litigated in state courts. When several banks merged, the purchasing bank notified beneficiaries that there had been personal trust overcharges and those fees would be reduced. Nearly 6,500 plaintiffs brought a class action alleging that for nearly 20 years the banks had overcharged fees for managing personal trusts and were now failing to properly compensate trust beneficiaries. Beneficiaries’ attorneys argued that the defendants…

• should have paid compound, not simple, interest to beneficiaries.
• Owed beneficiaries compensation for lost use of trust funds.
• owed plaintiffs profits from overcharged fees.
• were liable for punitive damages.

The banking defendants settled for damages of
$35 million. On appeal, the defendants also settled for
profits banks made on overcharged fees for $33 million.