Class Action Reform Boosted by Franchise Community

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Washington, DC-The International Franchise Association (IFA) has announced its support for the Class Action Fairness Act (HR 2341), a bill sponsored by U.S. House Representatives Bob Goodlatte (R-VA) and Rick Boucher (D-VA) that could curb class action lawsuit abuse. The bill would require all complaints to be written in plain English, protect defendants from settlements that would cause them to suffer a net loss, and change other requirements regarding the locations of plaintiffs and the size of the damages they seek.

IFA chair and Mail Boxes Etc. president and CEO Jim Amos hailed the legislation, acknowledging the implications for franchised businesses. IFA and its members support class action legislation as the first step in needed litigation reform.

"Attorneys may go after franchises in class action suits thinking they are digging into deep corporate pockets, when in fact they are threatening the stability of a network of perhaps thousands of individually owned and operated small businesses," Amos says.

One of the goals of the legislation is to allow large, multistate class action suits to be moved to federal courts, something that concerns the American Association of Franchisees & Dealers.

"The proposed legislation simply makes it more convenient and less costly for large corporations to defend class actions, and more difficult and expensive for small plaintiffs to bring them," says W. Michael Garner, AAFD spokesperson and a franchisee attorney with Dady & Garner PA in Minneapolis.

The bill was introduced in the House on June 27 and is currently in committee. -International Franchise Association, American Association of Franchisees and Dealers

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