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Class Act

Congress takes a vote on reforming class-action litigation procedures.

This story appears in the October 2002 issue of Entrepreneur. Subscribe »

Business advocates hope the U.S. Senate follows the lead of the House and passes a bill restricting class-action litigation. That would be good news for small businesses, which can get sucked into lawsuits just because they're located where lawyers expect to find a sympathetic court.

For some lawyers, filing and trying class-action lawsuits has become a lucrative business. After identifying some consumer problem, typically in an industry that does business nationwide, they shop for a sympathetic venue before sending out notices to people who might have been affected. A class-action lawsuit is easier to win in some states than others, and some counties are known for judges and juries with a penchant for multimillion-dollar judgments. The Manhattan Institute, a conservative think tank based in New York City, recently reported that the Madison County courthouse in Edwardsville, Illinois, sees more class-action lawsuits than any other jurisdiction except Los Angeles and Chicago. The county had two filed in 1998, 43 last year, and, if the trend continues, will have 78 this year.

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