Five years ago, President George W. Bush chose Madison County as the most appropriate place to sign into law the Class Action Fairness Act of 2005.
"Madison County juries are responsible for awarding large verdicts," he said at the time. "And the vast majority [of plaintiffs] are not from Madison County."
The bill shifted from state to federal courts most class action lawsuits involving geographically dispersed plaintiffs and damages expected to exceed $5 million.
Bush promised that the bill would "help protect people who are wrongfully harmed while reducing the frivolous lawsuits that clog our courts, hurt the economy, cost jobs, and burden American businesses." And it has.
To our great relief, the Class Action Fairness Act also undermined Madison County's dubious distinction as a venue of choice for forum shoppers. A U.S. Supreme Court decision last Monday should undermine it still further.
In Hertz Corporation v. Melinda Friend, the Court ruled, unanimously, that a company's principal place of business is not where most of its business is transacted, but where its top executives work.
"Lower federal courts have often metaphorically called that place the corporation's 'nerve center,'" Associate Justice Stephen Breyer observed. "We believe that the 'nerve center' will typically be found at a corporation's headquarters."
Although Hertz does most of its business in California, it is headquartered in New Jersey, and the California employees pursuing a class action suit against the company now must do so in federal, not state, court.
The implications for class action lawsuits of the type for which Madison County has become infamous are obvious. It will now be harder for forum-shopping plaintiffs attorneys to drag out-of-state corporations into court in plaintiff-friendly venues.
We salute the entire Supreme Court for striking a blow against gamesmanship in the legal arena, and we thank them for giving the citizens of Madison County another step up to help us climb out of our judicial hellhole.
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