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  • Understanding Class Action Lawsuits: Federal or State Class Actions

Video Transcript: Michigan State vs. Federal Class Actions

There are some differences between class actions in federal court versus state court. And it essentially comes down to the rule that governs the class action. In federal court, there’s one rule. It’s called Rule 23. And that’s the court rule that allows for class actions, and it determines the criteria that one must have to become a class action. The states all have similar rules. They’re not exactly the same. And they vary from state to state.

However, in 1994 or 1995, Congress passed a law called CAFA. It stands for the Class Action Fairness Act. And when Congress passed this law, they essentially said, we think class action should all be in one court system. There were some states that were anti-class action. There were some states that were very pro-class action. And so you had a body a law that really developed different from state to state. And it was affecting the rights of the parties, depending upon where those cases were filed. And so by centralizing the courts where class actions basically were held into the federal court system, Congress recognized that uniformity was good. Uniformity in these cases and how they would be certified, how they would be processed, was good, because Congress knows, as do the courts that handle these cases and the lawyers that work in this field, that class actions can be very powerful cases. They’re very important cases. And so today, there’s not a whole lot of difference between a federal class action and a state class action due to the fact that probably 80% to 85% of class actions all are in federal court.

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