Florida tightens its restrictions on class action lawsuits.

• Jurisdiction: United States
• Date: 01 March 2007
• Author: Rapprich, III, Francis X.

What was once a faint peal in the distance reverberated louder over the past few years and rose to a clang this summer following the 2006 legislative session. The bell of tort reform tolled loudly, first with the repeal of joint and several liability and then with a law that could change the landscape of class action litigation in Florida.

On June 7, 2006, Florida Gov. Jeb Bush signed off on legislation (H.B. 7259/S.B. 2304) that will narrow the scope of permissible claims in class action lawsuits filed in Florida state courts. (1) The act, (2) which took effect on July 1, 2006, and is codified as F.S. [section]768.734, imposes more stringent requirements on potential class action claimants by addressing both their capacity to sue and the damages they may recover. Nonresident claimants no longer have broad access to Florida state courts, but rather must fit within specific exceptions to the new general rule requiring class members to be Florida residents. Additionally, claimants must prove actual damages in order to maintain a class action lawsuit to recover statutory penalties under certain chapters of the Florida Statutes.

The bill, sponsored by the Judiciary Committee and Senator Baker in the Senate and the Judiciary Committee and Representative Simmons in the House, passed both the House and Senate unanimously. It garnered a House vote of 115 yeas to zero nays, and a Senate vote of 40 yeas to zero nays, indicating bipartisan support for the idea that class action litigation should be curtailed in some manner.

While this is not the state legislature's first foray into regulation of class action lawsuits, it might be the most dramatic. Past examples of legislative regulation include expressly authorizing class action for certain subject matters such as condominiums; (3) providing that certain provisions of the insurance code should not be construed as authorizing class action; (4) prohibiting class action lawsuits for certain subject matters such as Y2K-related suits; (5) prohibiting the use of funds to maintain a class action related to civil legal assistance for the poor; (6) and making limits on punitive damages inapplicable in certain actions. (7) In contrast to these more esoteric regulations that affect only particular types of claims or claimants, the new law could drastically reduce the size and number of class action claims brought in Florida state courts. (8) Time will tell if this latest effort amounts only to more tinkering under the hood--or the beginning of a major overhaul.

Prior to July 1, 2006, class membership was not limited to Florida residents in class action lawsuits filed in Florida state courts. However, there were instances where courts imposed residency restrictions based upon exceptional needs when determining class certification, such as in R.J. Reynolds Tobacco Co. v. Engle, 672 So. 2d 39 (Fla. 3d DCA 1996). In Engle, a products liability action against tobacco companies, the Third District Court of Appeal modified a trial court's decision to certify a nationwide class with over one million members by limiting the class to Florida residents. The appellate court reasoned that courts must consider the effect of class certification on the judicial system itself, citing the considerations involved in determining whether the "superiority" requirement for class certification (9) has been met. (10) Although there is nothing inherently wrong about certifying a national class in a state court action ..., where, as here, the class contains so many members from so many different states and territories that it threatens to overwhelm the resources of a state court, it is settled that such a broad-based class is totally unmanageable and cannot be certified. (11)

Has Florida's legislature declared there is something inherently wrong with certifying a national class in a state court action? While the new law does carve out some exceptions, those exceptions have nothing to do with class size or manageability, which seems to indicate such considerations were not primary in the...