It may be a blow to corporate America, but the Senate’s rejection of the Class Action Fairness Act is applauded by plaintiffs’ lawyers.

The US Class Action Fairness Act looks dead in the water after the Senate rejected the controversial reform bill in a move that will be welcomed by the plaintiff bar and dismay corporate America.

The act was put to a vote last week (8 July) securing just 44 votes — 16 short of the 60 threshold needed to proceed with the bill.

The legislation is designed to push more cases from the state courts to the federal courts in order to put a lid on so-called ‘venue shopping’, although the plaintiff bar has claimed it is a politically motivated bid to help big business avoid damaging law suits.

Milberg Weiss Bershad & Schulman partner and top securities litigator Melvyn Weiss — speaking before last week’s vote — said: “The federal courts are bleeding at the moment because they are so under-funded. This bill wants to bring an array of complex cases in front of the federal courts which they do not have the resources to handle.”

The failure to secure the 60-vote threshold is a blow to corporate America.

Thomas Donohue, president of the US Chamber of Commerce, commented: “Our country’s employers and workers have waited long enough for this legislation. This is a sensible bill that serves the best interests of the American people, not trial lawyers seeing jackpot justice.”

The proposed legislation divided the legal establishment between the plaintiff bar and larger law firms representing corporations, who supported the reforms. Previous attempts to cut down on class actions through statutory legislation have been widely regarded as failures.

It now looks almost certain that the bill will be put on hold until after the US election later this year.