LRM #IMS437 - Statement of Administration Policy on HR3789 Class Action Ju

      You will not receive a paper copy of this LRM.  Please note that House
floor action on HR 3789 is scheduled for Friday, October 2nd.  Therefore
the deadline is firm.  If we do not receive your response by the deadline
we will assume that you have no objection to the attached SAP.

Total Pages: ____


LRM ID: IMS437
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
Washington, D.C. 20503-0001

Thursday, October 1, 1998

LEGISLATIVE REFERRAL MEMORANDUM

TO:                      Legislative Liaison Officer - See Distribution below

FROM:           Jeffrey A. Weinberg (for) Assistant Director for Legislative
Reference
OMB CONTACT:    Ingrid M. Schroeder
                                PHONE: (202) 395-3883 FAX: (202) 395-3109
SUBJECT:           Statement of Administration Policy on HR3789 Class
Action Jurisdiction Act of 1998

DEADLINE:                2:30pm   Thursday, October 1, 1998

In accordance with OMB Circular A-19, OMB requests the views of your
agency on the above subject before advising on its relationship to the
program of the President.  Please advise us if this item will affect
direct spending or receipts for purposes of the "Pay-As-You-Go" provisions
of Title XIII of the Omnibus Budget Reconciliation Act of 1990.

COMMENTS: HR3789 is scheduled for House floor action on Friday, October
2nd. Therefore the above deadline is firm.
DISTRIBUTION LIST

AGENCIES:
61-JUSTICE - L. Anthony Sutin - (202) 514-2141
11-Administrative Office of the U.S. Courts - Michael W. Blommer - (202)
273-1120
25-COMMERCE - Michael A. Levitt - (202) 482-3151
lOS-Securities and Exchange Commission - Susan M. Ochs - (202) 942-0016
l1S-TREASURY - Richard S. Carro - (202) 622-0650

EOP:
David J. Haun
Steven D. Aitken
Robert G. Damus
Sarah Rosen
Julie A. Fernandes
Elena Kagan


Derek A. Chapin
Michelle Peterson
John THOMPSON
Kate P. Donovan
Peter G. Jacoby
Sara Wilson
LRM ID: IMS437 SUBJECT:       Statement of Administration Policy on HR3789
Class Action Jurisdiction Act of 1998


RESPONSE TO
LEGISLATIVE REFERRAL
MEMORANDUM

If your response to this request for views is short (e.g., concur/no
comment), we prefer that you respond bye-mail or by faxing us this
response sheet.  If the response is short and you prefer to call, please
call the branch-wide line shown below (NOT the analyst's line) to leave a
message with a legislative assistant.

You may also respond by:
         (1) calling the analyst/attorney's direct line (you will be
connected to voice mail if the analyst does not answer); or
         (2) sending us a memo or letter
Please include the LRM number shown above, and the subject shown below.


TO:             Ingrid M. Schroeder Phone: 395-3883     Fax:  395-3109
                Office of Management and Budget
                Branch-Wide Line (to reach legislative assistant): 395-3454

FROM:                                                    (Date)

                                                         (Name)

                                                         (Agency)

                                                         (Telephone)


The following is the response of our agency to your request for views on
the above-captioned subject:

               Concur

        ______ No Objection

        ______ No Comment

               See proposed edits on pages

               Other:

               FAX RETURN of _____ pages, attached to this response sheet

DRAFT -- NOT FOR RELEASE
October 1, 1998
(House)
 ."
H.R. 3789 - Class Action Jurisdiction Act of 1998
(Hyde (R) Illinois and 10 cosponsors)

The Administration strongly opposes House passage of H.R. 3789 which would
grant Federal district courts jurisdiction in almost all class action
cases where any class member is a citizen of a state different from any
defendant.  This would have the effect of transferring a significant
number of class actions into Federal court and O&federalizing08 class
action standards.  States should be permitted to manage their own courts
unless it can be demonstrated that there is a nationwide problem
interfering with the fair adjudication of cases.   Since this has not been
demonstrated the responsibility for handling class action litigation
should continue to be shared between the State and Federal systems.

Class action litigation provides an important mechanism for vindicating
the rights of plaintiffs whose individual claims would not warrant
separate litigation and to resolve large numbers of related claims in a
single action. H.R. 3789 also would require class action cases that are
not certified in Federal court to be remanded to State courts and stripped
of their class allegations, even if such a class could have been certified
under applicable State standards.    This provision would eliminate a viable
remedy for individuals suffering injuries who could not otherwise afford
to bring suit on their own and would significantly infringe on State
court sO , ability to offer redress to their citizens.

H.R. 3789 would move substantial numbers of State class actions to Federal
courts at a time when the Chief Justice, among others, has expressed
serious concerns about the workload of the Federal courts. A study by the
Federal Judicial Center demonstrated that class actions are much more
resource-intensive than other kinds of civil litigation.  Particularly at
a time when so many vacancies on the Federal bench exist, moving virtually
all class actions to Federal courts would be counterproductive.

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   FI