Originally assigned to FIN                                                                                            AS PASSED BY HOUSE

Now JUD-related

ARIZONA STATE SENATE

Fifty-Fourth Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B.1367

reconstruction contracting; local tax; exemption.

(NOW: class action settlements; attorney general)

            As passed by the Senate, S.B. 1367 prohibited a city, town or taxing jurisdiction from levying a tax on the proceeds of sales or gross income derived from reconstruction contracting, unless certain criteria are met.

            The House of Representatives adopted a strike-everything amendment that does the following:

Purpose

            Establishes a statutory right for the Attorney General (AG) to file a motion to intervene in a consumer class action proceeding.

Background

            The AG may bring a lawsuit on behalf of the state's citizens for certain illegal conduct. The AG has the statutory right to intervene in certain cases, such as racketeering cases and cases alleging a state statute is unconstitutional (A.R.S. §§ 13-2314.04 and 12-1841). Except in statutorily defined circumstances, the AG has a right to intervene only in the same situation as any other nonparty; when the AG claims an interest in the action that would be impeded by its absence, and none of the existing parties adequately represent that interest (Ariz. R. Civ. P. 24).

            Rule 23 of the Arizona Rules of Civil Procedure governs class action lawsuits. The claims, issues or defenses of a certified class may be settled, voluntarily dismissed or compromised only with the court's approval (Ariz. R. Civ. P 23).

            There is no anticipated fiscal impact to the state General Fund associated with this legislation

Provisions

1. Requires the AG to protect Arizona residents from consumer class action settlement abuse.

2. Deems the AG as statutorily authorized to protect Arizona's interest in preventing consumer class action settlement abuse.

3. Allows the AG to file a motion to intervene in a consumer class action proceeding to represent the interests of the state and Arizona class members by seeking an order that rejects or amends the proposed consumer class action settlement if the AG believes that a proposed consumer class action settlement:

a) does not provide fair, reasonable and adequate restitution or other relief for class members; or

b) unlawfully or unfairly compensates class counsel or named class members over unnamed class members.

4. Allows the AG to file a motion to intervene regardless of whether a class member in Arizona has objected.

5. Provides that the AG is serving the interests of Arizona and all class members in Arizona by intervening.

6. Declares that inaction by the AG in connection with a particular consumer class action settlement does not affect the rights of the state or the AG's ability to act as outlined.

7. Defines class action, class members and proposed consumer class action settlement.

8. Contains a legislative intent clause.

9. Becomes effective on the general effective date.

Amendments Adopted by the House of Representatives

· Adopted the strike-everything amendment relating to class action lawsuits.

House Action

JUD                 3/27/19     DPA/SE    6-4-0-0

3^rd Read          5/27/19                       31-29-0

Prepared by Senate Research

May 27, 2019

JA/kja