Aim­ing to limit class ac­tions

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House GOP wants class- ac­tion plain­tiffs each to have suf­fered “the same type and ex­tent” of harm.

Many com­pa­nies al­ready for­bid you from join­ing other dis­grun­tled cus­tomers in fil­ing a clas­s­ac­tion law­suit, forc­ing you in­stead to take your beef to an ar­bi­tra­tor.

A bill mak­ing its way through the Repub­li­can­con­trolled House would di­min­ish your le­gal op­tions even more.

“The back­ers of this bill aren’t even try­ing to hide their in­ten­tions,” said Chris­tine Hines, con­sumer and civil jus­tice coun­sel at the ad­vo­cacy group Public Citizen. “The aim is to wipe out class- ac­tion law­suits.”

How? By re­quir­ing that ev­ery­one in the suit have iden­ti­cal in­juries or losses, such as ex­pe­ri­enc­ing a bro­ken leg be­cause of a car’s faulty brakes. Peo­ple with bro­ken arms would have to file a sep­a­rate law­suit against the car­maker.

The shame­lessly ti­tled Fair­ness in Class Ac­tion Lit­i­ga­tion Act ( HR 1927) was ap­proved last week by the House Ju­di­ciary Com­mit­tee. It now heads to a vote by the full cham­ber.

The leg­is­la­tion is the brain­child of Ju­di­ciary Com­mit­tee Chair­man Bob Good­latte ( R- Va.) and Rep. Trent Franks ( R- Ariz.), who are pass­ing it off as a much­needed im­prove­ment to the U. S. le­gal sys­tem.

“The Fair­ness in Class Ac­tion Lit­i­ga­tion Act is a sim­ple, one- page bill that fur­thers a com­mon- sense prin­ci­ple that should ap­ply to class- ac­tion law­suits in the fu­ture,” said Good­latte.

Said Franks: “Clas­s­ac­tion law­suits should al­low those with se­ri­ous in­juries to have their own day in court. The Fair­ness in Class Ac­tion Lit­i­ga­tion Act would do just that.”

Ac­tu­ally, it wouldn’t. Just the op­po­site.

It’s strik­ing that such a far- reach­ing bill would fit on one side of a nap­kin. Here it is in its en­tirety:

“No fed­eral court shall cer­tify any pro­posed class un­less the party seek­ing to main­tain a class ac­tion af­fir­ma­tively demon­strates through ad­mis­si­ble ev­i­den­tiary proof that each pro­posed class mem­ber suf­fered an in­jury of the same type and ex­tent as the in­jury of the named class rep­re­sen­ta­tive or rep­re­sen­ta­tives.”

The key phrase is the re­quire­ment for “the same type and ex­tent” of harm. Un­der the ex­ist­ing sys­tem, peo­ple can join a class if they share sim­i­lar griev­ances against the de­fen­dant.

In a se­cu­ri­ties fraud case, for ex­am­ple, it wouldn’t mat­ter if you lost $ 200 and the named plain­tiff lost $ 100. Your losses stem from the same al­leged fraud.

Class ac­tions are es­pe­cially use­ful in sit­u­a­tions where losses are rel­a­tively small. You might not go to the trou­ble of fil­ing a law­suit on your own. But joined with scores of oth­ers with sim­i­lar in­ter­ests, a class- ac­tion law­suit can be an ef­fec­tive way of seek­ing re­dress for all.

Look what would hap­pen if the Fair­ness in Class Ac­tion Lit­i­ga­tion Act be­came law. In that se­cu­ri­ties fraud ex­am­ple, you’d be el­i­gi­ble to join the class ac­tion only if you ex­pe­ri­enced “the same type and ex­tent” of harm — that is, if you also lost ex­actly $ 100.

“If your in­jury is dif­fer­ent by just $ 1, it would pre­clude join­ing a class ac­tion,” said Adam Prom, a Chicago lawyer who spe­cial­izes in con­sumer cases.

Busi­nesses ar­gue, with some jus­ti­fi­ca­tion, that class ac­tions can be abused by un­scrupu­lous lawyers, who pack on ad­di­tional plain­tiffs in hopes of squeez­ing a fat­ter set­tle­ment out of the ac­cused com­pany. Cer­tainly that hap­pens.

But for ev­ery ques­tion­able class- ac­tion case, there’s an An­der­son vs. Pa­cific Gas and Elec­tric Co., which was made fa­mous by the movie “Erin Brock­ovich.”

PG& E was re­quired to pay a civil set­tle­ment of $ 333 mil­lion af­ter it was found that the util­ity had con­tam­i­nated ground­wa­ter be­neath the Cal­i­for­nia town of Hink­ley with a chem­i­cal that caused a va­ri­ety of can­cers and birth de­fects.

Such di­ver­sity of harm clearly wouldn’t be tol­er­ated un­der the Fair­ness in Class Ac­tion Lit­i­ga­tion Act.

“The cen­tral ques­tion in a class ac­tion is — and should re­main — whether a cor­po­ra­tion has en­gaged in mis­con­duct that harmed con­sumers,” said Linda Lipsen, chief ex­ec­u­tive of the Amer­i­can Assn. for Jus­tice, which rep­re­sents trial lawyers.

Pas­sage of the Fair­ness in Class Ac­tion Lit­i­ga­tion Act, she said, would leave cor­po­ra­tions “off the hook if they sell de­fec­tive prod­ucts, en­gage in wide­spread price­fix­ing schemes or de­fraud con­sumers with de­cep­tive advertising.”

The U. S. Cham­ber of Com­merce sees it dif­fer­ently. The pow­er­ful busi­ness lobby is a key backer of the bill.

Lisa Rickard, pres­i­dent of the cham­ber’s In­sti­tute for Le­gal Re­form, said af­ter last week’s Ju­di­ciary Com­mit­tee vote that class ac­tions “have be­come a tool of the plain­tiffs’ lawyers to game the sys­tem of jus­tice and in­flate their com­pen­sa­tion.”

In March, the head of the U. S. Cham­ber of Com­merce, Tom Dono­hue, de­clared at a busi­ness fo­rum that his or­ga­ni­za­tion is ac­cus­tomed to get­ting its way in court.

“We spend half of our time try­ing to re­duce the num­ber of suits by clas­s­ac­tion lawyers and the other half of our time su­ing the hell out of the gov­ern­ment,” he said.

It seems pretty clear who’s gam­ing the sys­tem.

Jac­que­lyn Martin As­so­ci­ated Press

REP. BOB GOOD­LATTE ( R- Va.) co- wrote a bill that seeks to se­verely re­strict class- ac­tion law­suits.

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