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Class-Action Suits are Under Siege

A new law introduced by House Judiciary Committee Chairman Bob Goodlatte, a Republican from Virginia, may have serious, and negative, effects on one of the most important tools citizens have against private companies and the government: class action lawsuits.

H.R. 985, also known as the Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017, was introduced Feb. 9 and passed through the House March 9. It has been passed to the Senate for consideration. The bill, in essence, puts heavy stipulations on class action lawsuits, making it more difficult for groups of individuals to band together for common causes.

The origins of the class action lawsuit (then called group litigation) go as far back as the 1200s in England, when class action was necessary because the difficulties of transportation made it unfeasible to hear several individual cases on the same matter. By the late 1700s, class action became the exception rather than the rule in England, as the British legislative system swung back to individual trials and as influential corporations formed and distrusted the suits.

In the United States, though, it was just beginning. In 1833, Equity Rule 48 was put into place in the U.S., allowing group representation when a large number of similar cases had been filed. Later, rules changed so that all members of the suit did not need to be present during the case. Several rule changes followed, but the foundation of the modern class action essentially came into place in 1966, when opt-out class actions allowing litigants to drop out of all facets of a class suit, and, if desired, proceed individually) were put into place.

According to HG.org, there are several advantages to class-action suits. The first is lower costs. Generally, class actions are larger cases, and attorney and court fees may be split among the plaintiffs. This allows people who may not be able to afford to take on a corporation or large entity the opportunity to have their case heard.

Larger groups also mean the potential of a larger settlement. If a business is being sued, it is possible that the business may go bankrupt, and, as a result, only individual plaintiffs that have sued early may receive settlements.

Class action lawsuits also offer efficiency. The court system hears one case instead of several, and plaintiffs’ actions are consolidated; for defendants, they have only one court case to defend, as well.

However, H.R. 985 could change that. Jenn Rolnick Borchetta, the lead attorney that prosecuted the class action suit overturning New York City’s stop-and-frisk policy, states in The Marshall Project that the new law primarily benefits large corporations and institutions if it passes. Borchetta suggests that if the bill becomes law, which Goodlatte said is a means of making sure lawyers don’t use loopholes to bilk corporations of billions of dollars, it will also have the effect of making it harder for other class action suits, including civil rights cases. The bill would also amend suits so that appeals by defendants may be immediate and allows for the potential of lengthening the timeline of trials – in essence keeping nonprofits and other groups with limited resources from prosecuting. It will also require litigants in class actions to have nearly identical, instead of similar, experiences.

A number of groups are fighting against the bill, but only time will tell if the bill will become law.

Guajardo and Marks of Dallas have the experience and resources you need and are proud to help fellow Texans with legal problems Contact us online or by phone at 972-534-2839