Proposed Law Could Be a New Attack on Civil Rights
A chilling little bill is working its way through Congress. It could have the effect of ending the class action as an American institution.
The legislation, the Fairness in Class Action Litigation Act, passed the House last week. If it becomes law, it will be one more perverse disservice to the working class who are said to have driven the 2016 election, because the main losers will be ordinary Americans.
In February, the chairman of the House Judiciary Committee, Representative Bob Goodlatte, Republican of Virginia, announced the proposed legislation in Orwellian terms, as a bill to “improve access to justice for American consumers.” He pushed it through the committee on a strict party-line vote only six days later, without a hearing, even though it is much longer and more complex than the bill that passed in 2016. The bill is such a mess that some experts say its main effect will be protracted litigation over its meaning.
The curious thing is the degree to which average Americans have been convinced that lawyers, and the law that is there to protect them, are their foes. Proponents of bills like the Fairness in Class Action Litigation Act stress the small individual recoveries class actions sometimes generate, the large lawyers’ fees and anecdotes that make lawsuits seem ridiculous, like the famous, though misrepresented lawsuit over McDonald’s coffee.
That is all quite misleading and it is a shame. If Congress kills the class action, many laws protecting ordinary people will become unenforceable. Nobody would pay a lawyer to bring most individual cases under our antifraud, product safety, antitrust, civil rights or employment laws, for example. The individual harm is usually small, though the policy is crucial and the overall social injury may be in the hundreds of millions of dollars.
And, indeed, so far from being a “fairness” measure to aid “consumers,” the legislation would crown a decades-long campaign of the United States Chamber of Commerce and other business interests, abetted by an increasingly conservative Supreme Court and Republicans in Congress, with no goal but to make consumer class recoveries impracticable.
The court has imposed various demanding new pleading requirements, and has upheld class-action waivers in mandatory arbitration clauses buried in the small print of consumer contracts. The lower courts have piled on other difficulties, especially through extremely demanding evidentiary requirements.
While the new class-action bill is longer and more complex than the bill that passed the House last year, its business end is the same: a requirement that every individual member of the plaintiff class suffered the “same type and scope of injury.” Proponents say such a rule is needed to preclude recovery by uninjured plaintiffs, which may seem persuasive to the uninitiated, but it is like the claim that we need voter identification laws to stop voter fraud.
The problem of ensuring individual injury has been routinely handled without difficulty for years through trial (or settlement) claims administration. Even the Supreme Court refused to impose proof of injury to all class members when business interests recently requested it.
But the rule would have one very real consequence: Most claims will be much harder to bring on a class basis. Imagine an antitrust challenge to price fixing by foreign manufacturers of goods sold to customers in the United States. It may be impossible to show that every purchaser suffered the “same type and scope” injury, whatever that means, or even that every single class member paid inflated prices at all. A few may have negotiated their way out of harm, although which ones did can be hard to tell, at least before trial.
But without a class action, the potential class members would most likely have no practical way to seek a recovery and foreign corporations would be free to prey on American consumers. All kinds of other cases will pose this same problem.
The Fairness in Class Action Litigation Act throws in a grab bag of other new provisions, most of them with little effect but to complicate or otherwise frustrate litigation. The consequence will be to make cases unattractive to the plaintiffs’ lawyers who shoulder the huge financial risks, and for the nonprofit organizations that bring many civil rights claims, leaving many Americans with no feasible way to enforce their rights at all.
For all these reasons, the bill already has a chorus of critics, civil rights and labor groups among them, as well as trial lawyers. The full body of the American Bar Association, leading scholars of the law of litigation and critics from the defense bar have also raised their voices. One can only hope Republicans will listen to those criticisms and not sell out the working people whose populist enthusiasm put them in control.
NY Times 3/13