Congressional Republicans, emboldened by the GOP’s control over all three branches of the federal government, have launched a frontal assault on consumers with a flurry of bills aimed at crippling the class-action lawsuit.
Class actions are often the only way consumers and other victims can hold big businesses accountable for harms that would otherwise be too small to justify individual lawsuits. Those big businesses and their Republican allies in Washington have long sought to gut the power of class actions.
A small sampling of people who could not have achieved justice without class actions includes Ponzi scheme victims and recipients of blood products tainted with HIV or AIDS.
Whether and how class actions can be “certified” to proceed are governed by complex procedural rules set out and continually reviewed by the judicial branch under the auspices of the Rules Enabling Act. The House bills circumvent—and inject partisan politics into—this longstanding judicial review process.
The existing rules are already restrictive in order to prevent frivolous litigation. The GOP’s bills would rewrite many of the rules to make it nearly impossible for a class action to survive to trial.
U.S. Rep. Jamie Raskin (D-MD) has said the legislation would put class actions under “the guillotine” and would be a big “wet kiss to large corporate polluters and tortfeasors, but gives the finger to millions of American citizens who suffer injuries from these defendants.” And the head of a nonprofit public-interest law organization said that “Christmas has certainly come early for corporate America.”
Several of the bills—which would also affect victims of discrimination, asbestos, medical malpractice, and pollution—have already passed in House of Representatives along party lines. Similar so-called “legal reform” or “tort reform” efforts have passed the House in years past, only to die in the Senate. Even if some of these bills do make it through both houses, it’s unclear whether President Donald Trump would sign most of them.
Here’s a rundown of the deceptively named House resolutions and their progress to date.
“Fairness in Class Action Litigation Act of 2017” (HR 985); “Furthering Asbestos Claim Transparency (FACT) Act of 2017” (HR 906). HR 906 was rolled into HR 985 and the combined final bill passed in the House on March 9, 2017, by a vote of 220 to 201. Together they aim to eviscerate “nearly all facets of class action” and multi-district injury litigation.
HR 985 would require that class members “be ascertainable” as a prerequisite for class certification. Currently, most class members cannot be located until after discovery has been completed and liability determined. This putting of the cart before the horse would close the courthouse doors to most class actions.
HE 985 would also require class representatives to show that all class members have suffered the “same type and scope of injury.” While this seems reasonable in theory, the reality is that among thousands of class members, there are often many similar but different types of injuries that nevertheless resulted from the same wrongdoing. They would not be resolvable in the same lawsuit.
Further still, HR 985 would prevent class representatives from employing class counsel that “have formerly represented the class representative in any matter.” This is a huge disruption—and a potentially unconstitutional interference in the attorney-client relationship that could prevent nonprofits like “the NAACP from bringing multiple cases with the same attorneys.” Moreover, the bill would limit class counsel’s attorney fees in civil rights cases (and other suits in which the plaintiffs seek an injunction) to a percent of the “value of the equitable relief.” This is harmful because it’s difficult or impossible to put a dollar value on a civil rights injunction. As one civil rights attorney put it, “How do you value Brown v. Board of Education?”
Additionally, the bill would stay discovery while certain motions (e.g., to dismiss the case or transfer it to a different jurisdiction) are pending and would allow immediate appeals of class certification as of right (they currently require the approval of the appellate court). Combined, these measures would add years of delay in the middle of class actions and flood appellate courts with countless meritless class certification challenges.
The FACT Act (now part of HR 906) would make it harder for asbestos victims to get paid and would intimidate them by publicizing their names, addresses and the last four digits of their Social Security numbers if they are involved in asbestos litigation.
“The Lawsuit Abuse Reduction Act of 2017” (HR 720) passed the House 230-188 on March 10. HR 720 would make it mandatory for judges to impose money sanctions on attorneys who file “frivolous” cases in federal court. These “Rule 11” sanctions are currently optional and can be avoided if a plaintiff withdraws the allegedly frivolous claim or pleading within 21 days. There’s no evidence that frivolous lawsuits have increased. Instead, this bill would simply discourage attorneys from taking on meritorious but borderline cases and would lead to increased litigation over sanctions orders.
“The Innocent Party Protection Act” (HR 725) passed in the House on March 9, 224-194. It’s intended to make it easier for corporate defendants to remove cases from state courts (where plaintiffs tend to do better) to federal court, where the rules tend to favor defendants.
“The Protecting Access to Care Act of 2017” (HR 1215) would punish people covered under the Affordable Care Act and other government programs (presumably including Medicare and Medicaid) by imposing a $250,000 cap on pain and suffering and other “noneconomic” damages in medical malpractice cases if the good or service was paid for by a government program. A similar law in California has had a devastating effect on victims of medical malpractice here. This is one measure that President Trump would likely sign if it arrived on his desk as he supported limiting malpractice awards during his campaign.