Class Action Bill Harms Seniors
As early as the week of June 21, the U.S. Senate will consider legislation (S. 2062) that would make it much more difficult to bring class action lawsuits that are needed to hold corporations accountable for ripping off consumers. The bill, which is opposed by the AARP, is a blatant attempt by the business lobby to restrict consumer access to the courts.
This bill is particularly detrimental to the rights of seniors, because seniors are often targeted by unscrupulous companies for such frauds, including:
• predatory lending practices
• telemarketer scams
• misleading billing information
• defective products or services sold to homeowners
As a result, seniors are often the beneficiaries of class action lawsuits. In one recent consumer class action, nearly all the beneficiaries were seniors. Sparks v. AT&T was a suit against AT&T for hiding, through misleading and incomplete billing information, charges for phone rentals. Their intent was to discourage older people who were used to leasing their phones from purchasing phones after the AT&T break-up, and a class action lawsuit brought refunds to tens of thousands of seniors across the country.
The proposed class action legislation will restrict your rights to stop such corporate fraud by pushing class action suits from state courts, where they have traditionally been adjudicated, to overburdened federal courts, which have been hostile to consumer lawsuits.
In addition, federal courts are currently unable to certify nationwide class action suits, meaning that if the bill is passed in its current form consumers in each state would have to bring the lawsuit over and over again on a state-by-state basis, as opposed to being able to benefit from court rulings in states other than their own.
A solution to this last problem is the “consumer amendment” being offered by Sen. Jeff Bingaman of New Mexico, which would permit nationwide cases to proceed when economy of scale makes them necessary. The ATT case is a perfect example of why the Bingaman amendment is necessary. While the case (which was tried in a state court) returned a substantial amount to consumers on a nationwide basis, there were fewer than a hundred class members in some individual states. Because the federal courts currently won’t certify nationwide class actions, in many states the case would not involve enough money to make a class action suit viable.
See also AARP’s Letter to Sen. Orrin Hatch Opposing Class Action Bill S.2062 and Urging Support of Bingaman Amendment*
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