A recent article by David Lazarus in the Los Angeles Times delivers a harrowing glimpse into the Fairness in Class Action Litigation Act (H.R. 1927) and its potentially devastating ramifications to the justice system should it pass in Congress. If class action lawsuits are already becoming endangered due to the systematic use of forced arbitration, H.R. 1927 would ultimately guarantee total extinction.
The disingenuously titled bill, endorsed by the U.S. Chamber of Commerce and sponsored by U.S. Reps. Bob Goodlatte (R-Va.) and Trent Franks (R-Ariz.), would effectively eradicate class action lawsuits due to its sweeping measures and preposterous restrictions. Franks has unabashedly lauded the measure as a means to “allow those with serious injuries to have their own day in court.”
The truth is radically different.
In reality, the bill prohibits individuals with serious injuries or lesser grievances from accessing the legal system at all. Under the current system, class actions may be brought if class members experience similar injuries or complaints. If this bill passes those types of class actions will move forward only if “each proposed class member suffered an injury of the same type and scope as the injury of the named class representative or representatives” (emphasis added) – a nearly impossible standard to meet — hence the extinction.
Under the “same type and scope” stipulation, the following claims would be precluded from joining a class action suit:
• Any claim that is off by even a margin of $1 (all claims, for example, in a securities fraud case, would have to exactly match that of the class representative).
• Any claim that does not involve the same injury to the same body part (all physical injuries, for example, in a cars’ faulty brakes case, would have to pertain to a broken leg, not a broken arm or other ailment pertaining to the leg).
With such arbitrary and absurd demands, even the most historically important class action lawsuits would have been prohibited from proceeding. In a landmark suit for public health that was highly publicized by the movie “Erin Brockovich,” Anderson v. Pacific Gas & Electric Co., led to the civil settlement of $333 million to Californian residents injured by contaminated groundwater. If this bill had been law, none of the residents would have received just compensation. The variation in their injuries, ranging from diverse types of cancer to birth defects, would have precluded them from banding together in a class action lawsuit.
The unrelenting attempts made by the U.S. Chamber of Commerce to stifle class actions is testament to the fact that such suits are a powerful means by which to hold corporations accountable for wrongdoing. Class action lawsuits are usually the most convenient and affordable mechanism to obtain compensation, particularly if the claims are for small sums of money. Without this legal avenue, individuals would have to singlehandedly battle corporate giants who have access to an incomparable amount of legal and financial resources.
With that high hurdle, most claims would never reach the desks of a judge. And that is the real intent of the bill.