Senate on Track to Lock Consumers Out of Courthouse, Invite More Market Deception

Feb. 9, 2005

Senate on Track to Lock Consumers Out of Courthouse, Invite More Market Deception

Statement of Public Citizen President Joan Claybrook

By defeating amendments that would make the class action bill fair to consumers, the Senate made it exceedingly clear that its allegiance lies with banks, credit card companies, drug manufacturers, big insurance companies and other major corporations that fund campaigns and don’t want to be held accountable for wrongdoing.

The result of this legislation, if enacted into law, will be more abuse and deception of consumers by unscrupulous businesses, because consumers will be locked out of the courthouse.

This bill creates a classic Catch-22 for consumers. Congress will be telling consumers that class actions based on state law must be heard in federal court, but the doors to the federal courthouse will be locked. Federal judges typically don’t allow such suits to go forward; they view them as unmanageable because they are based on a variety of different state consumer protection laws. The Feinstein- Bingaman amendment would have allowed federal judges to hear these cases, but its defeat ensures that corporate lobbyists will achieve their desired results: the elimination of virtually all class actions of significance. This will occur because there is no federal consumer protection law consumers can use to seek remedies.

If this bill is enacted, as it appears it will be, corporate wrongdoers will have a green light to lie, cheat and steal without fear of being held to account. The phrase “consumer beware” will once again be the law of the marketplace.

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