A Failure of Fairness
When corporate executives gush over any bill with the word “fairness” in its title, consumers had best check their wallets. The proposed Class Action Fairness Act, which big-business leaders and their friends in the U.S. Senate may pass Tuesday after years of trying, is a distressing example.
Class-action suits join together people who claim similar injuries from another’s wrongdoing, letting those who couldn’t ordinarily afford a lawyer prod corporations to improve workplace safety, protect the public’s health or clean up pollution.
To supporters of the bill, the lawyers who represent wronged consumers, victims of sex discrimination or residents of polluted communities are largely in it to shake down companies for millions of dollars. Settlements from such suits, they say, shrink corporate profits, dry up jobs and drag down the national economy.
To be sure, some class actions allege trivial injuries, if they are injuries at all, such as the suit against a video chain by customers who claimed they paid excessive late fees on rentals.
In many others -- suits involving thousands of injured workers or patients with defective hip implants, for example -- lawyers have arranged multimillion-dollar fees for themselves while doling out a pittance to their injured clients.
New court rules adopted last year already require federal judges to review and approve all class-action settlements to ensure that injured plaintiffs, not lawyers, are best served. The Class Action Fairness Act simply incorporates into statute those rules now in effect. That’s the bill’s sop to consumers.
But in the name of curbing frivolous claims, the bill would snuff out many worthy ones, eliminating any chance for injured parties to get a settlement or trial. The bill would transfer nearly all class actions from state courts, where most such lawsuits are filed, to federal courts, subjecting them to mandatory and time-consuming hearings.
For example, judges would have to assess the distribution of class members across states, apply a formula in the bill and, in many cases, hear additional testimony before deciding whether the suit should proceed in state or federal court.
Federal judges already have more than enough to do; that’s why Chief Justice William H. Rehnquist opposes this bill. The House version, passed last summer, would apply retroactively, requiring suits already filed, even those in which settlements have been reached but not yet paid, to start over again under the new rules.
The more than 400 corporate lobbyists who have spent some $40 million to win passage of this bill have gotten lawmakers’ attention. Despite opposition from virtually every environmental, consumers’ and patients’ rights group, plus state chief justices and California Atty. Gen. Bill Lockyer, Senate leaders have not allowed a single hearing on the bill in advance of Tuesday’s scheduled vote. Now, who thinks that’s “fair”?
