6/30/2015
It seems every few years or so, the specter of tort reform appears in the halls of Congress to test the political winds. Last week, while the winds of freedom emanated from the Supreme Court steps and the air from dozens of collective exhales from the White House over the ACA, the ghost of tort reform quietly re-entered Capitol Hill. The House of Representatives’ Judiciary Committee Chair, Bob Goodlatte (R-VA), and Civil Justice Subcommittee Chair, Trent Franks (R-AZ) introduced HR 1927, the Fairness in Class-Action Litigation Act (FICALA) of 2015 in April. On June 24th, the bill passed through the Judiciary Committee and is now set to be debated on the House floor. The bill seeks to limit who can opt into a class-action lawsuit, separated by the severity of injury of the party. According to the Judiciary Committee’s press release, the bill states, “uninjured or non-comparably injured parties can still join class actions, but must do so separately from parties that experienced more extensive injury.” As Goodlatte notes, the bill is a simple, one-page document “that furthers a common sense principle that should apply to class action lawsuits in the future.” It is unknown as of yet what kind of momentum the bill will have in the House of Representatives, let alone in the Senate; however Republicans, who control both Houses of congress have generally favored tort reform. The bill in its entirety reads as follows:
No Federal court shall certify any proposed class seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.
Unsurprisingly, the proposed legislation is drawing praise from tort-reform supporters and decries of “Orwellian” by detractors given the title of the bill. President of the U.S. Chamber Institute for Legal Reform (ILR), Lisa A Rickard, commended the Judiciary Committee for passing the reform, saying ““Class action lawsuits are supposed to be about efficient delivery of justice to individuals, but have become a tool of the plaintiffs’ lawyers to game the system of justice and inflate their compensation. The FICALA legislation would curb overbroad and no-injury class actions while preserving legitimately injured plaintiffs’ ability to sue, as well as resources to compensate them.” Meanwhile, Christine Hines, attorney for the civic group, Public Citizen reacted by saying, “The backers of this bill aren’t even trying to hide their intentions. The aim is to wipe out class-action lawsuits.” Language was added to the bill to clarify that the bill excludes civil rights cases, and only affects economic and monetary losses in order to strengthen support for the measure.
Noteworthy L.A. Times columnist David Lazarus and others note a key phrase in the bill’s language, “the same type and scope,” as being an unfair barrier to consumer’s legal rights. Lazarus explains the repressive nature of the bill by drawing an example of a hypothetical securities-fraud case. If the person filing the lawsuit lost $200, but other parties lost $100 and $50 respectively, current rules would allow them to file as a class since they were both victims of the same fraud, however, under FICALA, they would have to file separate suits. Adam Prom, a Chicago-based consumer lawyer says, “If your injury is different by just $1, it would preclude joining a class action.” Lazarus also notes that in auto defect cases, plaintiffs with broken legs would have to file separately from those with broken arms. Class-action lawsuits often involve cases where damages are low and the number of plaintiffs is high, making the legal costs of pursuing separate lawsuits much less tenable, Lazarus notes, however, that the famous “Erin Brokovich” case against PG&E yielded a $333 million settlement and led to landmark environmental reforms.
Sources:
House of Representatives’ Judiciary Committee – Press Release
JD Supra – Matthew Gagnon and Gerald Maatman
Los Angeles Times – David Lazarus
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