Proposed Bill Could Make It Harder To File Class Action Lawsuits

Critics warn that proposed legislation designed to “reform” class action lawsuits, appears to be engineered to block consumers from joining together to pursue claims against corporations and big businesses. 

The legislation, H.R. 985, was introduced by Republicans in the House of Representatives on February 10, and has been referred to the Judiciary Committee.

Known as the “Fairness in Class Action Litigation Act of 2017”, the bill seeks to add new requirements for plaintiffs attempting to bring a class action lawsuit, where they are seeking damages on behalf of a large number of individuals.

Class action claims are designed to level the playing field when a number of individuals suffer the same or similar injuries, allowing cases to be brought on behalf of a large group through one representational lawsuit. The process has long been upheld as a way to increase the efficiency of the legal processes and lower litigation costs, with plaintiffs able to pursue recoveries in situations where the costs involved in pursuing each claim individually may be too great for any plaintiff to bear.

The proposed new requirements place the burden on plaintiffs to identify each class member, forbids class representatives from being a previous client of the class action lawyer, and prevents attorneys from being paid until all class members have been paid. In addition, each class member must prove they suffered the same “type and scope” of injury.

The bill would also require every class representative to describe the circumstances by which they were included in the complaint, and would force them to reveal any other class action lawsuits where they played a similar role.

The bill would not only affect class action lawsuits, but would impact multidistrict litigation (MDL) procedures as well, where similar lawsuits are consolidated for pretrial proceedings, yet are still considered individual claims. The bill would require every plaintiff to present evidence of injury before being allowed into the MDL, which may counter efforts by judges to streamline filing procedures and move the litigation forward efficiently.

Critics say that the bill’s measures are designed to be prohibitively restrictive, and will have a major effect on the ability of consumers to hold companies accountable for wrongdoing that results in damages for a number of individuals. For example, they note that proving the same type and scope of injury is almost impossible in discrimination cases and many similar claims. They also point out that prohibitions on being a previous client of the class lawyer more or less prevents class action lawsuits by investors, who may use the same attorney for investment lawsuits.

The complaints also say that requiring attorneys to wait until all class participants are paid is unrealistic, since some cases can take decades to resolve, yet the attorneys’ offices must still spend substantial time and resources working on resolving such cases without compensation. As a result, the change may greatly impact the ability of law firms to pursue class action claims.