U.S. Capitol building in Washington, D.C. (Photo: Mike Scarcella/ALM)
The U.S. House of Representatives on Thursday passed a controversial legislative proposal that one legislator said would put class actions in a “straitjacket.”
The bill, as well as a separate proposal on joinder that also passed the House, is part of the largest tort reform push in more than a decade on Capitol Hill. The House was expected to pass the measures, but their future is less certain before the Senate.
The Fairness in Class Action Litigation Act of 2017 would make several changes designed to reduce the number of class actions, particularly those that critics say seek large payouts for speculative or nonexistent injuries. The bill passed by a vote of 220 to 201.
“This bill doesn’t prevent any claim from being brought as a class action,” said Rep. Blake Farenthold, a Republican from Texas who spoke in favor of the measure. Instead, he said, it ensures that compensation goes to the victims, rather than to the attorneys. “Imagine that: Incentivizing lawyers to do the best work for their clients. That’s what this bill does.”
The bill also would tie attorney fees to the amount of settlements, restrict who plaintiffs attorneys could represent and halt discovery early on in the cases—all areas that took up much of the debate on Thursday on the House floor.
“The overriding purpose here is really to give the class action mechanism the guillotine,” said Rep. Jamie Raskin, a Democrat from Maryland. “It’s not the guillotine, but it’s a straitjacket.”
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During Thursday’s debate, lawmakers highlighted specific cases. Proponents pointed to cases they deem ludicrous, such as a suit against the Subway restaurant chain over the length of its footlong sandwiches. Meanwhile critics of the bill noted that it would have hampered class actions filed over Volkswagen’s emissions scandal.
Lisa Rickard, president of the U.S. Chamber of Commerce’s Institute for Legal Reform, said after the vote: “Today, the House has done its job to ensure that class members get paid first and that plaintiffs’ lawyers only earn a percentage of what class members actually receive.”
Linda Lipsen, CEO of the American Association for Justice (AAJ), called the bill “offensive.”
“Today, the House of Representatives made it clear that it would rather shield powerful corporations from being held accountable for scamming, injuring, and discriminating against Americans, than protect our right to pursue justice,” she said. “This one-sided legislation only advances the interests of corporations that have killed and cheated Americans. The Senate should recognize this ridiculous bill for what it truly is—a corporate handout—and reject it.”
In a press call earlier Thursday, the AAJ joined the Impact Fund and Public Justice in calling for the House to reject the bill.
“It’s pretty clear the bill would wipe away the vast majority of class actions,” F. Paul Bland, executive director of Public Justice, told reporters.
Thursday’s hearing also included debate over another proposal, folded into the class action bill, that requires trusts of bankrupt companies to file quarterly reports disclosing payments to victims of mesothelioma and other cancers caused by asbestos. Advocates claim plaintiffs attorneys have withheld evidence in lawsuits brought on behalf of people who also have claims against the trusts.
The House also approved in a separate 224-194 vote the Innocent Party Protection Act of 2017, which is designed to halt the practice of “fraudulent joinder,” which the defense bar says has helped plaintiffs attorneys remand federal cases to more plaintiff-friendly state courts by adding a local defendant to a case. Raskin called the bill an “assault on federalism.”
Another bill, the Lawsuit Abuse Reduction Act of 2017, is due for a vote on Friday. That bill would mandate that judges impose monetary sanctions against attorneys who file frivolous cases in federal courts. Under current law, attorneys have 21 days to withdraw their cases to avoid getting sanctioned.
At least three other tort reform measures have been introduced, the most notable of which would impose a cap of $250,000 in noneconomic damages in medical malpractice cases, limiting awards for pain and suffering.
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