Pending Legislation Would Protect Corporations at the Expense of Consumers

Pending Legislation Would Protect Corporations at the Expense of Consumers

Big, bad changes may be coming to the U.S. civil litigation court system. Four Republican-sponsored “tort reform” bills are currently making their way through Congress. Each of these pieces of pending legislation would protect corporations at the expense of consumers. And perhaps to no surprise, the bills are backed by the U.S. Chamber of Commerce and dozens of the country’s largest corporate interest groups.Pending Legislation Would Protect Corporations at the Expense of Consumers

Innocent Party Protection Act

The Innocent Party Protection Act is supposed to allow judges to evaluate whether a defendant has been improperly named in a lawsuit. Proponents believe it will curb gamesmanship in litigation. The bill’s cheerleaders want to provide expanded access to “neutral” federal courts.

Generally speaking, corporate defendants do not prefer less predictable state court litigation. The act would allow corporations to remove litigation from state court to federal court. Unfortunately, this bill simply shifts the upper hand in gamesmanship from consumer plaintiffs to corporate defendants, which are usually much better positioned to exploit litigation loopholes.

We should also reject the premise that state courts are not neutral arbiters of the law. This is especially true where state law issues dominate the claims giving rise to the lawsuit.

And according to the American Association for Justice, this bill is nothing more than a license for corporate forum shopping. If enacted, the bill would hamper consumer plaintiffs’ ability to hold corporate wrongdoers accountable.

Fairness in Class Action Litigation Act

This bill would limit class action litigation in federal court to classes of persons with “injury of the same type and scope.” Long-standing case law already limits classes to similarly-situated plaintiffs. But this legislation takes that requirement much further.

The Fairness in Class Action Litigation Act limits lawsuits to those who suffer the exact same damages resulting from a defendant’s wrongdoing. The bill would effectively wipe out a vast number of consumer class actions. After all, many plaintiffs suffer grevious damages — but different damages — as a result of corporate misconduct. As pointed out in the Litigation Journal of the American Bar Association, the bill’s same-type-and-extent requirement provides an extraordinary and unprecedented escape hatch for corporate defendants.

The bill would effectively force judges to deny certification to otherwise meritorious class action plaintiffs. And it overweights a class action plaintiff’s burden to demonstrate affirmatively that all class members have suffered the exact same damages. That is patently unfair, since plaintiffs are often harmed in exactly the same way, but to different extents.

Lawsuit Abuse Reduction Act

This bill goes after plaintiff’s lawyers. The Lawsuit Abuse Reduction Act would roll back a 1993 amendment to Rule 11 of the Federal Rules of Civil Procedure. The bill creates mandatory sanctions for attorneys found to have insufficiently investigated the facts of a claim prior to filing.

Cue the procedural posturing. According to the American Association for Justice, this bill would incentivize corporate defendants to drag out litigation by filing unwarranted motions for attorney’s fees. The bill is a corporate defense attorney’s pipe dream.

Protecting Access to Care Act

The final “tort reform” bill under consideration would place a federal cap of $250,000 on state court jury verdicts for non-economic damages against healthcare and medical providers. Yet state court damages limits have always been a matter of state law. This bill would turn that long-held constitutional history on its heads. Limiting pain and suffering to $250K isn’t going to solve anyone’s problems. Except perhaps corporate underwriters.

The Pending Legislation Would Protect Corporations at the Expense of Consumers

While “Fairness” and “Protection” and “Innocence” appear quite prominently in the titles of these bills, they all have a singular and disturbing purpose: to shield corporate defendants from accountability in the courts.

Meanwhile, three of these bills already passed the House of Representatives on March 9, 2017. Hopefully, the Senate, dubbed the world’s most deliberative body, will reject these legislative efforts. Congresspeople should protect the majority of their constituents instead of simply rewarding the best lobbyists.

About Brian V. Lee 308 Articles
Brian V. Lee is the Washington, D.C. State Chair of the National Association of Consumer Bankruptcy Attorneys and the lead attorney at Lee Legal. His practice focuses on bankruptcy, business turnaround, and civil litigation.