House to Begin Debate on Bill to Fix Class Action Litigation

On February 7, 2017 Congressman Bob Goodlatte (R-Va.) introduced a Bill in the House of Representatives entitled the “Fairness in Class Action Litigation Act of 2017,” H.R. 985, (The Act). Goodlatte is chair of the House Judiciary Committee. Co-Sponsors of the bill are Congressmen Pete Sessions (R-TX) and Glenn Grothman (R-WI)

This week, the House of Representatives will begin debating the bill. A copy of the proposed Act can be found here.  If passed, the Act could significantly change the procedures governing class actions in federal court. 

A similar bill died in the Senate last year.  

The stated purposes of the Act are to: 

• assure fair and prompt recoveries for class members and multidistrict litigation (MDL) plaintiffs with legitimate claims;
• diminish abuses in class action and mass tort litigation that are undermining the integrity of the U.S. legal system; and
• restore the intent of the framers of the United States Constitution by ensuring Federal court consideration of interstate controversies of national importance consistent with diversity jurisdiction principles. 

The key provisions of the Act are: 

• mandating heightened class certification requirements;
• placing additional obligations on class counsel’s receipt of attorneys’ fees;
• creating procedural restrictions on class plaintiffs and counsel, including in multidistrict litigations (MDLs); and
• providing parties with a new right to appeal class certification decisions. 

insideARM Perspective

This bill is sure to be controversial. It didn’t take sophisticated research to find dozens of articles that have already been written and published on the subject. As expected, the articles are on both sides of the argument.

For example: 

1. The Leadership Conference on Civil and Human Rights, whose website describes the organization as “The nation’s premiere civil and human rights coalition” has already posted a form advocacy letter for interested parties to use when contacting representatives and encouraging them to oppose the legislation.
2. Today, The Hill ran an article entitled “Fix Class Action Lawsuits,” by Lisa Rickard, Opinion Contributor. Rickard notes, “Today, it is lawyers, not consumers, who are the main beneficiaries of class actions.” She provides several examples of cases she believes are abuses of class actions and mass tort proceedings, and are a huge problem for our federal court system, for consumers, and for businesses. She concludes, “Enacting the Fairness in Class Action Litigation Act of 2017 would be a critical step toward correcting those abuses.” Editor’s Note: Ms. Rickard is president of the U.S. Chamber Institute for Legal Reform.
3. The National Law Journal has published an article entitled, “Why Class Action Reform Bill Isn't as Bad as It Seems.” In that post a name familiar to many in the ARM industry, Jay Edelman of Chicago’s Edelson PC, is quoted extensively. Mr. Edelman is a prominent plaintiff’s attorney in the class action world. Oddly enough, Mr. Edelman believes the Act could be a “huge boon to the defense bar.” 

The ARM industry is no stranger to class action litigation. Whether it be Fair Debt Collection Practices Act (FDCPA) claims, Telephone Consumer Protection Act (TCPA) claims, Wage and Hour claims, or claims based upon any number of state laws.

A cursory review of either the our FDCPA Caselaw Chart or our TCPA Caselaw Chart will provide all of the evidence needed to show that the class action system needs reform. The cost to businesses in relation to the actual benefit to consumers is out of balance.