On Friday, the House passed the so-called Fairness in Class Action Litigation Act. And as is often the case, the bill actually has nothing to do with fairness, except for making the court system less fair.
In particular, the bill would prohibit federal courts from certifying any class action unless the party pursuing the class action demonstrates “that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.” This would make most class action lawsuits virtually impossible.
Lawyers have called it the “VW Bailout Bill”:
In the Volkswagen case, for example, “it could mean the same model car, the same defeat device, the same emissions system, the same consumer harm,” Mura says. “When really Volkswagen engaged in the same course of conduct on all their vehicles.” Defense attorneys could claim that a class representative who released fewer emissions because they drove fewer miles than their colleagues, or drove in harsher weather, or with lower tire pressure, should be excluded from the case. That could either whittle down classes to limit damages or disqualify them from certification.
And the applications go beyond Volkswagen. “In a mortgage fraud case, the class might have all been deceived in same way, but the documents signed might have been inconsistent,” says Andrus. “Or with for-profit schools, they might have paid different tuition or taken different classes.” Andrus has battled these tactics before, but the congressional bill would codify them into law. “There’s no question this was written by a defense lawyer whose job it is to defend corporations,” she says.
Without a class-action option, VW customers would have little recourse. “The damages are not enormous in the sense that I could hire individual counsel,” says George Farquar, a scientist and small business owner from Livermore, Calif., who is part of a class-action suit against the carmaker. “It’s amazing this legislation is being considered.”
The bill also includes language from the Furthering Asbestos Claim Transparency (FACT) Act of 2015, which provides disincentives to victims seeking reimbursement for their injuries from an asbestos settlement trust set up through a Chapter 11 bankruptcy reorganization by making their personally identifiable information publicly available through the Internet and by establishing burdensome new reporting requirements on these asbestos settlement trusts.
Here’s a longer description of the bill from the Office of the Minority Whip:
This bill would change the rules of the federal tort system by prohibiting federal courts from certifying any class action unless the party pursuing the class action demonstrates, through admissible evidentiary proof, “that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.”
With respect to federal class action lawsuits, under current law, individuals with injuries based on the same operative facts and law can hold entities such as corporations accountable for unlawful conduct by joining in a class-action lawsuit. Such lawsuits can proceed even when their injuries vary in certain ways, such as where one plaintiff receives a head injury and another suffers a broken rib from the same kind of faulty automobile airbag. H.R. 1927 would not allow such individuals to pursue a class action lawsuit because they did not suffer the exact same type of injury and would thereby make it more difficult for these victims to obtain just compensation for their injuries. As a result, H.R. 1927 will effectively shield corporate wrongdoers while denying plaintiffs access to the justice they deserve by forcing victims to bring separate lawsuits, which would be much more costly, burdensome, and time-consuming.
Additionally, H.R. 1927 would further burden an already overextended court system. By requiring that each individual in a suit have an injury of the “same type and scope,” the bill would exponentially increase the number of suits by forcing parties to file suits in smaller groups or even individually, leading to delays and additional unnecessary demands on our judicial system. H.R. 1927 is opposed by a broad coalition of consumer protection, public interest, labor, and civil rights groups, including the American Association for Justice, the AFSCME, the American Civil Liberties Union, Consumer Federation of America, Consumers Union, Public Citizen, and the Leadership Conference on Civil and Human Rights.
By requiring that each member of a class action has the same type and scope of injury, the bill would make it almost impossible for plaintiffs to pursue most class actions in federal court by effectively requiring them to prove the merits of their case twice – once at the certification stage and once during the trial on the merits of their case, which will result in increased litigation costs and delay and thereby deter plaintiffs from pursuing creditable claims.
The requirements imposed by this bill are based on the false premise that federal courts are routinely certifying class action cases in instances when not every class member has suffered the alleged injury. This bill will create unnecessary legal disputes that will raise litigation costs and delay justice for those who have suffered serious injuries.
The bill also incorporates unrelated language from H.R. 526, the Furthering Asbestos Claim Transparency (FACT) Act of 2015, which provides disincentives to victims seeking reimbursement for their injuries from an asbestos settlement trust set up through a Chapter 11 bankruptcy reorganization by making their personally identifiable information publicly available through the Internet and by establishing burdensome new reporting requirements on these asbestos settlement trusts.
This language would change the rules of the tort system with regard to asbestos-related injuries by requiring quarterly reports of claims made against the trusts and any payouts made by the trusts to asbestos victims. These reports, which would include the name, exposure history, and amount of payment made from the trust to each claimant, are required to be made available on the court's public docket that, in turn, can be accessed through the Internet. The disclosure of such sensitive information in a public manner creates new risks for asbestos victims. Such information could be used for inappropriate purposes by prospective employers, insurers, and lenders as well as by identity thieves.
The asbestos provisions are opposed by asbestos victims and their families, the Military Order of the Purple Heart, the AFL-CIO, the American Federation of State, County and Municipal Employees, Asbestos Disease Awareness Organization, the Environmental Working Group, Public Citizen, the Alliance for Justice, various consumer organizations, and legal representatives for future asbestos personal injury claimants with respect to asbestos bankruptcy trusts.
When the House last considered the asbestos provisions as H.R. 982 on November 13, 2013, all but five House Democrats opposed it. In the Statement of Administration Policy, the President's senior advisors stated that they would recommend he veto this bill. Members are urged to VOTE NO.
The bill passed 211 to 188.
16 Republicans voted against it, and 1—Morgan Griffith (VA-09)—voted present.
Here are the 16:
Justin Amash (MI-03)
Michael Burgess (TX-26)
Carlos Curbelo (FL-26)
Ryan Costello (PA-06)
Mario Diaz-Balart (FL-25)
Jimmy Duncan (TN-02)
Mike Fitzpatrick (PA-08)
Chris Gibson (NY-19)
Walter Jones (NC-03)
Frank LoBiondo (NJ-02)
Tom Massie (KY-04)
David McKinley (WV-01)
Pat Meehan (PA-07)
Mike Rogers (AL-03)
Steve Russell (OK-05)
Ryan Zinke (MT-AL)
There were roll call votes for 9 amendments.
On the Democratic side, there were three repeat offenders: Jim Costa (8), Collin Peterson (6), and Kurt Schrader (4).
And then on the Republican side, there 8 who crossed party lines multiple times: Carlos Curbelo (8), Steve Russell (7), Walter Jones (5), Chris Gibson (4), John Katko (4), Tom Massie (4), Jimmy Duncan (3), and Pat Meehan (2).
Now, on to the amendments themselves….
Steve Cohen (TN-09) offered an amendment to exempt claims for monetary relief against the perpetrator of a terrorist attack by victims of such attack.
It failed 158 to 211.
2 Republicans—Collin Peterson (MN-07) and Kurt Schrader (OR-05)—voted against it.
8 Republicans voted for it:
Carlos Curbelo (FL-26)
Jimmy Duncan (TN-02)
Chris Gibson (NY-19)
Walter Jones (NC-03)
John Katko (NY-24)
Tom Massie (KY-04)
Pat Meehan (PA-07)
Elise Stefanik (NY-21)
John Conyers (MI-13) offered an amendment to exempt claims for monetary relief pursuant to Title VII of the Civil Rights Act of 1964, which prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, and religion.
The amendment failed 163 to 221.
3 Democrats voted against it: Jim Costa (CA-16), Collin Peterson (MN-07), and Kurt Schrader (OR-05).
4 Republicans voted for it:
Carlos Curbelo (FL-26)
Chris Gibson (NY-19)
John Katko (NY-24)
Steve Russell (OK-05)
Ted Deutch (FL-21) offered an amendment to exempt claims brought by a gun owner seeking monetary relief involving the defective design or manufacturing of a firearm.
It failed 163 to 232.
4 Democrats joined Republicans in voting against it:
Jim Cooper (TN-05)
Jim Costa (CA-16)
Collin Peterson (MN-07)
Kurt Schrader (OR-05)
Gwen Moore (WI-04) offered an amendment to exempt causes of action arising under the Fair Housing Act or the Equal Credit Opportunity Act from the bill's requirements.
It failed 172 to 229.
Two members of each party crossed party lines: Carlos Curbelo (FL-26) and Steve Russell (OK-05) voted for it with the Democrats, and Jim Costa (CA-16) and Collin Peterson (MN-07) voted against it with the Republicans.
Gwen Moore (WI-04) then offered a second amendment, this time to exempt causes of action arising from a pay equity claim under Title VII of the Civil Rights Act or the Equal Pay Act from the requirements of the bill.
It failed 177 to 224.
1 Democrat—Jim Costa (CA-16)—voted against it.
6 Republicans voted for it:
Carlos Curbelo (FL-26)
Bob Dold (IL-10)
Chris Gibson (NY-19)
Walter Jones (NC-03)
John Katko (NY-24)
Steve Russell (OK-05)
Maxine Waters (CA-43) offered an amendment to exempt claims brought by students, service members and veterans seeking relief from institutions of higher education that have engaged in fraudulent activities and unfair practices.
It failed 177 to 223.
3 Democrats voted against it: Jim Costa (CA-16), Collin Peterson (MN-07), and Kurt Schrader (OR-05).
And then 7 Republicans voted for it:
Carlos Curbelo (FL-26)
Chris Gibson (NY-19)
Walter Jones (NC-03)
John Katko (NY-24)
Tom Massie (KY-04)
Pat Meehan (PA-07)
Steve Russell (OK-05)
Hank Johnson (GA-04) offered an amendment to strike the "scope" and "economic loss" language from the bill.
It failed 177 to 223.
2 Democrats voted against it: Jim Costa (CA-16) and Collin Peterson (MN-07).
6 Republicans voted for it:
Justin Amash (MI-03)
Carlos Curbelo (FL-26)
Jimmy Duncan (TN-02)
Walter Jones (NC-03)
Tom Massie (KY-04)
Steve Russell (OK-05)
And 1 Republican--Morgan Griffith (VA-09)--voted present.
Sheila Jackson Lee (TX-18) offered an amendment to require a defendant that requests information from a bankruptcy asbestos trust to first disclose to the plaintiff and the trust the median amount of claims paid by the defendant by disease category within the preceding 5 years.
It failed 174 to 228.
1 Democrat—Jim Costa (CA-16)—voted against it, and 2 Republicans—Carlos Curbelo (FL-26) and Steve Russell (OK-05)—voted for it.
Jerry Nadler (NY-10) offered an amendment to replace the bill's requirement for asbestos trusts to disclose detailed personal information with aggregate reporting of demands received and payments made by the trusts.
It failed 179 to 222.
1Democrat—Jim Costa (CA-16), again—voted against it.
7 Republicans voted for it:
Carlos Curbelo (FL-26)
Jimmy Duncan (TN-02)
Walter Jones (NC-03)
Tom Massie (KY-04)
David McKinley (WV-01)
Steve Russell (OK-05)
Ryan Zinke (MT-AL)