House Republicans come back after their break this week ready to give Volkswagen a huge belated Christmas gift—a bailout. The car company has been reeling from scandal after it admitted that it's been cheating on the air pollution standards test, and it's facing law suits from some 500,000 duped VW owners in the U.S., including hundreds of class action suits, which would be likely consolidated. True to form, House Republicans are plotting a massive corporate bailout for the company, David Dayen reports, one that would knee-cap American consumers deserving redress.
The combination of regulatory oversight and class-action litigation can keep companies in line. But a bill in Congress consisting of a little more than 100 words would not only prevent Kaplan from seeking justice but also cripple virtually all class-action lawsuits against corporations. It’s known as the "Fairness in Class Action Litigation Act," but lawyers and advocates call it the “VW Bailout Bill.”
The bill, which will get a vote on the House floor in the first week of January, follows a series of steps by the judiciary to block the courthouse door on behalf of corporations. "There's no question the Supreme Court has been moving in that direction to limit access to courts," said Joanne Doroshow, executive director of the Center for Justice and Democracy. "But Congress has never done something like this, trying to step in and wipe out class-actions."
The simplicity of the VW Bailout Bill belies the chaos it would create. Proponents like the U.S. Chamber of Commerce, the bill's leading lobbyist, say they merely want to get rid of "non-injury" class-action cases, based on potential damages from defective consumer products or corporate actions that have yet to result in harm. Lawyers for class-action litigants argue that defective products deserve compensation even if the consumer hasn't yet been injured.
But the bill goes much further, stating that courts may not certify class-action suits unless the plaintiff "affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives."
The VW owners haven't been injured physically, but they've sure as hell been injured financially. Their cars have lost pretty much all of their trade-in value. The language is so vague says Andre Mura, one of the lawyers representing VW owners, "it could mean the same model car, the same defeat device, the same emissions system, the same consumer harm. […] When really Volkswagen engaged in the same course of conduct on all their vehicles."
Of course, the legislation would go far beyond the current Volkswagen cases, making the hurdles for any class action suit high and expensive which is pretty much a dream for the Chamber of Commerce's dream. It would also probably mean the end to any challenge to VW—outside of a class action suit, the damages are small enough in the individual cases that it would be hard for individuals to pursue.
It's been clear for a long time now that congressional Republicans really aren't at all interested in representing actual people and their interests. Not when they've been fighting tooth and nail to neuter the Consumer Financial Protection Bureau. They want corporate America (and Germany) to be able to screw you with impunity. In this specific case, it's likely that the Senate Democrats can stop it and quite possible that if they couldn't stop it, President Obama would veto it.