House Republicans Push Radical Class Action Reforms

Last Wednesday, Congressman Bob Goodlatte (R-Va.), Chairman of the House Judiciary Committee, introduced the Fairness in Class Action Litigation Act of 2017 (H.R. 985), a sweeping set of proposals that would effectively kill many class actions.

The bill proposes to:

  • require that “the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives” (This poorly worded proposal was widely panned as the “Volkswagen Bailout Bill” when Rep. Goodlatte last introduced it in 2015, because it would have wiped away class actions and excused the worst corporate misconduct.)
  • require a class action complaint to identify whether the named plaintiff has ever been represented by class counsel before; if yes, no class action may be certified (Don’t we want plaintiffs to be represented by experienced counsel, and why does a prior representation automatically foreclose a future class proceeding where the same attorney represents the same client?)
  • restricts attorney fee awards (Courts, of course, already closely scrutinize class recoveries and attorney fee awards.)
  • limit a court’s authority to certify issue classes by requiring that “the entirety of the cause of action from which the particular issues arise satisfies all the class certification prerequisites” (Because Judge Posner is wrong that it is more efficient, “in terms both of economy of judicial resources and of the expense of litigation to the parties,” to decide some issues on a class basis rather than all issues in separate trials, see Butler v. Sears, Roebuck & Co.)
  • require that discovery be stayed in any class action in which a motion to dismiss is filed (Courts often deny these requests because a stay of discovery early in the case is highly inefficient. Now, inefficiency is mandated.)
  • require that, in multi-district litigation, a plaintiff submit adequate evidentiary support for any personal injury claim seeking redress within 45 days of transfer or direct filing, on pain of dismissal with prejudice. The submission must demonstrate that “there is evidentiary support (including but not limited to medical records) for the factual contentions in plaintiff’s complaint regarding the alleged injury, the exposure to the risk that allegedly caused the injury, and the alleged cause of the injury.” (This is free discovery for defendants and another basis to seek early dismissal. Mass torts appear to be the target here. No indication what demonstration suffices.)

There are good corporations that make safe products that contribute to our lives. These companies play by the rules. There are also those that do not. These proposals are a gift to bad actors who commit widespread fraud and injury.

We’ll be tracking this bill closely.