New House Bill Threatens Future of Class Actions

If you feel that class actions, which have been a feature of federal court practice in their modern form for  the past 50 years, are an important tool for civil justice in our country, then please call or write your representative in the United States House of Representatives and urge her or him to vote against H.R. 985 (and, if it passes the House, then call or write your Senators, too, urging opposition to the bill  there).

Numerous civil lawsuits that seek to protect civil rights (e.g., sex, race, age, or other discrimination), worker’s rights (fair wage laws), consumer protections, enforcement of our antitrust laws (to promote fair and full competition, a bedrock of capitalism), depend on the availability–in appropriate circumstances–of the class action device. The legal rights of  plaintiffs in these cases often simply cannot economically or effectively be advanced on an individual (rather than collective) basis.

Certain targets of these actions (think, for example, certain trade groups and financial institutions, like Wells Fargo, which was caught up in a scandal last year over bogus accounts its employees opened for unwitting customers, as found by the Consumer Financial Protection Bureau, “CFPB”), have captured the ears of certain members of Congress, who have advanced a bill seeking, essentially, to gut the class action option under the guise of “fairness.” These same special interests are also attempting to gut the CFPB. As the Wells Fargo controversy reveals, our system needs to move to protect and expand the availability of class actions–not thwart them. (Wells Fargo has attempted to defeat accountability in class actions by asserting mandatory arbitration clauses–a tactic that the CFPB has promulgated a rule to prohibit).

For a thoughtful perspective by a non-profit social justice law firm, see here.

What I find particularly frustrating is that our federal class action rule, Rule 23, is the result of such a balanced, careful, and deliberate rules making process.  This rule has received extensive analysis and its application has been carefully tuned by the federal courts over the last 50 years. The Supreme Court and the federal Judicial Conference have created a deliberative rules review and amendment process–subject to congressional and Supreme Court review and approval–for changing our federal court rules, including Rule 23. I have interacted with several of these individual over the years regarding amendments to Rule 23, and written for the ABA of their work. The committees are staffed with respected judges selected by the Supreme Court, renowned and highly regarded academics, and prominent counsel who represent both defendants and plaintiffs. It truly is a “fair and balanced” system by any measure. H.R. 985 seeks to upend, and do an end run around, that entire process. There is no good reason for it to be enacted that I can see.

Please call or write your Representative and urge her or him to vote against H.R. 985, which may be voted on as soon as this coming Wednesday, March 8, 2017.