H.R. 1927: The Bill that Further Destroys Accountability for Big Business

Let’s be honest. Class action lawsuits get a bad rap, plain and simple. Over the years and increasingly more so in the recent past, journalists and bloggers have written pieces against these types of cases–cases that afford large numbers of people who have been defrauded, injured or harmed to be represented in civil lawsuits against large companies they would not otherwise be able to bring.

Paul Bland, Jr., Executive Director at Public Justice, in one of his latest articles, states that H.R. 1927, introduced last week in the House Judiciary Committee by Rep. Bob Goodlatte of Virginia, “would make it essentially impossible for Americans to join together in bringing class action lawsuits for nearly any illegal act a corporation might undertake.”

Many times, class members affected by the acts of large corporations are so numerous and their claims so individually small, it is almost impossible for them each to sue in separate court filings. It is hard to imagine what would happen to our already crowded civil court system if each and every class member sued individually. It would flood the courts and create total judicial chaos.

One empirical study, published in 2004 by two law school professors, found that over the course of a decade, the average price of settling a class action lawsuit as well as covering the fees paid to litigators had remained steady, contrary to the position advanced that defending against such lawsuits was taking its toll on Big Business.

Another study, released last October by the Center for Justice & Democracy at New York Law School, lists a variety of class action lawsuits that have been settled over the past decade. From the famous $1.26 billion settlement by Toyota for covering up known defects in cars that made them accelerate out of control to Allstate Insurance Company violating the civil rights of almost five million African-American and Hispanic customers for unfairly charging them higher insurance rates than their White counterparts, the study analyzes the illegal business practices settling defendants agreed to change in the future. This is the true power of the class action lawsuit: the ability to provide financial incentives to huge corporations to follow basic ethical guidelines all the rest of us are expected to follow. Americans should feel safer knowing there is some sort of system in place that polices these corporations. To be sure, there is no corporate police force and no prison we can send a company to for harming or even killing people, violating their civil rights, or for committing petty larceny on a grand scale. As the authors of this study state, “Without the class action tool, corporations and businesses can ignore the law far more easily and operate with impunity.”

While most people may not hear about these class action victories in the mainstream media, they are happening; and they are one of the only ways these companies’ ethical compasses are kept in order. Class action lawsuits have become one of the only tools we have for holding large corporations accountable for their business practices. Without them, as Bland claims, corporate America “runs wild.”

So why then is Congress contemplating the elimination of a civil remedy that benefits so many people?