WASHINGTON (July 20, 2001)—A bill to reform class action personal injury lawsuits in the U.S. has the support of tire and rubber industry associations, although some observers warn that the legislation will have “an up-hill battle.”
The Class Action Fairness Act of 2001 is designed to move national class action lawsuits into federal courts and prevent plaintiffs' attorneys from seizing the lion's share of jury awards.
One of the most common abuses in class actions is personal injury attorneys “venue-shopping” in state courts, according to a spokesman from the Rubber Manufacturers Association.
“They file class actions in small state courts with a history of large judgments,” the spokesman said. “This legislation would take those class actions which are national in scope and move them to federal courts.”
Among other things, the legislation would also offer a stricter definition of “class action” for judicial purposes; require judicial review of coupon and other non-cash settlements to make sure they are equitable for all plaintiffs; forbid larger payments to class members who live closest to the court; and disallow bigger payments to a class representative serving on behalf of a class.
“Class members have been harmed by a number of actions taken by plaintiffs' lawyers, which provide little or no benefit to class members as a whole,” according to the bill's preamble. These include large fees to attorneys while class members get little or nothing; unjustified awards to certain plaintiffs at the expense of others; and the publication of confusing notices that obfuscate plaintiffs' rights.
As with a small business tort reform bill introduced earlier this year, the Class Action Fairness Act is an attempt to achieve some product liability reform on a small scale, the RMA spokesman said. General tort reform, which has been introduced in almost every Congress for the past 20 years, has met with little success because of the opposition of trial lawyers and consumer groups.
Two Virginia congressmen, Republican Bob Goodlatte and Democrat Rick Boucher, are the movers behind both the current bill and a similar bill introduced in the last Congress, the spokesman said. Mr. Goodlatte is the chief sponsor listed of the legislation, while Mr. Boucher is listed as one of 18 co-sponsors.
The RMA spokesman was pessimistic about the bill's chances in this Congress. “It certainly has an uphill battle, particularly in the Senate with the majority going over to the Democrats,” he said.
The Class Action Fairness Act of 2001 has been assigned to the House Judiciary Committee. No hearings had been scheduled as of July 18.
If this bill helps some tire makers avoid frivolous lawsuits, it will translate into the cost of doing business for our members, and help bring that cost down," said Becky McDicken, the Tire Association of North America´s director of government affairs.
The bill passed the House in the last Congress, and Mr. Goodlatte believes he can get it through the House again, according to Ms. MacDicken. "The problem is the Senate, which is typical," she said.