National Organizations Oppose H.R. 1927, Legislation That Would Destroy Federal Class Action Rights

Wednesday, April 29, 2015

For Release
April 29, 2015

Contact
Joanne Doroshow, Nicole Reustle
212.431.2882
joanned@centerjd.org
nicoler@centerjd.org

 

NATIONAL ORGANIZATIONS OPPOSE H.R. 1927, LEGISLATION
THAT WOULD DESTROY FEDERAL CLASS ACTION RIGHTS

 

New York, NY – More than 50 national and state organizations sent a letter to Congress today expressing strong opposition to legislation that “would effectively eviscerate consumer, employment and civil rights class actions.”  The bill, H.R. 1927, is scheduled for a hearing today in the U.S. House Judiciary Committee Subcommittee on the Constitution and Civil Justice.
 

Organizations signing the letter includes a broad array of prominent consumer, civil rights, immigration, labor, environmental, health, food and product safety, employment, housing, senior citizen, children’s, low-income and legal services organizations, among others.  The full letter is below.
 

Class action lawsuits are typically brought when a company practices a pattern of discrimination or receives a large windfall through small injuries to large numbers of people, allowing harmed individuals to band together to challenge this wrongdoing in court.  According to the groups, H.R. 1927 would prevent “[m]ost victims of civil rights violations or discriminatory practices” from bringing class actions.  “Brown v. Board of Education could not have proceeded under H.R. 1927,” said the letter. “In addition,” they said, “laws enacted to protect consumers from predatory practices, such as credit and debt collection abuses” would be shut out of court “despite pervasive company misconduct.”  The letter lists numerous examples of “recent, important class actions that … never would have been certified [as class actions] under H.R. 1927.”
 

H.R. 1927 would establish restrictive new “injury” criteria before a federal judge could allow a federal class action to proceed.  To further illustrate the impact of H.R. 1927, the Center for Justice & Democracy re-released its 2014 class action study, First Class Relief, a compilation of 150 recent class action lawsuit settlements that had widespread public benefit.  Said the report’s author, Joanne Doroshow, Executive Director of the Center for Justice & Democracy, “Our re-release of First Class Relief features a ‘strikethrough,’ demonstrating which cases could not have been brought if this bill were law.  Of the 150 cases in the report, only 30 cases could still be brought and only because those cases were settled in state court.  All 120 federal court cases would be barred by H.R. 1927’s restrictive criteria.  This terrible bill would wipe out one of the most important tools for justice we have in America, class action lawsuits.”
 

The First Class Relief re-release can be found here

 

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April 29, 2015

Hon. Trent Franks, Chairman
Subcommittee on the Constitution and Civil Justice
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515

Hon. Steve Cohen, Ranking Member
Subcommittee on the Constitution and Civil Justice
Committee on the Judiciary
U.S. House of Representatives
Washington, DC 20515
 

Dear Chairman Franks and Ranking Member Cohen:
 

The Subcommittee on the Constitution and Civil Justicewill soon consider H.R. 1927, the “Fairness in Class Action Litigation Act of 2015,” a bill that would effectively eviscerate consumer, employment and civil rights class actions.  The undersigned groups strongly oppose this bill.

Class members must already meet common requirements spelled out in F.R.C.P. 23, which requires that the class have the same type of injury stemming from the same unlawful conduct.  However, H.R. 1927 would require that every person in a classhave “an injury of the same type and extent,” which they would have to prove before a class could be certified.  What’s more, “injury” is defined as “impact” on “the plaintiff’s body or property.”  It is difficult to see how most class actions would ever be certified under these criteria. 

First, a common sense reading of the definition of “injury” suggests the bill intends to exclude from court entire categories of class actions.  Most victims of civil rights violations or discriminatory practices could not meet this definition.  Brown v. Board of Education could not have proceeded under H.R. 1927.  In addition, laws enacted to protect consumers from predatory practices, such as credit and debt collection abuses, often provide for statutory damages.  This is precisely because actual damages in those kinds of cases are difficult or impossible to ascertain despite pervasive company misconduct.  These class actions would be barred under this “injury” definition.

But even if this definition were broadened, the requirement that the entire class suffer the same type and extent of injury would sound the death knell for class actions.  Classes inherently include a range of affected individuals, and virtually never does every member of the class suffer the same extent of injury even from the same wrongdoing.  There are far too many examples to list here of recent, important class actions that would fail to meet this bill’s “extent of injury” requirement and that never would have been certified under H.R. 1927.  However, it is worth mentioning a few examples. 

Certainly many civil rights, discrimination and statutory damage cases would not satisfy these criteria.  This would also be true for recent successful class actions over bank and credit card abuses, where the same corporate policy resulted in customers being cheated out of various amounts of money; home and mortgage loan abuses; antitrust violations, where class actions have recovered millions for small businesses in varying amounts over illegal price-fixing cartels; illegal for-profit colleges practices; refusals by companies to properly pay workers; many types of product defects; and denial of insurance benefits.  Business owners financially injured by the BP oil spill all had different losses but all were financially injured by the same corporate misconduct.  The list is endless.

It is for these reasons that federal courts have rejected such a “commonality in damages” requirement for class certification.  As Judge Posner explained, a “commonality in damages” requirement: 

"[W]ould drive a stake through the heart of the class action device. . . [T]he fact that damages are not identical across all class members should not preclude class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous aggregate magnitude but so widely distributed as not to be remediable in individual suits.[1]"

Class action lawsuits are among the most important tools that harmed, cheated and violated individuals and small businesses have to hold large corporations and institutions accountable and deter future misconduct.  Under H.R. 1927, federal courts will be forced to deny certification to important, worthy classes of aggrieved consumers, employees and small businesses.  We urge you to oppose H.R. 1927, the “Fairness in Class Action Litigation Act of 2015.”

 

Sincerely,

 

Alliance for Justice

American Antitrust Institute

American Association for Justice

American Civil Liberties Union

American Federation of State, County and Municipal Employees (AFSCME)

Arkansans Against Abusive Payday Lending

Asian Americans Advancing Justice

Bet Tzedek Legal Services

Blue Ridge Environmental Defense League

Center for Effective Government

Center for Justice & Democracy

Center for Science in the Public Interest

Citizen Works

Climate Change Law Foundation

Consumer Action

Consumer Federation of America

Consumer Watchdog

Consumers for Auto Reliability and Safety

Consumers League of New Jersey

Consumers Union

D.C. Consumer Rights Coalition

Demand Progress

Disability Rights Education & Defense Fund

Employee Rights Advocacy Institute for Law & Policy

Equal Rights Advocates

Food & Water Watch

Georgia Watch

Homeowners Against Deficient Dwellings

Justice in Aging

Kentucky Equal Justice Center

Law Foundation of Silicon Valley

Leadership Conference on Civil and Human Rights

MFY Legal Services, Inc.

NAACP

National Association of Consumer Advocates

National Consumer Law Center (on behalf of its low income clients)

National Consumer Voice for Quality Long-Term Care

National Consumers League

National Disability Rights Network

National Employment Law Project

National Employment Lawyers Association

National Fair Housing Alliance

National Housing Law Project

National Immigration Law Center

Natural Resources Defense Council

New Jersey Citizen Action

Protect All Children’s Environment

Public Citizen

Public Justice

SC Appleseed Legal Justice Center

Science and Environmental Health Network

Southern Poverty Law Center

The Arc of the United States

U.S. PIRG

Woodstock Institute



[1]Butler v. Sears Roebuck & Co., 727 F.3d 796, 801 (7th Cir. 2013).

 

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