Consumer Law & Policy Blog

Paul Bland in Daily Kos: Banning Class Actions Will Not Put “America First”

Here.  Excerpt:

Drywall from China was . . . highly toxic.

* * *

Approximately 60,000 homes built with drywall from China were affected, according to one source. In fact, the problems caused by this imported drywall are so massive and widespread that individual lawsuits could not have even begun to make a dent in the problem.  

Fortunately, many homeowners were able to seek a solution via class action suits that provided much needed financial compensation as well as helping to fix the underlying problem.

* * *

[P]roperty owners were essentially compensated for 100% of their losses

* * *

Under a new bill from GOP Congressman Bob Goodlatte now making its way through Congress, however, remedies like this would be made virtually impossible. The so-called “Fairness in Class Action Litigation Act” (a misnomer if ever there was one) would wipe away Americans’ ability to take on companies whose defective products put their health and safety at risk.

From dangerous drywall from China, to defective and harmful precription drugs – and nearly everything in-between – this sweeping legislation would essentially inoculate foreign companies flooding the American market with dangerous products from ever having to answer for their behavior in court. American consumers would be blocked from the courts in favor of boosting corporations’ bottom line.

 

Bloomberg's Articles on Trump and the Pending Class Action Bills

Trump to Weigh Litigation Changes Long Coveted by Business

Trump Seen as Supportive of Business-Backed Litigation Bills

 

Consumerist: Wells Fargo Tries, Fails To Explain Why Customers Shouldn’t Be Allowed To Sue Over Fake Accounts

Here. 

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Paul Bland in HuffPo: House GOP’s Bill to Eliminate Nearly All Class Actions Would Encourage More Ponzi Schemes & Other Corporate Cheating

Here.  Excerpt:

[E]nter Congressman Bob Goodlatte (R-Corporate Lobbyist Heaven), with his ironically titled “Fairness in Class Action Litigation Act,” which passed through the House Judiciary Committee two weeks ago. Its passage was a remarkable feat of avoiding public notice or debate, with Goodlatte ramming through the legislation in the middle of the night, voting down all amendments along party lines, and refusing to even hold a hearing on the bill, which had at least ten new provisions never included in the previous version passed by the Committee.

Now, the bill is expected to be voted on by the full House next Tuesday.

Goodlatte’s bill was drafted by corporate lobbyists to eliminate the vast majority of class action lawsuits. It would roll back protections for defrauded investors, cheated consumers, people whose privacy has been violated, small businesses harmed by price fixing, workers cheated by wage theft, and pretty much anyone harmed in any way by corporations that break the law.

Bloomberg BNA's Perry Cooper Report on the Class Action Bill the House Judiciary Committee Reported

Here.  I won't post an excerpt because the report is too full of information to single some items out.  If you care about class actions, I suggest reading the whole piece.

Reuters' Alison Frankel on "House Republicans’ bill to gut class actions"

Here.  Markup on the bills is schedule for tomorrow.  Excerpt from Frankel's piece:

The bill would limit class certification to class actions in which plaintiffs all “suffered the same type and scope of injury” and would bar certification unless courts can ascertain class membership and assure that only injured plaintiffs recover. Class action lawyers would not be able to sue on behalf of relatives and employees – or any other client with whom they have an ongoing contractual or attorney-client relationship. Class certification decisions would be automatically appealable. Attorneys’ fees in class actions resolved through injunctions would be limited to a percentage of the “value of the equitable relief.”

* * *

At least two leading class action law profs - Myriam Gilles of Cardozo and Elizabeth Burch of the University of Georgia – have submitted comments. Gilles, who described the proposed legislation in an email as a “partisan, kill-all-class-actions bill,” focused her submission to the Judiciary Committee Democrats on the vast body of class action precedent, including Supreme Court cases, that guides judges on predominance and ascertainability. She also raised her concerns about the future of issues cases. Burch’s 8-page letter points out that the judiciary is already addressing many of the issues the Goodlatte bill raises * * *

CBS News: Samsung Trying to Block Class Actions for Exploding Phones by Invoking Arbitration Clause No One Noticed

Here. HT: Gregory Gauthier

Adam Levitin: Calls to Fire Cordray are About Shilling for the Financial Industry and to Block Arbitration, Payday Lending Regs

by Jeff Sovern

In a characteristically terrific post at Credit Slips, Georgetown's Adam Levitin explains the real reasons for calls to fire CFPB Director Cordray.  A worthy companion to Adam's recent op-ed at American Banker (free content), What the CFPB 'Commission' Debate Is Really About.   Both worth a read. 

Drahozal Article Examines Arbitral Issue Preclusion as a Substitute for Class Actions

Christopher R. Drahozal of Kansas has written The Issue Preclusive Effect of Arbitration Awards, Proceedings of the NYU 69th Annual Conference on Labor: Mediation and Arbitration of Employment and Consumer Disputes, Forthcoming.  Here's the abstract:

Courts in the United States have two primary means (in addition to individual adjudication) by which to resolve disputes in which numerous claimants have claims against a defendant that raise the same or similar issues. The first is the class action, in which the class representative brings suit on behalf of similarly situated but absent plaintiffs. A judgment in the class action (assuming that a class has been certified) binds the defendant and the absent class members. Since the Supreme Court’s decisions in Concepcion and Italian Colors, however, businesses can reduce if not avoid the risk of class actions by using arbitration clauses with class arbitration waivers in their standard form contracts with consumers and employees. When businesses use such contract provisions, disputes are to be resolved in individual arbitration, with no aggregation of claims either in arbitration or in court.

The second primary means of resolving duplicative litigation of similar claims is the doctrine of issue preclusion (also referred to as collateral estoppel). Issue preclusion bars a party from relitigating an issue that was resolved in a prior case involving the same party or parties. The issue must have been fully and fairly litigated and actually decided in the prior case, and only a party to the prior litigation or one in privity with a party is bound by the prior judgment. But a non-party to the prior case can, in appropriate circumstances, rely on issue preclusion against a party to the prior case (what is called “nonmutual issue preclusion”) and preclude relitigation of the issue — i.e., hold the other party bound by the resolution of that issue in the prior case.

This paper examines the extent to which arbitration awards have issue preclusive effect, such that issue preclusion might substitute for class actions when businesses use arbitration clauses with class waivers. It further suggests that the law governing issue preclusion in arbitration might develop in ways parallel to the law governing class actions and arbitration: with businesses using “issue preclusion waivers” to avoid the issue preclusive effect of awards, consumers and employees challenging such waivers as unenforceable, and businesses relying on FAA preemption in response.

HT: Gregory Gauthier.  I haven't posted lately because I'm swamped with a tight deadline for grading exams ("Make America Grade Again!"), but I hope to be back posting soon.

House "Freedom Caucus" Asks Trump to Kill CFPB Proposed Arbitration Rule; Is Freedom Just Another Word for Tricking/Trapping Consumers?

WSJ report here (behind paywall). The Caucus consists of 40 members.  The article reports that they seek rollback of 200 rules, but they anticipate that the number will rise.