|
Introduction
Class action lawsuits
have become a primary means by which the trial bar has been able
to "game" the civil justice system by filing abusive lawsuits in
"magic jurisdictions" on behalf of allegedly-harmed plaintiffs,
thereby generating millions or billions in fees.
While the
Class Action Fairness Act of 2005
has addressed some of the most egregious abuses of class action
rules and procedures, most observers believe that additional
major reforms at the state level will be necessary to restore
fairness and predictability to the civil justice system.
Fast Facts
-
“The class action suit. . . is the deputation of the
nation’s lawyers as “bounty hunters” to sue whomever they
can legally assert has engaged in conduct injurious to large
groups of individuals. In practice, it amounts to the
lawyers suing whomever they believe vulnerable to a
settlement and capable of paying large attorneys’ fees.”
(KRC:
Hensler, “Class Action Dilemmas…”, fn 3, p. 402,
quoting Larry Schonbrun, “The Class Action Con Game”,
Regulation, Fall 1997, pp. 50-51)
-
“Class action cases are designed to address relatively small
but numerous losses for which individual suits would be
impractical. However, when the class is large enough, even
claims that are trivial individually can have a significant
effect on particular firms and even whole industries.”
(KRC:
Congressional Budget Office, “The Economics…”, Chapter 2, p.
5)
-
“[T]he substantial power that plaintiffs gain from class
litigation derives from certification of the class” ... “As
is well known, a principal concern regarding the operation
of class actions is that the certification of a class
itself, often based upon satisfaction of relatively
undemanding procedural requirements, will bludgeon a
defendant into a massive settlement.”
(George L. Priest, "What We Know and What
We Don’t Know About Modern Class Actions: A Review of the
Eisenberg-Miller Study”, Manhattan Institute for Policy
Research, Civil Justice Report No. 9, February 2005)
-
"Few people, other than lawyers, know that virtually every
certified class action ends in settlement. Why does this
happen? The reason, as Alabama Attorney General Pryor noted,
is simple: to face a class action is to risk the corporate
death penalty."
(KRC:
Hantler, “Seven Myths…”, p. 21)
-
"That is why corporations tend to settle class actions before
they get to juries. To go to jury trial can make a game of
Russian roulette seem like a reasonable gamble."
(KRC:
Hantler, “Seven Myths…”, p. 22)
-
“Class-action suits had a reputation as a magnet for
unpleasantly hardball or cynical operators, in part because
no constituency of actual clients was looking over the
lawyers’ shoulders.”
(KRC:
Olson, “The Rule of Lawyers”, p. 87)
-
“Because of the huge financial exposure associated with
these mega-lawsuits, manufacturers say they feel forced to
settle damage class actions, rather than contest them. The
end result, they claim, is to drive good products from the
market and to deter investment in developing other
beneficial products.” (KRC:
Hensler, et. al., “Class Action Dilemmas…”, p. 50)
-
“Judicial Hellholes are venues plaintiffs’ lawyers choose to
bring their cases because of their reputation for
pro-plaintiff decisions and high verdicts, their lower
standards for the admissibility of expert testimony and the
certification of class action lawsuits.”
(www.atra.org
Press Room, “Federal Class Action Bill Passes Senate
Judiciary, Scheduled For Debate Next Week”, as accessed
on Sept. 19, 2005)
-
“Other suggested abuses of the class action system include
collusive settlements between plaintiffs’ attorneys and
defendants
in which class members get little of value – often coupons –
and plaintiffs’ lawyers get large fees; payments of
‘bounties’ to a few class members at the expense of other
members; and incomprehensible class notices that have lead
some consumers to sign away their rights.”
(KRC:
Nicolaides, “U.S. Tort Reform and the Implications…”,
July 2004, p.10, citing Institute For Legal Reform, Issues –
Class Action, available at
www.legalreformnow.com /issues)
-
“Class actions allow for the convenient and efficient
grouping of plaintiffs sharing a common complaint to link up
in a single lawsuit….. But the perverse incentive of
contingency fees has warped class action litigation.”
(KRC:
Hantler, “Seven Myths…”, p. 12, 13)
-
“Equally disturbing, some class-action lawyers had a
reputation for striking deals with the companies they
sued—some called them “sweetheart deals—which provided
little benefit to the class but major fees to the lawyer.”
(KRC:
Olson, “The Rule of Lawyers”, p. 87, 88)
-
“Predatory class action lawsuits are getting significant
traction from Trial Lawyers, Inc.’s sophisticated marketing
tactics. Websites help trial lawyers troll for class
members online: ‘Justice is now just a click away’ announces
a headline on ClassActionAmerica.com, where for $8.95 a
month consumers can get information on hundreds of class
action ‘opportunities’ and sign up to get ‘the money that
you may be due’.”
(KRC:
Manhattan Institute, Trial Lawyers, Inc., p. 8,
see
www.classactionamerica.com )
Class Actions Contents
|
Speakers Home Page
|
Next Page |
