Class Action Reform

Problem

Today, some class actions are meritless cases in which thousands, or millions, of plaintiffs with unique injuries and grievances are granted class status, often without the knowledge of class members. In many of these cases, plaintiffs’ counsel negotiate settlements with the defendants early on that allow the defendants to avoid costly litigation, and rewards the plaintiffs’ counsel with millions in legal fees. Meanwhile, the class members, who play no role in the negotiation process, and who often have no idea that plaintiffs’ lawyers are advancing a lawsuit on their behalf, often receive pennies or nearly-worthless coupons.

ATRA's Position:

ATRA supports state legislation that allows only plaintiffs from the forum state who have suffered the same injury with similar claims against similar defendants to be certified as a class. ATRA also supports legislation that allows the interlocutory (immediate) appeal of class action certification orders.

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Opposition Opinion:

The personal injury bar’s argument against meaningful class action certification standards — that flexible standards make the process more efficient by incorporating all like claims, and more fair by ensuring representation for plaintiffs with claims that would not otherwise be profitable for attorneys — fails to address the hardship imposed by abuse of the device on class members, (who receive pennies, while their lawyers receive millions), defendants, (who are often forced to settle unmeritorious lawsuits), and consumers, (who ultimately bear the burden of class actions through increased costs).

The personal injury bar’s argument against the interlocutory appeal of class action certification orders — that such orders are appealable at the end of a case — fails to take into account the strong incentive that defendants have to settle an unmeritorious case once the class is certified in order to save unnecessary litigation costs.