On Wednesday afternoon, a subcommittee of the House Judiciary Committee held a hearing on legislation that, if successful, would be a giant step forward for corporate America and an equally giant step backward for consumers.
Rep. Bob Goodlatte has introduced H.R. 1927 -- the misleadingly titled Fairness in Class Action Litigation Act of 2015 -- which would make it essentially impossible for Americans to join together in bringing class-action lawsuits for nearly any illegal act a corporation might undertake. Goodlatte's bill, which is an extremist wish list from corporate lobbyists, strips away consumer protections on everything from deceptive advertising to privacy invasions. It could roll back wage-theft protections for workers, antitrust protections for small businesses and securities-fraud protections for investors.
In fact, the only protections this legislation offers are for big business. As my organization, Public Justice, noted in our testimony to lawmakers, the bill is a walking catastrophe for the rule of law in America.
Think Brown v. Board of Education was a good idea? Congressman Goodlatte's bill would have made bringing that case impossible. By eliminating any class action that does not involve quantifiable "property" loss or personal injury, the legislation would eliminate any case that didn't involve money or blood. Because the dignitary and other harms the children forced into segregated schools faced didn't involve such "property loss," Brown (which was a class action, after all) would have been a non-starter.
Civil rights, in the vision set forth by Goodlatte and his corporate cronies, don't constitute the "fairness" this bill seeks to impose.
At a time when consumers are more concerned about privacy invasion than ever before, Goodlatte would largely eliminate the ability to challenge such invasions in court. H.R. 1927 would wipe away cases like the one now pending against a company that used spyware to turn on home computers and spy on citizens using their own cameras. That's just one example of the illegal acts not involving money or physical injury that could soon be fair game.
From there, the bill gets even more bizarre. It would also stipulate that a class action can only be brought if each and every victim of illegal behavior suffered precisely the same "alleged impact" to their "property," "of the same type and extent" as every other victim.
Under this unprecedented move, two investors cheated in the Enron scandal would not have damages "of the same extent" if they had different amounts of stock. So someone with 1,000 shares could not join with someone holding 10,000 shares, even if they were cheated by the same company using the same tactics to defraud investors. That means nearly every class action involving the cheating of consumers, theft of workers' wages, defrauding of investors, price fixing -- almost anything -- would be eliminated.
It's hard to overestimate the damage this bill could do.
Not surprisingly, the Subcommittee's hearing predominantly featured witnesses from corporate lobbying firms who are charged with protecting the interests of corporations that routinely violate consumer protections and securities and antitrust laws. Fortunately, though, consumers have a voice, too. In addition to Public Justice's written testimony, lawmakers heard oral testimony from Professor Alexandra Lahav of the University of Connecticut's School of Law, whose eloquent and thoughtful remarks can be found here.
Battling big business can be a herculean task in today's Congress. Yet it is essential that every American understand the direct, and damaging, impact this particular legislation will have on countless consumers.
This bill isn't about "fairness." It's about giving a gift to corporate lobbyists on Capitol Hill.
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