Tort ‘reformers’ give defendants the upper hand

Sound Off is a public forum. Articles are selected from letters to the editor or may be written specifically for this feature. Today, Michael Withey, a personal injury attorney with the Seattle firm Stritmatter Kessler Whelan Withey and Coluccio, makes the case against tort reform.

Earlier this year, the U.S. House of Representatives voted to federalize virtually all class action litigation (H.R. 2341). The bill would provide special protections for corporate wrongdoers by preventing consumers from filing class action lawsuits in state court.

This corporate class-action bill says Washington judges and juries are not equipped to review the merits of class-action lawsuits.

At a time when stories about corporate abuses dominate the news, the passage of a bill federalizing class actions diminishes consumers’ power to hold wrongdoer corporations accountable.

It’s also ironic that conservatives who are normally advocates for states’ rights would jump to the beck and call of corporations in their move to vest the federal government with control over class actions.

Corporations have the most to gain under H.R. 2341. Consider the impact of potential class actions in just these cases: Worldcom’s and Enron’s conspiracies to overstate profits and hide losses, Arthur Andersen’s failure to notify shareholders of Enron’s actions and then shred documents related to its client’s misdeeds, Firestone’s selling of tires it knew were defective, and Monsanto’s dumping of toxic PCBs, mercury, lead, and mustard gas for 40 years in the town of Anniston, Ala.

The bill allows defendants to take a lawsuit out of a state court it doesn’t like and put it in a federal court it does like — allowing defendants to forum-shop and gain an unfair upper hand over consumers that bring the suits.

But worse, since the federal courts are backlogged, moving a case to federal court can provide defendants with valuable “stall time” that can win irresponsible corporations years of reprieve from justice and further investment profits on its wrongly-gotten gains.

Here is how class actions work: Judges approve a petition to roll many clients’ similar, often small monetary claims into one legal action. Why would many consumers have the same claim against a defendant? If that defendant, usually a large corporation, had cheated a multitude of consumers, but each in a small way.

For example, if a cable company intentionally overcharged each of its hundreds of thousands of customers one dollar per monthly bill, it would get an extra $12 per customer per year — but over that year, the company would reap a windfall, because $12 times 500,000 equals $6 million.

The only method the civil justice system has for stopping this kind of fraudulent behavior is the class action lawsuit. That’s why class actions exist — to disgorge wrongdoer defendants of wrongly (often fraudulently) obtained money.

Will individual customers in the above case get a lot of money back from the cable company? No. According to the law, they should get back what they lost — about $12.

But that doesn’t mean that they aren’t “winners.”

They’ve made the defendant pay for its wrongful behavior, and have kept the defendant from gouging other consumers in the future. And, hopefully, that corporation’s experience will serve as a deterrent to other potential wrongdoers.

Washington state courts are capable of separating out deserving class actions from frivolous ones. State courts are constrained by Civil Rule 23 to only grant class certification cases where a corporation perpetuates a common course of conduct against unsuspecting consumers.

In cases of widespread insurance bad faith affecting thousands of policyholders, as one example, class actions are a superior method of resolving these claims rather than requiring each citizen to file his or her own case.

In fact, one of the main forms of class action abuse takes place when large corporate defendants want to use class actions to deprive individual consumers of their constitutional right to opt-out of settlements or pay little to claimants but large sums to the attorneys.

These kinds of class cases have been effectively opposed by many public interest legal organizations, including the Trial Lawyers for Public Justice (www.tljp.org ) and Public Citizen (www.publiccitizen.org ).

In an age when corporate wrongdoing is widespread, pernicious, and devastating, now is not the time for Congress to adopt special protections for corporations which defraud consumers.

Even U.S. Supreme Court Chief Justice Rehnquist criticized Congress in 1998 “for their propensity to enact more and more legislation which brings more and more cases into the federal court system.”

The bottom line is that, as long as there are irresponsible corporations, lawsuits will occur.

The question is, who gets to choose where they should be resolved? The consumer who was injured by the misconduct of the defendant or the wrongdoer defendant?

Make no mistake: tort “reformers” want the playing field tilted in favor of defendants. They have spent millions to poison public opinion about the legal system, lawyers, and juries. They have lobbied relentlessly to restrict the legal rights of injured consumers and workers, while enhancing those of negligent and irresponsible corporations.

We should not give up our right to let Washington juries and judges review the merits of class-action lawsuits.

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