Washington, D.C. – House Judiciary Committee Chairman Bob Goodlatte (R-Va.) released the following statement upon House passage of the Fairness in Class Action Litigation Act (FICALA) of 2017 (H.R. 985) by a vote of 220-201.
Chairman Goodlatte: “Class action lawsuits were created so Americans could have strength in numbers when they took their legitimate disputes to court. These suits were supposed to provide a level playing field for both consumers and businesses, so their issues could be settled in a just and fair system.
“Sadly, because of abuses by unscrupulous trial lawyers, many Americans now see class action lawsuits as a television commercial, a hotline, and a cottage industry where lawyers win and victims lose.
“I authored the Class Action Fairness Act over ten years ago to curb the number of baseless claims that come into our courts, and protect groups who use our civil litigation system as a way to have their grievances resolved. But since President George W. Bush signed that bill into law, unscrupulous attorneys have been exploiting loopholes at the expense of their own clients, and the American consumer.
“FICALA will keep the doors to justice open for the American consumer, while holding businesses large and small accountable. Additionally, we are giving judges the tools they need to keep abusive practices out of our courts, and to prevent further exploitation of victims by trial lawyers who wish to line their pockets.”
Background: Introduced by Chairman Goodlatte, provisions of FICALA seek to maximize recoveries for deserving victims, and weed out unmeritorious claims that would otherwise siphon resources away from innocent parties. Among the legislation’s reforms, the bill requires that classes consist of members with the same type and scope of injury. Under the proposed legislation, uninjured or non-comparably injured parties can still join class actions, but must do so separately from parties that experienced more extensive injury.
The bill also contains additional provisions to:
- Prohibit judges from approving class actions in which the lawyer representing the class is a relative of a party in the class action suit.
- Require that class action lawyers only get paid after the victims get paid.
- Order any third-party funding agreement be disclosed to the district court.
The bill also contains provisions of the Furthering Asbestos Claim Transparency (FACT) Act (H.R. 906), which was introduced by Regulatory Reform, Commercial and Antitrust Law Subcommittee Vice-Chairman Blake Farenthold. The FACT Act reduces fraud in the asbestos bankruptcy trust system through increased transparency measures. These measures ensure that asbestos bankruptcy trusts have the tools to combat fraud, which limits funds available for deserving asbestos victims. The FACT Act is a measured approach that strikes the proper balance between achieving transparency and protecting victims’ privacy.