U.S. House of Representatives Passes Class-Action Reform Bills

U.S. House of Representatives Passes Class-Action Reform Bills

Earlier this year the House passed the Fairness in Class Action Litigation Act of 2017 (FCAL), which is aimed at reducing class-action lawsuits according to a report issued by the American Bar Association (“ABA”). The next day, the House passed a second bill, the Lawsuit Abuse Reduction Act of 2017 (“LAR”). The ABA officially opposes the FCAL and the LAR.

What These Bills Propose

A major provision in the FCAL would have federal courts deny class-action certification unless every one of the members in the proposed class affirmatively demonstrates he or she has suffered the same type and scope of injury as the named class representatives. According to reports by the National Law Journal and the Los Angeles Times, the bill would also tie attorneys fees to settlement amounts and would limit the types of clients lawyers could represent.

The ABA is concerned that the passage of the FCAL bill would usurp the traditional regulatory authority of the courts.

The LAR amends Rule 11 of the Federal Rules of Civil Procedure (FRCP) to mandate judges sanction attorneys who file lawsuits deemed to be meritless. Sanctioned lawyers would have to pay the opposing party’s attorney’s fees plus other expenses. This provision is not new; it was put in place in 1983 and rolled back 10 years later. As the law stands, judges file sanctions at their own discretion and there is a 21-day “safe harbor” period after the filing of a motion for sanctions during which the attorneys can choose to withdraw litigation before the motion is decided.

The ABA is opposes this bill because it believes the proposed changes would encourage new litigation over sanction motions and, as a result, increase court costs and delays.

Because both bills passed at the House, they will now head to the U.S. Senate for consideration. The Senate has blocked similar bills in the past, but the Washington Post reports that with a majority Republican in both houses of Congress and in the White House there is a push to get them passed.

 

Understand the Changes

 Attorneys should familiarize themselves with the proposed bills and how these changes can affect their legal practice. Likewise, individuals seeking to join a class action lawsuit should speak with a knowledgeable attorney about the FCAL and how it can affect your eligibility to join a class action lawsuit.

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