Update On Legislation Attacking Access To Justice

By NELA HQ posted 03-17-2017 07:38 PM

As described in the February edition of On The Hill, a narrative has emanated from Republicans in Congress for several years in which lawsuits and lawyers are villains robbing defenseless corporations of time and profits through frivolous litigation. Absent from this messaging is any mention of the responsibilities and accountability corporations and employers have to ordinary Americans when they violate civil rights and other laws. In keeping with this theme, Republican members of Congress named the week of March 6 “Lawsuit Abuse Week,” and moved forward on five bills in the House of Representatives designed to attack access to justice. Three of the five bills have already passed in the House and it is anticipated that the other two will pass in the near future. NELA is gearing up to fight passage of these bills in the Senate. 

Fairness In Class Action Litigation And Furthering Asbestos Claim Transparency Act Of 2017 (H.R. 985)
On February 9, Representative Bob Goodlatte (R-VA) introduced an expanded version of the Fairness In Class Action Litigation Act Of 2017, legislation that has been introduced and opposed by NELA previously. The bill would so severely restrict class action litigation that it would essentially eliminate this important tool for addressing widespread violations of civil rights and wage and hour laws. NELA joined a coalition of consumer activists in one letter, and civil rights and women’s advocacy groups in another letter, opposing the bill.

Among other objectionable provisions, the bill imposes a new and impossible hurdle for class certification. It requires that attorneys for the class demonstrate that “each class member has suffered the same type and scope of injury.” In the early stage of a civil rights class action, it may be impossible to identify all of the victims or the precise nature of each of their injuries. Even if this information were available, class members’ injuries would not be “the same type and scope.” For example, in an employment discrimination class action, the extent of a class member’s injuries will depend on factors such as each individual’s specific position, tenure, salary, and length of exposure to the discriminatory conditions.

The House bill passed on March 9 by a vote of 220-201 with one abstention. Fourteen Republicans opposed the bill. The Fairness in Class Action Litigation bill was joined with the Furthering Asbestos Claim Transparency (FACT) Act.

Lawsuit Abuse Reduction Act Of 2017 (S. 237 /H.R. 720)
Introduced by Representative Lamar Smith (R-TX) on January 30, the Lawsuit Abuse Reduction Act Of 2017 (LARA) would bypass both the Judicial Conference of the United States and the U.S. Supreme Court and make significant substantive changes to Rule 11 of the Federal Rules of Civil Procedure. Currently, Rule 11 gives judges the discretionary authority to sanction attorneys for filing frivolous claims and defenses and to make a determination on a case-by-case basis. LARA would eliminate such judicial discretion and make sanctions mandatory. This version of LARA would reinstate a rule put into effect in 1983 that was so unworkable it was rescinded in 1993 after extensive criticism. In addition to having a chilling effect on the filing of meritorious civil rights, employment, environmental, and consumer cases, this approach burdened the strained federal court system with litigation over compliance with the rule itself.

The House bill, reintroduced by Representative Lamar Smith (R-TX), passed on March 10 by a vote of 230-188. Five Republicans voted against the bill. The bill has been introduced in the Senate by Senator Chuck Grassley (R-IA).
Innocent Party Protection Act (H.R. 725)
The Innocent Party Protection Act was introduced by Representative Ken Buck (R-CO) on January 30 to address the supposed overuse of “fraudulent joinder” to defeat complete diversity jurisdiction, upending established law on federal court jurisdiction. This is a corporate forum-shopping bill that would allow corporations to move cases properly brought in state courts to federal courts. Corporate defendants support this bill because they prefer to litigate in federal court, which usually results in less diverse jurors, proceedings that are more costly for plaintiffs, longer wait times for trials, and stricter limits on discovery.

The House bill, reintroduced by Representative Ken Buck (R-CO), passed on March 9 by a vote of 224-194. Ten Republicans opposed the bill.

The Stop Settlement Slush Funds Act Of 2017 (H.R. 732)
The Stop Settlement Slush Funds Act Of 2017 was introduced by Representative Bob Goodlatte (R-VA) on January 30. Under existing laws, settlement terms that result from federal enforcement actions may include payments to third parties to advance programs that assist with recovery, benefits, and relief for communities that have been harmed when such awards further the objectives of the enforcement action. The bill would permit only individualized restitution and other forms of direct payment for “actual harm,” and eliminate payments to third parties. This restriction would foreclose federal officials’ negotiation of appropriate relief for harm caused to the public by illegal conduct that is the subject of federal enforcement actions. It would be a windfall to those who break the law in a manner that cannot be addressed by direct restitution.

There has been no further action on this bill.

Watch for “Take Action Alerts” to oppose these bills in the Senate. NELA is committed to working with our members and allies to ensure that these bills do not pass in the Senate. We cannot succeed without your help!

Read about NELA's legislative & public policy efforts each month in On The Hill: NELA's Washington Report.