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By Liz Crampton
The House is slated to vote on a bill the week of March 6 that could limit plaintiffs’ ability to hold companies liable for antitrust violations by preventing them from suing as a class.
The measure could have sweeping ramifications for antitrust cases. Class action lawsuits are often the only way customers hurt by anticompetitive companies can receive compensation because the cost of bringing such cases is so high.
Foreign companies in particular could benefit from the bill because they’ve been targets of major recent antitrust class actions, Irving Scher, partner at plaintiff’s law firm Hausfeld LLP, told Bloomberg BNA. Price-fixing class action cases in the auto parts, air freight and LCD panel industries in the past few years have involved foreign businesses.
Several groups concerned with antitrust issues, including the American Antitrust Institute, Consumers Union and the Committee to Support the Antitrust Laws, signed a Feb. 14 letter to House Judiciary Committee leaders expressing their opposition to the bill. Randy Stutz, general counsel for the American Antitrust Institute, told Bloomberg BNA his group is tracking the bill and will be examining it “in detail” as it moves to the floor.
Supporters of the bill, such as the Small Business & Entrepreneurship Council, say it would cut down on “lawsuit abuse.”
Most antitrust cases are brought by a class of plaintiffs. A 2013 report from the University of Baltimore School of Law analyzed 60 of the largest recent successful antitrust cases in the U.S. and found that 49 were class action suits that delivered as much as $21 billion in compensation to victims.
The House Rules Committee has set a March 7 deadline for proposed amendments to the bill (H.R. 985). It could be on the House floor as early as March 8. The bill, introduced by House Judiciary Committee Chairman Bob Goodlatte (R-Va.), would add conditions to class action and complex litigation cases in an effort to ensure “fairer and more efficient outcomes.”
A similar bill passed the House last year. It then stalled in the Senate. There isn’t a Senate companion measure yet this year.
The proposal threatens to throw established legal standards for antitrust cases “into complete disarray,” Stutz said. Opponents are chiefly concerned about the bill’s requirement that all members of a class suffer the same injury.
Courts have always recognized that classes will contain members who are injured to various degrees for different reasons and the law has been clear that that fact doesn’t defeat class certification, Stutz said.
“I’ve been trying to think of a single successful antitrust class action in the past where all the victims all suffered ‘the same type and scope of injury,’ and I can’t,” Stutz said. “The problem would be particularly acute in antitrust cases, because antitrust plaintiffs frequently have to rely on statistical evidence to calculate damages.”
“Class action lawsuits are among the most important tools to enable harmed, cheated and violated individuals and small businesses to hold large corporations and institutions accountable and deter future misconduct,” the letter said. “H.R. 985 would annihilate that tool. We urge you to oppose this bill.”
The bill would create new mandates for plaintiffs in big antitrust cases that are filed in multiple jurisdictions that could make it more difficult to collect damages. For example, plaintiffs in consolidated multi-district litigation proceedings in federal court would face new evidence requirements if they are seeking compensation for injuries. The SBE Council, by contrast, says that provision would prevent “injured individuals from being forced into class actions with those with minimal or no injuries.”
The bill also would hamper the antitrust plaintiff’s bar by capping or delaying the distribution of fees to class counsel and requiring disclosure of litigation financing.
“Broadly, it’s a bill that’s intent is to end class actions,” Eric Fastiff, president of the Committee to Support the Antitrust Laws, told Bloomberg BNA. “For antitrust in particular, any attempt that makes it harder for victims, particularly consumers, that have suffered a wrongdoing that’s not financially viable for them to prosecute on their own means that they have no redress.”
Scher is also concerned about a provision that would prevent a company bringing a class action from retaining the same attorneys more than once. That prohibition would remove efficiencies that his firm has gained from representing clients such as retailers, pension funds, and hospitals, he said.
The bill also would extend the duration of a class action dramatically because class certification decisions would be automatically appealed, and pretrial discovery stayed based on motion practice, Scher said.
“It’s going to clog the courts,” he said.
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