Senate Prospects for Class Action Bill Still Murky

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By Perry Cooper

Plenty of attorneys have strong opinions about the class action overhaul bill that recently cleared the U.S. House of Representatives along party lines.

But few will admit to having any inkling of what could happen to the bill next in the Senate.

The Republican-led House approved the far-reaching Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017 ( H.R. 985) in March without holding any prior hearings. The legislation is generally expected to face greater scrutiny and longer odds in the Senate. But when that work will begin, and what the final legislation will have to look like for supporters to get it onto the Senate floor, is still ripe for speculation.

Frequent class settlement objector Ted Frank said recently it’s unlikely the bill could get the necessary 60 votes to overcome a filibuster and pass the Senate in its current form. Frank is the director of the Competitive Enterprise Institute’s Center for Class Action Fairness in Washington.

Bill-backer John H. Beisner said the legislation is not a top priority right now for the Senate Judiciary Committee, which has been focused on Judge Neil Gorsuch’s nomination to the U.S. Supreme Court. Beisner is a defense attorney Beisner at Skadden, Arps, Slate, Meagher & Flom LLP in Washington.

A consumer advocate and bill opponent agreed the bill’s next steps are unclear.

“McConnell doesn’t keep me on speed dial,” said Paul Bland, referring to Senate Majority Leader Mitch McConnell (R-Ky.). Bland is executive director of Public Justice in Washington.

Bland is concerned the Republicans will try to move it through the Senate as fast as it passed the House. “It will be a travesty of justice” if the Senate passes the bill without holding hearings, Bland said.

Changes Likely

Beisner acknowledged that there will likely have to be changes to the bill to get it through the Senate, but he wouldn’t pinpoint any specific provisions he’d be willing to jettison.

Enactment of the Class Action Fairness Act of 2005 was the last victory for supporters of federal “litigation reform.” Then, as now, there was a Republican in the White House.

But CAFA “had many changes along the way,” Beisner said. “That’s how legislation works.”

Oh, yes, “it was a great compromise,” Bland said sarcastically. The changes “made it 5 percent less bad.”

“It still got 72 votes in the Senate,” Beisner reminded him.

Bland, Frank and Beisner spoke at a March 31 program in Washington organized by the Law & Economics Center at George Mason University’s Antonin Scalia Law School.

Bill Provisions

The current bill includes language from a previous proposal targeting class actions where, defense attorneys say, not all class members are injured. The earlier version passed the House in January 2016 but stalled in the Senate.

The new bill adds provisions to reach nearly every corner of class action and complex litigation practice. They include tightening up class certification requirements, capping or delaying distribution of fees to class counsel, requiring the disclosure of litigation financing and tying the reporting of settlement data to plaintiffs’ lawyers’ fees.

It also includes new requirements on plaintiffs in consolidated multidistrict litigation proceedings in federal court.

More Litigation Ahead

The bill, if it becomes law, would change the dynamic of class action practice, which currently allows plaintiffs to pressure companies into settling to avoid the costs of protracted litigation, Beisner said.

But Bland said the bill’s provisions would “wipe away nearly all class actions.”

Frank called that an exaggeration.

“This will be the seventh time in the last 25 years” the plaintiffs’ bar has said class actions would be killed, Frank said. But he also argued the bill as written is poorly drafted to address the concerns of the defense bar.

“It’s sufficiently ambiguous,” he said. If the bill is enacted in its current form, “Attorneys will be litigating for years until we figure out what the language really means.”

Problems Require ‘Chiseling.’

Speaking at another event the same day, Professor Howard Erichson said there is a “deep skepticism of class actions” underlying the bill. Erichson specializes on ethics of complex litigation at Fordam University School of Law in New York.

He acknowledged that class-action practice is flawed, but said the bill “takes a sledgehammer to problems that require chiseling.”

“I would vote no if I were a senator,” he said. “The bill makes no attempt to preserve what’s useful about class actions.”

But defense attorney Andrew Grossman responded, “When you talk to people in the trenches, you recognize a lot of pathologies in the system and broken incentives.”

“The bill is a pretty sensible way to change those incentives,” Grossman, partner at Baker & Hostetler LLP in Washington, said.

“There are areas in the bill for compromise at the margins, but there are also lots of good provisions,” he said.

Erichson and Grossman spoke March 31 at a Federalist Society teleforum.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bna.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bna.com

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