Thursday, January 07, 2016

A Bailout for Volkswagen? Congress Wants to Do Something Absolutely Crazy

Republicans have said we don't need regulation of such things, because businesses will refrain from doing them in fear of being sued by customers. Of course, we have seen they have not been deterred by this. They can afford to outspend individual consumers and file appeal after appeal until the consumer runs out or run. And they have been working to nullify the ability of consumers to file class action suits. If they succeed, they will encourage higher legal penalties on them. If we started sending CEOs to jail for years, maybe that would have an effect

Please read the whole article at the following link:

Fiscal Times

By David Dayen
January 4, 2016

When Volkswagen admitted to cheating on air pollution standards tests in September, it opened itself up not only to government punishment, but lawsuits from 500,000 U.S. purchasers of its “clean” diesel vehicles. Volkswagen has yet to fix the vehicles to bring them into emissions compliance, and even if it does, that will likely create a lower-performance car than consumers paid for.


The combination of regulatory oversight and class-action litigation can keep companies in line. But a bill in Congress consisting of a little more than 100 words would not only prevent Kaplan from seeking justice but also cripple virtually all class-action lawsuits against corporations. It’s known as the “Fairness in Class Action Litigation Act,” but lawyers and advocates call it the “VW Bailout Bill.”

The bill, which will get a vote on the House floor in the first week of January, follows a series of steps by the judiciary to block the courthouse door on behalf of corporations. “There's no question the Supreme Court has ben moving in that direction to limit access to courts,” said Joanne Doroshow, executive director of the Center for Justice and Democracy. “But Congress has never done something like this, trying to step in and wipe out class-actions.”

The simplicity of the VW Bailout Bill belies the chaos it would create. Proponents like the U.S. Chamber of Commerce, the bill’s leading lobbyist, say they merely want to get rid of “non-injury” class-action cases, based on potential damages from defective consumer products or corporate actions that have yet to result in harm. Lawyers for class-action litigants argue that defective products deserve compensation even if the consumer hasn’t yet been injured.

But the bill goes much further, stating that courts may not certify class-action suits unless the plaintiff “affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.”

“This is devastating because it sets up all class-actions to fail,” says attorney Lori Andrus, who represents several Volkswagen plaintiffs. If every class member must have the same type and scope of injury, it forces extensive proofs for class certification — essentially a full-blown trial up front, where plaintiffs will have to prove that their injuries match with their fellow representatives.


Not only would these trials be costly, but they would empower corporate defense lawyers’ schemes to limit damages. While current rules already require class members to have some level of commonality and typicality, the words “same type and scope” offer opportunities to refine that further. “It’s not clear what they mean by same injury,” says Andre Mura, another class-action plaintiff’s attorney. The terms are so vague, Mura argued, that they would have to be interpreted repeatedly, with unpredictable results.

In the Volkswagen case, for example, “it could mean the same model car, the same defeat device, the same emissions system, the same consumer harm,” Mura says. “When really Volkswagen engaged in the same course of conduct on all their vehicles.” Defense attorneys could claim that a class representative who released fewer emissions because they drove fewer miles than their colleagues, or drove in harsher weather, or with lower tire pressure, should be excluded from the case. That could either whittle down classes to limit damages or disqualify them from certification.

And the applications go beyond Volkswagen. “In a mortgage fraud case, the class might have all been deceived in same way, but the documents signed might have been inconsistent,” says Andrus. “Or with for-profit schools, they might have paid different tuition or taken different classes.” Andrus has battled these tactics before, but the congressional bill would codify them into law. “There’s no question this was written by a defense lawyer whose job it is to defend corporations,” she says.

Without a class-action option, VW customers would have little recourse. “The damages are not enormous in the sense that I could hire individual counsel,” says George Farquar, a scientist and small business owner from Livermore, Calif., who is part of a class-action suit against the carmaker. “It’s amazing this legislation is being considered.”


H.R.1927 - Fairness in Class Action Litigation Act of 2015

Sponsor: Rep. Goodlatte, Bob [R-VA-6]

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