Business Litigation - Friday, July 30, 2010 8:29 - 0 Comments

The Past, Present, And Future Of Class Actions

Over the past several years, class action litigation has been the focus of some positive, but mostly negative, publicity. Much of this treatment has been unfair. The class action is, and will continue to be, the best tool available to allow the American public to defend its rights and keep over-reaching business interests, whether financial, product-related, or relating to securities, in check.

The history of class action litigation is over 1,000 years old. America’s present class action system was born when law and equity merged in 1937. That year the Supreme Court adopted the Rules of Civil Procedure, and Rule 23, “Class Actions,” was included. Rule 23 has been adjusted in favor of and to the detriment of Plaintiffs. In 1966, substantial changes in the process added “opt out” language that changed the landscape of class actions. Class action litigation through 2005 was generally limited to state or federal cases only; removal was difficult due to diversity limitations.

In 2005, the Class Action Fairness Act (CAFA) was enacted, relaxing the rules of diversity and removal, enabling most large class cases to be filed in, or removed to, federal court; restricted the practice of “coupon settlements”; and transformed the procedures for settling class actions in federal courts. Ever-changing interpretation and application in class actions continues to be evident even today in recent Court decisions, such as the Supreme Court’s decision in Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009).

Throughout these changes, whether substantive or procedural in nature or effect, class actions have stayed true to their purpose: to provide the group of injured persons with relatively small claims with a way to come together and take action against the entities that harmed them. These injuries were real and painful to Plaintiffs, but because of their position in relation to those who harmed them, their voices were silent without class litigation. No one should be allowed to injure thousands of people without being held accountable for their actions. Often those who champion “tort reform” say that because these actions result in large awards, but are then split among many, they are only injuring businesses and helping lawyers. This is simply not true.

Big business cannot be allowed to enjoy huge profits while it injures consumers. Consumers shouldn’t be forced to take on these massive companies alone. By banding together in a “class,” consumers can force these businesses to stop their actions and repay the ill-gotten gains. In many cases, these consumers successfully punish the wrong-doers so they understand that their behavior cannot be tolerated in the future. Without this type litigation, how could individuals stand up against Big Tobacco companies? Asbestos manufacturers? Insurance companies? Financial companies, such as Enron? What about today? Could a single person take on Toyota or BP? In theory yes, but in reality no. This subtle fact is known by the large and irresponsible entities when they do harm to individuals. Folks need to be able to associate themselves with other people who have suffered common injuries and utilize the skills of experienced lawyers who can adequately represent their interests. Lawyers in our firm continue to champion the causes of individuals and groups. Through the efforts of our highly-skilled lawyers and support staff members, we continue to fight to keep the scales of justice balanced. If you need additional information on class action litigation, contact Dee Miles or Tim Fiedler at 800-898-2034 or by email at Dee.Miles@beasleyallen.com or Tim.Fiedler@beasleyallen.com.