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Making America Great? Not So Much: The Fairness in Class Action Litigation Act Is Designed to Harm American Consumers and Businesses
Last week, the U.S. House of Representatives passed the Fairness in Class Action Litigation Act of 2017, H.R. 985 (The “Act”); the Senate referred the Act to its Judiciary Committee. The Act would “would crown a decades-long campaign” by the U.S. Chamber of Commerce to slam the courthouse doors shut on millions of Americans. The Chamber, and its allies in Congress, aim to achieve this through an amendment to the Federal Rules of Civil Procedure which could make it impossible in class actions for a damages class to be certified unless each class member suffered exactly the same amount of harm. This provision, and the Act in general, would inure to the benefit of corporate wrongdoers at the expense of the American public; if passed, the Act would essentially immunize from civil lawsuits thefts committed on a national scale.
An ongoing case, In re Automotive Parts Antitrust Litigation, No. 2:12-md-02311 (E.D. Mich.) (“Auto Parts”), illustrates the perverse consequences the Act would create. Auto Parts involves an illegal conspiracy in violation of the antitrust laws to fix the prices of parts used in the manufacture of new cars and trucks. Almost all of the participants in the conspiracy were foreign corporations based in Japan and Germany who engaged in this cartel to prevent competition and to damage American businesses and consumers. As the late Justice Scalia put it, collusive cartels such as the one in Auto Parts are the “supreme evil” antitrust laws are designed to thwart. Verizon v. Law Offices of Curtis Trinko, 540 U.S. 398, 408 (2004).
The Auto Parts cartel damaged American businesses and consumers all along the distribution chain. Automakers such as General Motors, Ford, and Chrysler, were forced to pay more for the parts used to build cars and trucks. Thousands of suppliers to these automakers paid illegal overcharges for the parts used in assemblies for the automakers. Dealerships throughout the country overpaid for automobiles. And finally, American consumers and businesses ultimately bore the brunt of the overcharges which were passed on to them.
Through civil actions, more than $1.25 billion has been recovered for these American businesses and consumers. Because of the prohibitive costs in pursuing complex litigation such as this, very few businesses (only the largest) could even afford to pursue an action to recover for the harm caused by this illegal conspiracy. The only way to achieve substantial and meaningful justice for victims in cases like Auto Parts is through the class action mechanism. Seeking to codify class action standards which could be impossible to meet in cases like Auto Parts, the Act would immunize these illegal cartelists from any responsibility for their pernicious conduct, not only depriving American businesses and consumers of justice but further, encouraging cartelists to target American businesses and consumers.
Steven N. Williams, of Cotchett, Pitre & McCarthy, LLP (“CPM”), is interim co-lead counsel for plaintiffs in Auto Parts. Joining Williams in the fight against the “supreme evil” in Auto Parts are CPM lawyers Demetrius X. Lambrinos, Elizabeth T. Tran, and Joyce M. Chang. CPM: Keeping America great, one case at time.