by Richard Prior
Staff Writer
The blame most often falls on an incident with Blockbuster.
Customers of the movie rental business complained they had been charged excessive late fees. Lawyers were hired, a suit was filed and a settlement eventually reached.
The customers got $1 coupons for future rentals. The attorneys split a $9.25 million fee award.
Responding to what they call “the widespread abuse of frivolous class action lawsuits,” Virginia representatives Bob Goodlatte and Rick Boucher introduced a bill in the House of Representatives called the Class Action Fairness Act. It passed the House by a 253-170 vote last June 12.
A similar bill is pending in the Senate, where it was introduced by Sen. Charles Grassley of Iowa.
“This bill will help end the forum shopping abuses and resultant extortionate settlements that plague class action litigation today,” Goodlatte said after the House approved his bill. “Presently, the only winners are the lawyers who may get a half-billion dollar payday.
“The Class Action Fairness Act will help ensure that real plaintiffs with real grievances are protected against settlements that give the lawyers millions and mere coupons to the consumers.”
Norwood Wilner strongly disagreed with the characterization of the Act as a consumer bill.
“I think this is a desire on behalf of big business to try and buy itself more protection through the political system so they don’t have to be accountable to their customers,” said Wilner, one of the founders of Spohrer Wilner Maxwell & Matthews.
The firm has filed numerous class actions on issues such as defective products, medical malpractice and nursing home neglect.
Wilner has read the bill. To him, it’s an attempt to bog down class actions in an already overcrowded federal court system.
“They hope the cost of litigation to the plaintiffs will be so large they’ll abandon them,” he said. “It’s a transparent attempt to shield big business against their customers, who have no power against these multi-national corporations except through class action suits.”
Wilner also challenged the claim that courts are awash in “frivolous” suits.
“Frivolous lawsuits could be a problem in the country, but they’re very easily handled,” he said. “The mechanism for handling them is in place. A frivolous suit gets no farther than a correct decision by a trial judge to dismiss the case.
“Frankly, I have a hard time understanding why people would file frivolous lawsuits. It’s not done very much. It’s expensive to file lawsuits, and attorneys don’t make any money on them.”
Michael Freed said the public may have picked up an “adverse perception of lawyers and the role they serve” because of certain suits.
The perception is not valid, and neither are the stated reasons for changing the system, he added.
“I think the state courts exist for particular types of claims, as do the federal courts,” said Freed, managing partner for Florida at Brennan Manna & Diamond. “There’s some overlap in that.
“To the extent there is overlap, litigants should have appropriate choices to where they want to file, based on the circumstances.”
Freed is past president of the Jacksonville chapter of the Federal Bar Association. He has seen class actions from both sides, as a plaintiff and defense attorney.
A case he is defending now involves the J.M. Smucker Co. The plaintiff’s lawyers are claiming that the company’s preserves don’t contain 100 percent of the fruit on the label of an “all-fruit product.” Other fruits are also blended in to make the preserves.
Without commenting on the merits of the case, Freed said that even if they were successful, the plaintiffs would be entitled “to little if anything.”
“I’m not saying that’s what would happen here, but that’s what I’ve seen,” he said. “In those cases, the lawyers get hundreds of thousands of dollars, if not millions. I think some people see that as not casting the legal profession in its greatest light.”
The counterargument, he said, is the public needs class actions “to cause the companies to be responsive to the needs of consumers, and that one or two or 10 consumer lawsuits individually are not going to be enough to right these wrongs.
“There’s certainly merit to that argument.”
Litigators are fighting the new legislation, but it’s an uphill battle, said Wayne Hogan, with Brown Terrell Hogan Ellis McClamma and Yegelwel.
“The Association of Trial Lawyers of America is doing what it can to oppose this,” he said, “but they are terribly outnumbered by battalions of industry lobbyists and industry money that’s involved.
“If the issue were decided on the merits, there wouldn’t be a question. There’s no reason to make a federal case out of it.”
Hogan was a member of Gov. Lawton Chiles’ “Dream Team” that won a $13.1 billion judgment in 1997 in the State’s suit against the tobacco industry.
Most consumers probably don’t realize this bill is making its way through Congress, said Hogan. And the realization would probably set off more yawns than alarms unless their own ox had been gored.
“If you don’t know that your credit card company is charging you in a way that you ought not to be charged, or that there’s some kind of violation in your arrangement with your mutual fund company, you don’t know that you ought to be protesting it until it’s too late.”
Hogan, too, said that calling this measure a “consumer bill” disguises its real purpose.
“I’m not shocked that HMOs, insurance companies, credit card companies and other kinds of companies that sell consumer products would want to be protected from having to answer for the wrong that they did,” he said. “In a sense, they’re saying, ‘If we hurt a lot of people, we want to be more protected.’ ”
If, as the critics charge, soaring judgments have sprung from “forum shopping,” the states should make the needed changes, Hogan insisted.
“One of the things they say is that they’re concerned there are certain jurisdictions around the country that they view as problem areas,” he said. “I think there was some complaint about Mississippi.
“But there are ways to address those rules right there in the state of Mississippi. The federal government doesn’t have to come down with the iron hammer on these kinds of things.”
Not only is the proposed legislation unnecessary, Wilner said. It’s an insult.
“This is an affront to the competence of the trial judges in the various states,” he said. “It’s an affront to suggest the judges can’t control their own dockets.
“How can the federal government dictate to the judges? I just don’t believe it.
“I believe the real goal is to frustrate . . . access to the courts by consumers who have been victimized by big business. I believe there’s nothing else to it.”