The few class action settlements that solely protect
ill-gotten corporate profits and enrich lawyers -- but
that fail to properly compensate victims or correct
corporate misbehavior -- are inappropriate and unusual
results of a court system that is designed to give every
individual the opportunity for justice.
The Association of Trial Lawyers of America (ATLA)
and its 60,000 members who represent those injured
through no fault of their own abhor such misuse of the
civil justice system. We believe in vigorous
representation of clients' interests above all. Some of
these lawsuits fly in the face of that ideal, and ATLA
supports remedies that are fair and reasonable.
While class actions and other litigation have brought
progress in consumer protection -- including
automobiles, the Dalkon Shield IUD and tobacco -- the
marketplace continues to yield situations posing
physical and financial harm to the public which can best
be addressed through class-action legal procedures.
Specifically, ATLA's policy for years has been that
tort and consumer causes of action should be prosecuted
as class actions only when society's interest in
deterring wrongful conduct can be advanced, when
individual litigation to redress wrongful conduct would
be impractical, and when the rights of the victims to
fair and timely compensation can be protected.
Some class actions do not follow these guidelines.
While some may be promoted by self-interested lawyers,
it is often the defendant corporations which have been
devising collusive or coupon-only settlements (such as
those spotlighted in The Washington Post in its
November 14, 1999, article on this topic), with
plaintiff lawyers and their fees taking the heat.
In briefs before the U.S. Supreme Court, ATLA has
argued that settlements deserve close judicial scrutiny
and a high regard for individual class members' rights.
As Columbia University law professor John Coffee
noted in the ABA Journal, "the class action is turning
from plaintiffs' weapon to defense shield." Some
corporations welcome and even seek out class action
litigation and settlements as quick routes out of costly
courtroom battles resulting directly from their
misdeeds.
Judges themselves have a critical role to play in the
outcome of class actions. It is their stated mission to
closely police these settlements and scrutinize the
resolutions so that all parties are treated fairly.
Given the proper resources, judges will be better
able to apply remedial measures to assure that class
action settlements result in proper compensation for
victims and correction of corporate misbehavior. Judges
have the ability to scrutinize class actions until they
have certified that a settlement truly benefits the
public and the plaintiff class wholly and individually.
This way, lawyers will not earn fees just because they
negotiated a settlement providing only coupons that
class members will never use.
Moreover, ATLA recommends that more "sunshine" will
serve as an antiseptic in class action litigation
procedures to ensure full accountability and fair
settlements. Class action notices also must be written
in plain language for the targeted class so all
interested parties can understand what's going on. And
settlement terms and outcomes should be made public, not
veiled behind secrecy orders.
ATLA generally opposes coupon-only resolutions of
class actions -- if only because they may well be
presumptively questionable. Coupons should rarely be the
only answer; the corporation must be required to
"cost-out" its end of the settlement so that the public
knows exactly what each wronged consumer will receive as
reasonable compensation.
Meanwhile, we must not allow the coupon situation to
masquerade as an excuse for enactment of new class
action legislation (the so-called "Class Action Fairness
Act"). These House and Senate bills are nothing but a
ploy to federalize all class action suits, remove them
from the states where the consumer harm occurred, and
overwhelm the already overburdened federal courts.
This legislation falsely claims to be based on a
"tidal wave" of class action cases at the state level --
while its real objective is to postpone class-action
adjudication, delay justice for thousands and deny it to
others who may be forced to abandon legitimate claims.
That's why it has been criticized by Chief Justice
William Rehnquist and opposed by the U.S. Department of
Justice and the Conference of Chief Justices
representing state courts.
What we do need are: more resources for the courts
and a full complement of decently-paid federal judges;
more class actions resolved at the state court level;
prohibition of defense class-action coupon schemes to
avoid accountability and an end to cooperation by the
few attorneys who collude with corporate wrongdoers; and
a streamlined system to assure the maximum financial
awards to the actual individual plaintiffs who compose
each class.
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Richard H. Middleton Jr. is the President of the
Association of Trial Lawyers of America and partner in
the Savannah, GA, law firm of Middleton, Mathis, Adams
and Tate.
