Newspaper article THE JOURNAL RECORD

Judiciary Considers New Rules for Claims in Class-Action Suits

Newspaper article THE JOURNAL RECORD

Judiciary Considers New Rules for Claims in Class-Action Suits

Article excerpt

WASHINGTON -- Anyone who ever buys a car, subscribes to a computer on-line service or uses medicine might one day find themselves part of a class-action lawsuit.

But now, the federal judiciary is thinking of changing the rules for claims that can involve thousands of people -- many of whom never even knew they had suffered harm until someone else filed suit.

Lawyers for businesses generally like the proposals before the U.S. Judicial Conference. They argue that class-action claims can be a form of blackmail, forcing companies to choose between a settlement and years of costly litigation. "There's been too much growth in the kinds of cases that are being addressed on a class-action basis," says Alfred W. Cortese Jr. of the Lawyers for Civil Justice, a business attorneys' group. On the other side of the issue, a group of law professors has lined up with the consumer-activist Public Citizen Litigation Group to oppose the changes as a potential sellout of people who have suffered real harm. If the rule changes are approved, "You are going to create a much larger incentive to go out and cheat individuals," says John Coffee, a Columbia University law professor, and one of 144 academics who signed a letter opposing the proposals. One proposal would let judges decide that some class-action claims just aren't worth it. They could deny class-action status to a claim if the likely award to each person would be small -- say $5 or $50 each -- in comparison with the trouble and expense of trying the lawsuit. If class-action status is denied, each person would have to sue separately, and most wouldn't bother. "Where litigants are getting pennies and lawyers are getting large fees, what is the purpose of the class?" said New York lawyer Sheila Birnbaum, who represents companies in product liability claims. But Brian Wolfman of Public Citizen says that under such a rule, class-action status could be denied to valid claims of wrongdoing. He cited lawsuits filed last year that accused Packard Bell Electronics of selling new PCs with used parts. The company agreed to settle the claims by creating a $1 million fund and extending repair contracts. …

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