Class-action Reform a Must (Editorial)

Class-action litigation as it exists is a joke for which the American public is the butt.

United States Senate Bill 1712, The Class Action Fairness Act, would help curb frivolous lawsuits by entrepreneurial lawyers who seek to create a courtroom version of “Who Wants To Be A Millionaire.” The bill would make it easier to move class-action suits to federal court, where judges tend to examine them more carefully.

We’re all for holding companies, and people, accountable for misconduct and rewarding appropriate damages when circumstances warrant.

But frequently trial lawyers slap corporations with class action suits in the name of clients who stand to benefit little, if any, from a settlement. Often, there’s not even any evidence of wrongdoing on the part of corporations.

And by the time the lawyers divvy up their fees, the “clients” get vouchers for product upgrades or enough cash for a fast-food lunch.

Here are a couple examples:

• In a class-action suit against Southwestern Bell involving 6 million customers in five states including Arkansas, during the trial of which virtually no evidence of misconduct was uncovered, lawyers got $4 million. Each Bell customer got a $15 service credit.

• In a suit against Cheerios over a food additive, which contained no evidence of customer injury, lawyers collected nearly $2 million in fees. Consumers in the class got a box of free cereal.

In the end, we all pay. Firms must charge more for their products to fight legal assaults and counter market against courtroom publicity. Settlements heaped with punitive damages even drive firms to bankruptcy.

The courts stay bogged down with lawyers who file class action suits in counties where judges are elected. So judges who are accountable to a single county can make decisions regulating products distributed nationwide.

The House already passed the bill, despite pressure from the American Trial Lawyers Association on the many Democrats who take its contributions. Even the notoriously liberal Washington Post endorsed the House bill.

U.S. Sen. Tim Hutchinson, R-Arkansas, will vote for fair class action. It’s time U.S. Sen. Blanche Lincoln, D-Arkansas, got off the fence on the side of common sense, as well.

A group of Northwest Arkansas business leaders met in mid-May at the Springdale Chamber of Commerce to discuss class-action reform, and it’s clear they want change.