Last year, the chairman of the House Judiciary Committee, Bob Goodlatte (R. Va.), proposed the Fairness in Class Action Litigation Act of 2015-2016 (H.R. 1927). The Act passed the House last week on January 8, 2016, and is presently before the Senate.
If passed, the Act will amend the federal judicial code to prohibit federal courts from certifying “any proposed class seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered an injury of the same type and scope as the injury of the named class representatives.” H.R. 1927. According to its sponsor, the Act “aims to reform the current federal class action lawsuit framework by requiring uninjured parties to be part of separate class action suits than those parties experiencing more extensive injuries.” Data from the Administrative Office of the United States Courts indicates that enactment of this legislation could reduce the number of class action suits filed and the number of plaintiffs in them.
The Act would in effect tighten what in class actions is called the typicality requirement: all the class plaintiffs need to look the same. While a lot will turn on judicial interpretation of the Act’s language, one thing is certain – if passed, the standard for class certification will rise to a new heightened level, likely relieving manufacturers from the threat and pursuit of any number of overly broad and no-injury class action lawsuits.
This could have tremendous impact for companies like, for example, Volkswagen, which faces economic loss class action suits across the country that are seeking certification. Indeed, there are some who are referring to this legislation as the “Volkswagen Immunity Bill” or “VW Bailout Bill”. If passed, it could impact certification to, if nothing else, reduce overall class size or splinter the classes based upon nature or extent of economic harm.
The Act would certainly prevent, for example, the certification of the classes brought on behalf of consumers who did not all experience the claimed issue with the product. For example, this legislation would likely have prevented certification of the class in the matter of In re Whirlpool Front-loading Products Liability Litigation. In that case, plaintiffs alleged a design defect existed in Whirlpool Corp.’s front-loading washing machines, which caused the machines to develop mold. The district court granted class certification, and the U.S. Court of Appeals for the Sixth Circuit, in In re Whirlpool Front-Loading Washer Products Liability Litigation, 722 F.3d 838, 844 (6th Cir. 2013) affirmed, even though many consumers in the class never actually experienced mold. The Act could also reduce settlements and awards in personal injury class actions because it would stratify classes based upon the severity or type of injury and certify the people who were actually injured so those who were not do not receive the same relief.
Bottom line is that if passed, this Act will change the landscape of product liability class action litigation going forward. Stay tuned here for updates as to whether the Fairness in Class Action Act of 2015-2016 gets through the Senate and signed into law.