- The Washington Times - Wednesday, March 13, 2002

Hilda Bankston's only crime was filling FDA-approved drug prescriptions in Jefferson County, Miss. That's when the lawyers stepped in, smelling blood in the water.

For nearly 30 years, through hard work and long hours, Mrs. Bankston and her late husband had earned a solid reputation for running a caring and honest pharmacy helping people by filling their prescription needs. The Bankstons were living the American Dream.

In 1999, the Bankston Drugstore was dragged into a national class action lawsuit against a pharmaceutical company. Because the Bankstons were Mississippi residents and had filled prescriptions, they provided the perfect litigation target for attorneys seeking a backdoor entry into the Jefferson County court system. In addition, these attorneys needed the Bankston Drugstore's prescription records in order to fish for potential clients in Jefferson County for future lawsuits. Once the lawsuits began, Mrs. Bankston's husband suffered a heart attack and died. Mrs. Bankston sold the drugstore. Yet the lawsuits keep coming.

Consumers and hard-working Americans like Mrs. Bankston are being victimized many even bankrupted each day by plaintiffs' attorneys shopping for the county court system most likely to pay out big money. Unfortunately, the only people hitting the jackpot in the class-action lottery are the lawyers.

This week Congress is considering legislation to restore fairness and reduce abuse of our class action legal system. This legislation doesn't take away anyone's right to sue; rather, it remedies the glaring inconsistencies in the current system by allowing large interstate class action cases to be heard in federal courts. Federal courts are accountable to all Americans, unlike the few remote state courthouses that have become notorious for lax standards and poor judgment.

Most importantly, the Class Action Fairness Act of 2002 establishes a "Consumer's Class Action Bill of Rights" to ensure the rights of class action members are protected. That certainly wasn't the case in a class action against a Boston bank over disputed accounting practices. The attorneys representing the class-action members reached a settlement awarding each class member $8.76; however, each member had $90 deducted from his or her bank account to cover the attorney fees. Such abuse would be outlawed under this legislation by prohibiting the approval of net-loss settlements.

Consumers will also be protected by establishing a "Plain English" requirement that clarifies class members' rights. We have all received or heard notices about the rights of class members to a proposed class action or settlement. However, few understand what these notices really mean. Because many rules require class members to opt out of class actions, millions of Americans are in class actions and don't even know it. The Plain English standard will eliminate legalese language so class members will know if they are in a class action and what their rights are as a potential class member.

The legislation requires greater scrutiny of coupon settlements. It's not difficult to see whose interests are being served in a class action settlement with Cheerios over food additives that produced $2 million in attorneys fees while class members only received coupons for more Cheerios. An airline price-fixing settlement produced $16 million in attorneys fees yet only a $25 credit for class members if they purchased an additional airline ticket for more than $250. While trial lawyers reap millions in these settlements, the costs are ultimately passed off to you and me the American consumer.

In addition, the legislation would prohibit settlements providing bounties to class representatives or bonuses to class members from specific states. The current class-action system produces enormous disparities. For instance, an infamous Mississippi asbestos settlement awarded class members from Mississippi as much as 18 times more money than class members from other states.

Currently, attorneys lump thousands and sometimes millions of speculative claims into one class action and race to the most hospitable state courthouse in hopes of a rubber-stamped settlement. Indeed, filing of state court class actions have increased 1,000 percent over the past 10 years transforming certain state courts into the epicenters for class-action abuse.

Because of the cost, distraction and potential embarrassment associated with litigation, many defendants are cornered into settling class-action lawsuits regardless of their merit. The cost of these settlements is passed on to the American consumer in the form of higher prices and to employees in the form of diminished returns on their retirement plans. Ultimately, it costs jobs, investment and innovation with consumers getting the short end of the stick.

It's time for Congress to put an end to these abuses and provide Americans with the fair and efficient civil justice system they deserve.


James Sensenbrenner, a Wisconsin Republican, is chairman of the House Committee on the Judiciary.


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