Congressman Trey Gowdy, a South Carolina Republican, has offered his strong support for legislation that aims to curb what sponsors argue are abusive practices related to class action lawsuits.
The U.S. House passed the Fairness in Class Action Litigation Act in March, and it is now with the U.S. Senate's Judiciary Committee. Its main provisions include setting limits on recoveries for victims; requiring that class actions consist of members with the same type and scope of injury; and mandating that those with lesser injuries file separate actions.
“Class action lawsuits provide a level playing field for both consumers and businesses to settle disputes," Gowdy told Palmetto Business Daily. "The Fairness in Class Action Litigation Act ensures Americans have the opportunity to resolve their grievances through our civil litigation system while simultaneously providing judges with the discretion they need to protect equal access to justice. "
The congressman, who voted for the bill, praised Rep. Bob Goodlatte (R-VA) for introducing it "and for his steadfast commitment to a fair and transparent justice system."
The bill will now be considered by the U.S. Senate Judiciary Committee, of which Sen. Lindsay Graham (R-SC) is a member. In response to questions from Palmetto Business Daily asking for the senator's position on the bill, Graham's press spokesman, Kevin Bishop, said, "It hasn't come up yet."
Goodlatte, chair of the House Judiciary Committee, said class action lawsuits "were supposed to provide a level playing field for both consumers and businesses, so their issues could be settled in a just and fair system."
“Sadly, because of abuses by unscrupulous trial lawyers, many Americans now see class action lawsuits as a television commercial, a hotline, and a cottage industry where lawyers win and victims lose," Goodlatte said in a statement following the passage of the bill in the House.
Goodlatte claimed trial lawyers are exploiting loopholes in a previous bill he authored more than 10 years ago, the Class Action Fairness Act. It was signed into law by President George W. Bush.
"We are giving judges the tools they need to keep abusive practices out of our courts, and to prevent further exploitation of victims by trial lawyers who wish to line their pockets," the congressman said.
The bill also contains additional provisions prohibiting judges from approving class actions in which the lawyer representing the class is a relative of a party in the class action suit; requiring class action lawyers only receive payment after victims are paid; and ordering that any third-party funding agreement be disclosed to the court.
It also contains provisions relating to asebestos bankruptcy trusts, which were set up to manage the disbursement of awards in those cases. The bill orders increased transparency.