Class actions are important as a litigation tool to vindicate the rights of consumers, workers and others. They also perform a significant regulatory function. Lawsuits can be brought by individuals working together to uncover and stop harmful actions or deceptive behavior on the part of large businesses.
Individual consumers or workers may have little individual power in litigation, because unless there are tens of thousands of dollars at stake, it can cost more to litigate the issue than would be recovered in a successful case.
With a class action that affects millions of consumers or thousands of workers, that litigation can become cost effective. As we noted last time, many businesses and politicians are working hard to eliminate any rights by many individuals to file class action lawsuits. Sadly, the Supreme Court has supported these efforts, allowing the federal arbitration law to trump more protective state legislation.
Class action lawsuits also help fill the gap when regulation is weak or missing altogether. Lawsuits like the Ford Explorer/Firestone tire rollover epidemic of the early 1990s exposed the dangerous tendency of the vehicle to rollover. The automaker blamed the tire maker, and the National Highway Traffic Safety Administration (NHTSA) agreed with Ford.
However, documents uncovered in lawsuits against Ford point to suspension and roof issues with the Explorer. NHTSA, refused to open and investigation, a practice that has occurred in numerous other defect cases, including the Toyota unintended acceleration issue, the GM ignition switch and the Takata air bag defect.
Something can be done to reverse these damaging court rulings. Congress could amend the law to prohibit class waivers and ensure other rights, but given the current political views of the Congress, that is unlikely to happen for the near future.
Consumers, workers and shareholders should recognize the threat posed by the movement to lock them out the courtroom and hold their politicians accountable.
Source: Regblog.com, “A Bleak Future for Class Actions?” Wataru Aikawa, May 7, 2015