Class Actions

Class actions developed as a form of litigation in which a group of people claiming similar injuries or damages could band together to sue the same defendant. Nowadays, however, these cases are often pursued with the sole intention to shakedown a defendant—hurting businesses and damaging the American economy. Read More...

The sheer size of some classes is enormous—thousands to sometimes, millions of individual claimants come together in single class actions. The large size of a proposed class could result in huge damage awards, making these cases very risky for businesses despite strong defenses. Consequently, once a court decides that a case can proceed as a class action, most defendants end up settling the case instead of risking a trial—even if they have not done anything wrong.

Unfortunately, plaintiffs’ lawyers have exploited businesses’ caution by filing many meritless class actions—all with the goal of scoring a jackpot settlement where consumers receive minuscule amounts, and lawyers walk away with huge fees. For example, the Telephone Consumer Protection Act (TCPA) and our securities laws have sparked enormous class action lawsuits that significantly damage legitimate American businesses all while benefiting plaintiff lawyers. Even more alarming are cy pres cases where some or all of the settlement proceeds go to a charity rather than the class members. The U.S. Department of Justice recently ramped up efforts to review abusive class action practices to curb further exploitation.

The Class Action Fairness Act of 2005 (CAFA) helped curb many class action abuses by moving most large, interstate class actions to federal courts, where examination of class actions is generally more rigorous than in state courts. To help address the problems not resolved by CAFA, the Institute for Legal Reform (ILR) believes The Fairness in Class Action Litigation Act (FICALA) would help to ensure that class actions are fulfilling their intended purpose. FICALA aims to bring fairness to the current state of class action litigation by closing various loopholes that increase meritless cases, limiting conflicts of interest between these plaintiffs’ attorneys and their class member clients, as well as bringing needed reforms to multidistrict litigation and fraudulent joinder standards.

01/01/2019

Suggested Resources

Research
  • Ill-Suited: Private Rights of Action and Privacy Claims

    Ill-Suited: Private Rights of Action and Privacy Claims

    July 11, 2019

    Private rights of action (PRAs) are highly problematic: the plaintiffs' bar benefits significantly from America's lawsuit system, while consumers are left with little. PRAs are especially poor tools for addressing privacy issues, which are better left to regulators with relevant expertise and perspective to shape and balance penalties, deterrence, innovation, and consumer protection. Read More

  • Unstable Foundation: <br>Our Broken Class Action System and How to Fix It

    Unstable Foundation:
    Our Broken Class Action System and How to Fix It

    October 24, 2017

    Unstable Foundation examines the pervasive flaws afflicting the United States' class action system. Class actions rarely provide meaningful compensation for class members, and are poorly suited to deterring wrongful conduct. Read More

All Results for Class Actions

  1. Chamber Urges Review of Illinois Class Action Suit

    January 24, 2000 | Press Release

    WASHINGTON, D.C., Jan. 24, 2000 - The United States Chamber of Commerce warned that overly lenient state courts are becoming magnets for class action litigation, in an amicus brief filed today in the Supreme Court of Illinois on behalf of State Farm Mutual Automobile Insurance Company. State Farm was hit with a billion-dollar judgment after a state trial court certified a class action suit involving nearly five million plaintiffs in 48 states.<... Read More

  2. Chamber of Commerce Endorses House Action on Class Action Reform

    September 23, 1999 | Press Release

    WASHINGTON, D.C., Sept. 23, 1999 - The Interstate Class Action Jurisdiction Act (H.R. 1875) passed the House of Representatives 222 to 207 to the applause of small and large businesses across the country, according to the United States Chamber of Commerce.... Read More

  3. Class Action Reform Vital to Business Says United States Chamber of Commerce

    September 22, 1999 | Press Release

    WASHINGTON, D.C., Sept. 23, 1999 - The Interstate Class Action Jurisdiction Act currently before Congress is essential to address the frivolous lawsuits currently undermining both small and large businesses, according to the United States Chamber of Commerce. "This bill will stop abusive cases that trample the rights of defendants and do little more than line the pockets of unscrupulous trial lawyers," said U.S. Chamber of Commerce Executive Vice President Bruce Josten. "HR 1875 is bi-partisan lawmaking at its best."... Read More

  4. December 31, 1969 | News

    According to SCOTUSblog, the U.S. Supreme Court asked for additional briefings in Frank v. Gaos, a case that could decide the future of "cy pres" class action settlements.... Read More