How does preventing Americans from holding foreign makers of shoddy goods make America great again?

PictureFor more on this subject: “Closing the Courthouse Door”

Banning Class Actions Will Not Put “America First”
By Paul Bland for Public Justice

If you were one of the many Americans who built a home during the housing construction boom of the mid-1980s, chances are pretty good that your home was built with drywall imported from China.

High demand for inexpensive construction materials, coupled with a short supply of domestic drywall following a series of devastating hurricanes in the Southern United States, led to a surge of imported drywall materials being used in U.S. home construction.

At first, it seemed like the perfect solution. Drywall from China was cheap and plentiful. As it turned out, however, it was also highly toxic: It emits volatile chemicals, stinks like rotten eggs, corrodes wiring, fire alarms and copper piping, and causes a range of serious health problems, including chronic fatigue, insomnia, asthma, coughing and headaches, and sinus difficulties. 

Approximately 60,000 homes built with drywall from China were affected, according to one source. In fact, the problems caused by this imported drywall are so massive and widespread that individual lawsuits could not have even begun to make a dent in the problem. 

Fortunately, many homeowners were able to seek a solution via class action suits that provided much needed financial compensation as well as helping to fix the underlying problem.

In 2013, for example, a drywall manufacturer from China settled a complex series of interrelated class actions on behalf of Gulf Coast residents that provided for complete remediation (down to the studs and back) of approximately 3,000 ruined properties. 

These property owners were essentially compensated for 100% of their losses, as the company agreed to an uncapped remediation fund for homeowners, separate from a different fund for attorney’s fees.

This litigation is a testament to the importance of the class action device. If the individual homeowners had not been able to pool their resources and proceed as a class, only a handful (and certainly not all 3,000 of them) would have been able to achieve such a favorable result.  
And without the class action, they also would have clogged the courts for years with individual cases, forcing one judge after another to relitigate the same issues, review the same evidence, and consider the same defenses. 

In short, class actions were the only procedural approach that made any sense when it came to helping homeowners whose health and safety were jeopardized by this unsafe product.  

Under a new bill from GOP Congressman Bob Goodlatte now making its way through Congress, however, remedies like this would be made virtually impossible. The so-called “Fairness in Class Action Litigation Act” (a misnomer if ever there was one) would wipe away Americans’ ability to take on companies whose defective products put their health and safety at risk.

From dangerous drywall from China, to defective and harmful prescription drugs – and nearly everything in-between – this sweeping legislation would essentially inoculate foreign companies flooding the American market with dangerous products from ever having to answer for their behavior in court. American consumers would be blocked from the courts in favor of boosting corporations’ bottom line.

If the Goodlatte bill becomes law, it would be official U.S. policy to reward wrongdoers at the expense of American consumers. That’s a result that we should all band together to avoid.

While some supporters of the Goodlatte bill deny that it would wipe away nearly all class actions – claiming that civil rights and consumer advocates are crying “wolf” and that the corporate anti-class action bill is actually very mild – their arguments are nonsense on stilts.  Two thoughtful, academic responses written by some of the leading scholars on class actions and civil procedure in courts, Myriam Gilles of Cardozo Law School and Elizabeth Burch of Georgia Law School, prove that the bill really does contain poison pills that would wipe away virtually all class actions filed in the United States. The bill would, for example, slash enforcement against securities fraud, enable pharmaceutical companies to fix prices artificially high, make it easier for employers to pay women less than men, free up payday lenders to ignore rules against deceptive advertising, and on and on.

In an ironic twist that seems impossible anywhere but in the halls of Congress, the lawmakers propping up the Goodlatte bill are the very ones who have turned an “America First” campaign platform into something nearly akin to a religious conviction.

The truth, however, is that Goodlatte’s bill would put American consumers dead last in the battle to take on corporate wrongdoing, even favoring foreign corporations over American citizens. Companies like Takata [defective airbag maker], Volkswagen [diesel engine emissions cheat] and the drywall manufacturers from China have already made it as difficult as possible to take them to court. But now some lawmakers want to permanently seal the deal in favor of big business by making it legally impossible to challenge them in court.

Indeed, the bill is a stark example of government overreach – stipulating when Americans can and cannot have their day in court – and a gift to shady corporations infiltrating the American market with shoddy products. There’s no “fairness” in that, and Congress can’t have it both ways.

There was nothing great about poisonous drywall lining the homes of America, and there’s nothing about shielding the manufacturers of those products from liability that will make America – our homes, our courts or our government – great again.

Republished with kind permission of the authors after first appearing at DailyKos. Co-authored by Public Justice Senior Attorney Leslie A. Brueckner.