Banks and Consumers at Odds Over ‘Fairness in Class Action Litigation Act’

The Fairness in Class Action Litigation Act of 2017 (H.R. 985) is a misleadingly named bill that, if passed, would gut the class action lawsuit system as we know it and make it virtually impossible for consumers to file lawsuits on behalf of large groups of people who want to hold companies accountable for allegations of widespread fraud or other misconduct.

Large banks and corporations dislike consumer class action lawsuits and often take steps like including mandatory arbitration clauses in attempt to keep consumers from filing lawsuits on behalf of large numbers of consumers.

Banks such as Wells Fargo have everything to gain from the passage of H.R. 985 and consumers have everything to lose by the bill’s passage. If H.R. 985 passes, it could affect the ability of consumers to hold banks accountable for egregious conduct, such as Wells Fargo’s practice of creating fake bank accounts for consumers without their knowledge.

After news of the Wells Fargo fake bank account scheme broke, the banking giant was hit with class action lawsuits from outraged consumers. Wells Fargo was accused of fraudulently opening more than 2 million credit and debit card accounts. A class action settlement was reached, and this month Wells Fargo agreed to expand the class action settlement amount from $110 million to $142 million. The bank also faces extensive civil penalties and many executives, employees and board members have been fired.

Without the ability to file class action lawsuits, consumers affected by this Wells Fargo bank account scam may not have been able to seek compensation for the bank’s wrongdoing. Millions of customers were affected, but the losses they individually suffered from Wells Fargo’s conduct were likely not large enough to justify filing an individual lawsuit against the company. Class action litigation is an excellent tool for situations in which a large number of consumers have suffered losses due to a company’s widespread conduct.

If passed, H.R. 985 would effectively take away consumers’ ability to file class action lawsuits against large banks and corporations. The bill will require Class Members to suffer virtually identical losses in order for a case to proceed as a class action lawsuit. The Wells Fargo class action lawsuit may not have been allowed to move forward even though the Class Members were all affected by the same scheme because Wells Fargo employees opened different types of bank or credit card accounts on different dates spanning many years.

In addition, H.R. 985 creates additional burdens that make it far more difficult for plaintiffs and their attorneys to bring successful class action lawsuits, such as a requirement that the plaintiff prove causation and liability even before discovery commences in multidistrict litigation. The bill also includes provisions that prevent attorneys from representing a plaintiff in a class action lawsuit if the attorney has already represented the plaintiff in a different legal matter.

What Can I Do to Stop H.R. 985 From Passing?

Call the Capitol Switchboard at (202) 224-3121 and ask the operator to connect you with your state’s senators. Then ask your Representative to vote NO on the Fairness in Class Action Litigation Act. Let your Representative know that you support consumers’ rights and that you want to retain the right to use class action litigation to hold corporations accountable for wrongdoing.

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