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Thursday, Dec 7, 2023

COMMENTARY–Class Action Suits: You Need Not Be Present to Sue

Apparently you don’t need plaintiffs or a courtroom to file a class action lawsuit. The envelopes consumers receive from the class action lawyers would be more appropriate if they just read, “You may already have sued a big company.”

The parallels between the current class action system and sweepstakes contests are as much disturbing as they are a rallying cry for meaningful reform.

First, there are thousands, if not millions, of consumers involved, all thinking they can win the jackpot. Second, the outcome for most of them amounts to little more than a booby prize. Third, the only real winners are those who organized the event , in this case, the lawyers.

The class action system, once envisioned as a means of streamlining the civil justice system and called the key to the courthouse door, has been perverted into the class action lawyers’ key to the legal lottery.

The rules of engagement are fairly simple: find or invent some form of argument for liability, file a class action on behalf of consumers, negotiate a settlement and collect your winnings.

The recent trend in filing lawsuits against HMOs is a perfect case in point. The self-serving lawyers who’ve filed these cases, some right here in San Diego, are getting their knickers twisted trying to get the cases settled, all but saying they don’t want the cases to even go to trial.

Lawyers wield class action lawsuits like a club to strong-arm companies into large settlements. In many of these cases, consumers often are not even informed that they are part of the class until the case has been filed and settled. Don’t believe that? Here’s what one consumer wrote to a national auto manufacturer:

‘Truly An Attorney’s Scam’

“Enclosed are two copies of a request for me to join a class action against you folks. To join, I do nothing. No mailing back, no stamp, no nothing. This is great. If I can’t read English, I’m in. If I’m not at home or on vacation or just toss junk mail, I’m in. This is truly an attorney’s scam.”

This consumer is right on target in pointing out one of the fundamental flaws in the current system. It’s up to the consumer to “opt out” of a class action.

If you are not adequately informed of this responsibility, you are automatically included as a member of the class. In your name, attorneys can file lawsuits for everything from the size of computer screens to the ingredients in breakfast cereal.

And what do consumers get from all this? Typically, the reward is a coupon good on the next purchase of a product made by the company that was sued.

We’ve seen this in cases where consumers got a coupon for a free box of cereal while lawyers earned $2 million, or where consumers received coupons worth $13 toward the purchase of a new computer screen but the lawyers pocketed nearly $6 million.

As for the latest class action lawsuits against the health care industry, the consumers’ reward is most likely to be higher health care premiums.

Laughing To The Bank

The companies that are sued , supposedly on your behalf , take a financial hit that results in either less investment in new jobs and equipment or higher prices for consumer products and services. With any luck, the coupons consumers get from class action settlements will offset the price hike that results from the lawsuit. Or worse, you’ll end up paying more while the attorneys are laughing all the way to the bank.

Today’s class action system is a far cry from what early class action pioneers envisioned. Originally designed to serve consumers, it’s now clear that consumers are being victimized by predatory lawyers seeking a quick financial gain. And consumers are about to be victimized again as the latest class action lawsuits threaten to drive up the cost of our health plans.

The class action system must be fixed so consumers’ interests are put ahead of the lawyers. Judges should be required to carefully evaluate attorneys’ fees to determine if the class members are truly benefiting from the action.

An “opt in” reform to replace the “opt out” requirement would help ensure consumers aren’t used and manipulated by class action attorneys to hammer a lawyer-profiting settlement out of another party.

Most importantly, we would all be much better served if we remove the lottery mentality from the class action system and replace it with the concept on which it was founded , justice.

Kotner is executive director of San Diego County Citizens Against Lawsuit Abuse.


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