The House Judiciary Committee has voted 19-12 to approve the Fairness in Class Action Litigation Act of 2017 (H.R. 985), a bill that would amend the procedures used in federal court class actions and multidistrict litigation proceedings.
“The bill’s passage by the House and Senate with strong Republican support would seem to augur well for the adoption of a joint resolution of disapproval under the Congressional Review Act to nullify a final arbitration rule should one be issued by the CFPB,” Alan Kaplinsky, a partner at Ballard Spahr LLP and pioneer of the use of pre-dispute arbitration provisions, wrote in the firm’s CFPB Monitor blog.
The bill was passed along party lines in the committee, with no Democratic support. It includes provisions on class-action injury allegations, conflicts of interest, class member benefits, money distribution data, issues classes, stays on discovery, third-party litigation funding disclosure, appeals, misjoinder of plaintiffs in personal injury and wrongful death action, among other provisions.
“A federal court shall not issue an order granting certification of a class action seeking monetary relief for personal injury or economic loss unless the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives,” the bill states.
Also, attorneys would be required to disclose whether any proposed class representative or named plaintiff in the complaint is a relative, present or former employee, present or former client or whether there is any contractual relationship between the class representative and attorney.
The bill would amend the terms of attorneys’ fees.
For instance, “[u]nless otherwise specified by federal statute, if a judgment or proposed settlement in a class action provides for a monetary recovery, the portion of any attorneys’ fee award to class counsel that is attributed to the monetary recovery shall be limited to a reasonable percentage of any payments directly distributed to and received by class members. In no event shall the attorneys’ fee award exceed the total amount of money directly distributed to and received by all class members.”
Classes seeking monetary relief must be defined according to “objective criteria.”
“[T]he party seeking to maintain such a class action affirmatively demonstrates that there is a reliable and administratively feasible mechanism (a) for the court to determine whether putative class members fall within the class definition and (b) for distributing directly to a substantial majority of class members any monetary relief secured for the class,” the bill states.