Class actions allow people with similar claims to band together to hold corporations accountable. This gives American workers and consumers the power and ability to level the playing field, even when facing the most powerful corporations in the world.
Class actions are often the only way that individuals can seek justice when they are faced with widespread corporate wrongdoing. When corporations rip off consumers for smaller amounts of money, it is very difficult for individuals to find the time and resources it takes to hold a corporation accountable on their own. If the stakes of individual lawsuits are just too high for one person, class actions make access to justice feasible.
Class actions also make the market place safer and better for consumers and investors because corporations have an economic incentive to treat them fairly. Class-action lawsuits have uncovered years of corrupt practices in the tobacco industry, contamination of ground water that caused cancer, fraudulent pricing strategies and misleading advertising by drug companies, and predatory payday lending practices.
Corporations and their front groups are working to end class actions because by doing so they would effectively be immunized from being held accountable for their dishonest and deceptive practices.
The ability of Americans to join together in a class action is essential in ensuring corporate accountability. Further limits on class actions will only give corporations a green light to rip off consumers and workers.
Two recent U.S. Supreme Court decisions have aided corporations’ efforts to end class actions. The U.S. Supreme Court’s decisions in AT&T Mobility v. Concepcion and Wal-Mart Stores v. Dukes are the latest barriers that prevent workers and consumers with similar claims or injuries to band together as a class to receive justice and hold powerful interests accountable.
- In AT&T v. Concepcion, the Court gave corporations broad authority to force consumers into one-sided, secret arbitration proceedings, practically writing a blueprint for how to avoid class-actions, and ultimately, any accountability. [U.S. Supreme Court]
- In Wal-Mart Stores v. Dukes, the Court made it substantially more difficult to establish class-action status and could significantly impact future discrimination and defective product cases for American workers and consumers. [U.S. Supreme Court]
To restore employees’ rights to bring class-action lawsuits, Senator Al Franken (D-Minn.) and Representative Rosa DeLauro (D-Conn.) introduced the Equal Employment Opportunity Restoration Act of 2012 (S.3317 / H.R.5978) in the 112th Congress. This legislation is a direct response to the Supreme Court's Wal-Mart decision in which thousands of female workers were denied access to justice.
U.S. Sens. Al Franken (D-Minn.), Richard Blumenthal (D-Conn.) and U.S. Rep. Hank Johnson (D-Ga.) also introduced the Arbitration Fairness Act of 2011 (S. 987 / H.R. 1873) in the 112th Congress to amend the Federal Arbitration Act to eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and allow consumers and workers to choose arbitration after a dispute occurs.