Fairness in Class Action Litigation Act or ‘Volkswagen Immunity Bill’

Volkswagen (VW), the world’s largest automaker, is in the midst of a massive crisis brought on by its rigging of engines to fool diesel emissions tests.  The company’s scheme was first discovered by a West Virginia laboratory investigating emission levels in diesel vehicles. It has been reported that the Environmental Protection Agency (EPA) later found that millions of VW cars have devices in their engines that detect when they are being tested and temporarily adjust performance to improve (and falsify) results. Once on the road, these cars pump out as much as 40 times the legal level of nitrogen oxides. 

To add insult to injury, reports allege that VW knew about these falsified results long before it was discovered, but still continued to actively tout the cars’ false “low emission” standards via a massive marketing campaign aimed at U.S. consumers.  

{mosads}As a result of VW’s decision to lie to consumers, the value for customers’ vehicles, many of whom paid a premium for the promise of greater fuel efficiency and lower emissions, is significantly diminished.  VW shareholders have already faced massive financial losses after nearly a quarter of the company’s market value was wiped out.  

If that West Virginia lab had not uncovered VW’s deception, the company would likely have continued to push their defective cars and defraud consumers.  VW has already been ordered to halt sales and recall 500,000 U.S. cars (though they admit 11 million cars currently have this “defeat device”).   

This type of behavior from VW is not only irresponsible, but also shameful, and they should be held accountable for their wrongdoing.   

Unfortunately, this type of bad corporate behavior is nothing new to consumer advocates. All too often corporations knowingly deceive their customers, coercing them to purchase defective products or to shell out additional money for phony repairs.  While much of this deception is focused on ripping off consumers, the retailing of these defective products can sometimes lead to serious injury. 

Perhaps that explains why the Institute for Legal Reform and U.S. Chamber of Commerce just released a report claiming that plaintiff lawyers are scoring “big perks” through “secret” lobbying.  While the Chamber did a terrific job highlighting the hard work that trial lawyers across the country do every day to help protect consumers from the corporate scams and abuses of Wall Street and multinational corporations, the Chamber’s report was just the latest tactic in their ongoing campaign to divert attention away from their long history of lobbying for less transparency, less regulation and less corporate accountability.  

Right now, the only line of defense consumers have against these corporate scams and abuses is the civil justice system, within which consumer protection class action lawsuits have proved to be the essential, and sometimes only, tool allowing citizens to hold bad-acting corporations accountable and force them to change their behavior.  Often, for individuals, the cost of pursing a claim against a massive corporate rip-off can exceed the likely recovery. So corporations can generate millions in ill-gotten profits on faulty products without fear of consequence. With class action lawsuits, the playing field is leveled when many consumers with smaller injuries can band together and seek justice and accountability for corporate scams and abuses. 

Unfortunately, a bill in the House of Representatives seeks to take away this fundamental American privilege, diminishing the rights of consumers while empowering corporations to carry on with dishonest practices.  The recently proposed “Fairness in Class Action Litigation  Act” (H.R. 1927) would eliminate most consumer class actions by forcing consumers to prove that they’ve each suffered the exact same type and scope of injury from a company in order for their case to be certified—and move forward as a group—in court. In the VW case this means that, in order to proceed, each consumer would need to have suffered in the same exact way, down to details like how long the defective vehicle was driven, price, or even the model year. 

If this bill passes, it would take away citizens’ rights to form a class and take on Goliath corporations. It means that corporations, like VW, would be immunized while their consumers are left holding the bag. It means there would be fewer consequences for a company’s dishonest dealings and that, in the future, a corporation may well decide it’s better for the bottom line to lie to their costumers than to fix a serious problem. 

It’s fortunate that VW’s “defeat device” was discovered but, all too often, these types of deceptions go unnoticed or ignored.  It is the right of every American to be treated fairly, to be empowered to speak out and seek justice against those who wrong them. It is the right of all Americans to stand up to bad-acting corporations that put profits before safety, and our duty as consumer advocates to fight any corporate-led bill that takes these rights and remedies away.

Lipsen is the CEO of the American Association for Justice (AAJ).