Slate had a great article on Friday, illustrating the value of perhaps the most controversial procedural rule in law — the rule that allows a plaintiff to bring a lawsuit not only on his own behalf, but on behalf of everyone who suffered similar harm at the hands of the same defendant. I am speaking, of course, about class action lawsuits. Many people’s only experience with class actions is, unfortunately, limited to receiving a laughably small check in the mail, one that is often too tiny to even justify the time and gas needed to get it over to the bank. Adding insult to injury, that check often follows a notice from the court overseeing the case, letting the class members know that the lawyers who brought the lawsuit will receive millions, sometimes tens of millions, of dollars in fees for their efforts.
Their bad (but only occasionally accurate) reputation for enriching lawyers while leaving customers with little to show for it has led to a substantial — and wildly successful — effort to rein class actions in, to the point that these types of lawsuits have ceased to be an option in a lot of the circumstances where they used to occur regularly. As the Slate article demonstrates, however, there are many circumstances in which, without the option to pursue a class action, consumers, employees, and other groups would be at the mercy of the large organizations with whom they deal. When I encounter a person who wants to abolish class actions, I always ask: “Okay, let’s say you prevail and class actions disappear entirely. Imagine a situation in which a company flat out deceives every single one of its customers into paying it $10 more for a particular service than the customer thought it was agreeing to pay. Would you agree that, as a society, we want to prevent that type of behavior? How do we do it?”
Slime in the washing machine!!! (Any Houston, Texas residents reading this?)
The Whirlpool washing machine case that is the subject of the Slate article shows why this is a difficult problem to solve. Over the years, Whirlpool has sold hundreds of thousands of front-loading washing machines that turned out to have a tendency to develop mold after just a short period of normal use. The mold created a nasty smell, both in the washer and on the clothes, and has proven to be somewhere between extremely difficult to impossible to eradicate. According to the plaintiffs who have brought the lawsuits, Whirlpool not only continued selling the machines long after it had become aware of the problem, but figured out a way to further profit off the flaw by selling a cleaning product that they claimed (incorrectly) would eliminate the mold. When customers called Whirlpool to complain, they were all given the same advice: keep the door open between washings and try a different laundry detergent. This advice uniformly failed to solve the problem.
So now what? From the perspective of average consumers, this is not a small amount of money at issue. They have spent a couple of thousand dollars on machines that they expected would last them at least a decade. It’s a pretty big investment into something that most homeowners consider to be a necessity.
Class actions: A nuclear bomb in a one-weapon arsenal
From the perspective of the legal system, however, these consumers don’t have anywhere near enough money at issue to justify a lawsuit. At least not individually. Just filing the case and having a lawyer put together the initial disclosures that plaintiffs are required to make to defendants would probably cost more than any single plaintiff could possibly recover.
The only way to get the attention of a company as big as Whirlpool (and to get an attorney to take your case) is to deal with the whole problem for everybody who is experiencing it all at one time. Alone, no single consumer has anywhere near enough leverage to force Whirlpool to fix the problem if it doesn’t want to do so (and it has made it quite clear that it doesn’t want to do so). Joined together, however, those consumers are a nuclear bomb.
The power of the class action is a source of the widespread resentment towards it. Detractors frequently argue that the problem with class actions is that they increase the potential liability for companies against whom they are brought by such a large amount that even companies who have done nothing wrong cannot afford to fight them. The consequences of a loss would be too great.
As a lawyer who has attempted to make a living by pursuing class actions at various points in his career, however, I can tell you that there already are a lot of barriers in place to bringing these types of lawsuits. As the Slate article illustrates, you can’t just simply file a class action lawsuit and shake a company down. You need to file the lawsuit on behalf of an individual first (someone willing to subject himself to an extremely invasive, time-consuming, personal investigation by the defendant), and then get the court’s approval to proceed as a class action. In order to get that approval, you need to demonstrate to the court that the underlying issue is one that impacts everyone in your proposed class in a similar way, and that the same relief given to the named plaintiff can be given to all of the class members as well without having to investigate each of their individual situations to determine the type and extent of damages that they suffered.
Defendants rarely have difficulty coming up with a long list of reasons why each class member’s situation might be different from the others and why class certification is therefore inappropriate. In the washing machine case for example, one of the defendants has argued that not every member of the class will have developed mold in his or her washing machine, and that the defendant has the right to investigate each class member’s claim to verify whether mold actually exists. These lawsuits are some of the hardest for plaintiffs to win, and representing a class is, in fact, not an easy way for an attorney to get rich quick (representing class action defendants, on the other hand, is extremely lucrative work).
If the idea is to replace class actions with some other way for consumers and other groups to be able to exercise their rights and protect their interests in an affordable way, that would be great. But from what I can tell, the people who want to get rid of class actions think that a growing business is always something to be encouraged, even if that growth is built on a little bit of deception every now and then. Is that too harsh? I would love to hear from you if you’ve got a better idea than class action lawsuits for protecting ourselves from abuse by the many large institutions that tend to govern our lives nowadays. Please leave your comments down below.