ThePopTort

Forced Arbitration Is About to Shift Shape

I’m no historian but the amount of lying going on these days by those desperate to hang onto power seems unprecedented. Take the issue of forced arbitration clauses.

“What are forced arbitration clauses?” you may ask. Those are the ever-present clauses that corporations bury in fine print legalese “agreements” (that no one reads) when you get a phone or something online or even a job. Here's what they mean: if the company cheats, defrauds, discriminates against, harasses, physically injuries or otherwise harms you, you cannot sue the company in court or have a trial. Instead, you are forced to deal with the company in a private, secretive, rigged arbitration system controlled by the company. You may have to pay for the arbitrator. You can’t talk about what happened. And there is no right to appeal.

While the U.S. Supreme Court decision narrowly OK'ing these atrocious clauses in 2011 had a number of disturbing results, one of the weirdest was the shape-shifting of corporations into consumer and worker rights advocates! (Whatever demonic potion they've been drinking, keep it away from us.) More specifically, since that 2011 SCOTUS decision, corporate lawyers have stuck these clauses in everything because, they say they want to help you! You, the consumer! You, the worker! Not only are forced arbitration clauses good for you, they say, they’re so great that for your own good, you must be forced to agree to them! And if you don’t, no product, service, job or soup for you! (FYI we used to get our soup there and it’s all true.)

Well of course, nothing about any of this is good for you (except the soup – try the Mulligatawny). When we push back (see e.g., here, here, here), they say not only are we wrong, but we’re too stupid to know we’re wrong. But of course, we are not stupid and they are lying. And now Congress seems poised to help expose this lie for the first time in a very long while.

On Monday, an extraordinary thing happened in the U.S. House  of Representatives. A strongly bi-partisan bill, titled The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, passed the U.S. House by a vote of 335 to 97. When finally passed by the Senate and signed into law, this bill will ban the use of forced arbitration clauses in cases involving sexual harassment and sexual assault. This will be the first major, permanent crack in the “forced arbitration” wall erected by SCOTUS more than a decade ago.

Because passage of this bill will help expose the lie from those corporate shape-shifters, its importance cannot be overstated – for survivors, for workplaces everywhere, for all of us. And it’s worth remembering that these clauses are as bad for sexual harassment and assault victims as they are for you the defrauded bank customer, you the neglected nursing home resident, you the small business being squeezed by some conglomerate, you the low-wage essential worker being ripped off during a pandemic. Forced arbitration clauses have proliferated in all of these areas and should be outlawed. But one very important step at a time.

Please tell your Senator to support this bill.  And if you need a little more convincing, please watch this video. #EndForcedArbitration!

#EndForcedArbitration from American Association for Justice on Vimeo.

Equal Pay Means Ending Forced Arbitration

When Lilly Ledbetter discovered she had been paid significantly less than her male counterparts for the very same work at Goodyear’s Gadsen, Alabama plant, she filed a lawsuit and was awarded more than $3 million by a jury. After the U.S. Supreme Court overturned the decision, ruling that Ledbetter had waited too long to file her case, Congress passed the Lilly Ledbetter Fair Pay Act, the first bill President Obama signed into law. This law supplemented other important federal laws passed by Congress to remedy pay discrimination, namely the Equal Pay Act of 1963 and Title VII of the Civil Rights Act of 1964.

Yet today, the gender pay gap persists. Indeed, what could be more clear than the absurd situation that the victorious women’s soccer team finds itself, forcing them to file a lawsuit against the U.S. Soccer Federation. Specifically,

As of Sunday, the U.S. women's team has won four World Cups — more than any women's soccer team in the world. The men's team has won none. But according to the lawsuit from the women's team, male players stand to make nearly three times as much per game as women.  There's also a major pay gap in the prize money awarded by FIFA, the global soccer federation that oversees the tournament. The prize pot for the women's team this year was $30 million — compared to $400 million for last year's Men's World Cup. 

With their record-breaking World Cup performance, which attracted a viewing audience of 1 billion people (along with crowds chanting “Equal pay! Equal pay!”), this should not be happening. Just, fuggedaboutit!

But then consider the U.S. labor market generally:

… women’s median weekly earnings in 2018 were 81.1 cents for every dollar earned by a man. (The gap is bigger for women of color: Compared with white men’s median weekly earnings in 2018, Hispanic women earned just 61.6 percent and black women earned just 65.3 percent.) And it’s getting worse. According to data analysis from the Institute for Women’s Policy Research, the gender wage gap actually widened last year. And some researchers believe the wage gap could be much bigger than what’s reported now.

The women's soccer team and U.S. Soccer tentatively agreed in June to mediate the lawsuit once the World Cup was over, and we will see how far they get. But for the everyday female worker these days, things are substantially tougher. Once reason, for sure, is that the rights secured by those 1960s-era early civil rights laws are in jeopardy as a result of forced arbitration clauses and class action bans, found in most employment contracts. A whopping 56.2 percent of nonunion private-sector workers are now subject to these clauses and by 2024, it is estimated that more than 80 percent of the private-sector nonunion workforce will be bound by them. These clauses make private litigation against violators virtually impossible. They allow corporations and businesses to break the law and operate with impunity. 

In the New York Times article covering the World Cup win, reporter Andrew Keh wrote,

Few sports teams are asked to carry so much meaning on their shoulders, to represent so many things to so many people, as the United States women’s soccer team. Few athletes are expected to lead on so many fronts at once, to be leaders for equal pay and gay rights and social justice, to serve as the face of both corporations and their customers. Fewer still have ever been so equipped to handle such a burden, so aware of themselves, so comfortable in their own skin, as those American women.

I know it’s a lot to ask, but … after they succeed in the mediation room and force USSF to pay them what they deserve, may we politely ask one more thing of this amazing team: join the fight to end forced arbitration clauses and class action bans, so female workers at every level have a fighting chance at equality and justice. #EndForcedArbitration

Sexual Assault and Civil Justice, Except for Servicemembers

In the Center for Justice & Democracy’s new report, The Importance of Civil Justice to Sexual Assault Survivors and the Devastating Consequences of “Tort Reform,” you will learn about recent civil cases filed after sexual violence by all types of assailants: Boy Scout leaders, clergy and religious instructors, doctors, Uber drivers, entertainment moguls, massage therapists, restaurant employees, school employees and students, security guards, and sports coaches.

But here’s what you won’t find in that 50-page report: a single case brought by a servicemember. That would include the nearly 15,000 (women and men) members of the military who are sexually assaulted each year, sometimes more than once. 

In every other instance of sexual violence, civil cases can be filed to help ease the financial burdens of an assault, expose abusers and provide a forum to hold perpetrators directly accountable. But if you are a servicemember, who pledged to die for your country and was raped while doing so, there is almost nothing you can do about it.

We have written about this before, but there are good reasons to remind us of the issue again, not the least of which is the change in Congress. It is up to Congress to fix this, and by “this,” we mean the Feres doctrine.

Feres is a 69-year-old policy – created out of whole cloth by the U.S. Supreme Court in 1950 – which bars U.S. military personnel from suing the government for personal injuries suffered while they are in the armed forces. It applies even in the case of a sexual assault. Read more about Feres here and in this great new article, Rethinking Feres, by Professor Andrew F. Popper of American University’s Washington College of Law. 

Dwight Stirling, the CEO of the Center for Law and Military Policy (CLMP) wrote about the injustice of this law shortly after Senator Martha McSally (AZ-R), the first female pilot to see combat, recently said she had been raped by her commanding officer. Noted Stirling,

Fearing career retaliation, some estimates say 90 percent of sex assault victims, like McSally, don't even bother to report.…

It is outrageous that sexual assault is characterized as an occupational hazard of military service. …The only way to fix the system is to empower the victims of military sexual assault to hold their assailants accountable in civil court …It is absolutely the only way.

In January, Rep. Jackie Speier, D-Calif., new chair of the House Armed Services personnel subcommittee, said this would be a priority issue for her. Writes Military Times,

[T]he panel’s guiding focus will be to tackle “critical issues that impact not only our service members but their families who also bear the burden of sacrifice and commitment to our country.”…

[T]he Feres Doctrine debate could lead to some of the most dramatic military policy changes to come out of Congress this year. Speier has been following a handful of court challenges to the legal precedent in recent months, and is planning a hearing on the issue early this session.

This couldn’t come soon enough!

Tort Reform: Victimizing Assault Victims a Second Time Around

We are so happy to see that Sen. Rand Paul (R-KY) is enjoying the benefits of Kentucky's state Constitution, which prevents the state from capping non-economic and punitive damages for injured victims. (See Section 54.) Paul, you see, is suing his neighbor for both, for over a million dollars no less “in compensatory and punitive damages for his medical treatment and ongoing discomfort.” (Paul’s neighbor, Rene Boucher, pled guilty to felony assault, having attacked Paul as he hopped off his lawnmower.)(Update: Paul just won over half a million dollars.)

How fortunate that Paul, a leader in the “repeal Obamacare movement” who’s about to travel to socialized-medicine-Canada for hernia surgery (yes, you read that correctly), doesn’t live in neighboring Ohio or Tennessee. Those states cap both kinds of damages, protecting assailants and criminals who commit assault. A few years ago, we showed how devastating caps on damages can be to an Ohio assault victim: 

“Jessica Simpkins was raped at the age of 15 by her church pastor – a man hired by Grace Brethren Church in Sunbury despite the knowledge that he had previously sexually abused two girls. In a civil suit, a jury awarded Simpkins $3.5 million for pain and suffering, but the amount was reduced to $250,000 due to a state law that caps damages.” 

This is one of the dirty little secrets of “tort reform.” When a state caps damages, it usually covers every kind of personal injury case, including when injuries are the result of a criminal assault. That includes situations where your neighbor beats you up. It also includes cases of sexual assault. It also includes the sexual assault of children. Which brings us to our next story.

When it comes to sexual assault especially of children, there is another tort limit that often blocks the ability of survivors to sue: overly-restrictive state statutes of limitations. Most state laws require someone to file a lawsuit within a very short period of time of their assault. Gradually, states are starting to lift those restrictions for sexual assault survivors – particularly for child victims. New York is the big story on this today.

For years, as we’ve covered before, the New York Senate had blocked bills to increase the state’s archaic statute of limitations in these cases. Then the 2018 elections happened, and the clouds parted. So this week, the NY legislature finally passed the Child Victims Act (which the Governor will sign soon): 

The Child Victims Act will allow child victims to seek prosecution against their abuser until the age of 55 in civil cases, a significant increase from the previous limit of age 23. For criminal cases, victims can seek prosecution until they turn 28. The bill also includes a one-year window during which victims of any age or time limit can come forward to prosecute.

"New York has just gone from being one of the worst states in the country to being one of the best," in terms of the statute of limitations for child sex abuse cases, said Marci Hamilton, CEO of Child USA and a professor at the University of Pennsylvania.

Fortunately, New York does not cap damages for injury victims. But too many states do. Time to start changing those laws, too.

In the Preemption Trenches

To most, “federal preemption of state law” is legalese that sounds like it belongs and should stay in a law school classroom. So apologies if you’re bored out of your minds by our post today. 

But I think it’s important to talk about real-life consequences when the federal government (Congress or the Trump Administration) tries to preempt – or invalidate – a pro-consumer or pro-safety state law.  Those consequences can range from invasion of personal privacy, to financial ruin, to death. California is on the frontlines of “preemption” battles these days, and a good illustration of what’s stake. 

NET NEUTRALITY

After the Trump Administration’s Federal Communications Commission (in cahoots with the telecom industry) threw out federal net neutrality rules, California passed its own tough state net neutrality law. The state law “largely mirrors the FCC’s discarded 2015 net neutrality rules,” and in other ways, it goes further. The federal Department of Justice immediately sued, saying California’s law was preempted by federal policy.   

However, there are good reasons why DOJ may not succeed. Specifically, what federal policy? There isn't one any more:

[W]hen the FCC dismantled its own authority over broadband ISPs (by rolling back their classification of ISPs as Title II common carriers under the Telecom Act), it ironically killed any authority it might have had to tell states what to do.

“An agency that has no power to regulate has no power to preempt the states, according to case law,” Stanford Law professor Barbara van Schewick said in a statement to The Verge.

In other words, according to the U.S. Constitution, industry can’t have it both ways. If there’s no federal policy or regulation with which a state is in conflict, states can’t be prevented from acting. Oh, the irony.

DATA BREACHES

Similarly, one way an industry can preempt an area and prevent states from acting is to suddenly agree to subject itself to federal regulation. That has the dual effect of setting an ineffective federal public protection standard and preempting states like California from doing anything more. That’s exactly what’s happening in the tech privacy area, where the U.S. Chamber of Commerce and tech companies “recently urged Congress to ‘adopt a federal privacy framework that preempts state law.’”

But California already has strong data breach and privacy laws.  As explained by Neema Singh Guliani, senior legislative counsel at the American Civil Liberties Union,

A federal law wiping out — otherwise known as preempting — state protections would be a bad deal for consumers. It would likely put existing consumer protections, many of which are state-led, on the chopping block and leave states bound by a federal law that could prevent additional consumer privacy protections from ever seeing the light of day. State regulators could lose the authority to sue or fine companies that violate their laws. And consumers may even be barred from taking companies to court.

SLEEP DEPRIVED TRUCKERS

There’s nothing scarier than being on the road with a sleep-deprived trucker.  Just ask comedian Tracy Morgan. A few years ago, a crash critically injured him and killed his friend on the New Jersey Turnpike when their vehicle was hit from behind by a Wal-Mart truck driver who had not slept for more than 24 hours. (See our coverage here.)

For almost two decades, California has had a meal and rest law for commercial truckers, protecting all motorists from highway accidents. But the American Trucking Association has now petitioned the Federal Motor Carrier Safety Administration to preempt California’s sensible law. (If you’re as appalled as we are, tell them your thoughts here.) The trucking industry wants to prevent the state from having authority in this area. Notably, 20 other states have laws like California’s.

This isn’t even the first time this year that the trucking industry has tried to preempt or eliminate state laws that make sure truck drivers get enough rest. It also recently tried and failed to get a bill through Congress to do this and proponents came uncomfortably close. Let’s hope this latest effort fails too.

FORCED ARBITRATION/#METOO

That all said, there are evidently limits to California’s state leadership and willingness to push back against federal preemption. Consider this cowardly act by California Governor Jerry Brown:

Just as he was signing California’s net neutrality law, he was also vetoing two bills, passed by the California legislature, to assist #MeToo survivors in taking abusers to court. These bills “had high-profile champions, including former Fox News anchor Gretchen Carlson, who won a $20-million settlement against Fox News after she accused the channel’s now-deceased chairman Roger Ailes of harassment and retaliation.”    

One of the bills would have kept employers from requiring these disputes to be resolved in private, secret, corporate-controlled forced arbitration – the very same process that Trump has used to try to silence his victims. Brown was unwilling to fight this even though the bill was duly passed by the California legislature, which clearly knew what it was doing. He declared, “states must follow the [federal] Federal Arbitration Act and the Supreme Court’s interpretation of the Act.” 

Brown will be out of office soon. Let’s hope they try again.

It’s the Punitive Damages, Stupid

There’s a compelling (yet terrifying) new “must-see” documentary now streaming on Netflix called “The Bleeding Edge.” Here’s the Los Angeles Times’ lead paragraph about it:

If body-horror auteur David Cronenberg had dramatized any of the nightmarish stories in Kirby Dick and Amy Ziering’s medical documentary “The Bleeding Edge,” you wouldn’t hesitate to call it a fright film. Such is the grim impact of this investigative, wince-inducing examination of the $400 billion medical device industry, which routinely sends FDA-approved products into the marketplace for use on and in patients without any rigorous clinical safety-testing on humans.

One of the stories involves Johnson & Johnson’s “heavily sold, under-scrutinized gynecological product — vaginal mesh that hardens, causing horrible pelvic damage, and in one couple’s instance, cutting the husband’s penis during intercourse — getting such devices removed (when they were intended to be permanent) can be as undefined and risk-laden a decision as leaving them in.”

(Johnson & Johnson is a company we tend to cover a lot here at ThePopTort, including our 2013 post about that very nightmarish chapter in the annals of corporate wrongdoing. This is one Terrible, Horrible, No Good, Very Bad company.)

In an interview with Salon’s Gary Kramer, filmmaker Amy Ziering replied to the question, “Can legal cases change things?”:

Not exactly, because of Tort Reform. It’s a $683 billion industry and they paid off $200 million in settlements. They can factor that in. That’s the collateral damage: We might have to settle because it’s a bad product. We might have to pay $500 million, but we made $683 billion. We’re good.

The types of “tort reform” to which she may be referring are limits on punitive damages. Punitive damages,“are awarded to hold reckless companies accountable through imposition of significant financial liability.… They are one of the most critical tools to stop and remedy egregious corporate misconduct."

As the Center for Justice & Democracy wrote in its 2011 study, “What You Need to Know About … Punitive Damages,"

Despite the fact that punitive damages are supported by some of our nation’s most respected free-market economists (many of whom are politically conservative), and have been around for centuries and are often a stronger deterrent than the criminal justice system, they remain under attack. In the last few decades and even this year, corporate lobbyists and court decisions have rendered punitive damages’ deterrence power meaningless, often by disconnecting punitive remedies from a company’s wealth.…

The size of a punitive damages award shouldn't be dictated by politicians sitting in a state capital. It is supposed to depend on,

…widely varying factors determined on a case-by-case basis — factors like the nature of the misconduct involved and the amount that the judge or jury determines is necessary to get a company’s attention, which is precisely what makes punitives so effective.… [J]uries know that to a multi-billion-dollar company … even a million-dollar punitive damages award is barely a slap on the wrist, creating no financial pressure on the company to create a safer design.…[L]imiting punitive damages to a predictable amount of money undermines their deterrent force in the civil justice system.… 

To put it another way, when laws cap or limit punitive damages, as they do in many states, the type and amount of misconduct in which a large company like J&J may engage becomes, simply, a cost of doing business.

Juries are generally very smart about punitive damages. Just this month, a St. Louis jury hit J&J with a punitive damages award of over $4 billion for putting asbestos in its talcum powder, which caused ovarian cancer in its customers. One of the jurors told the St. Louis Post-Dispatch, that it “arrived at that figure by multiplying a recent talcum powder yearly sales total by the roughly 40 years since the company said its products were free of asbestos.” Smart.

But now come the “twists.” Writes the paper, "Johnson & Johnson vowed to appeal the verdict. The company also is likely to file a motion invoking a cap on punitive damages of five times compensatory damages, although Holland said Friday that the constitutionality of that Missouri cap had never been fully tested."

Indeed, Missouri’s cap on punitive damages was struck down as unconstitutional in 2014, but that ruling only covered some claims. It also is not uncommon for judges, on their own, to reduce or reverse large punitive damages award. And then there’s the U.S. Supreme Court, which sometimes takes its own swipes at large punitive damage awards – although not always.

But that’s not the only trick up J&J’s sleeve as it tries to wiggle out of responsibility for the hell it has caused its victims. There's another legal maneuver they will pull, called “personal jurisdiction.” Specifically, "On June 29, a Missouri appeals court tossed out a South Dakota woman’s award of $55 million in another St. Louis trial, saying Missouri courts lacked jurisdiction because neither she nor Johnson & Johnson had the necessary connection to the state. Only five plaintiffs in Thursday’s case are from Missouri …."

But J&J's argument may fail. We’ll see.

One thing’s for sure, however. The frustration we feel about all this is nothing compared to what the victims and their families must feel, some of whose stories are covered in The Bleeding Edge. Let’s hope J&J is finally on the hook for some of the misery it has caused its loyal customers.

Trump: Forced Arbitrator in Chief

Retweeting @realDonaldTrump isn’t my favorite thing to do, but sometimes duty calls. At 5:54 this morning, after Trump’s new lawyer, Rudy “It’s Guiliani Time” Guiliani went on Sean Hannity’s show “asserting that the president had reimbursed his personal lawyer for a $130,000 hush payment to a pornographic film actress — contradicting his client, the president,” Trump tweeted

Mr. Cohen, an attorney, received a monthly retainer, not from the campaign and having nothing to do with the campaign, from which he entered into, through reimbursement, a private contract between two parties, known as a non-disclosure agreement, or NDA. These agreements are..... ...very common among celebrities and people of wealth. In this case it is in full force and effect and will be used in Arbitration for damages against Ms. Clifford (Daniels). The agreement was used to stop the false and extortionist accusations made by her about an affair...... (bold added.)

We’ll leave it to criminal prosecutors, history textbook writers and November voters to sort this out. What’s of interest to us is his glowing praise of “Arbitration” (capitalized for no apparent grammatical reason), which is not new. As we’ve noted before, Trump and his lawyer, Michael Cohen, have long used forced arbitration clauses to silence their accusers, which keeps them from bringing legal cases in open court before unbiased judges and juries. As the Associated Press reported during election season, “In his businesses and presidential campaign, Trump requires nearly everyone” to sign clauses where any dispute is subject to arbitration at the “sole discretion of Trump and others protected by the agreement,” and which are “binding during employment and ‘at all times thereafter.’” 

And since becoming President, his Administration has been forcing arbitration on victims any way they can. (See the Center for Justice & Democracy’s running scorecard.)

The hypocrisy of this guy is one for the record books.  While Trump clearly doesn’t like being held legally accountable in open court, he and/or his businesses have filed more than 1,900 civil cases over the past three decades. For example, Trump sued “Palm Beach County, Fla., because of the ‘malicious’ jet noise above Mar-a-Lago”: Bill Maher “after the comedian challenged Trump to prove he was not the spawn of an orangutan”; the Chicago Tribune “for $500 million because its architecture critic said Trump’s idea for the world’s tallest tower was silly”; “neighbors of the Trump National Doral Miami for vandalizing palm trees”; and “two business executives for using the name ‘Trump,’ even though their surname was also Trump.”

In 2009, Trump filed a defamation lawsuit seeking $2.5 billion in compensation and $2.5 billion in punitive damages after an author claimed Trump was a millionaire not a billionaire. (The case was thrown out). Then there was the time when “Miss Universe LP, partly owned by Trump, sued to confirm a $5 million arbitration award against Sheena Monnin, a former Miss Pennsylvania USA and Miss USA Pageant who called the pageant “fixed and called the organization ‘fraudulent, lacking in morals, inconsistent and in many ways trashy.’”

An April 2018 ProPublica investigation revealed, “Across the country, the Trump Organization is suing local governments, claiming it owes much less in property taxes than government assessors say because its properties are worth much less than they’ve been valued at.  …At stake is millions of dollars that communities use to fund roads, schools and police departments.”

And then, there was this today:

Over the opposition of lawyers for a company owned by President Donald J. Trump, State Supreme Court Judge Eileen Bransten ruled Thursday that a condominium on the Upper West Side could remove the bronze letters spelling out his name from its 46-story building.

 In the letter, Mr. Trump’s lawyer, Marc Kasowitz, said that if the condo made any effort to remove the Trump lettering, Mr. Trump would “commence appropriate legal proceedings to not only prevent such unauthorized action, but to also recover the significant amount of damages, costs and attorney’s fees.”

That was no small matter in the minds of many condo owners. Mr. Trump has a reputation as a vigorous if not always victorious plaintiff and defendant whose determination to drag out a court fight could cost a fortune.

Oh, there’s even more. In fact, this is just a taste of what’s to come in the Center for Justice & Democracy upcoming  “Hypocrites of ‘Tort Reform’” 2018 edition.  You’ll just have to stay tuned!

The Meaning of Class Actions to Sexual Harassment Victims

In 2016, Valeant settled with 225 female sales representatives who had been subjected to “unwelcome sexually-charged ‘jokes’ and commentary, name-calling, and offensive stereotypical comments about women, pregnancy, and caregiving,” expected to drink alcohol, socialize with and tolerate sexual advances from co-workers, denied promotions and paid less than their male counterparts.

That same year, BAE Systems Norfolk Ship Repair settled with female shipyard workers for horribly discriminatory practices, which in addition to relegating women to lower-level jobs and denying promotions, also created a work environment where managers and supervisors often “shared or displayed sexual photographs at work while making sexual comments,” “frequently and regularly us[ed] the words ‘bitch’ and ‘whore’ to refer to women, and discuss what they did sexually with women, including graphic descriptions of sex acts.” Victims who spoke out faced retaliation and termination.

What did these cases have in common? They were both class action lawsuits. And both resulted in compensation for the plaintiffs and significant policy changes at those companies.  Medicis/Valeant agreed to pay class members $4.4 million and institute extensive new company training and protocols as well as fairer compensation and promotion processes. BAE agreed to $3 million in class relief as well as to “changes in workplace policies and procedures, including the implementation of relief addressing BAE’s hiring, promotion, training, and complaint investigation process.”

These and other cases can be found in the Center for Justice & Democracy’s newly-updated survey of recent class action settlements, First Class Relief 2017: How Class Actions Benefit Those Who Are Injured, Defrauded And Violated. The report updates CJ&D’s 2014 report, First Class Relief, and describes important class actions that corporations have settled in recent months for financial fraud and abuse, sexual harassment, discrimination, price-fixing and product injuries. In March 2017, the U.S. House of Representatives passed legislation that would make it impossible for class actions like these to proceed.

Now, on Wednesday November 8, the U.S. Senate Judiciary Committee is set to hold a hearing to examine so-called “lawsuit abuse.” The focus is apparently on whether the legal rights of individuals and small businesses to file class actions and other kinds of cases should be taken away. This comes just weeks after Congress took the extraordinary step of undoing the Consumer Financial Protection Bureau’s rule that would have allowed defrauded and cheated individuals to file class actions against financial institutions that violate the law, like Wells Fargo and Equifax.

Class action lawsuits are among the most important tools for sexually harassed, cheated and harmed individuals and small businesses to hold large corporations and institutions accountable and deter future misconduct. Voters did not send politicians to Washington DC to take away their fundamental legal rights. The House may not have quite understood that. We hope the Senate does.

Forced Arbitration Closes Out the Summer – Again!

While clearly so much has changed since the ThePopTort's last summer break, actually much remains the same.

Take the issue of forced arbitration and gender discrimination. Last year, we closed out the summer with Roger Ailes trying to force Gretchen Carlson’s sexual harassment lawsuit into private, secret “forced arbitration,” sparking outrage. (He eventually gave up and settled.)

This year - actually today as we write this - the importance of class action lawsuits to remedy systemic gender workplace discrimination is the topic of a powerful new New York Times op ed from Anita Hill, titled, "Class Actions Could Fight Discrimination in Tech.” As one reader wrote, “Anita Hill has earned her wisdom the hard way, and her advice should be taken seriously by women employed in the tech industry.” So heed these words:

The tech industry is stuck in the past, more closely resembling “Mad Men”-era Madison Avenue or 1980s Wall Street than a modern egalitarian society. It may take the force of our legal system to change that.…

We can’t afford to wait for the tech industry to police itself — and there are few indications that it will ever do so. …

Instead, women in the industry should collectively consider their legal options. Top among these would be class-action discrimination cases against employers.

The tech sector is not the first white-collar “boys’ club” to demand an industrywide correction. In the 1990s, Wall Street firms faced a slew of class-action discrimination lawsuits. Perhaps the most notable was the 1996 “Boom-Boom Room” case. A group of 23 women filed a class-action lawsuit against the Smith Barney stock brokerage firm, charging it with rampant harassment and gender discrimination. By the time Smith Barney settled the case for $150 million, nearly 2,000 women had joined the suit and helped expose a culture of sexism to the outside world.

As a result of this and other cases that similarly challenged systemic practices at other Wall Street firms, many of these companies now have more extensive human-resource policies addressing sexual harassment and gender discrimination. While pay and promotion discrimination still exists, more women on Wall Street are advancing in their careers to managing directorship and other leadership roles. The lesson of these cases is clear: Class-action lawsuits can force industrywide change, even in the most entrenched, male-dominated industries.

Women in tech no doubt have hurdles to bringing class-action lawsuits, including the requisite preponderance of statistical evidence and the prevalence of confidentiality clauses and arbitration agreements, which are, in effect, designed to pre-empt class actions. But this challenge doesn’t mean the suits cannot be brought, or won. This is a route that the women of Silicon Valley should consider, especially if regulation is not an immediate and viable solution.

Unfortunately in many cases, forced arbitration clauses mean that "suits cannot be brought, or won," which is why Gretchen Carlson has become so active and outspoken on the issue. Every industry is trying to using these clauses to duck liability and responsibility for breaking laws and causing harm. Now they are getting some help from the Trump administration. In fact, if you can’t get enough of forced arbitration this summer, do check out the Center for Justice & Democracy’s comments to nasty Trump agencies that want to force arbitration on abused and neglected nursing home patients and defrauded students.

• Comments Objecting to CMS Forced Arbitration Rule for Nursing Homes
• Comments Objecting to Department of Education Forced Arbitration Class Action Waiver Actions

Summer o’fun, what can we say?

Ponder all of that for a few weeks, loyal readers. We’ll be trekking around some mountain somewhere, hoping to forget the damage our President is doing, and hoping for a much better Fall (as in “season,” not “off the mountain”). You get it, right?  See you after Labor Day!

A Damages Update: Yes, No, Maybe?

First, the undeniable YES! Yes-terday, a Florida appeals court “ruled that limits on ‘non-economic’ damages in medical-malpractice lawsuits are unconstitutional.” Woo hoo! This comes as the Florida Supreme Court considers the issue in another case – the same court that ruled in 2014 “that the caps were unconstitutional in a wrongful-death case involving a woman who died after giving birth in a Northwest Florida hospital.” See our coverage here. (One step at a time, I guess.)

Now, the NO! A Washington Post “Wonkblog” called, “In one corner of the law, minorities and women are often valued less,” presents a very a troubling aspect of our civil justice system when a case goes to trial or settles:

[W]hite and male [injury] victims often receive larger awards than people of color and women in similar cases, according to more than two dozen lawyers and forensic economists, the experts who make the calculations. These differences largely derive from projections of  how much more money individuals would have earned over their lifetimes had they not been injured – projections that take into account average earnings and employment levels by race and gender.

In one case, when a 6-year-old girl and a male fetus were killed in the same car crash, the settlement for the fetus was calculated to be up to 84 percent higher than the girl’s, according to court records.

Yet valuing the destruction of someone’s life based on what they might have earned in the marketplace can result in additional types of race and gender discrimination. Because “lost earnings” make up such a significant element of compensation for severe injuries, low wage earners, children, seniors, and stay-at-home parents – often, moms - will frequently receive a larger proportion of their compensation in the form of “non-economic damages.” That is compensation for injuries like blindness, trauma, mutilation, physical impairment or a damaged reproductive system. More than half of state legislatures have severely capped non-economic damages, which experts say results in harsh discrimination. (See more here.)

Finally, the MAYBE? In 2015, Congress did something positive for injury victims (for a change.)  It increased by 45 percent the federal law’s cap on damages for mass casualty train accidents – i.e., the limit went from $200 million to $295 million, with an inflationary adjustment every five years. And it made the increase retroactive to cover compensation to victims of last year’s Amtrak derailment and crash in Philadelphia, which killed 8 people and injured over 200. Many people and some Senators wanted a larger increase - but at least it was something.  

Now, Amtrak just agreed to settle the Philly case for $265 – less than they had to but clearly more than the original cap. The money must now be distributed to victims and two special masters will review victims' claims:

Under the 25-page agreement, victims must decide by Nov. 21 whether to participate in the settlement. Two court masters will review submissions from the participants by Dec. 20. Amtrak and its insurers will give $265 million to a court-supervised trust by Feb. 28, with offsets for previous payments of up to $10,000 per passenger for funerals, transportation and lodging expenses. Participants will be notified by June 30 of the share they will receive.

Let's hope everyone gets the help they need.