A pair of recent studies debunk some of right-wing media's favorite rationales for legal “reforms” that make it more difficult for consumers to sue corporate wrongdoers.
Right-wing media have consistently railed against class action lawsuits, despite the fact that such suits make it easier for consumers to group low-value claims together that attorneys might otherwise not take. The Wall Street Journal in particular has been critical of class actions, calling them "frivolous," too expensive, and only beneficial to the plaintiffs' lawyers. In one editorial after the Supreme Court upheld the decades-long use of class actions for investors in securities, the Journal attacked the decision as “a champagne day for trial lawyers ... as the Justices voted to maintain the status quo.” In another, the editorial board claimed that class action lawsuits that were filed to help workers recover back wages for the time they spent waiting in security check lines “would benefit lawyers far more than workers,” ignoring the potential wage theft at issue.
But two new studies undercut some of the main premises behind the Journal's anti-lawsuit crusade. According to a recent report from the Center for Justice & Democracy, “class actions have not only helped victims of corporate law-breaking, but have also resulted in injunctive relief that protects us all from a wide array of corporate wrongdoing, from employment and civil rights violations to price-fixing and consumer fraud to automotive defects to health care abuses.” From servicemember financial abuse to systematic sex discrimination at the country's largest employers, the report analyzed hundreds of class action lawsuits and settlements and found that nearly all of them provided meaningful relief to the plaintiffs who had been injured or defrauded. CJ&D note that “without the class action tool, corporations and businesses can ignore the law far more easily and operate with impunity.”
Moreover, the conservative idea that class action lawsuits result in higher costs in the industry with the challenged practices is also suspect -- at least in the context of healthcare. A new study from the Rand Corporation suggests that even though “many believe that fear of malpractice lawsuits drives physicians to order otherwise unnecessary care and that legal reforms could reduce such wasteful spending,” states that have enacted such reforms have not seen a corresponding reduction in healthcare costs.
For example, as The American Prospect's Paul Waldman explained, healthcare costs have actually gone up in Texas since the state passed a constitutional amendment that severely limited money damages that could be recovered in medical malpractice suits:
[I]n Texas, they passed a constitutional amendment in 2003 that made it almost impossible to recover meaningful damages from medical malpractice. That was good for doctors -- the number of malpractice claims plummeted, and malpractice premiums went down -- but instead of falling, health care costs in the state actually rose faster than in the rest of the country.
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When you ask Republicans what they'd like to do to reform American health care, the first thing out of their mouths is usually “tort reform.” But the fact that all the evidence suggests it would do nothing to cut costs is probably not going to dent their commitment to laws limiting people's ability to sue for malpractice. That's because the truth is that conservatives see this as a moral question as much as a fiscal one. “Frivolous lawsuits” make them livid, and as far as they're concerned a frivolous lawsuit getting filed (even if it never goes anywhere) is a greater outrage than someone who was victimized not being able to get compensation.
Class action lawsuits provide a valuable legal remedy for consumers who have been defrauded or injured by large corporations, but right-wing media have often discounted their value and hyped their supposed societal costs. Yet as these recent studies once again demonstrate, conservative justifications behind tort “reform” seem to be based less on sound policy and more on antipathy to a court system that encourages corporate accountability.