The Truth about Class Action Lawsuits
The U.S. Chamber of Commerce doesn’t like class actions. Neither do the corporations that fund their efforts. Why?
Because they know that class actions give American workers and consumers the power and ability to level the playing field. Class actions are a cornerstone of America’s civil justice system, often the only way individuals can hold corporations accountable.
A new report by the American Association for Justice and the National Association of Consumer Advocates reviewed class actions filed in 2009 and debunks the myths the U.S. Chamber is spinning on class actions lawsuits.
Here are some ways consumers benefited from class actions in 2009:
- They empowered consumers. When the price of propane shot up in 2008, consumers filed suit against Ferrellgas for allegedly reducing the amount of propane in its tanks without notifying consumers or changing the labels. Through a class action settlement, consumers recovered up to $25 million for being overcharged.
- They allowed victims of financial fraud to recover. Through a class action, $219 million was returned to investors whose retirement funds were devastated by Bernie Madoff’s colossal Ponzi scheme. The judge in the case praised the equitable settlement, stating that nearly all class members were made whole.
- They restored people’s rights. Thousands of disabled residents living in New York City Housing Authority buildings could not go in and out of their housing due to widespread disrepair of elevators. Through a class actions, the residents forced the city to repair the elevators in a timely matter.
- They restored employees’ retirement funds. Level 3 Communications employees filed suit against employee retirement plan managers for withholding information about company troubles and continuing to invest in the overvalued company stock while employees lost their retirement funds. It took a class action to restore $3.2 million in lost retirement funds.
- They addressed health and environmental harms. A dike at a coal plant operated by the Tennessee Valley Authority (TVA) burst, sending more than a billion gallons of highly toxic coal ash slurry into waterways and covering nearly 300 acres with sludge. The coal ash at this plant was held in earthen dikes rather than lined landfills. Leaks and seepage plagued the dikes at the TVA coal plant for years. According to an inspection report, the TVA knew about leaks at the facility for more than two decades and opted not to pay for long-term solutions to the problem. A class action was brought on behalf of property owners who suffered damages. The district court found in their favor on their claims of negligence, trespass, and private nuisance. The case then went to mediation to determine appropriate damages, and on August 1, 2014, it was announced that TVA had agreed to pay $27.8 million to settle claims from property owners who suffered damages due to the 2008 spill of coal ash sludge.