The Old Regime of Class-Action Looting

 

"This is a nice piece of reporting, using the simple document of a check for 49 cents to track down the whole sordid story of a class-action shakedown. But it is also, hopefully, a bit of a time capsule--since this is precisely the kind of story that a new federal class-action reform is meant to prevent from happening."

 

-Robert Tracinski, editor www.TIADaily.com

 

http://tinyurl.com/5gowz

 

"A Suit That Makes More Cents for the Lawyers," Doug Smith, LA Times, April 11

 

" 'What's that?' I asked, pointing to the rumpled document in the trunk of my son's car.... He said he had sued Bank of America and won. 'Zero and 49/100 dollars,' he read, delivering the bottom line with dramatic flair. For those unaccustomed to tiny amounts, that's 49 cents.

 

My 34-year-old son, Chris, it turned out, had joined the millions of Americans who become plaintiffs in class-action lawsuits, without any effort on their part or even their knowledge. The suits are filed by lawyers who allege corporate misdeeds and negotiate settlements that are generally divided two ways: one large piece for the lawyers and many minuscule pieces for their clients.... T

 

he case was filed in 2001 in Pima County. After some skirmishing, it was settled May 24, 2004. Without admitting fault, Bank of America agreed to pay $4.2 million. The plaintiff's attorneys took half of that.

 

The class, estimated at 1.95 million bank customers, got the other half. Nominally, that would be about $1.10 pe! r member. But, of course, there were unspecified costs....

 

A new law that President Bush personally campaigned for will force many of these cases into federal court where, its authors hope, judges will be less inclined to approve large settlements. That's a twist on the work of a 1960s federal judicial panel that strengthened class-action law as a tool for social justice."