WaPo on Supreme Court’s Pro Biz Stance on Class Actions

Kia Franklin

WaPo on Supreme Court’s Pro Biz Stance on Class Actions

Today's Washington Post had this article on the Supreme Court and its recent business-leaning ways, in addition to a look ahead at an upcoming shareholder fraud suit to be heard by the High Court. The case, against cable company Charter Communications Inc. and third party supplier companies, is said to be "one of the most important securities cases to be heard by this court in many years."

For the most part, the article offers a fairly balanced review and assessment of the issues this case stirs up. The article also does a fair job of challenging and not simply accepting the typical tort "reform" argument that securities class action lawsuits are unecessary because of the government's regulatory function in addressing fraud. It pulls quotes from experts who observe that class action lawsuits are often the only way plaintiffs can reasonably recover from such huge investment losses. It also cites to a study showing that this particular form of class action suit has declined over the years.

One thing that was troubling was the article's description of the controversy behind class action lawsuits:

Class-action lawsuits have long been controversial because the financial stakes for the defendant companies are huge, as are the potential financial rewards for the lawyers who bring such cases. Once a judge certifies a class of alleged victims _ such as stockholders _ their lawyers have tremendous leverage in negotiating often costly settlements with corporate defendants.

Poor little corporations and mean old lawyers bullying them around.

I also noted a lack of discussion around whether Bush's concern with frivolous and "unecessary" lawsuits is a well-founded one (which, I believe, it is not). However, this is a helpful article and a good alert to watch what happens with this case, and potentially with an Enron third party lawsuit, over the next Supreme Court term.

Kia Franklin: Author Bio | Other Posts
Posted at 6:48 AM, Aug 10, 2007 in
Permalink | Email to Friend | Comments (2)

Comments

Kia: As you know, corps are fictional. They do not even get upset at being sued after the first 1000 suits. They pass on all costs to the public. If bankrupted by the land pirate, their disappearance reduces access to their product or raises prices by decreasing competition.

Not poor corp vs. Lawyer bullies, but evryone raking the public over the coals. The entire tort scheme is a bunko operation and straight robbery.

Class action lawsuits are a means of transferring wealth - nothing less and nothing more. They transfer wealth from the hands of stockholders and into the pockets of lawyers.

I have yet to see ANY class action lawsuit where the end result was anything different than that, and I've gotten many a voucher good for $10 off on the purchase of a bazooka or a ocean cruiser. If the stockholders are to be paid off in vouchers then the attorneys should be paid by receiving money for each voucher redeemed, say 15% of the value of each voucher redeemed

Until I see attorney compensation brought under control, nothing can convince me that there is anything legitimate about class action lawsuits