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February 10th, 2017

House Bill Would Help Stop ‘Empty Suit Litigation™’

Though it’s still early in the new 115th Congress, a just proposed House bill could help stop certain plaintiffs’ lawyer-driven class actions, often consumer claims, that ATRA calls “Empty Suit Litigation™.”  

Schwartz

“The majority of class members in ‘empty suit’ litigation have suffered no true injury,” explains ATRA general counsel and renowned tort law expert Victor Schwartz.  “But the claims persist because they are money-makers for the lawyers who gin them up” and because the law and procedural rules allow these lawyers to do so.

“These are claims in which the harm to the attorneys’ clients (or class members) is illusory,” wrote Schwartz and his Shook, Hardy & Bacon law partner Cary Silverman in a 2015 article for the Brooklyn Law Review.

They either seek recovery for speculative present or future “injuries” or rely upon a fictitious construct of an economic loss that is a creative invention of expert testimony.  …[T]he civil justice system should be reserved for individuals who have experienced real injuries and actual losses. Courts can discourage empty suit litigation by requiring objective proof of injury, carefully applying safeguards governing class certification and expert testimony, and, when warranted, sanctioning lawyers who knowingly file meritless claims. Government agencies should address safety concerns before injuries occur and provide clear rules for businesses on the use of marketing terms that can have different meanings for different people, such as “natural” ingredients. Regulators have the tools to be more efficient and effective than courts in responding to potential threats and developing public policy. When necessary, legislatures should step in to put the brakes on litigation that leads to unpredictable and inconsistent outcomes for businesses, harms consumers through higher prices, reduces consumer choice, and damages respect for the legal system.

ATRA will continue its campaign to encourage Congress and state legislatures to help stop empty suit litigation.