Lawmakers should not set great store by the U.S. Chamber of Commerce’s April testimony from attorney John Beisner before the U.S. House of Representatives’ Committee on the Judiciary. In his testimony, Beisner advocated legislation to prevent what he labels “overbroad” or “no-injury” class actions. A new Public Citizen report, “The Fiction of the ‘No-Injury’ Class Action,” counters his argument case by case.
Because class-action lawsuits are often the only feasible way to bring small-dollar claims, class actions are powerful tools for combating corporate wrongdoing and are frequently a target for corporate interests seeking to limit consumers’ access to court remedies.
In one of its many theories about why consumers’ should not be able to hold bad actors accountable, the Chamber’s lobbyists are pushing the idea that consumers who were duped by misrepresentations into buying products or overpaying for products have suffered “no injury.”
Public Citizen’s report has the goods on the real letter of the law: Consumers conned into buying a product that is defective or mislabeled have suffered economic injury. For example, consumers duped into purchasing worthless cold remedies have suffered an obvious injury, but Beisner’s testimony for the Chamber called their lawsuit a “no-injury” class action.
Public Citizen’s report looks past the façade of Beisner’s arguments and reviews each of the class-action lawsuits referenced in his testimony to show that the cases involved real injuries suffered by consumers who bought defective products or made purchases because of misrepresentations. These injuries included the need to repair or replace products to avoid serious injury, as well as economic losses suffered when consumers paid for defective products that were not worth the premium prices charged, purchased worthless products that were not what manufacturers represented them to be, or paid extra for products based on misrepresentations about their nature or quality.
The report also explains that securities law, trademark law, and antitrust law accept that consumers can suffer an economic harm if they purchase a product based on false information or an artificially inflated price. The policy goals that underlie those types of laws likewise apply to consumer misrepresentation suits — protecting purchasers and the integrity of the marketplace.
Let’s make sure Congress doesn’t buy what the Chamber’s trying to sell. The laws and rules that allow consumers to band together in a single suit to seek compensation for harm are essential protections that Congress should strengthen, not weaken.
Susan Harley is the Deputy Director of Public Citizen’s Congress Watch Division