In Defense of Class Actions

In Defense of Class Actions

Copyright 2002, Traffic World Magazine

Your editorial of March 4 ("Consider the Source") requires a comment in defense of class actions in general, particularly with respect to their benefits to the shipping public, given the substantial difference in the size of most shippers compared to the major carriers controlling transportation today. Federal and state civil procedure acts give individuals and corporations the right to bring a class action when the issues are common to many persons in order to avoid a multiplicity of suits and to conserve the courts' resources.

Without this remedy, many wrongs would result in unrecoverable injuries to individuals and corporations that can not afford to sue the wrongdoer individually. For example, see AVR v. Churchill Truck Lines, 915 F. Supp. 1025 (D. Minn. 1996), which involved a meritorious class action that recovered millions of dollars for shippers but the class action representative's claim was for only $500!

Corporate Goliaths realize that they can defend and stall an individual lawsuit for years, until the claimant tires of the suit or the attorney's fees. A perfect example of this strategy is the Feb. 18 Traffic World article ("No Class Action," p. 26) that reported on UPS's and Federal Express' tariff prohibition against customers' suing them as a part of a class action suit. UPS's tongue-in-cheek response that "customers are absolutely free to file a suit or pursue a claim, either in small claims court or other venues" ignores the realities of the business world.

If a corporation violates the law, there must be a realistic remedy. Denying an injured party the right to join with others in the form of a class action suit against a corporation with unlimited resources for all practical purposes immunizes that corporation from being sued. Class action suits also protect individual shippers against retaliation by carriers, such as by threatening or actually discontinuing service or by refusing to discount its rates any longer. That is the real world in which shippers live today when they must deal with carriers that have market dominance. The real world also became tougher for shippers when Congress sunsetted the Interstate Commerce Commission and limited shippers' administrative remedies against carriers.

The right to bring a class action should be preserved as is. There are many safeguards against abuses built into the present class action rules. No class action lawsuit can proceed without first being certified by the court. The courts must approve the lawyers that will represent the class. The courts also have the power to control class action awards, settlements and attorney fees.

The current class action laws serve to discourage potential wrongdoers from using their superior economic power to take advantage of shippers. Congress should, however, fine-tune the law by preventing corporations from restricting access to class action lawsuits by aggrieved customers.

William J. Augello

Transportation Consumer

Protection Council