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Monday, July 10, 2017

Democrats Giving Gifts to Trial Lawyers

One group that consistently supports Democrats is the nation's trial attorneys.  As a result, if there's a move that helps lawyers generate more litigation, the liberals and the Democrats are always in favor of it.  Today, however, they made a move that really goes too far.  The Consumer Financial Protection Bureau finalized a new regulation that bars arbitration agreements that prevent class actions against financial institutions.  Think what that means.  The CFPB wants to open up banks, mortgage lenders, and other credit companies to class action litigation brought by the vultures called class action lawyers.  It's really a misnomer since most class action lawyers are clearly not a class act.

Let's put this in perspective.  Right now, class action lawyers can bring these claims in court against public companies.  Every time something happens that causes the stock of a company to drop by a big amount, firm after firm of these lawyers announce that they are conducting an investigation in preparation for a class action.  Normally these announcements are followed by some sort of class action being brought.  The actions continue for a year or so and then they are settled.  Normally the settlement consists of the company agreeing to put some meaningless measure up for a vote or to take some meaningless action.  The shareholders get nothing at all.  The class action lawyers, however, get a few million or more dollars in legal fees paid by the target company (or its insurance carrier).

Let me give you a good example.  Some years back, Royal Caribbean Cruise Lines was sued in a class action because it collected port taxes from passengers in certain ports but did not list these taxes separately on ticket invoices.  If memory serves, the port taxes amounted to something like $3.00 per passenger on trips that cost thousands of dollars.  The lawyers brought the action and then fought it out for about two years.  Finally a settlement was reached.  The cruise line agreed to list the taxes separately and also agreed to give each passenger during the relevant period a coupon good for $15 off a future cruise.  The key point, however, was that the coupon could only be used if the full list price for the cruise were paid.  No one pays full list price however.  I have gone on a great many cruises and have never paid close to the full list price, ever.  So Royal Caribbean was settling for $15 off with a coupon that no one in his right mind would ever use.  But let's not forget, the lawyers who brought the claim got millions of dollars in attorneys fees.  In other words, only the lawyers got anything.  

I have to add that nothing that the class action lawyers did in that example was illegal.  It was just disgraceful and disgusting. 

Now the CFPB wants to give the trial lawyers the chance to do the same thing in additional cases.  The new regulation will not help consumers; they will still get essentially nothing from the class actions.  This is just a boondoggle for lawyers.  It is the Democrats paying off their biggest contributors.

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