Here we go again. H.R. 985 places a bulls’ eye squarely on the back of every securities class action. It does so under the guise of attempting to fix a supposedly broken litigation system for class actions, which the bill’s proponents allege is rife with abuse. But in fact this bill is designed to eliminate all class actions — including securities class actions. Not only is the “abuse” the bill’s proponents claim exists illusory; they ignore the critical role securities class actions play in maintaining the integrity of our financial markets and providing recourse to investors, retirees, pension funds, health and welfare funds, states and municipalities invested in the market when fraud is committed.
H.R. 985 shot out of the House at record speed. In fact, the bill was introduced on a Thursday and voted out of committee the following Wednesday without so much as a hearing. The House voted along mainly party lines, with fourteen Republican members joining all Democratic members in opposing the legislation. H.R. 984 is now in the Senate, before the Judiciary Committee, where one can only hope that Senators will reject this brazen attempt to close the courthouse doors.
There is much to say about the H.R. 985. It shamelessly seeks to erect hurdles where none should exist, complicates class certification proceedings, buries the judiciary with class certification appeals and data collection and seeks to tie up the payment of attorneys’ fees and require funding disclosures. This is all with a view to make cases much more difficult to litigate and take far longer to resolve than they do now, and disincentivize plaintiffs’ firms from taking on these cases, thereby denying investors their ability to hold those who defraud them accountable.
The full article can be viewed here.