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Law

Class Action Lawsuit Abuse Reform

The problem:   Minnesota’s rules to prevent frivolous class action lawsuits are among the weakest in the nation.  Courts here rarely impose sanctions on these lawsuits, but companies are forced to deal with the cost of such lawsuits every day. Meritless suits drain judicial resources and crowd out the ability to hear legitimate cases.  Minnesota consumers pay the price when meritless lawsuits are filed against businesses.  This ‘lawsuit tax’ costs every consumer more than $2500 a year.  Business development and job creation is greater in states that have enacted meaningful lawsuit reform.  

 

  • In Minnesota, it’ s become too easy to file questionable lawsuits which adds costs and expenses as individuals and companies often are forced to go through an expensive pre-trial process of providing information to plaintiff’s attorneys looking for evidence (known as the discovery process).  Discovery should be stopped while an appellate judge rules on whether the lawsuit should be classified as a class action (called an “Interlocutory Appeal of Class Action Certification.”)

  • In Minnesota, discovery proceeds while the class certification is being challenged.  Ten other states by law provide for an interlocutory appeal of class certification before discovery.

  • In Minnesota, class action plaintiffs don’t have to prove they suffered any monetary damages to join a class.  This leads to large cases based on the weakest of facts, where no real harm was done.  Despite the weakness of the case, the larger the class, the more likely a company will settle (even if the case is meritless) simply because it is more cost effective to settle the case than it is to attempt to mount a successful defense.
     

The solution:  We support legislation to bring Minnesota’s class certification process more in alignment with other states, so cases can be judged on their worthiness before the expense of most discovery is incurred.  This will help prevent frivolous lawsuits and unnecessary costs by requiring class members to prove they were actually harmed by the conduct of the defendant and to show they suffered at least some out-of-pocket loss.  This would potentially stop cases where the class members get coupons (because they weren’t really harmed) and the trial lawyers walk away with millions of dollars in legal fees.

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