W ill Republicans in Congress never learn that backing legislation to expand litigation opportunities for the class action plaintiffs ‘bar simply pours money into the Democrats’ campaign coffers? The question arises yet again because of the bill recently moved forward by the Senate Judiciary Committee to amend the False Claims Act. The proposal would encourage even more frivolous lawsuits by profiteering class action plaintiffs’ lawyers, while hurting the small and medium-size businesses and contractors that are the job-creating backbone of the economy. The bill’s main sponsor is Iowa Republican Sen. Charles Grassley. A second powerful GOP patron is Sen. Arlen Specter of Pennsylvania. Knowing a great opportunity to weaken Republicans when they seeit, liberal Democratic Sens. Patrick Leahy of Vermont, Richard Durbin of Illinois and Sheldon Whitehouse of Rhode Island are co-sponsors.
Grassley’s bill would expand the number of defendants against whom third parties could file suit while seeking to prove the government has been defrauded. Worse, it would make those defendants liable not just for government loss due to the fraud itself, but instead for damages based on the value of the whole contract, even if only a small portion of the contract was (supposedly) dealt with fraudulently.
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The details are a bit abstruse; what’s important is that the bill would enrich the class action plaintiffs’ bar, while encouraging witch hunts against businesses for alleged fraud that in most cases doesn’t even exist. Regardless of the facts of any particular case, though, aggressive class action plaintiffs’ lawyers know they win regardless of the outcome because it’s usually cheaper for businesses to settle out of court. Guess who gets the lucrative legal fees such settlements typically include?
Grassley may have good intentions, but what’s baffling is how Republicans so often support proposals clearly designed to benefit class action plaintiffs lawyers. Multiple campaign finance analyses show the class action plaintiffs’ bar donates huge amounts of campaign money to Democrats. Republicans usually get token amounts. Overall so far in this election cycle, lawyers of all sorts have given nearly $79 million to Democrats but less than $25 million to Republicans. Among class action plaintiffs’ lawyers who would be the main beneficiaries of Grassley’s bill, 90 percent of the donations go to Democrats.
Worse, the plaintiffs’ lawyers target the very entrepreneurs who are Republicans’ natural constituency, thus further decreasing potential resources available to the GOP. Republicans like Grassley ought at least to stop pushing bills that fund the other side.
