Lawsuit Abuse Reform
Freeing franchisees and franchisors from the burdens of frivolous lawsuits is a top priority for IFA. The Association is an active part of the Litigation Fairness Campaign sponsored by the Institute for Legal Reform of the U.S. Chamber of Commerce.
- Small businesses and franchises in particular, are the victims of thousands of frivolous lawsuits each year. Time, money and entrepreneurial energy that could be spent creating jobs, wealth and opportunity are squandered litigating and defending against these lawsuits. Far too often, small business owners, especially franchise owners, are losers. More often, the big winners are the trial lawyers.
- Franchised businesses are a high risk target of these lawsuits because of their association with a national brand name and the perception that behind each local franchisee stands a large corporation with the "deep pockets" necessary to pay lopsided judgments and damage awards.
- IFA supports sensible reforms to our civil justice system which will provide for fair and predictable decisions based on the rule of law and not the "deep pockets" appeal of a particular brand name as a litigation target.
ADA REFORM – Americans with Disabilities Notification Act
The Americans with Disabilities Notification Act would provide businesses an opportunity to correct any alleged American with Disabilities Act (ADA) violations before civil lawsuits could be filed against them. This legislation is designed to curb certain practices (i.e. “drive-by lawsuits”) whereby frivolous lawsuits are filed by plaintiff's attorneys alleging non-compliance with ADA standards. The bill would create a "cure period" and stop the legal fee clock from running early in the process.
In May 2001, the Supreme Court ruled in Buckhannon Board & Care Home, Inc. et al. v. West Virginia Department of Health & Human Resources et al. that plaintiffs in ADA violation cases cannot force the defendants to pay attorney's fees. While it was believed that once the outcome of this case was publicized, the practice of filing frivolous lawsuits would be curbed, and the legislation would no longer be necessary, that is not the case.
THE LAWSUIT ABUSE REDUCTION ACT
LARA would impose mandatory sanctions on lawyers who file frivolous lawsuits. The bill would also crack down on "forum shopping" by mandating that plaintiff attorneys must file their claims where the plaintiff is located, where the incident occurred or where the defendant's place of business is located.
IFA is an active member of the Lawsuit Abuse Reform Coalition (LARC), a group of more than 128 associations primarily representing small business, which seeks to remove junk lawsuits and litigation tourism. Last Congress, the Coalition supported the Lawsuit Abuse Reduction Act (LARA), H.R. 420. The bill passed the House but was not considered by the Senate. The bill has not yet been introduced in this Congress.
IFA supports legislation to pprohibit frivolous lawsuits against food distributors/restaurants. The legislation shields the manufacturer, distributor, or seller of a food or non-alcoholic beverage product intended for human consumption from civil liability, relating to consumption of such products, in Federal or State court, unless the plaintiff proves that the product was not in compliance with applicable statutory and regulatory requirements at the time of sale.
Last Congress, the Personal Responsibility in Food Consumption Act (H. R. 554) was approved by the House 306-120, with 80 Democrats supporting the measure. A companion bill (S. 908) was unfortunately not considered by the Senate. The bills have not been reintroduced so far this Congress. IFA is an active member of the Obesity Reform Coalition, working to eliminate frivolous lawsuits against businesses.
THE CLASS ACTION FAIRNESS ACT
On February 18, 2005, President Bush signed into law the Class Action Fairness Act (PL 109-2) after the bill had passed both the House (279-149) and the Senate (72-26) with bipartisan support.
This law is designed to curb class action lawsuit abuse and return fairness to the civil justice system. One of the main goals of the law is to allow large, multi-state class action suits to be moved to federal court to ease overburdened state courts and to ensure that uniform standards are applied to interstate class action litigation.
For more information, please contact Jay Perron, Vice President of Government Affairs and Public Policy at firstname.lastname@example.org or 202-662-0797