WASHINGTON – The U.S. Chamber Institute for Legal Reform (ILR) found in a recent study "Ill-Suited: Private Rights of Action in Privacy Claims," that private rights of action laws tend to serve the attorney more than consumers or plaintiffs. In other words, when labor laws are enforced or litigated by attorneys through private rights of action as opposed to governmental agencies, the financial interests of attorneys purusing the cases may outweight consumers' interests.
“They’re really not experts … so how can somebody ... enforce a law they’re not experts on,” said Tom Manzo, founder and president of the California Business and Industrial Alliance.
A private right of action permits private law firms or lawyers to sue defendants in lieu of, or as a proxy to, governmental agencies. But many are questioning whose interest these attorneys are really serving. Manzo said the consumer is the one that really gets caught in a litigation crossfire.
“If the attorney gets the bulk of the money and the employee doesn’t get much and the employer has to pay this attorney all this money … that distribution of wealth is going toward attorneys,” Manzo said. “And what’s going to end up happening is … consumers are going to end up paying more money.”
He cited four cases pertaining to retailer Walmart in the state involving millions of dollars.
“If you look at Walmart in California alone, there are four cases that total $250 million,” he said. “You know darn well that $250 million, even for a large company like Walmart, is a lot and they’re going to have to pass it (loss) on to the consumers. They’re going to have to raise prices to pay for this lawsuit.”
The study indicated that lawyers have used the Telephone Consumer Protection Act (TCPA) to file high-dollar lawsuits. It also reported that a mere 4 percent of eligible consumers file settlement claims, but plaintiff’s attorneys receive up to 30 percent of the settlement as a portion of their fees.
Editor's note: The Southern California Record is owned by the U.S. Chamber Institute for Legal Reform.