Herb Kohl: “Senator Grassley and I today introduce the Class Action Fairness Act of 1999. This legislation addresses growing…”

“Senator Grassley and I today introduce the Class Action Fairness Act of 1999. This legislation addresses growing problems in class action litigation, particularly unfair and abusive settlements that shortchange class members while class lawyers line their pockets with high fees. Let me share with you just a few disturbing examples. First, one of my constituents, Martha Preston of Baraboo, Wisconsin, was an unnamed member of a class action lawsuit against her mortgage company that ended in a settlement. While at first she got $4 and change in compensation, a few months later her lawyers surreptitiously took $80--twenty times her compensation--from her escrow account to pay their fees. In total, her lawyers managed to pocket over $8 million in fees, but never explained that the class--not the defendant--would pay the attorneys' fees. Naturally outraged, she and others sued the class lawyers. Her lawyers turned around and sued her in Alabama--a state she had never visited--and demanded an unbelievable $25 million. So not only did she lose $75, she was forced to defend herself from a $25 million lawsuit. Second, class lawyers and defendants often engineer settlements that leave plaintiffs with small discounts or coupons unlikely ever to be used. Meanwhile, class lawyers reap big fees based on unduly optimistic valuations.”