U.S. House Approves FACT Act
The U.S. House of Representatives recently passed H.R. 985, titled “The Fairness in Class Action Litigation and Furthering Asbestos Claim Transparency Act of 2017,” or FACT Act. The bill aims to establish certification and reporting requirements for class-certification and to prevent “double-dipping” by requiring asbestos trusts to file quarterly reports reflecting the amount and purpose of their payouts. Supporters argue that the bill will protect bankruptcy trusts’ limited resources, thereby reserving funds for those claimants who are most in need by requiring trusts to file quarterly reports that will reflect claimants’ demands for payments and the actual payments made. Of note, the bill aims to achieve the following:
Requiring potential class action claimants to affirmatively demonstrate that each proposed class member suffered the same type and scope of injury as the named representative.
Requiring an accounting to be recorded that would include “the total amount paid directly to all class members, the actual or estimated total number of class members, the number of class members who received payments, the average amount (both mean and median) paid directly to all class members, the largest amount paid to any class member, the smallest amount paid to any class member and, separately, each amount paid to any other person (including class counsel) and the purpose of the payment.”
Requiring counsel in multi-district litigation to verify that “there is evidentiary support (including but not limited to medical records) for the factual contentions in plaintiff’s complaint regarding the alleged injury, the exposure to the risk that allegedly caused the injury, and the alleged cause of the injury.”
Requiring asbestos bankruptcy trusts to file the above-mentioned quarterly reports, which describe “each demand the trust received from, including the name and exposure history of, a claimant and the basis for any payment from the trust made to such claimant.”
Of course, the bill still needs to pass some legislative hurdles before becoming law.