We’ve all seen those postcards in our mailboxes inviting us to join one class action lawsuit or another. Some of the lawsuits involve data breaches with financial institutions, while others involve exposure to harmful substances. The sentiments shared by many folks opening their mail are, “No thanks. Some law firm is going to make millions in attorney fees, and I’m going to get a voucher for $4.50 for all my troubles. Keep your class action lawsuit!” Not surprisingly, we don’t usually associate class action lawsuits with the boating community or the maritime industry.
An obvious reason is that the numbers simply aren’t there in the marine sector. Some of the best-known boat models out there have production runs numbering only in the hundreds… not quite the population size associated with bulk litigation. And it’s not as if cruise lines get together to form a legal class when a gas turbine generator aboard a single ship creates maintenance headaches. Such limited population sizes don’t often make economic sense in forming a class of plaintiffs. Class action lawsuits gobble up large pools of disgruntled customers, more commonly associated with institutional consumer settings. However, we still see class action lawsuits in the boating universe.
One such case involved warranties offered by a sailboat manufacturer, where boat owners claimed violations of the Magnuson-Moss Warranty Act (MMWA), a federal consumer protection law restricting tying the validity of a warranty to repair or service by specific providers. Plaintiffs alleged that the manufacturer did not adequately disclose the difficulties and costs that boat owners would be confronted with in complying with the terms of their warranties.
Another lawsuit that strived for class action approval involved a powerboat manufacturer. Here, the boat experienced shearing of its center console, which then smashed into the stern. The owner argued that the manufacturer had not used a high-grade adhesive, instead using short bolts that were inadequate. In response, the manufacturer argued that their boat was improperly towed, at tow speeds of around 16 knots. The damage report stated that a safe speed should have been around 7.5 knots.
In another class action setting, plaintiffs initiated a lawsuit in connection with seller’s practice of charging a fee for preparation of legal documents in connection with boats and trailers. Plaintiffs argued that this conduct amounted to an unauthorized law business.
Whether class action lawsuits are based on paperwork for boat trailers, propeller pitch, or metallurgy of piston rings, there are common denominators in all such cases. These factors are outlined in Federal Rules of Civil Procedure under Rule 23. The federal rules hold that a proposed class must satisfy these four factors: (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical for the entire class, and (4) the representative parties will fairly and adequately protect the interests of the class.
To put this another way, we’re looking at lots of plaintiffs whose cases have a lot in common and it makes sense for a handful of plaintiffs to represent everyone. If these four attributes are met, a district court can “certify” the class. And while seemingly simple on its face, it is not always a given that a court will give the green light to lawsuit proceeding as a class action.
It’s true that class action lawsuits have a certain economy of scale, similar to the way a Panamax tanker can haul the equivalent of several World War II T-2 tankers in its holds, while enjoying an economy in fuel burned and crewing costs. Similarly, class action lawsuits can mean reduced litigation costs, especially in terms of expert testimony from naval architects, materials engineers, or safety experts. It means fewer investigators. It can mean less traffic in the court system.
But not everyone embraces the concept. Critics argue that class action lawsuits make for abuse of the legal system. For instance, even if a case is weak, the defendant is clearly disadvantaged in facing a large number of plaintiffs. Another point raised by critics is that attorneys are sometimes the real winners, where a ton of otherwise weak cases incentivizes litigation.
Most people will not deal with the issues of bulk litigation. But as new year dawns on the horizon, we wish our readers a great bulk and abundance of happiness, health, and prosperity for the year ahead. Happy New Year! Tim, Erol
