Consumer Federation of California

As government regulators and private consumer attorneys seek to hold AIG and its Wall Street friends to account for misconduct that has destroyed the jobs, homes and retirement savings of millions of Americans, these onetime financial titans are scurrying to slam shut the courthouse doors on their victims.

Assemblyman Van Tran, R-Costa Mesa (Orange County), is carrying legislation, AB298, which would sharply limit the right of consumers to join together to file class-action lawsuits on behalf of the public. The bill would give defendants the right to appeal a judge’s decision to certify a class action – a change that would effectively kill class actions by halting them for a year or more. It is set for a hearing in the Assembly Judiciary Committee on Tuesday.

The Civil Justice Association of California is the legislation’s main backer. The Sacramento lobbying group is funded by big businesses. AIG, the insurance giant that received $180 billion in taxpayer bailout funds and paid its executives $165 million in bonuses, long has had a place on the Civil Justice Association of California’s board.

Representatives of several large banks that have received billions more in taxpayer bailouts also sit on the board, as do executives from Big Oil, tobacco and drug manufacturers, all of which seek to evade justice by restricting consumers’ right to band together to file class action lawsuits.

AIG’s former chairman, Hank Greenberg, has been among the largest funders of the effort to restrict access to federal and state courts, giving nearly $25 million through his foundation in recent years to the U.S. Chamber of Commerce to push for what it calls legal "reform" and to limit regulation.

Tran’s legislation is the third time in as many years that California legislators have attempted to roll back the right to bring class-action suits in California courts.

Make no mistake: The measures are part of a nationwide effort to limit consumer access to the courts. President George W. Bush and the Republican-controlled Congress in 2005 won approval of legislation that sharply limited the right to bring class-action claims in federal and state courts.

It’s no wonder that big business has turned its attention to California’s courts. Here are a few cases which might have faced additional hurdles and delays had the proposed legislation been law:

— During the 2008 Christmas shopping season, Attorney General Jerry Brown brought a successful class action against major toymakers, persuading them to remove lead from commonly sold playthings. Consumer lawyers had brought a similar case the year before.

— During the California energy crisis, government and consumer lawyers brought class actions on behalf of the University of California and state pension funds against Enron and other rogue energy traders that bilked Californians out of billions.

— In the 1990s, state attorneys general and private attorneys sued the tobacco industry, forcing firms to pay out more than $200 billion to California and other states to cover medical costs of people sickened and killed by their products.

— Activists seeking to end the use of sweatshops brought sweeping class actions in 1999 under California state law against high-end garment manufacturers who were evading U.S. labor law by operating in what they thought was the safe haven of the Mariana Islands.

Despite the steady drumbeat of rhetoric about "jackpot" lawsuits, class actions represent a tiny fraction of all civil filings in California state courts. This month, the Judicial Council of California issued a survey of cases filed between 2000 and 2006 that concluded "class action cases represent less than one-half of 1 percent of all unlimited civil filings in the study courts during the study period."

The extraordinary greed of AIG and the other financial giants that brought our economy to the brink underscore the necessity of protecting our rights as Americans to hold big business accountable. The last thing we should contemplate is erecting barriers that stop consumers from banding together in class-action suits against corporate fraud and abuse.

Richard Holober is the executive director of the Consumer Federation of California, based in San Mateo.