Chris Love Testifies about SB 5090 Before Washington State Senate

Jan 23, 2023 | Firm News

Partner Chris Love recently testified before the Washington State Senate Law and Justice Committee regarding proposed legislation SB 5090 [LINK], which amends portions of the Revised Code of Washington to address tort litigation issues. Chris joined Larry Shannon, government affairs director for the Washington State Association for Justice. In their testimony, the two thanked the Committee, the bill’s proponents, and its sponsor for their efforts to highlight these issues through the work session and SB 5090. They agreed that the bill speaks to real issues but is not the appropriate solution as currently drafted due to its unintended consequences.

What is the background of SB 5090?

Class action lawsuits allow groups of plaintiffs to file a case together when individually their claims would be too small to justify legal action.

Litigation costs in class actions are typically the responsibility of the individual parties in the lawsuit unless the attorneys’ fees are authorized by a contract or statute, or recognized through the common fund doctrine. In common fund recoveries, attorneys’ fees can be awarded and paid using a reasonable percentage of the overall recovery.

Additionally, to bring any lawsuit, including class actions, a plaintiff must have standing, which is achieved when they are able to identify a specific “injury” or “harm” that was caused by the named defendant. Standing may also be conferred through legal rights created by statute even though without the statute no injury would exist. However, in a series of recent U.S. Supreme Court cases, including TransUnion LLC v. Ramirez (2021), the court ruled that the violation of a plaintiff’s legal rights created by the statute was insufficient to confer standing and that harm must also be proven.

What are the Goals of SB 5090?

SB 5090 (then SB 5893) was first introduced in the 2020 legislative session by Senator Mike Padden; however, it did not advance through the legislative process. Chris previously testified in a 2022 Senate Law and Justice meeting intended to determine whether the bill should be taken up again in the new legislative session.

After amendments, the bill was reintroduced in the 2023 legislative session as SB 5090 by Senator Padden.  The bill would accomplish the following:

  • Only parties charged with paying attorneys’ fees in a tort action could petition the court to determine the reasonableness of the attorneys’ fees. The court would need to consider various factors to determine the reasonableness of the fees.
  • In any tort action brought on behalf of a class under Washington law in which a common fund is sought as damages, as part of determining the “adequacy” of the plaintiff’s attorney counsel to represent the proposed class in determining whether the lawsuit should be certified to proceed as a class action, the court must determine the percentage of the common fund to be paid to the plaintiff’s attorney.  This percentage must be used in any later award of attorneys’ fees to the plaintiff’s attorney unless the court enters written findings and conclusions that changed circumstances require an adjustment of the percentage.
  • It would confer standing on a party alleging a violation of a statute that could be remedied by an award of statutory damages.
  • When a court orders an award of statutory damages, it must account for inflation from December 31 of the year in which the damages were incurred through December 31 of the year before the award.

What Concerns Are There About SB 5090?

  • While the intent of SB 5090 is to address important issues regarding modern issues in tort litigation, there are some issues with the proposed legislation that should be addressed. Plaintiffs need the ability to request court approval of fee awards. Under current law, plaintiffs have the ability to request court review of an attorney’s fees. Although rarely invoked, this legal transparency is a building block in the trust between plaintiffs and their attorneys. SB 5090 would shift that safeguard from plaintiffs to defendants responsible for paying fees. Not only would this deprive plaintiffs of this important civil protection, it would potentially escalate the problem SB 5090 attempts to address: frivolous objections to attorney fee requests.
  • The state often does not have jurisdiction over these claims. Since most class actions are heard in federal court, due to federal diversity jurisdiction, the state does not have jurisdiction over most class action claims. Therefore, the federal constitution will apply, and the court will apply federal precedent. If SB 5090 were enacted, it would not affect the majority of class actions.
  • The bill may make certification of lawsuits as class actions more difficult. Judicial decisions require plaintiffs seeking to have a court certify a lawsuit to proceed as a class action as soon as reasonably possible in the lawsuit.  In contrast to this early class certification proceeding in the lawsuit, the amount of the plaintiff attorney’s fee award is determined at the end of the case, after the amount of a class’s (if any) recovery is certain due to a settlement or jury verdict and the number of class members who have sought reimbursement from the recovery is certain.  Requesting and determining the fee award at the end of the case allows plaintiff’s attorneys to maximize the class’s recovery first by requesting a truly “reasonable” fee percentage based on the actual amount of money recovered by and paid out to the class.  It also allows plaintiff’s attorneys to accurately answer the primary question courts have in determining a fee award:  “if I say ‘yes,” how much is left for the class?”  Moving the fee determination to an early stage of the lawsuit when any recovery at all, including its amount, is uncertain will require answering these critical questions based on speculation.  And making the uncertain answers to these questions part of determining whether the lawsuit should proceed as a class action at all, SB 5090 may result in greater difficulty in obtaining class certification.  A court would have the discretion to rule “Because the recovery at this time may be nothing, you are not ‘adequate’ counsel because your requested fee is too high, and I deny class certification.”  This in turn may discourage plaintiff’s attorneys from agreeing to represent clients in class actions or filing lawsuits as proposed class actions.
  • The bill may have unintended consequences.  Under Washington State Supreme Court case law, “procedural” matters are exclusively reserved to the authority of the Washington State Supreme Court to address through promulgating rules applicable to all the state’s courts.  Washington Civil Rule 23 addresses the procedure courts must use for determining whether to certify a lawsuit as a class action, including determining whether the plaintiff’s attorney is “adequate” to represent the proposed class.  By adding an additional consideration to Civil Rule 23’s class action requirements, SB 5090 may violate Washington State’s constitutional separation of powers.

What Is Next for SB 5090?

“I appreciated the opportunity to discuss the content of the bill with members of the Washington State Senate Law and Justice Committee, and I look forward to continued talks so that we can ensure access to justice for all,” Chris says.

Chris remains in ongoing discussions with SB 5090’s proponents regarding these concerns.