Fairness in Class Action Litigation Act of 2015

Floor Speech

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Ms. MAXINE WATERS of California. Mr. Chairman, I rise in support of my amendment to H.R. 1927, the Fairness in Class Action Litigation Act.

My amendment would protect students, servicemembers, and veterans who are seeking monetary relief from fraudulent institutions of higher education by exempting them from the onerous requirements for class certification outlined in the bill.

H.R. 1927 requires Federal courts to certify a class only when all class members demonstrate they have suffered the same type and scope of injury. This additional requirement would be unduly burdensome to students, servicemembers, and veterans who have been fraudulently misled by the for-profit college industry.

For example, recently the Department of Education conducted a joint investigation with California Attorney General Kamala Harris. They concluded that for-profit college Corinthian Colleges misrepresented its job placement rates to prospective and enrolled students.

Specifically, the investigation found that, among other abuses, a Corinthian accounting program reported a job placement rate of 92 percent of its graduates in accounting-related fields, but that, in reality, only 12 percent of the graduates of this program had secured jobs in accounting.

For a separate business associate program, Corinthian reported a 95 percent job placement rate, but the Department of Education determined that, in reality, only 14 percent of the program's graduates had jobs in the relevant field.

It is clear that, with job placement rate errors of 80 and 81 percent respectively, students enrolled in both programs were intentionally and fraudulently misled by Corinthian Colleges.

Yet, under H.R. 1927, these defrauded students arguably would not be able to form a class to seek relief because they have been injured by a mere 1 percent degree of difference or because they were lied to about job placement rates in different careers. This is totally illogical and unfair, and it defeats the purpose of the class action.

As the example demonstrates, particularly in the context of higher education, H.R. 1927 essentially makes class certification impossible to achieve and, thus, impractical to pursue. The inability to bring forth class actions will selectively shield for-profit colleges from accountability and will significantly reduce access to our court system for deserving students and veterans.

We only need to look further at Corinthian Colleges to understand the harm that ensues when these schools are left unaccountable. For decades, Corinthian Colleges defrauded its students by inflating job placement rates, by engaging in unfair marketing practices and illegal debt collection tactics, and by requiring students to take out private loans at high interest rates.

According to the California attorney general, it likewise unlawfully used military seals in its advertising materials to lure an increasing number of our active servicemen and veterans. Worse yet, by including bans on class actions as a prerequisite to enrollment, Corinthian Colleges protected itself from liability while engaging in these awful predatory tactics.

As a result of its decades of predatory conduct, Corinthian Colleges was finally forced to close its doors in April 2015, leaving thousands of students with tens of thousands of dollars in debt, with worthless degrees, and with no job opportunities to show for their time and hard work.

Hundreds of veterans forfeited their GI benefits, which were earned on the battlefield in service to our country. One veteran of the wars in Iraq and Afghanistan told Politico that the months he had spent studying auto mechanics at a Corinthian school was wasted time because of the poor equipment and the training he received.

In October, a Federal judge ruled that Corinthian Colleges was operating a predatory lending scheme and ordered the school to pay back $531 million in damages to all students who attended the network of colleges before it closed its doors.

Yet, in reality, because the school has filed for bankruptcy, executives will walk away with millions while students and veterans will never see any of the money owed to them. Meanwhile, taxpayers will be expected to pick up the tab for this and any other future Corinthian judgments.

The law already favors schools like Corinthian and other big corporations over classes of harmed consumers--as evidenced by the fact that students were unable to join together and prevail in a class action during Corinthian's prior decades of misconduct, and prior to its bankruptcy and collapse. Corinthian should have been forced to repay these students out of their own profits, and our service members and veterans should have had their G.I. benefits returned so those funds could be used at a competitive, high-achieving institution.

Yet, today, we are considering advancing H.R. 1927, which will serve as an additional barrier to ensuring justice for these students, service members and veterans. My amendment would eliminate the hurdle that H.R. 1927 imposes on defrauded students, which would help ensure that the institutions of higher education would be on the hook for their fraud and unfair practices, and ensure that other for-profit institutions would be held accountable in the future.

I would ask for support for my amendment. I am sure that my colleagues on the opposite side of the aisle would not want to go down in history as preventing these kinds of acts from being dealt with.

I yield back the balance of my time.

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Ms. MAXINE WATERS of California. Madam Chair, I demand a recorded vote.

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