Transcripts For CSPAN2 Brian Fitzpatrick The Conservative Case For Class Actions 20240713

Review. He is also the author of the chapter in the popular guide series on 17200 claims so please welcome christopher sure about. [applause] our next panelist is the professor himself he wrote the book. He is a graduate of notre dame where he was a runnerup valedictorian. But he made up for that when he went to Harvard Law School in one of the diploma for being top student to graduate in his class. [inaudible] and he has been a lawyer and a professor including back at harvard for a while. Is currently a vanderbilt and hes the author of this book and makes get compelling case on the class action mechanism that we will hear more from him in just just a bit. And our moderator today, is judge on the ninth circuits, he is a graduate of well hes a korean immigrant to start with and came to this country and graduated from i believe cornell, and then Harvard Law School. He has classmates . Is magna cum laude and it works out several places special counsel to the judiciary committed he was recently appointed to the ninth circuit. So around of applause for dodge kenly. Michael thank you for the introductions, i think were going to have a great debate here. We have two experts on class actions, little bit of format, i will give professor Pitts Fitzpatrick the floor let him speak for 1015 minutes to make his case and then there will be ten to 15 minutes to rebut and then we will open up the floor for questions. I guess michael mentioned brian and i were classmates in law school. We in fact lived in the same dorm floor. And i can tell you that back in the data harvard if you were a rocksolid republican you are treated as if you were to write of attila the hun. Brian was actually was to the right of attila the hun. [laughter] brian was actually more of a libertarian. But verily sterling conservative credentials he clerked for justice glia works for senator jon cornyn of texas and is a stalwart of the federal society. So this is a very long way of asking him how does a member of the vast rightwing conspiracy write a book in support of class actions. [laughter] thank you for that kind introduction. [laughter] the reason i think conservatives should support class actions is because we have to ask ourselves what the alternative is. And the alternative is told to us in an amicus brief, filed by the United States chamber of commerce in 2010. In this amicus brief is really what inspired me to it write the book you have in front of you today. The case with the Supreme Court is called at t d conceptually on. I suspect many of you know about this case. The quest was our class action waivers that are embedded in arbitration agreements enforceable . In the u. S. Supreme court said yes. My old boss justice glia wrote the opinion in the court said you can ask someone to waive their right to join a class action as long as you do it in an arbitration clause. Any state laws to the contrary are preempted. It was apparent to everybody than 2010 that if you got rid of the class action waivers, the people who were injured in small amounts by corporis amounts, small frauds small pricefixing, small injuries. People with small harms way to have a very hard time Holding Accountable for those small harms not remaining people are gonna do that on their own. Everybody knew this in 2010 and the chamber of commerce filed this to calm everybody down. The u. S. Chamber said dont worry if the class action goes away there is something than the class action. Quotes federal regulators. Fag federal regulators should be policing our marketplaces. Now as judge lee mentioned, i have been a member of the vast rightwing conspiracy for very long time. I have been going to these Federalist Society members for 20 years. I have never once in any of these gatherings heard anyone say that federal regulators were a solution to any problem. And they are not a solution to this problem as well. The conservative way to police the marketplace is class action lawsuits not federal agencies. I start the book with some quotations from milton freedman. Who reminds us that for all of the virtues of the United States chamber of commerce, they are often not very conservative. He has a wonderful passage that a quote in the book where he says listen big businesses often waxed poetic about the Free Enterprise system and they are off on a plane to washington d. C. Asking for special legislation for their company. So like chris, i represented many members of the chamber of commerce when i was a lawyer in washington d. C. Im very grateful for all the companies do for our economy and for our country. But they are not the best place to find what the conservative principles suggests we should do to police the marketplace. What is the best place to find what conservative principles say . Well my book is built upon people like milton freedman, like freedman hyatt. Like terry becker, like george stickler. Like Frank Easterbrook like richard epstein. Conservative and libertarian, economists, scholars, lawyers, judges. What do they say . This is what they say. Number one. We do have to have policing of our marketplace. Not even friedrich hyde, the Austrian School of economics beliefs incomplete laws a fair market. The very least even libertarian say we need three rules in our markets. No fraud, no breach of contract, and no pricefixing. We cannot have vibrant markets if companies can breach their promises to us. If they could lie about what they are selling, and if can editors can get in cahoots with one another. At least we need those rules. So the question then is how are we going to enforce and implement those rules. I argue in the book the conservative way to do it is through the private enforcement of the law. I go back to the literature on privatization that was very popular during Ronald Reagan and margaret thatchers times. In this literature basically says we want to privatize everything. And therefore, why should we want to privatize enforcement of the law as well. Identified six reasons why. This literature advocates privatizing over government solutions. All six of these apply to private enforcement of the law. Number one, we would like Smaller Governments. Everything else being equal we want a Smaller Government that means lower taxes fewer bureaucrats looking around for things to do. This is consistent with private enforcement of the law. If we didnt have classaction lawyers Holding Accountable for misdeeds we have to hire thousands of more lawyers and thats more taxes and more people to do. We like selfhelp. Thats reason number two. We like to build selfreliance among our citizenry, people relying on themselves and their neighbors when things go wrong. Not waiting around for the government to save them and bail them out. This again is consistent with private enforcement of the law. Reason number three, better incentives. We like to privatize because private sector participants are motivated by profit. And we think that galvanizes them to do a better job in Government Bureau but bureaucrats get paid the same no matter what they do. This is consistent with private enforcement. Classaction lawyers earn contingency fees. These are two horrific motivator. So we would expect and ill explain in a moment there is data to confirm this. We would expect classaction lawyers to do a better job than lawyers do. Number four, better resources. The private sector has better resources and the government does. The government is always strapped for cash, budgets are always being cut. Enforcement budgets of the least sexy thing in the budget, its the first thing to go. The private sector can find financing for any profitable venture. And therefore we would expect the private sector to be able to bring much better resources to bear in enforcing the law. And again, the date is consistent with that. Reason number five, less centralization. We prefer private solutions because they are less centralized than government solutions. We do not want all their eggs in one basket. What if we drop the basket . Do you get bad results for everybody. We like to hedge your bets by having decentralized solutions to problems. That is why we like federalism. That is why we should like different classaction lawyers all over the country filing lawsuits before different judges instead of one federal agency in washington deciding what the law should insured not be. Lastly, the reason we like private solutions is because private solutions are more independent than government solutions. And the in the academy we often teach about something called agency capture. Conservatives have a word for it, term four called crony capitalism. Government agencies are often captured by the people they are supposed to be policing. Campaign contributions, the revolving door personnel, this makes our Government Agencies less independent and more biased. The private sector does not have that problem. The private sector is focused on profits. Their focus on contingency fees. Thats purer than the government which is often focus too much on who gave who money. All six of the reasons we normally like to privatize, leads to the conclusion that private enforcement of the laws preferable to the u. S. Chambers of federal regulators. As i said, the Empirical Data supports the theory. If you compare classaction lawyers in securities fraud, classaction lawyers in antitrust, you will find that classaction lawyers are recovering more money than the government lawyers are recovering. In securities fraud its ten the one in any given year security fraud lawyers are covering ten times as many because they file more cases. But even if you look at the exact same cases when they got to the exact same people for misconducts, the private bar still collects four times as much as the sec does. The theory supports private enforcement and the data suggest private enforcement does a better job. Now of course it is true, that the private sector can go too far. The profit motives can go too far. And people can abuse the system in order to eke out more profits. This is not a reason to turn everything over to the government. Corporations can abuse the system in pursuit of profit. We dont say therefore lets have the government do everything instead of corporations. Now, we say we are going to put rules into place. To harness the profit motive so that it is directed towards the public good. We can do the exact same thing with classaction lawyers. We have a lot of power over classaction lawyers by regulating those contingency fees that they earned in their cases. Every one of those awards must be approved by a federal judge. And we can direct classaction lawyer profit motives toward the public good by ensuring that we only award fees when the cases are good and the lawyers get a good recovery from the case. And so i dont think the fact that the profit motive can sometimes lead people to go too far is reason to turn things to the government. Its recent but rules in place to make sure the profit motive is pointed in the right direction. What i argue in the book as i think we have largely already have rules in place. We can always improve the system and i have a few reforms that i advocate for in the book. But the most part i think our system is working. And i consider a few of the main arguments the chamber makes against class actions and i bring dated to bear on the arguments. And i conclude the chamber is basing its advocacy against class actions more and miss then reality. Let me give you a few examples. Number when the chamber says we have so many meritless class actions being filed all the time. And i always like to. To the subway footlong case. Some of the subway footlongs were only 11 inches. And some classaction lawyers sued alleging Consumer Fraud. This was a frivolous lawsuit. But is this subway footlong a representative class action or as an outlier . And one chapter of the book i try to do a deep dive into the data and i conclude no matter how you slice it, subway footlong is an aberration, it is not a typical case. The truth of the matter is this, its never been easier in the history of america to dismiss a meritless case in court. At the United States Supreme Court decided this is the golden age of motions to dismiss. If you cannot dismiss the subway footlong case after their. [inaudible] that is on you that is not on our classaction system. I also take a look at the chambers own lists of the ten worst class action ten worst cases filed every year in america. They have a ten most frivolous cases list. I looked at five years of their list, there tend classaction cases on there. There subway footlong, a couple of cases against starbucks because theres too much ice in the ice coffee or too much from when the latte. There are three frivolous cases on the list the other seven class actions were not even frivolous. There is a case against mastercard because they ran a promotion that said if you use your mastercard were going to donate a percentage of your purchases to charity. They didnt tell people the amount of money they would give to charity was capped at a certain level. And they hit that. In mid third month of the year end they thought they were this was a debatable case on misleading consumers. So most of the cases on the chambers list fond of that category that are at least debatable. And what to say in this book is that in five years if the United States chamber of commerce could only find three classaction cases that are clearly meritless, we do not have a problem with meritless cases in her system. But i am willing to meet the chamber halfway and so one of the things i proposed in the book is we can tamp down even further on meritless cases. If youre not happy theres other things we can do. We can put an automatic stay of discovery in place when a motion to dismiss is pending. Most judges do it now but some dont. We can make it automatic. I am even willing to give defendants an appeal in a classaction case when their motion to dismiss is denied. Just to make extra sure that cases not meritless. So i am willing to tweak the system a little bit but i dont think we have a meritless cases problem. What about attorneys fees . This is another big argument the chamber makes. The only people getting money in classaction is the lawyers. Classaction gets nothing. You can find one or two or three cases again were class members get nothing in the lawyers get everything. These cases exist, but i submit to you these are outliers. Extreme outliers in my empirical work as a professor, i have added up every single dollar the defendants pay out in class actions. And i have compared it to every single dollar, judges award lawyers and fees. And you know what, the percentage of what defendants payout is awarded in fees. 15 . 15 . Its with the lawyers are getting. Its not everything. Its far from everything its far from even a normal individual case contingency fee. We do not have a problem with lawyers making too much. We actually argue in the book if we want to be good law conservatives we are probably playing classaction lawyers too little. Theyre all kinds kinds of ways of the capital their incentive and no one once those to be capped. We dont have a problem with fees. It is true not many class members recover from Class Action Settlements in a lot of cases. In consumer cases the claims rates are low. The ftc just came out with a very well researched study where they showed the median claims rate and a consumer class action is 9 . That means 91 of consumers are not getting any compensation from classaction. That doesnt mean soleimani theyre all going to the lawyers. We split the money up among the 9 that file claims. Every good left of her money to charity. But it is true in a lot of cases that the classaction is not regular compensation, i admit that. But two things about that. Number one, remember the alternative here folks is the government. Is the government going to be better at Getting Compensation to people when they go after wrongdoers . To begin with, most of the time the government goes after wrongdoers that are prohibited by law from distributing the money to the victims. That has to go into the u. S. Treasury. On the occasions where the law permits the government to distribute money to victims, what he think the government does her they hired the same people to classaction lawyers do to distribute their settlements. On governments claim is 9 two. The government is no better compensation thats first thing to know. Number two, the case of the lot classaction is not dependent upon classaction. Even when not everybody is getting their money back the class action serves as an important function. Deterrence. If Companies Know they are going to have to pay when they do something wrong, they are less likely to do bad things to begin with. This is a conservative law and economics theory. We have been teaching for 50 years. Its another reason why the class action is valuable. And actually theres some very good empirical studies that show when classaction goes up corporate misconduct goes down. So i am willing to rest a case on deterrence alone, but in a lot of cases we also have to at least have the side benefit of compensation. So i think when you look at the data, when you look at the theory, the conservative way to please our marketplaces is not enteral regulators. My view on this was really the conservative view for most of the 20th century. We can talk in the q a about why things change, but until Ronald Reagans time, the conservative view was private enforcement is better than the government. I will give you one example. In 1978s, was a bill introduced into congress that wouldve abolished consumer class actions. This is the chambers dream bill today. In 1978 a bill was introduced to abolish class actions. This bill was introduced by ted kennedy. At the behest of jimmy carter. Because they were going to create a federal agency to do the Consumer Fraud policing instead. What i say in the book and what i say to you today as we should not be taking advice from ted kennedy and jimmy carter. Thank you very much. [applause] very thoughtprovoking your response. Will i did not write a book on this, but ive been doing it for about 20 years. And i certainly applaud professor fitzpatricks contrary in thinking his creative thinking on this subject, but i respectfully disagree. And again i do that from a conservative perspective. My perspective is one of actually spending the bulk of my career defending these types of actions. Litigating them in the trenches. That something im very proud to do. I work for these companies. I fundamentally disagree that the aim of these companies is to cheat consumers to take advantage of consumers, certainly we can all find highprofile examples where that has occurred. An professor fitzpatrick cites a few high profiles in his book. But by and large the companies i am privileged to defend in my firms privilege to defend, valued their relationship with the consumer. Value it much more then the classaction lawyer i can assure you that. And from my perspective, one of the greatest threats in civil litigation today is the threats of the class action. I think it has been taken from its historical intended purposes and it has been taken to such an extreme, that i dont think anybody intended. And again from a conservative perspective i reject the nanny state i reject the notion that they need the government whether its in the form of a government or federal regulation or fag federal regulation or statute thats been involved. I think business in this country is considerably overregulated. We have one of the most hostile business climates in the country in this particular state. I am speaking with some folks before this program began, i dont know how a company survives in this particular climate. We have wage and hour laws in the states which make it impossible to comply. You comply with one statute you are violating another regulation. And then you have the risk of the federal government coming in with the plaintiff lawyer using federal statute saying thats a violation. And i think the class action is use the procedural mechanism to take advantage of this in the consumer context in the employment context and the answer employment context. But i am describing she was real. Its not something thats just theoretical. Its something that happens on a daily basis. And i would respond to professor fitzpatricks thesis with four principal critiques. Let me outline them. First i think his theory presents a false economy. You will not hear me advocate that we should supplant the classaction with greater federal regulation. I did not write the amicus brief, my firm is not involved that amicus brief. I dont think the choices we face are between class actions as they exist today, or even as modified and reformed versus government enforcement. There is a third way, and i think its a critically important tool in the use of private enforcement and that is industry selfregulation. And that can take many different forms. We are all familiar with the Better Business bureau. They actually have a division called the natural Advertising Division Board Members can go in petition if somebody crosses the line if they are advertising product in a way that it competing business feels crosses that line, the industry works together. And in that particular scenario, the resolution of those disputes may often lead to file on class actions or file on lawsuits. But thats a situation where the business kind of regulates itself. I am not suggesting we replace class actions with it, but he think its an underutilized tool. There is also competitor litigation. There are many federal statutes that are used not if exclusively by competitors. There is a false advertising law that is used most often following those nad proceedings that i reference. The Robinson Patman act that is correlated to the federal antitrust laws often use baseball businesses, businesses or some suing the larger businesses that are competitive. We are all familiar with ip suits, Patent Infringement suits, bridgeman suits, some the largest trials weve seen in recent years have not been class action they have been between competitors. The appliques that result earlier this year is just one of those examples. And i viewed these private lawsuits where the incentives are actually perfectly aligned. Companies will not go overboard. Let me give you an example of a company i believe may have gone a little overboard. A few years ago there were nad proceedings and instituted number of false advertising laws under the act were all of its competitors had argued that their pomegranate juice was not pure pomegranate juice it was flavored. Their advertising pomegranate and they believed they were the believe they were the only ones with pure pomegranate juice. Then quite a bit of success, and in the industry they got together and went after powell wonderful with proceedings because these companies felt palm was crossing a line in the way it advertises products. And so this is a private way, and a free and fair marketplace for businesses to regulate themselves and for businesses without distributing the windfalls from those results to the wrong group. Namely plaintiff classaction lawyers. As a child of the cold war actually believe this concept that we also did that was a mutually assured destruction. It works in the nuclear age of think it can work here as well. I think the problem we have here in this country is over litigation. Theres too much litigation over flea might disagree where we draw that frivolous line. Theyre way too too many instances where people are taking advantage of very, very broad regulations and they are bringing class actions based on that. And im going to discuss a few that i have read about or have had the privilege of defending. My second critique is what i describe is the law of unintended consequences. One of the most fascinating things i read, and that i learned an professor fitzpatricks book and i would encourage all of you to read about it was the history of the classaction. It was news to me that the bill to introduce us was introduced by ted kennedy. I did not know that. And certainly i dont want to take that side of this debate. But i think the world has changed quite a bit since 1978. If you look, lets remember class action is a procedure. You dont bring a class action and you say im bringing a class action. Its a procedural mechanism for a plaintiff to group together with other likes similarly situated plaintiffs and bring a lawsuit for a violation of the law. See you have to have the substantive law underlines the procedure of using a class action. Without it you do not have a class action you dont have anything on state or federal. What if the law looks like today is what it look like in 1978. I would argued that we were overregulated in 1978. I would say today we are even more overly regulated. That is the fundamental prominent problem. What you are seeing them react to is the fact that the class action is being used in all these different scenarios to enforce privately statutes that were never really designed or intended to be enforced in a class action saw quite a bit. We are finding that these are being concentrated more more and with it, highstakes class actions and for those of you that work at law firms like mine and her peers, if you be surprised at the way they define the most significant event that the company news dive boat litigation. I think its a little bit different than our class would define it. Theyre talking about multibilliondollar losses, theyre talking about losses or tens of millions of dollars so thats what you are finding. And again if you look at the history, the professor lays out, it is a lot different today than it was back then. I suddenly agree as he lines out in his book, this sort of quote laws that all conservatives believe in, breach of contract, was a fraud, and antitrust laws are all sensible regulations. Any pre marketing to baseline. So that a company or an individual that looks to start a business, was to ensure that the marketplace is free and that the marketplace is fair. Professor Pitts Patrick uses an example in his book of the company that is struggling because there are scenes that are sold in a south american country. And that can be no assurance that the seeds are actually going to work. The market is florid funded with big seeds and there is no recourse to the legal system. That is not a problem. Our problem is the other one. With the companies can even begin a business because they have to comply with all of these federal and state regulations to even start a business. And wont i do it, and theyve achieved that success, they immediately hit the class action. I remember a few years ago meeting with client downtown and he was about to president to the board, it was their first class action, new series, had no idea why is my company being hit. Good company will trying to make it and some bigger players in the industry. And i mentioned to him, while its in your lobby, there was this industry magazine i saw you big on the front of it. As you are here with class action is because you didnt do anything wrong, you are successful. Has me on that kind of change little that i wasnt appreciating pretty was proud all of us and that he had a class action. [laughter]. I said no no no, this has brought something to be proud of this. Please dont understand me. Misunderstand me. That tells you a lot about the way that the plaintiffs view this. Not going after truly legitimate cases been going after deep pockets pretty good these lawyers avert a beer at the end of the case, this will tell you. Just as there are looking to do. I also would reject the notion that Business Community have this organized lobby and lobbyist and theyre trying to Lobby Congress and of course that is happening. In my experience in world, which is largely consumer class actions, i find that the plaintiff news bar is far more organized and far more strategic about how the lobby are governments pretty late the california simile. Do you get laws to change. Look at for example the california privacy act that has been passed. Modeled after the you privacy regulation. For which advocates freely acknowledge his own set of the island has brought said relations to scream companies. Heres what you need to do. Heres how you comply. There is a safe harbor if you do this, you will not, now they tell you will wait until we enforce it a few times. Would we go ahead and have some discounts on the wall with a put it. And then you know how to comply with the law. And that is no way to regulate in any modern economy. But that is whats happening this country. I wouldnt model any of our laws after the e. U. Because thats exactly what happened and whats interesting about this is you look at its history who lobby for it and who passed it. Its a plaintiffs classaction barn you go through the details of this particular statute, as the requirement they show actual injury. Theres an ultimate medic attorney the if you prevail. And again, what rule is that advocating or advancing on behalf of consumers. Its not is the interest of the private classaction bar. My third critique is several times in his book, professor pitts cut fitzpatrick outlines the conception decision. At t case the help arbitration causes and classaction waivers in these agreements. And are ultimately going to lead to the demise. At one point in his book, even suggests that the class actions are all but irrelevant these days. That is just again, or practitioner standpoint that is just not consistent. No site or in the staple im sure we can spin the whole session discussing for his frivolous class actions that weve either read about or had to defend. Im here to tell you that red bull does not actually give you wings. [laughter]. Im also here to tell you the froot loops, does not contain actual fruit. [laughter]. Notice crunch berries. Subway footlong sandwiches and example that professor fitzpatrick uses, may not measure exactly 12 inches would the bread is actually baked. This obviously ones will love about and we joke about and i agree, they are relatively rare but a few observations. Those are not always dismiss on the pleadings and unlike professor Pitts Fitzpatrick i do we do if you bring a motion to dispense dismiss. I can tell you the most of the cases where defendant is basically a jumble with that case will be displaced. And i would note, most judges we do talk to them they have a fatigue. Theyre tired of seeing this motion because they see them not only the frivolous cases but on the case. It is very difficult do you get the case dismissed on the pleadings before any discovery. In front of that is the skill of advocate in making the argument, in my humble experience and opinion a lot of changes, are predisposed to let these cases go into discovery. Most didnt have jug leaves background where he saw enormous cost and settlement practices i can take a case into discovery. Subway actually reached the course because it settled the case. And i didnt represent subway. It wasnt in the bulb in the case. I can only assume that it wasnt the lack of skill of the advocate on their assessment of the risk of that case going into discovery. Thats why they settled that particular case. So there was obviously ones but they are the ones that maybe on the surface, you might look and say this might actually have some merit. In one example that i would give you is our firm was defending major Motor Vehicle manufacturer in case involving the brakes and these hybrid vehicles. One day after the client announced a recall of those vehicles, to do what youd expect in a responsible Corporate Citizen can do to address an issue, not a safety issue but nothing phyllis, and both brakes and wanted to fix it. One day later, after its announced, they got hit with class hash classaction. The class action alleges that while you recall is for this generation of vehicles, im not going to have a claimant for those but it must be that the earlier generations vehicles brakes are defective as well. This completely different model completely different brake system and the two vehicles. This case went on for three years. There are multiple millions of dollars of discovery that this defendant had a face redhead turnover at source code to the plaintiff news lawyers to allow them to sort of come through and try to find something to support the flames. They couldnt do it. And it was only would a firm was brought into takeover for over for the appeal, we got into the ninth circuit. And they left the plaintiffs out of quote. They said this is ridiculous and has absolutely no merit. The quote should ferret out the pleading but it didnt. But again that was only after my client had to invest millions of dollars. And is the rare client that will actually do that. That has the resources and the commitment to actually see those particular cases through. So again i third critique is that do not think class actions are in the road to demise. If anything i think there is even more incentives for plaintiffs to bring these cases today than there will many years ago. I also think because i noted that state parks class actions are just as vibrant today as they were after the passage of the class action act in 2005. For those of you not familiar, this was law the Congress Passed major one of the most signature changes lease at the federal loophole in my lifetime and the time that ive been practicing. Always relate to take these National Class actions and move them into federal quote. Because companies will finding themselves stuck in some hometown jurisdiction for the plaintiffs will really charming. Ive been hearings in texarkana and will sure you have as well. Would the judge comes out of the chambers with his arm around the plaintiffs lawyer in the best friend. Weather went to law school with the judge. And then they get on the record the judge defers the ruling on the motion to dismiss until all of this discoveries produce. Just an exorbitant pressures placed on the defendant. So the goal was where you have multiple or very large multi stake class actions. Those long in federal quote. On traditional roles of diversity jurisdiction, we have citizens from different states. You need to complete diversity. And he also could aggravate the flames. Sweet claimant and each plaintiff, each crossmember had a claim of 5. Number 10 million class members. This 50 million claim. By any stretch of the imagination but in the traditional roles, you could aggregate. The class action fairness act change that. So everyone predicted that even judges in la predicted and i spoke with many of them after this was passed. Predicted will not going to have class actions anymore. Well ask any practicing lawyer today if that is the case. We have seen is more concentration in the flames are being strategic. Reinstate my classaction california, went to texas, new york illinois and other more populous states. Try to see how it goes and then expect settlement as best they can. In our losses, are all of us exclusively in state quote if my attorneys. Not exclusively bonobos. Something that. Is one that we should it just class over. Class actions are continuing to rise. My fourth and final critique, im not going to defend the chamber news advocacy of more federal regulation but i want to give you maybe a slightly different perspective than i think many businesses have would it comes to this issue. And then is this very difficult these days for companies to achieve global peace. It used to be that if you settled a major National Class action, you obviously get the release of all class members. And you can count on the fact that you are putting this issue behind you. As i think the motivation for and the reason a lot of clients pay really big dollars to settle something. Just get it behind them. But again to my first. , would i dont think this is like the economy between federal enforcement and private classaction enforcement, im finding that essential both. Our clients are being sued in class actions and then federal or state regulators are coming after them. Also being pursued by the regulators of any of the other class actions. There really is no easy mechanism on our constitution or ill pause for a company to basically fight global peace alyssa brings all of those people to the table. And what kind of incentive does that create. You basically an option between the two trying do you get more. Than the last. I am finding the local city attorneys especially in california, and even state ages are partnering now with pride if plaintiff classaction lawyers and bring these petty lawsuits in california at least on the unfair competition law. Private parties why not get Civil Penalties. What a civil penalty is as if you establish for example use of the crunch berries case. If everyone students classaction against their 3 back for the serial. On civil penalty. In this establishment that is a violation of the false advertising was pretty can get up to 2500 per violation and are actually enhancements if you are elderly person and you purchased any or deceived. And or some other protected category. So now each 3dollar fox of spirit has become a 2500dollar fox. An enormous settlement pressure. So the lodge nasal and Public Officials may pursue those Civil Penalties for false advertising. And the money must be directed to the enforcement of the unfair competition. What is undone. The primary private lawyers will always marketing ourselves and clients to pitch new cases. What is the plaintiffs and more doing. What they are doing is they are making pitches to Public Officials and staying, mr. City attorney, how would you like to be attorney general and the governor than president. And heres the statute and i can bring it on a contingency basis and i can actually enforce it whether or not there is a classaction or sediment and i will go ahead and bring this lawsuit and you get to keep every single dollar that we recover a 2500 a fox. And you get to build this little Enforcement Unit in your office and bring all this money in. That is a little bit beyond the problem that will talking about today. Thats a perspective of the Business Community today. And some of the research facing on top of these class actions. So make it very difficult for them to achieve global peace which again i think is part of the conservative case for why you would want class actions in private enforcement and get some global peace. So the most basic loophole, i would say again, i applaud professor fitzpatrick news three predicates creative. I think it has created to be. I dont it may be a debate between capitalism and socialism. Im not of course calling him a socialist. I would never do that. Please understand me. But i dont think this is necessarily a conservative or liberal issue. I think it is a smart government. Its may be considered probusiness perspective. But i think again from the perspective in which i operate, i think companies are trying to do the best they can to deliver great products to consumers and to survive in a hypercompetitive environment in a regulated economy. And as you noted, i dont think conservatives are ending all class actions. That certainly not my position. I think we do look at the history of this country, certainly during the civil rights era, class actions played a critically Important Role in blink bringing justice to people who would ordinarily not have been entitled to it. I think if you look at where we are today first this what we will 50 years ago, i dont think anyone would say that this is the right way to set up an economy, this is the right way to align incentives amongst lawyers and amongst the Business Community and consumers. So again, i say some of the most obvious poster children for the toll Reform Movement happened to be class actions. And theres a reason for that. Thank you. [applause]. I want to open this up to the floor and see if anybody had any questions for other professor fitzpatrick or the other professor. [inaudible conversation] defined that movement is leading to a deregulation. Do you fear it will be marked. My second question is is there kind of a rhythm to where sometimes private attorney general system works better than the public policy. And vice versa, and for the reason, you need to have working on perfecting the policy. And at certain times would withholding the gaps. I can take his habit answering that. I think ill take those second question first. Absolutely, i think we need both. My book has brought for private enforcement only. There are times would the government is going to be the best enforcer. Sometimes theres a lot of profit to be made in private enforcement. In this case is if we want any enforcement, will have to rely on the government. And one of the interesting things i found the data on the fcc, first this the private bar is the sel special brings lots of cases against various small processors. Because they know the private bar will not go after those people. So theres an interesting synergy that is developed between the government and the private bar. So think you do need both credit business both in the same case. Piling on and i think it can be piling on. I absolutely think the companies should not pay more than the harm they have caused. And so they pay out fully in case one, that have not off in case is it too. So absolutely agree with him that we need to make sure that we are not over deterring. The first question. Interesting about whether the regulators have become more active as class actions have declined. I think ive seen anyone try to gather data like that. I will note that africans have for csp me and kicked it into high gear for a while because they will worried that class actions going away will make it hard for consumers do you get a fair shake. Since we had a change in administration, i dont know how active the f bb is anymore but if i will, i think it was some notion that because of class actions going way, see if pd needs to pick up the slack. I dont know if that thought has continued. I guess from my perspective, the book i think is the really nice job walking through the potential impact of the consumption on and where it will effect from my perspective, litigating these cases. It is let it anything more plate litigation. And we found is the plaintiff news lawyers are to go away. You have a whole industry in the state predicted but other states as well. The main the likelihood and made a lot of money on consumer class actions in wilton news account did it just what goes away pretty first of all, you need have a contractual relationship with your customer. Beverages a huge area of litigation in the state. Despite my best attempts on my clients to walk in arbitration costs on the philips. [laughter]. Interbank sued for breach of warranty. Which last time icheic was of contract claim but nothing nevertheless. What we are finding our number one is the link that class of cases where theres an express contractual relationship with the customer pretty need to actually have [applause] to have the waiver to have the arbitration. Anyone in those cases where weve been litigating for the last ten plus years is the plaintiffs are first attacked the [applause] information and they argued well i didnt understand the contract and i didnt agree read it. The arbitration clause was at the end and said at the beginning. And it was in black text and not capitalized. And instead of red and all caps and all those types of arguments. And you all of us always see the online commerce. The apps that sort of thing the whole clip click wrap arguments and those sorts of things. He also saw this what led to concepcion on in the first place was that the reason why the spring quote reversed the california Supreme Court in that case, and a ninth circuit, but because the states have started using a contractual defense which is then crunched doctrine. So essentially the contract is over onesided and you didnt disclose certain things, if the state law doctrine you can validate the contract because it is substantively unconscionable. In resurrection of the doctrine, and immediately thereafter, the quote started invalidating the causes as the employment context and the Consumer Product as unconscionable. Those cases made their way to the Supreme Court and they said no we really meant what we said in consumption. Please listen to his credit and then taking five or six cases and send my. Is you finding more and more ways in which the plaintiff smart to basically attack those. We mostly have conception having as most forces really in the consumer context. And also the employment context at least today, the ninth circuit, you dont have a single case that they think delivers a Silver Bullet went to defendant based on a class action waiver and arbitration and that is because number one, and the employment case you are also going to find a private attorney general or partner claim. Which Supreme Court has held, you why not arbitrate. It basically allows an individual to bring an action as private attorney general, get their attorneys the and its not subject to arbitration. In the second is, in california even more ridiculous in my own personal view, is an argument that if you a sneak consumer are seeking what is described a sneak public injunctive relief so again in the food label context, if you want company or your reaction is do you get the company to change the label in a way that you will allege or contend no longer is deceptive. Thats considered public junker relief. If thats in every class action ive seen. That why not be arbitrated. So which have now is even in cases where you have a rocksolid arbitration agreement, its enforceable. Two of the employment top context, and sure enough, the season quote. And that public injunctive and the consumer case is shaved off. Season quote. I course and kinda make sense whether to they have the goes first are the arbitration go first. But i dont think conception on has had the impact that a lot of people have directed. I just want to add one thing to that. I think that would the fog of dispute actually goes to the United States Supreme Court, theyre going to roll that it why not withstand arbitration. They will order arbitration. The u. S. Supreme court ever rules on it but i do want to emphasize one source of agreement that chris and i have created you talk a lot about it in the book. We do have way is it too many laws on our companies. Way is it too many legal constraints are coming. Way beyond. Would beyond contract pride and pricefixing progress in the book, is i agree, we are over regulating. And all advocate for business. I say rather than class action waivers which are a very blunt instrument, you can insulate yourself from liability or wrongdoing in any kind of case in the class action waiver. Rather than allow this blunt instrument, why dont we focus on the laws we dont like. And say you cant use class action in those situations but allow the class action unless we do like. Fraud, breach of contract and price fixing. Advocate in the book that we should reach this principle the roles of principal procedures transit substantively. We dont have to have the exact same rules of procedure never case. Contrary to what we have learned a lot these years. Rather than have no regard for the principle we continue. I say lets use rule 23 for the laws we think should be in place and should be enforced robustly. So i agree, we wait and the answered get rid of all class actions and threatens to do, i sent said lets just limit where we can use the class action. I one question. In my experience most for the majority of class actions brought within the plaintiff is that a plaintiff the walked across the sink i did wrong. Three dollars or 30 or whatever. Please represent me. They were generated by lawyers. Does it trouble you at all. In terms of the class action mechanism. In this economy. Actually asked the more they get them from. And im surprised how often people do come to them and say ive been mistreated this can be right. But even in the case with classaction lawyers figure out theres a problem, and then find someone to stand in and rep. , i really have a problem with that because we need sophisticated intelligent well resource people to sometimes uncover wrongdoing. And i dont begrudge the classaction lawyer for being that dive boat policeman. Ive talked to a class action lawyers who have done years and years of analysis with professors to try to figure out weather theres pricefixing going on in an industry. Really hard for particular consumer to know that. If you do investigation, is expensive, and sophisticated and sometimes you can uncover these things. So i think that if we want to police the marketplace, went to be encouraging people with resources and sophistication to find wrongdoing. Is the specialty of the United States. I teach you wrote another consultation, is founder and she starting to arrive. If you will designing the system for european country and you have limited classaction to what degree would resemble the United States system and what would you change about it. Ive handled a couple of copycat cases and other countries. Its very much liberal liberal tradition. Big l small l. And cars are country is founded on liberal can tradition. More conservative certainly you wrote politically. In those countries, the perspective that they take on class actions, and again the modern classaction which really arose out of the 1960s mid 1960s and minutes, to rule 23 and what we know today as the cox action is called the opt out class action. You are presumptively in would class is certified. And if you dont want to be part of that, you have to affirm that we opt out. And in these other countries, is the exact opposite. Is the way our system is to be that way. You have to affirmatively opt into the classaction other was a can represent you even if the quote says that i am similarly situated to you unless you give me your permission. See have more mass actions. These options. The prisons both challenges and benefits to defendants. Yet fewer smaller class actions. If there we do have is that people dont often come with a wait and see how the case goes. Is a lot more difficult do you get global peace. So to answered your question, i think either system is perfect. We do think my will designing something, i would borrow her friends in the uk who think theyre having a pretty important election today. I would borrow from them and it would have the system of loser pays. Because would i think that would do, and again, ryan has a very good ideas in his book about how we can implement some of these reforms and i agree with morse most of the reforms he advocates by the way. But i think there needs to be some skin in the game for the lawyers bringing these cases. And right now i understand the contents tendency is part of that because they are taking the risk they are investing but that goldie be investing if they work recovering a handsome sum on their investments. At least that successful ones. I think for example perspective to this discovery request. The plaintiff lawyer cant just ask for you would i started, i learned on his wing. And he said honor, these practical can i grab my client by the ankles and shake him. It is pretty much what we experience in civil discovery. I think if there will loser pay system, or some robust cost shifting, if i will designing a class action system, i dont know how i would feel about the opt in first this out out. I see benefits to our system but i would definitely have the ability of her clients do you get some of our fees back that we have to incur the intricacies cases. Ive a a question. In your experience, the classaction defense lawyer. What percentage of the cases do you believe frivolous. And of those, how many of them will dismissed by the courts. And i was staying stipulate they have no bearing on your ability a sneak lawyer. [laughter]. Is an important caveat. Every lawyer would say a hundred percent. Meritless. But i would say this frivolous is the legally charge term. It means that there is no good faith or objective basis for bringing a lawsuit and intently the consumer context i would say is probably at least half again. Im not staying frivolous in the sense that it has to rise to the loophole othe froot loops is something completely silly. Red bull gives you wings but there is just nothing there. And there is no good faith basis for bringing it. There is a news report, there was one customer came to them and complained about something and they launched a class action. In of this 50 percent, ive defended many lawsuits. Lets say about 250. I would take getting it dismissed in the pleading, was upheld, and is less than a corner. It is extremely rare do you get a case knockout that early. It is extremely rare that you get the case knockout that early and then he goes up to your part and the quote affirms it. Im not speaking anything out of turn here, which is the most courts especially in the circuit, they viewed as a very high bar to the case dismissed on the pleadings. They want folks to have their Data Incorporated as part of operating presumption with horst judges is that a lawyer puts his or her name on this document on the rule 11 certifies that is brought in good faith have no basis for forming today to question that, if you are in the pleadings, theres been the discovering there usually isnt a basis to into the record. The belief lawyers lawsuits event. So from that perspective, even if it is superficially frivolous for the subway sandwiches case, lets take that as an example. Im not staying i wouldnt have moved to dismiss the case. It probably would have. But am synthetic with the defense lawyer from their client that they face an uphill battle. So wait your advertising your sandwiches this sandwiches. Not large severing percentages your advertising them is how long. It says 12inch subs sixinch company with many of. Every law in this country, every state in this country has a law that part in its false or deceptive advertising for it even if that is not outright false, minimum deceptive. You expect in the see pictures displaying them already baked. Theres no disclaimer there is no libido. Im not defending the lawsuit, moody characterize that as ive just framed it is objectively frivolous. The law or decision the subway could cite to the federal judge to say they have not stated the claim they cant get the discovery you must dismiss it. Well listen to this and say, and it is absurd. Its ridiculous and Everybody Knows and that is with the judge due to the starbucks case print everyone knows we do buy a latte at starbucks and didnt get it with eyes that the isis going to consume some of the volume and its not going to be exactly 20 ounces or 20 to 8 ounces. The judge liked that if i common sense. I love that. But those instances are extremely rare in my experience. As unfortunate. We dont need more than i think that would alleviate the problems today. I do want to say one thing that also i think emphasizes an area of agreements. One thing ive learned, is a bit on this book to her, i am a professor and i dont get to practice in our course has often as chris does read one thing that i have learned, is that lawyers are not very careful. But what they are willing to allege very good friend is very liberal. Federal District Court judge. And he told me recently that every year he asks his law clerks what is the thing that surprises you most about your clerkship. They said every year, is all of us unanimous the same answered he gets. How willing lawyers are to live. I do think we may have a problem. And the people not doing any investigation before they file complaints as they are supposed to do on rule 11. Just taking a shot and see what might happen. I think that is a problem. We probably do need to do something. To strengthen rule 11 and sanctions in the rule 11 procedures. Some people cant just make a perfect because it is truth, theyre making a perfect is harder. Target this case is dismissed. No judges hate toward rule 11 sanctions. Theres been efforts in the past to try to change that and is been unsuccessful. And i dont know if chrissy any ideas what could be done to make rule 11 sanctions more of a deterrent to lawyers but have been persuaded by things you have said and things that ive heard elsewhere in this quick tour that we may need to do something with rule 11. One last question. Dcpa case. Section and would like to hear chriss for life. Interesting that you asked me about that because i explicitly say in the book, in the last chapter where advocate for forms, that the dcpa should be one of the laws that we do not allow class action to enforce. A sneak Consumer Protection act. If you get a robo call or text, are entitled to 500 or 1500 every time. So this, we do combine those bounties which have no relation to how much we are actually farm from the robo calls, class action, unit threatening companies with massive over deterrence. Theres some cases where the defendant is facing and im not making this up, a trillion dollars of liability. Thats ridiculous. These two obvious credible leverage. You can bankrupt the company through bhopal case. So i say that we should not use the class action device would resulted in over turns. Sexually damages cases is intuitive are not appropriate in my view and the class action device. I must say this out, would going around to other federal societies audiences, and i have mentioned the dcpa is one of the things that we shouldnt use a class action for because it can result in over deterrence, their action i usually get his professor fitzpatrick, its not resulting in overdue deterrence. Im still getting robo calls and text all the time. And in trouble and buried more class actions. [laughter]. [laughter]. Obviously i agree. [laughter]. Professor fitzpatrick does walk that there is motivation why than even those of us who practice it. We can find an agreement in it. And the purpose of the statutory damages is because congress and it is very hard to quantify if you are eating dinner and your being distracted. Some are going to set the statutory damages. And the penalties in the amount to encourage individuals to bring these losses. Small claims court whatever you want to do it. I thinks its an abuse of the congressional intemperate certainly of the statutes. The layer the class action procedure over that particular law to the to these trillion dollars. I defendant many of the lawsuit the client often asked, what is my potential exposure here. The find out how many alleged spam text theyve sent. 90 percent of the time comments in response to your request do you get a text or your opt in. And as of very quickly. I want to thank professor pets fitzpatrick. I think everyone is learned quite a bit today. [applause]. [background sounds] sunday tv features the latest books from former trump Deputy Assistant sebastian gorka, a former New York Times labor reporter, Steven Greenhouse, starting at noon eastern on in depth, was a live conversation with sebastian gorka. Was on the two flames fly into the twin towers of the world trade center. I understood that totalitarian drawbacks. They may not be communists, but they are totalitarian. And as read the works that inform groups like hal qaeda, if it is clear that is and more mecca is wont again facing a global totalitarian ideology. Is lose focus more for americas soul. His other times are we fight, any feeding jihad. Joining the conversation with your phone calls, tweets and facebook messages. In a nine eastern on afterwards, Steven Greenhouse talks about his book, beaten down and worked up. So many people have no idea what unions are into and how unions help bring us a 40 hour workweek and tension and pensions and a Bumper Sticker union to the folks who brought it to the weekend. I wanted to explain to people that you units have achieved a lot in history another and declined pretty a sneak result, things are considerably worse for workers. Then 30 or 40 years ago pretty watch featured nonfiction authors, this weekend and every weekend on book tv on cspan2. Recently on our Author Interview program afterwards, university of virginia history professor sara mata discussed the history and politics of dibacco. Heres a portion of the interview. Is the member of the communication workers of america. She went to a Union Steward and she said you know, this is a Workplace Health issue. Can you help me. Throughout the meeting she is smoking, which mustve given her an indication of how she would not get very far. In talking to him. Due to the comedy doctor, the company so she went to the company dr. The dr. Says this is ridiculous. You are ill, your workplace is making you ill, you need to say home. Until the Company Works out an arrangement so that you can return to work and face and healthy environment. And so she says okay, ill talk to the supervisors and you think you shall be home a couple of days until they agree to accommodate her. Days turn into months which in irvine mustve been alarm bells going off. What the heck is going on. Are they finding to a farming, it might going to do my job why so devoted to this. To the smoking office. Is that while she is at home, she is basically on sabbatical. As an academic i understand that by being on sabbatical, she actually gets some work done. She basically emerges herself in burgeoning world of antique tobacco activism. So she makes [applause] with a group called ash. It was illegal arm arm of the anti tobacco movement. She contacted a local social movement called group against smoking pollution. And so these forces, she basically learns that she is in uncharted territory. There no states of federal laws that govern the presence or absence or regulation of smoking work. And so she basically realizes that the only way that this will get resolved is to pursue legal action. And so she decides she is going to sue her employer. This also a really daunting thing to consider. Shes in totally uncharted territory here. Watch the rest of this program, visit our website, booktv. Org. Click on the afterwards tab near the top of the page. [applause]. Good evening everyone and welcome to the society and it is a great thrill to see you on a very wintry night and are beautiful robert a smith auditorium. Tonight news program open