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

Actions including over 20 dismissals of classaction cases so you may have a sense of where his position is on that. Hes a graduate of georgetown and university of Virginia Law School where he is also the author of a chapter in the popular letter guide series on the claims. [applause] the next panelist is the professor that wrote the book. He is a graduate of notre dame. He made up for that when he went to graduate school and was the top graduate in his class. He makes a case into class action mechanism and we will hear more from him in just a b bit. [applause] we are going to have a great debate with experts on class actions. Brian and i were classmates in law school they are more libertarian. To write a book in support of classaction complaints. [laughter] thank you for that kind introduction. The reason i think conservatives should support class actions is because we have to ask ourselves what the alternative is. The alternative was told to us in an amicus brief filed by the United States chamber of commerce in 2010 and amicus brief which inspired me to write a book you have in front of you today. The case went before the Supreme Court called at t the conception. I suspect many of you know about this case. The question was our classaction waivers embedded in arbitration. The Supreme Court said yes. Justice scalia wrote the opinion of the court says so long as you do it in an arbitration clause. It was appearing to everybody in 2010 that if you got rid of the classaction and enforced it these class action waivers people that have been injured small amounts by corporations, small fraud, small breach of contract, small injuries, people would have a very hard time Holding Companies accountable because if you have to go on your own but many people are going to do it. The u. S. Chamber said dont worry if the classaction goes away. Theres Something Better than the classaction. Federal regulators. Federal regulators should be policing the marketplace is. Now, as judge lee mentioned, ive been a member of the vast rightwing conspiracy for a very long time. Ive been going to the Federalist Society members meetings for 20 years. Ive never once at any of these gatherings heard anyone say that federal regulators were a solution to any problem. The conservative way to police the marketplace is classaction lawsuits, not federal agencies. I start the book with some quotations from Milton Friedman 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 i quoted above where he says listen, big business is often black 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 of the chambers of commerce when i was a warrior in washington, d. C. Im very grateful for all the companies do, for the economy and for the country, but they are not the best place to find what the conservative principles suggest we should do to police the marketplace. What is the best place to find what the conservative principles say . Well, my book is built upon people like Milton Friedman, like frederic kayak, like gary becker, like george stigler, frank easterbrook, richard epstein, conservative and libertarian economists, scholars, lawyers, judges. And what do they say . This is what they say. Number one, we do have to have some policing of the marketpla marketplace. But even frederic kayak the Austrian School of economics believed in common pleas was a fair market. At the very least, even the libertarians say we need three rules in the markets. No fraud, no breach of contract and no price fixing. We cannot have vibrant markets of the companies can bridge the promises to us if they can lie about what they are selling and its competitors caitas competito cahoots with one another and least we need those rules. So the question then is how are we going to enforce and implement those rules and what i argue in the book is the conservative way to do it is through the private enforcement of the law. I go back to the literature on the privatization that was very popular during Ronald Reagan and margaret thatchers times and this literature basically says we want to privatize everything. And therefore, why shouldnt we want to privatize the enforcement of the law as well. I identified six reasons why. This literature advocates privatizing solutions over the government solutions. They look around for things to do. This is consistent with private enforcement of the law. If we didnt have the classaction lawyers holding them accountable we would have to hire thousands of more government lawyers to pick up the slack. We like selfhelp, its reason number two. We like to build selfreliance among the citizenry and relying on their neighbors when things go wrong not waiting for the government to save them and bail them out. This is consistent with private enforcement of the law. Reason number three, better incentives we like to privatize because the private sector participants are motivated by profit and we think that galvanizes them to do a better job in the government bureaucrats get paid the same no matter what they do. This is consistent with private enforcement. Class action lawyers are in contingency fees. These are a terrific motivator. So, we expect and i will explain in a moment there is data to confirm this classaction lawyers do a better job enforcing the law and the government voyeurs. Number four, better resources. The private sector is better resourced than the government. The government has always strapped for cash, governments are always being cut. Enforcement is the least sexy thing in the project. Itbudget. Its the first thing to go. For any venture and therefore we would expect the private sector to be able to bring much better resources to bear in enforcing the law and the data is consistent with that. We prefer private solutions because they are less centralized. We like to hedge the bet that is why we should like different classaction lawyers all over the country following lawsuits before different judges instead of one federal agency in washington deciding what the wall should and shoullawshould. Lastly, the reason we like private solutions because private solutions are more independent than government solutions. In the academy, we often teach about something called agency capture, conservatives have a word for it, crony capitalism. Capitalism. Government agenciegovernment agn captured by the people that are supposed to be policing. Campaign contributions, the revolving door of personnel. This makes our Government Agencies less independent. And for biased. The private sector doesnt have that problem, the private sector this focus on profits, focused on contingency fees and in my view that is pure in the government that is focused too much on who gave who money. All of the reasons we like to privatize leads to the conclusion that private enforcement of the law is preferable to the u. S. Chambers federal regulators. As i said, begindoublequote data supports the theory if you compare classaction lawyers sensitivity fraud, classaction lawyers and antitrust, defined the classaction lawyers are recovering more money than the government lawyers are recovering and security fraud is tim1 and they recovered ten times as much. A lot of that is because of the security they fail more cases but even if you look at the same cases where they go after the same people for misconduct, it still collects four times as much as the sec. The data suggests the private enforcers are doing a better job. Now of course this trip they can go too far. The profit motive can go too far into the abuse the system to get forprofits. This is not a reason to turn everything over to the government. The corporations can now use the system in pursuit of profit. We dont say therefore lets have the government do everything instead of corporations. 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 have a lot of power over classaction lawyers by regulating those contingency fees if they are in their cases. Every one of those awards must be approved by a federal judge, and we can direct the motives towards 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 that the fact it can lead people to go too far is any reason to time things to the government. Its a reason to put things in place to make sure the profit motive is pointed in the right direction. What i argue in the book as i think we largely already have rules in place. We can always improve the system and i have reforms ive advocated in the book but for the most part, i think that the system is working and i consider a few of arguments by bring data to bear on the argument and i conclude it is basing its advocacy more on myth and reality. They say we have so many meritless cases title of time and i like to point to the subway footlong case you probably read about this in the paper, some of the subway for forms were only 11 inches in some classaction lawyers sued alleging Consumer Fraud. This was a frivolous lawsuit. But this is a representative ree class action or an outlier. 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 isnt a typical case. The truth of the matter its never been easier in the history of america to dismiss a meritless case in court after the United States in court decided this is the golden age of motions to dismiss. If you cannot dismiss the subway footlong case that is on you, it is not on our classaction system. I also take a look at the chambers list of the ten worst titles in america. The ten most frivolous cases they put out every year i looked at five years of the listed at over ten classaction cases, subway footlong, a couple of cases against starbucks because there was too much ice in iced coffee or tea much foam on the law say. The other seven were not even frivolous. There was a case against mastercard because they ran a promotion that said if you use your mastercard we are going to donate a percentage of your purchases to charity. They didnt tell people the amount they would give was capped at a certain level and they hit that point month free in the year and there were nine more months they were running the promotion we are contributing to charity and it wasnt true. This was a debatable case misleading consumers, so most of the cases on th the chambers onn list to that category and are at least debatable. What i say in the book is this if in five years the United States chamber of commerce can only find three classaction cases that are meritless, we do not have a problem with meritless cases in the system. But im willing to meet the chamber halfway so one of the things i propose in the book is we can tap down even further on the case is if you are not happy with all these other things we can do weeken we can put an autc stay of discovery in place when a motion to dismiss is pending. Most judges do this now with some dont. We can make it automatic. Im even willing to give defendants in interrogatory appeal in a classaction case in a motion to dismiss is denied just to make sure the case is not meritless. Im willing to tweak the system a little bit but i dont think we have a meritless case problem. Attorneys fees is another argument the chamber makes. The only people getting any money and class actions are the lawyers. Class members get nothing. You can find one or two or three cases again where the class members get nothing an mathemats get everything. The cases do exist but i would assert it to you that these are outliers, extreme outliers in my work as a professor i have added up every single dollar that defendants pay out in class actions and icon. To every single dollar judges award voyeurs and fees and you know what the percentage of what the defendants pay out is awarded fees, 15 is what the lawyers are getting. This is far from everything and far from even a normal individual case contingent fee. We dont have a problem with lawyers making too much. I actually argue if we want to be good economic conservatives and youre probably paying too little. We have all kind of ways to cap the incentives in ways that in the market no clients would want their lawyers incentives to be kept. We dont have a problem with fees. It is true that not many class members to recover from Class Action Settlements in a lot of cases. And consumer cases, they are low. They came out with a very well researched study where they showed the median claims raised in the consumer class action is 9 . 91 of the consumers are not getting any come in station. We split the money up among those that filed the claim to give to charity but it is true if the class action isnt good for competition, i admit that but two things about that. Remember the alternative here its the government. As the government going to be better at getting the compensation to people when they go after the wrongdoers . Most of the time the government goes after wrongdoers they are prohibited by law from distributing the money to the victims. It has to go into the u. S. Treasury. On the occasion when the law permits the government to distribute money to victims, what do you think the government does . They hired the same people the class action in higher to distribute their settlements. And actually there are some good empirical studies to show that class action goes up corporate misconduct goes down. I am able to rest the case on deterrence alone been a lot of cases we have the side benefits of compensation. So look at the theory would look at those federal regulators. And in the q a until Ronald Reagans time the conservative view was private enforcement is better than the government. So in 1978 there was a bill introduced into congress to abolish consumer class actions this is the chambers dream bill today in 1978 a bill was introduced to abolish consumer class actions 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 of what i say to you today we should not taking advice from kennedy and carter. Thank you very much. [applause] [laughter] very thoughtprovoking. [laughter] i didnt write a book on this but i have been doing this for about 20 years in a certainly applied the professors contrary in and creative thinking on the subject but suffice it to say i respectfully disagree. I do that from a conservative perspective. My perspective is one that i have spent the bulk of my career defending these actions and litigating in the trenches and i am proud to do. I work for these companies i fundamentally disagree the aim of the companies is to cheat consumers and take advantage of consumers certainly we can all find high profile examples were that has occurred and the professor has those examples in his book but those that we are privileged to defend value the relationship with the consumer much more than the classaction lawyer i can assure you of that. From my perspective, one of the greatest threats we face of civil litigation today is the threat of the classaction. It has been taken from the historical intended purpose and to such an extreme it is not from what was intended from a conservative risk perspective i reject the notion consumers need the government whether in the form of a law or federal regulation or agency or in the form of a statute used in private litigation i think the businesses in this country is considerably overregulated we have one of the more hostile business climates in the country in this particular state i was speaking with some folks before this Program Began i dont know how a company survives we have wage and hour laws in the state which make it impossible to comply if you comply with one then you violate another then you have the risk of the federal government to say thats a violation nonetheless and classaction is used as a procedural mechanism to take advantage of this of the antitrust context and what im describing to you is not theoretical it happens on a daily basis. I would respond to the thesis with four principal critiques that we outlined. First his theory presents a false dichotomy you will not hear me advocate we should supplant the classaction with great one greater litigation. We were not involved in the amicus brief i dont think the choices we face are between class action as they exist today or even modified versus government enforcement. There is a third way and i think its critically important in the use of private enforcement of industry selfregulation and that could take many different forms. We are all familiar with the Better Business bureau they have a National Advertising division were members can go if somebody crosses the line advertising a product in a way competing business deals crosses the line then industry works together and in that scenario the resolution of those disputes may often lead to file a classaction or a lawsuit but thats where the business regulates itself im not suggesting we replace classaction but its an underutilized tool. There is also a competitor litigation if not exclusively that almost by competitors of false advertising law is used most often following those proceedings. The robinson act which is a corollary to the federal antitrust laws is used in Small Business in ways they view anti competitive we are all familiar with the Patent Infringement suits the breach of contract suits some of those that have not been class actions that the qualcomm case that was reserved earlier this year is the latest example. But where the incentives are aligned companies will not go overboard. To give you an example of a company that may have gone overboard a few years ago there was a number of nad proceedings and false advertising laws and all the competitors argued their pomegranate juice wasnt peer her juice it was flavored but they believe they were the only ones making peer pomegranate juice. All these lawsuits had success. Than the industry went after palm wonderful because they felt they were crossing the line they advertised as products. So this is a private way in a free marketplace for businesses to regulate themselves without distributing the windfall to the wrong group. As a child of the cold war to believe in this concept which is mutually assured destruction it worked in the nuclear age i think he can work here as well and the problem we have in this country is over litigation theres too much litigation if we disagree where we draw that line there are way too many instances folks take advantage of very broad laws and regulations to bring the class actions based on that and i will discuss a few ive 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 have read and learned with this book that i would encourage all of you it was news to me the bill was introduced by ted kennedy. I did not know that in a certainly dont want to take that side of this debate. But the world has changed quite a bit since 1978. Remember class action is a procedure you dont bring a classaction and say im bringing it with the procedural mechanism for a plaintiff to Work Together with similarly situated plaintiffs to bring a lawsuit for a violation of a law. You have to have the substantive law with that procedure and without it you dont have a classaction you have no lawsuit in state or federal court. What it was like today as opposed to 1978 i would say we were overregulated and thats the fundamental problem now you see them being used in all the different scenarios to enforce the statutes that were never designed or intended to be enforced in a class action by all objective measures , class actions are more significant than there were in 1978 the law firm did an annual study if you read this on an annual basis even yeartoyear aggregate family members may dip quite a bit they are concentrated more and more of a highstakes classaction in if you look at law firms like mine, youd be surprised to see the way they defined the most significant type of litigation its a little different than our clients would define it they are not talking about a multimillion dollar lawsuit but tens of millions of dollars. That is what you are finding if you look at the history the professor lays out its a lot different today than it was. I certainly agree as he outlines the core laws of breach of contract, fraud and antitrust are sensible regulations any free company or individual that looks to start a business or ensure the marketplace is free and fair. Professor fitzpatrick use is an example of a company because the feeds are sold in the south American Country and theres no assurance the seeds will work the market is flooded with fake seeds and theres no recourse in the legal system thats not a problem the problem is where the companies cannot even begin a business because they have to comply with the federal and state regulations to even start and they achieve that success and they are immediately hit with a classaction. I remember meeting with a client downtown a few years ago when he was about to present to the board and he was furious he had no idea why we are hit where a good company trying to make it against the bigger players. I mentioned to him there was an industry magazine in your lobby desire big smiling face on the front youre not hit because you didnt do anything wrong you are successful. He wanted to change a little bit then he was proud he had a classaction. [laughter] to say this is not something to be proud of. But that anecdote tells you a lot about the way the plaintiffs abuse these not going after truly legitimate cases but deep pockets if you talk to the lawyers over a beer thats what they will tell you. I also reject the notion that Business Community has us organized lobby and has lobbyist i find the plaintiffs bar is far more organized in strategic how they lobby the government governments, particularly the california assembly. Look at the privacy act modeled after the eu privacy lovick one litigation this is what you do heres how you comply here is your safe harbor so then they tell you wait until we enforce it a few times and have some scouts and then you will know how to comply. Thats not the way to regulate any modern economy but thats whats happening in this country i would not model any laws after the eu bit but thats exactly what happened but whats interesting look at who lobby for it and who passes a plaintiffs classaction bar if you go through the details of the statute theres no requirement to show injury, and automatic entitlement to attorneys fees if you prevail and what gold does that advance on behalf of consumers . Its not is the interest of the private classaction bar. My third critique several times the professor outlines the at t case upheld arbitration clauses and classaction waivers are ultimately going to lead to the demise of one. He even suggests that state Court Class Actions are all but irrelevant these days and again from a practitioner standpoint thats not consistent. We can all cite around this table discussing frivolous class actions we even there read about or had to defend. I will tell you red bull does not actually give you wings. [laughter] im also here to tell you that froot loops does not contain actual fruit. [laughter] nor does crunch berries. Subway foot long may not measure exactly 12 inches when the bread is baked. Those are ones we laugh about in joke about and i agree they are relatively rare but a few observations those are not always dismissed on the pleadings and unlike professor fitzpatrick if you bring a motion to dismiss and they are not because most of those cases i have defended it is a jump ball whether it will be dismissed i would note most judges when you talk to them they are tired of seeing these motions not only in the frivolous case but every case prick was very difficult to get a case dismissed on the pleadings before discovery and part of that its not the skill to make the argument in my humble opinion, a lot of judges are predisposed to let them go into discovery. Most federal judges did not have the background where they worked at a firm to see the enormous cost and settlement pressures getting into discovery that is placed on the defendant. Reaching the Appellate Courts and with that assessment why they settled that case. Obviously those are frivolous but in that this may have some merit. In the firm that was defending a major Motor Vehicle manufacturer involving the brakes one day after the client announced a recall that you would expect them to address the issue it was a mistake but they wanted to fix it. One day later they are hit with a classaction. And alleges its for this generation of vehicles that must be the earlier generation is defective as well. Can fill you in a different model and brake system in the two models. This case went on for three years. Multiple millions of dollars of discovery this defendant had to face it had to turn over the source code to probe through to find something to support their claims. They could not do it at only what our firm was brought in he said this theory is ridiculous it has no merit it shouldve been turned on the pleadings but it didnt but thats only my client had to invest millions of dollars its a rare client that will do that. That has the resources and the commitment to see those cases through. My third critique is that i dont think theyre on the road to demise now theres more incentives for plaintiffs to bring the cases today than there were many years ago. Also they are just as vibrant today after the fairness act in 2005 this was a law Congress Passed the most signature tort reform changes at the federal level in my lifetime. The goal is to take the National Class actions and move them to federal court. Why . Because companies were finding themselves stuck in some small town jurisdiction with the plaintiffs lawyer were good friends and then the judge comes out of chambers with his arm around the plaintiffs lawyer and they are best friends. They went to law school with each other. Within a get on the record and the judge defers the ruling it is exorbitant settlement pressures. So the goal is to have very large multistate class actions belong in federal court in defendants couldnt because under traditional rules of jurisdiction was citizens of different state you need complete diversity and you cannot aggregate the claims so each had a claim of five dollars and there were 10 million class million thats a 50 milliondollar claim but under the traditional rules you cannot aggregate but the class action fairness act changes that even judges in l. A. Predicted that we just dont have class actions anymore ask any practicing lawyer today if thats the case for canal and they are strategic bring in california and texas and new york and the more populous states to see how it goes wage and hour cases are almost exclusively in the state courts. So that point is one we should not just gloss over they are abusive and continuing to rise. My final critique i will not defend the advocacy of more federal regulation but maybe give a slightly different perspective that many businesses have when it comes to this issue. Its very difficult these days for companies to achieve global peace. Used to be if you settled a major National Class action you get the release from all class members and you can count on the fact you put the issue behind you. That was the reason clients would pay big dollars to settle something to get it behind them. But again to my first point why dont think this is the dichotomy between federal and private classaction enforcement im finding it is both our clients are sued in class actions and state regulators come after them. They are pursued by federal or state and then the classaction. There is no easy mechanism for a company to find local peace alyssa brings all the people to the table basically is an auction between the two to get more than the last. In finding local City Attorneys especially in california and even state attorney generals are partnering now with private plaintiff classaction lawyers to bring the bounty lawsuits at least in california the unfair competition law private parties cannot get civil penalty. If you establish like the crunch berries case that they all sue to get their three dollars back, under civil penalty that is a violation of the false advertising all you could get up to 2500 per violation and there are enhancements if you are elderly and you purchased or another protected category. Now this threedollar box of cereal cereal is a 2500dollar box now only Public Officials may pursue that for false advertising and that money must be directed to the enforcement for the false advertising law is. As private attorneys we market ourselves to new clients. So the plaintiff is making a pitch to Public Officials to say City Attorney how would you like to be attorney general then governor thenpresident . Here is the statute on a contingency fee basis i can enforce it no matter the settlement and i will bring this lawsuit and you can keep every single dollar we recover at 2500 a pop and you can bill this Enforcement Unit in your office and bring all the money into the state. Thats a little beyond the problem we talk about today but that is the perspective of the Business Community today some of the risks they are feasting on top of these class actions. So it makes it very difficult for them to achieve global peace which i think is part of the conservative case why you want private enforcement to get some global peace. So at the most basic level again i applied professor fitzpatricks theory it is creative for guile of the contrary in thinking that went by behind it i dont view this as liberal versus conservative issue. It may be a debate between capitalism and socialism. I am not or i would not ever do that. [laughter] but this is not conservative or liberal issue at the smart government, may be considered probusiness, but from the perspective on which i operate i think Test Companies are trying to do the best they can to deliver great products to consumers and to survive in a hypercompetitive environment it over regulated economy. I dont think conservatives are for ending all class actions thats not my position go i think if you look at the history of this country , certainly during the Civil Rights Era class actions later critically Important Role to bring justice to people who ordinarily were not entitled. But look at where we are today versus 50 years ago, i dont think anyone would say this is the right way to set up an economy or to align incentives amongst lawyers in the Business Community and consumers. So again some of the most obvious poster children for tort reform is classaction and theres a reason for that. Thank you. [applause] thank you for the counterpoint. We will open it up to the floor. Do you find that with regulation . Is there rhythm to the private attorney general . And for that because at certain times because at certain times. To take your second question first absolutely we need both my book is not for private enforcement only when the government will be the best enforcer sometimes or is not a lot of profit to be made and in those cases if we want any enforcement we rely on the government and one of the interesting things the data i found with sec actually bring lots of cases against very small. They know that there is an interesting synergy developing between the government and the private bar so you do need both sometimes you have both in the same case and that is piling on and it can be piling on. Absolutely i think that companies should not pay more than the harm they have caused. If they pay out fully in case one that they dont have a case to one number two so we dont over deter the first weather regulators have become more active in classaction i dont think i have seen anyone try to gather data like that. But i will note the cfpb kicked it into high gear for a while because they were worried the class actions going away would make it harder for consumers to get a fair shake. Now theres been a change in the administration i dont know but for a while there was some notion because of classaction going away the cfpb would pick up the slack. The book does a really nice job to walk through that potential impact but it has led to more litigation the plaintiffs lawyers are not just going to go away we have a whole industry in the state in particular to make their livelihood with a lot of money on consumer class actions. But conceptually own did not just wipe those away first of all you have to have a contractual relationship with your customer. Food and beverages a huge area of litigation my client still will not put an arbitration clause. But yet they are sued for breach of warranty. So its only that class of cases where we have to have the contract but even in those cases will be our litigating to say i didnt understand the contract i did not read it it was in black text are not capitalized instead of being read it all capitalized for you also see with online commerce with the apps and this is also what led to this in the first place is the reason why the Supreme Court reversed in that case because the state started to use a contractual the unconscionability doctrine so if it is overly onesided or if you didnt disclose certain things you could invalidate the contract because it is unconscionable but ironically afterwards you had a resurrection and immediately thereafter the court started to invalidate the causes in the employment context as unconscionable. They made their way to the Supreme Court and said we meant what we said please listen to us and theyve taken five or six cases since your finding more ways to basically attack those. And conception to have in the consumer context that at least today you dont have a single case that delivers to a defendant based on the classaction labor clause because number one in any employment case the private attorney general act the Supreme Court has held you cannot arbitrate. And the second is even more ridiculous that if there is an argument that you as a consumer that are looking for public conjunctive release relief if you want the company to change the label so its not deceptive than that is sought and every consumer classaction i have ever seen. So now even in cases with rocksolid arbitration is enforceable and in the employment context, and the public conjunctive relief claim. But the courts are mixed to have that go first or arbitration. I just want to add one thing to that so that dispute actually goes to the United States Supreme Court they will rule on that and not withstand and we will all order arbitration of the us Supreme Court ever rules on it. But i do want to emphasize one source of agreement that i do talk about we do have too many laws on our companies too many legal constraints. We are way beyond Friedrich Hayek from pricefixing. I agree we are over regulating. And what i advocate for is rather than classaction waivers that are a blunt instrumen instrument, insulate yourself from liability for wrongdoing in any kind of case of a classaction waiver. Rather than allowing this blunt instrument, why dont we focus on the laws we dont like to say you cannot use class actions in those situation but allow the laws we do like. Breach of contract and pricefixing. We should breach this principle of tran substantive but he. You have to have the exact same rules in every case contrary to what we have learned all these years. It hasnt handed down by god. We can change it. Use rule 23 for the laws we think should be in place and should be enforced robustly. I agree we have way too many laws the answer isnt to get rid of all classaction what they threatened to do i say instead just limit where we can get those class actions. In my experience the majority of class actions brought that he walked into the Lawyers Office to say ive been wronged by three dollars so does that trouble you at all in terms of the classaction mechanism . It doesnt trouble me i asked classaction lawyers where they get their cases and representative plaintiff that i have been surprised how often people do actually come to them and say i have been mistreated. This cant be right. That even in the cases where the classaction lawyers figure out theres a problem , and then find someone to stand in as a representative, i dont have a problem with that. We need sophisticated intelligent and well resourced people to sometimes uncover wrongdoing. I dont begrudge the classaction lawyer to be that type of police man. I have talked to classaction lawyers who have done years and years of analysis with those to try to figure out if pricefixing is going on in an industry. Is not for me to know that there is pricefixing going on but if you do investigations , it is expensive and sophisticated sometimes you can uncover these things. I think if we want to police the marketplace, we ought to be encouraging people with the resources of sophistication to find the wrongdoing. The classaction mechanism to me is in the United States and europe i know it is foreign there although it starting to rise if you are starting the system for a european country so to what degree would it resemble the United States system . Is interesting the debates are going on in europe and have handled a couple cases that involve copycat cases to the countries and pretty much the professor rightly describes this liberal tradition. And of course our country is founded on the liberal tradition that todays politics are more conservative in europe politically. In those countries the perspective they take with classaction again the modern classaction that arose in the sixties to rule 23 and what we know is called the opt out. So you are presumptively in when a class is certified if you dont want to be part of that you have to affirmatively opt out in the other countries its the opposite. Its the way our system used to be that you have to affirmatively opt in to the classaction i cannot represent you even if the court says unless you give me your permission so that presents challenges and benefits. You have fewer and smaller class actions but then people wait and see how the case goes and is a lot more difficult. So to answer your question i dont think either system is perfect but if i were designing something, i would borrow from the uk who i think are having a pretty important election toda today, and i would have a system of loser pays. What i think that would d do, brian has very good ideas in his book how we can implement these reforms and i agree with most of his reforms by the way. They are great. But there needs to be some skin in the game for these lawyers perk i understand that contingency fee is part of that they are taking the risk but they are only investing if they are recovering a handsome sum at least successfully. So for example with respect to discovery request how a plaintiff lawyer cant just ask when i was a trial lawyer i learned your honor these discovery request are grabbing my client by the ankles until every single penny falls out of his pocket. Its a stark image but what we have experienced. If there was a loser pay system or a more robust Cost Shifting if i was designing a system i dont know how i would feel about the opt in versus off to about one opt out ics benefits i would deftly have the client to get our fees back that we have to incur to defend against these cases. In your experience of classaction as a fed lawyer what percentage of the cases do you believe are frivolous and of those how many are dismissed by the courts i will stipulate no bearing on your ability as a lawyer. [laughter] many would say hundred percent were meritless. But frivolous is a legally charged term meaning no good faith or objective basis. And in the consumer context i would say probably at least half of them. Im not frivolous in a sense it has to rise to the level of froot loops or something completely silly. But there is nothing there and there was no good faith basis to bring it. There was a news report one customer complained about something and then launch day classaction. Of those 50 percent i have defended many hundred lawsuits if thats 250 getting dismissed on the pleadings is less than a quarter. It is extremely rare to get a case knocked out utterly its extremely where where you get it knocked out that early then the Court Affirms that. Again im not speaking out of turn bet most courts especially in this circuit they view it as a very high bar to get a case dismissed on the pleadings and they want folks to have their day in Court Operating with presumption that if a lawyer puts his or her name on the document under rule 11 certifies its brought in good faith with no basis before me today to question that there has been no discovery. They believe they bring them in good faith. So from that perspective even if potentially frivolous even with subway sandwiches take that as an example. Im not saying it would not have moved to dismiss i probably would have but i am sympathetic with the defense lawyer who informed their client they face an uphill battle you are advertising a footlong berkeley go to the store it says 12inch and 6inch when you look at the menu. Every state in this country has a law that prohibits false or deceptive advertising even if not outright false it is deceptive and there are pictures displaying the subs baked they dont show a lump of dough there is no disclaimer. I am not defending the lawsuit but would we characterize that as objectively frivolous . In that decision that subway could cite to the federal judge to say they have not stated a claim they cant do discovery you must dismiss it. We all listen to this and say come on. This is absurd and ridiculous Everybody Knows and thats what the judge did with the starbucks case Everybody Knows if you get it with i. C. E. The i. C. E. Will consume the volume is not exactly 22 i ounces. Apply common sense and i applaud that. But those instances are extremely rare in my experience and its unfortunate. I think we need more of that and that would alleviate a lot of the problems we discussed today. Also one thing that emphasizes an area that we have that i have learned on this book tour that i am a professor i dont get to practice in our courts as often as chris does but one thing i have learned is that lawyers are not very careful about what they are willing. I have a very good friend who is a liberal District Court judge and he told me recently what surprises you most he says every year its almost unanimous how willing the lawyers are to live. So i do think we have a problem not doing any investigations before they file a complaint to just take a shot to see what might happen and i think that is a problem and we do need to do something to strengthen rule 11 sanctions and procedures of people just cannot make up a fact. So it is harder to get those cases dismissed i know judges hate to order rule 11 sanctions and theres been efforts to change that and they have been unsuccessful unsuccessful to make that a deterrent but i have been persuaded by things you have said things i have heard that we may need to do something with rule 11 as well. [inaudible] its interesting you ask me about that because i explicitly say in the book in my last chapter one advocate for reforms the pc pa should be one of the laws we do not allow class actions to enforce. It is the Consumer Protection act if you get a robotech store robo call you are entitled to 500 or 1500 every time. When you combine those two how much were actually harmed with the classaction you end up have over deterrence there are some cases where the defendant i am not making this up a 1 trillion of liability. This is ridiculous alls on obvious that gives you incredible settlement leverage you could bankrupt the company with a robo call case. We should not use that when it results in overages. It is not appropriate my point of view for the classaction device. But i will say this. When i have gone around two other federal society audiences i have mentioned the tcp a that we should not use a classaction because it could have over deterrence the result is is not resulting that im still getting them all the time. [laughter] so triple down and double down more classaction. [laughter] so thats the theory and the reality. Its fitting the end on a point of agreement obviously i agree. [laughter] and the professor does walk through that in his book and it shows why even those who practice can find a lot of areas of agreement with his thesis. The purpose of the statutory damages because its hard to quantify your eating dinner so we will set these penalties at an amount to encourage individuals to bring them in small claims court. So i think it is an abuse of the statute to layer the classaction procedure over that law to lead to these trillion dollars per go i have to say have defended many of those lawsuits and the client asks what is my potential exposure . I find out how many allegedly they sent in 90 percent of the time you have opted in or requested and it is resolved very very quickly. Thank you for the discussion today. [applause] in this room tonight my mother in her own right how as a child i watched her every move to see her eyes fall upon every word encountered on the Grocery Store the package labels my high school textbooks. She was always wolfing down the words insatiable which is how i learned that words were a sustenance to be a beautiful relief and how i learned that words make me know what my mother always said in between raising 12 humans. I am in this room and so is my mother. [applause] and this room the yellow house when she was only 19 which felt like planet unknown and in this room tonight i love the raise a fellow artist the most inspired accompaniment of my life. And my siblings not here but whose voice exist in mind carl, michael, karen, darrell, a , thank you for telling me the stories in the first place and helping me to make them and to allow me to call your names because it is no small thing to recover the names. There are other names my family told me the history. Some of whom died before the book was finished my auntie elaine my mothers only sister my uncle joe and january of this year and then the swiftest below, my oldest brother simon junior who died the day after this book appeared in the world. We all know our First Amendment rights, Fourth Amendment rights, bill of right rights, and how they contribute to our liberty but i must wonder of the separation of powers and how important it is to our liberty. Many countries have wonderful bills of rights north koreas is my favorite. [laughter] it promises all the rights we have in the bill of rights and more. Free education , healthcare, and my favorite the right to relaxation. [laughter] i dont know how thats working out for the Political Prisoners in north korea but the point is madison knew this when he wrote the constitution that those are just promises. He didnt even think we needed a bill of rights we have the constitution and the separation of powers he knew that the key to your liberty is to keep our separated i am one ninth of one third of the government divide power. What happens when we ignore the separation of powers has been forgotten i know that sounds academic and wonky and it did to me in my High School Civics class. I have been a judge for a while now but the day in and day out cases in the ninth circuit i came to see what happens when you dont have separation of powers in real peoples lives. So what happens when the legislative power is transferred to the executive branch . It was supposed to be two houses of congress responsive at different times. And then to make the fulcrum of the legislative process so they could protect themselves and that minority rights would be protected most of all with a list of promises in the bill of rights. What happens if you take that process put it ahead of the executive branch to apply the law . And make the law . If you can make it through this cement put in one persons hands. So what happens when you take out 435 elected representatives of one person in their place . I dont want to exaggerate the what happens when that power is delegated . Small business in colorado to provide inhome nursing care. Its a good size business. Then they are accused by the federal government of medicare fraud. And they are fined 800,000 but then it turns out through litigation that they complied with all the rules in place at the time and the agency had so many new rules and laws and enforceable sanctions even the agency could not keep up. I asked my law clerks how many of these criminal are out there on the books written by federal executive agencies only responsible to the president if that at all . They said academics stopped counting many years ago when i got to over 300,000. So thats one example. What happens when the power to judge is transferred to the executive branch . I have veterans and immigrants who come before me who when i look at the law they win. They deserve to win but we have doctrines that say no per go independent judges should defer to the interpretation of the law by the executive bureaucrat. So even though i think they should win the immigrant should win and the Social Security benefit recipient should when i have to rule the other way. What happens to your right of an independent judge . What happens to your right in the lawmaking process . It supposed to be a republic. A weekly Interview Program with relevant guest hosts interviewing top nonfiction authors about their latest works. All after words programs are also available as podcasts. Than