Throughout the u. S. And the world with interactive maps. Watch ondemand anytime unfiltered at cspan. Org coronavirus. I am very delighted to welcome you to our event today. Its on a conservative case for class actions, a book written by professor fitzpatrick that galvanized this debate. We have three outstanding speakers, panelists i should say. Our first is the head of the class action practice here it gets indented coach rivera key has litigated in the fitted doubtless class actions including over 20 dismissals of class action cases. So you may have a sense of where his position is on that. He is a graduate of georgetown, undergraduate and the university of Virginia Law School where he was the long review and hes also the author of a chapter in the popular better guide series on 1702 and claims, so please welcome christopher. [applause] our next panelist is professed himself wrote the book. He is a graduate of notre dame where he was runnerup valedictorian, but he made up for that when he went to Harvard Law School and one the diploma for being the top student to graduate in his class. He is [inaudible] a lot easier, a lot easier. And he has been a lawyer and a professor including backup for wild turkeys come vanderbilt panties off with this book, mexican poling case compelling case to class action mechanism. And are moderated today is judge on the ninth circuit. He is a graduate, a korean immigrant i should start with and came to this country and graduated from i believe cornell and it also Harvard Law School. You guys classmates . Classmate. Magna cum laude and worked at other Large Schools and was an associate counsel to Judiciary Committee of the city and recently appointed to the ninth circuit. So round of applause for judge kenneth lee. [applause] michael, thank you for the introduction. I think will have a great debate here. We have two experts on class actions. Just a little bit of format. I will give professor fitzpatrick the floor and let them speak for about ten, 50 minutes to make his case. Ten or 15 minutes to rebut and after that will open the floor for questions here. As michael mentioned, ryan and i were classmates in law school. We live in the same dorm floor and i can tell you that back in the day at harvard if you were an rockefeller republican you are treated as if you were to the right of attila the hun. Brian was to the right of a till of the hun. [laughing] i say that in just. Brian more libertarian but he has their easterling conservative credentials. He clerked for judge of skala, for Justice Scalia, worked for senator john cornyn of texas and is a stalwart of the Federalist Society. This is a very long way of asking him how does a middle of the vast rightwing conspiracy write a book in support of class actions and plaintiffs lawyers . Well, thank you for the kind introduction, judge lee. [laughing] the reason that a think conservatives should support class actions is because we have to ask ourselves what the alternative is. And the alternative was told to us in an amicus brief filed by the United States chamber of commerce in 2010. This amicus brief really is what inspired me to write the book that you have in front of you today. The case before the Supreme Court was called at t versus conceptual. I suspect many of you know about this case. The question was, a class action waivers that are embedded in arbitration agreements enforceable . And the u. S. Supreme court said yes. My old boss Justice Scalia wrote the opinion and the court says you can ask someone to waive the right to join a class action so long as you do in an arbitration clause, any state lost to the contrary are preempted. And it was apparent to everybody in 2010 that if you got rid of the class action, if you enforced these class action waivers, and people had been injured small amounts by corporations, small frauds, small breach of contract, small pricefixing injuries, people with small harms would have a very hard time Holding Companies accountable for those harms. Because if you have to go it on your own, not many people are going to do it. Everyone knew this in 2010 and the chamber of commerce filed an amicus brief to calm everybody down. U. S. Chamber said dont worry if the class action goes away. Theres Something Better than the class action. Quote, federal regulators. Federal regulators should be policing our marketplaces. As judge lee mentioned ive been a member of the vast right wing conspiracy for very long time. I 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. And they are not a solution to this problem as well. The conservative way to police and marketplace is class action 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 that a court in the book where he says listen, big businesses often wax poetic about the Free Enterprise system and theyre all on the 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 principle suggests we should do to police the marketplace. When is the best place to find what conservative principle say . My book is built upon people like Milton Friedman, like friedrich hayek, like gary becker, like george stigler, 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 that doe policing of our marketplace. Not even friedrich hayek, the Austrian School of economics believed in complete laissezfaire markets. At the very least even the libertarians 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 of the promises to us if they can lie about what theyre selling and if competitors can get in cahoots with one another. At least we need those rules. So the question then is how are we going to enforced and implement those rules . What i argue in the book is the conservative way to do it is to the private enforcement of the law and they go back to the literature on privatization that was very popular during Ronald Reagan and margaret thatchers times. In this literature base of process will want to privatize everything. And, therefore, why should we want to privatize enforcement of the law as well . I identify six reasons why this literature advocates privatizing, private solutions over government solutions. All six of these reasons apply to private enforcement of the law. Number one, we like smaller government. Everything else being equal we want a smaller government. It means lower taxes, fewer government bureaucrats looked around for things to do. This is consistent with private enforcement of the law. If we didnt have class action lawyers Holding Companies accountable for misdeeds, we would have to hire thousands of more government lawyers to pick up the slack. Thats more taxes are more people looking for things to do. We like selfhelp. Thats reason number two. We like to build selfreliance among our citizenry, people rely on themselves and their neighbors and 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 in sensitive would like because private sector participants are motivated by profit and we think that colonizes them to do a better job than government bureaucrats who get paid the same matter what they do. This is consistent with private enforcement. Class action lawyers earn contingency fees. These are a terrific motivator, and so we would expect and ill explain in a moment there is data to confirm this. We would expect class action lawyers to do a better job of enforcing the then government lawyers do. Number four, better resources. The private sector has better resources than the government does. A government is always strapped for cash, like its always been. Enforcement budget are 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 data is consistent with that. Reason number five, less centralization. We prefer private solutions because they are less centralized then government solutions. We dont want all our eggs in one basket. What if we drop the basket and we get a bad result for everybody . We like to hedge your bets by having decentralized solutions to problems. Thats why we like federalism and its why we should like different class action lawyers all over the country filing lawsuits before different judges instead of one federal agency in washington deciding what the law should and should not be. Lastly, the reason we like private solutions is 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, a term for it, crony capitalism. Government agencies are often captured by the people they are supposed to be policing. Campaign contributions, the revolving door of personnel. This makes our Government Agencies less independent and more biased. The private sector doesnt have that problem. The private sector is focus on profits, focused on contingency fees here in my view that is more pure than to government which is often focused too much on who gave you money. All six of the reasons we normally 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, the Empirical Data supports the theory. If you compare class action lawyers in securities fraud, class action lawyers in antitrust, you find the class action lawyers are recovering more money than the government lawyers are recovering. In securities fraud it can do want any given your securities fraud lawyers recover ten times as much as the sec does. A lot of that is because security front lawyers filed more cases the defendant if you look at the exact same cases with a glut to the exact same people for misconduct, a private bar still collects four times as much as the sec does. The theory supports private enforcement and the data suggest private enforcers are doing a better job. 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 and pursuit of profit. We dont say therefore lets have the government do everything instead of corporations. No. We say were going to put rules into place to harness the profit motive so it is directed towards the public good. We can do the exact same thing with class action lawyers. We have a lot of power over class action lawyers by regulating those contingency fees that they earn in the cases. Every one of those awards must be approved by a federal judge, and we can direct class action lawyer profit 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 the fact that the profit motive can sometimes lead people to go too far in his recent to turn things to the governor. Its reason to put rules in place to make sure the profit motive is pointed in the right direction. What i argued book is i think we largely already have rules in place. We can always improve the system and i have a few reforms that advocate and book, but for the most part i think our system is working. I consider a few of the main arguments agenda makes against class actions and they bring data to bear on the arguments and i conclude the chamber is basing its advocacy against class actions more on myths and realities. Let me give you a few examples. Number one, the chamber says we have so many meritless class action case of all the time. I like to point to this subway footlong case. Some of the subway footlong were only 11 inches, and some class action lawyer sued alleging Consumer Fraud. This was a frivolous lawsuit, but is this subway footlong of representative class action or is it an outlier . In one chapter of 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. Its not a typical case. The truth of the matter is this. It is never been easier in the history of america to dismiss a list case in court. After the United States Supreme Court decided twombly, this is the golden age of motions to dismiss. If you cannot dismiss the subway footlong case after twombly, that is on you. It is not on our class action system. I also take a look at the chambers owned the lists of the ten worst class the ten worst cases filed every year and america. They have a ten most frivolous cases lists they put out every year. I looked at five years of the list. There were ten class action cases come subway footlong, a couple of cases against starbucks because there was too much ice in ice coffee or too much phone and a latte. There three frivolous cases on the chambers list. The other seven class actions were not even frivolous. There was a case against mastercard because they ran a promotion that said if the user mastercard we are 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 point at month three and here. There were nine vermont the running a promotion. This is a least a debatable case, misleading consumers. Most of the cases on the chambers a list fall into that category were at least debatable. What i say in the book is best. If in five years the United States chamber of commerce can only find three class action cases that are clearly meritless, we do not have a problem with meritless cases in our system. But im willing to make the chamber halfway into one of the things i propose in the is we content down even further on meritless cases. If enough happy with twombly are other things we can do that would put an automatic stay of discovery in place when a motion to dismiss is pending. Most judges do this now but some dont. We can make it automatic. Im willing to give defendants and interlocutors appeal in a ia class action case when the motion to dismiss is denied just to make extra sure that the case is not meritless. So im willing to tweak the system a bit but i dont think we have meritless cases a probl. What about attorneys fees . This is another big argument the chamber makes. The only people getting any money in class actions are the lawyers. The class members get nothing. Listen, you can find one or two or three cases again were class members get nothing and the voters get everything. These cases exist but i but i t to you these are outliers, extreme outliers. In my empirical work as a professor i had added up every single dollar the defendants pay out in class actions, and i compared it to every single dollar judges award lawyers in fees. And you know what . The percentage of what defendants pay out his award in fees . 15 , 15 . Is what the lawyers are getting. This is not everything. This is far from everything. Its far but even a normal individual case contingency fee. We dont have a problem with lawyers making too much. I argued book if you want to be good law and economic conservatives we are probably paying class actually saluted with all kinds of ways to captain santas in ways in the market know quite what their lawyers intend this to be capped. We dont have a problem with these. It is true that not many class members recover from Class Action Settlements in a lot of cases. In consumer cases the claims rates are low. The ftc came out with a very well researched study where they showed the medium claims rate in the consumer class action is 9 . That means 91 of consumers are not getting any compensation in class actions. That doesnt mean the money is all going to the lawyers. We split the money of the month and 9 the file claims or give some leftover money to charity. It is true in a lot of cases the class action is not very good at compensation, i admit that the 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. It has to go into the u. S. Treasury. On the occasions where 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 lawyers hired to distribute their settlements. The governments claim rate is 9 , too. So the government is no better at compensation. Thats the first thing to note. Number two, the case of the class action is not dependent upon compensation. Even when that everybody is getting their money back the class action still serves an important function. Deterrence. If Companies Know theyre going to have to pay when you do something wrong, you are less likely to do bad things to begin with. This is a conservative law and economics degree. We have been teaching it for 50 years, and its another reason why the class action is valuable and there are some very good empirical studies that show in class action threat goes up, corporate misconduct goes down. So im willing to rest the case on deterrence alone but in a lot of cases we also at least have the side benefit of compensation. I think when you look at the data, look at the three, the conservative way to police our marketplace is not federal regulators. My view on this was really the conservative view for most of the 20 century. We can talk in the queue and if you want about why things change but until the want of reagans time, the conservative view was private enforcement is better than the covenant and ill give you one example on that. In 1978 there was a bill a bill introduced into the congress that would have abolished consumer class actions. This is the chambers greenville today. In 1978 of those introduced to abolish consumer class actions dream bill. This bill was introduced by ted kennedy at the behest of jimmy carter, because they were going to great a federal agency to do the Consumer Fraud policing instead. What i say in the book and what i say to you today is we should not be taking advice from ted kennedy and jimmy carter. Thank you very much. [applause] i respectfully disagree. Again i do that from a conservative perspective. My perspective is one fell of actually spending the bulk of my career defending these types of actions litigating them in the trenches. 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, and professor fitzpatrick cites a few highprofile examples in his book. But by and large the companies that i purpose to think and my firm is privileged to defend value the relationship with the consumer, value it much more that the plaintiffs class action lawyer i can assure you of that. And from my perspective one of the greatest threats that we face in civil litigation today is the threat of the class action. I think its been taken from its historical intended purposes and its been taken to such an extreme that it dont think anyone really intended. From a conservative perspective i reject the nanny state. I reject the notion that consumers need the government whether its in the form of a mall or a regulation or federal agency or in the form of a statute that is used in private litigation. This business in this country is considerably overregulated. We have one of the most hostile business climates in the country in this particular state. I was speaking with some folks before this program begin. I dont know how a company survives in this particular climate. We have wage and hour laws in the state which make it impossible to comply. If you comply with one statute you are violating another regulation and then you have the risk of a federal government coming in and come plaintiffs lawyers using federal statutes to say okay, thats a violation nonetheless. I think the class action issues as a procedural mechanism to take advantage of this in the consumer context, and implement context and the antitrust context. What im describing to you is real. Its not something thats just theoretical. Something happens on a daily basis. I would respond to professor fitzpatrick said thesis with four principal critiques and let me outline of them. First, i think his theory presents a false dichotomy. You will not hear me advocate that we should supplant the class action with greater the regulation. I did not write the amicus brief in reference to my firm was not involved in that amicus brief. I dont think the choices we face of a between class actions as existed it or even as modified and reformed versus government enforcement. There is a third way i do think its a critically important tool in the use of private enforcement, and thats industry selfregulation. That can take many different forms. We are all familiar with the Better Business bureau. They have a division called the National Advertising division where members can go and petition if someone crosses a line if their advertising a product in a way that a competing business feels crosses that line. The industry works together. In that particular scenario the resolution of those disputes may often lead to a file on class actions or file a lawsuit but thats the situation with the business regulates itself. On the suggestion replaced class actions with this but i think this is an underutilized tool. Theres also a competitor litigation. There many federal statutes that are used if not exclusively almost exclusively by competitors. A federal false advertising law is used most often following those in the proceedings that are referenced. The Robinson Patman act which is a corner to the federal antitrust laws is often used by small business, this is a source of the larger businesses in ways they just at a competitive. Were all familiar with ip suits combat infringement suits, breach of contract suits come so with the largest trials weve seen in recent years have not been class actions. The event between competitors. The apple qualcomm case the resolved earlier this year is one of the latest examples. I view these private lawsuits were the where the incident is a perfectly alive. Companies will not go overboard. Let me give you an example of the company that i believe may have thought they instituted all of these lawsuits. They are quite a bit of success and the industry got together started going after palm wonderful because these companies felt palm was crossing the line in the way it advertise its products. And so this is a private way in a free and fair marketplace for businesses to regulate themselves and for businesses without distributing the windfall from those results to the wrong group, namely plaintiffs class action lawyers. As a child of the cold war i believe in this concept that we all study which is mutually assured destruction. It worked a nuclear age. I think he can work as well. I think the problem we have in this country is over litigation. Theres too much litigation, too much litigation over if we might disagree when with you draw the frivolous line. That we can instances where folks are taking advantage of a very broad laws and regulations and that bring class actions based on that. Im going to discuss a few that ive read about or ive had the privilege of defending. My second critique is what i describe as the law of unintended consequences. One of the most fascinating things that i read and daughter learned in professor fitzpatricks book and i would encourage all of you to read about his history of the class action. It was news to me that the bill to introduce abolishing consumer class actions was introduced by ted kennedy. I did not know that. Certainly i do want to take the side of this debate but i think the world has changed quite a bit since 1978. If you look at, lets remember, class action is a procedure. You dont bring class action and you say im bringing a class action. Its a procedural a procedural mechanism for a plaintiff to group together with other similar situated plaintiffs and bring a lawsuit for a violation of a law. So you have to have the substantive law underlying the procedure of using a class action. Without it you dont have class action. You have any lawsuit in state or federal court. What if the law look like to do as opposed to what look like in 1978 . I would argue we were all the regular 1970. Today we are even more overregulated. Thats the fundamental problem is i think witches and businessmen to react to react to these days is the fact 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. All objective measures class actions, they are more significant class actions and more in total number filed today in the were in 1978. Carlton fields law from those in annual study of class actions and if you read this on an annual basis as i do what you are noting is even if yeartoyear the aggregate filing numbers may dip, the ebb and flow quite a bit, which are fine is these are being concentrated more and more in what they call the highest stakes class action. For those of you the work law firms like mine, you would be surprised to see the way they define the most Significant Companies that litigation is different from the way our clients with the find. Theyre not talk about the multibilliondollar lawsuit or the talk chocolate lawsuits ths of millions of dollars. Thats what youre funny. I didnt even look at the history, that professor fitzpatrick lays out its different than it was back then. I agree as he outlined in his book that the sort of core laws all conservative believe in, breach of contract, the loss of fraud and antitrust laws are all sensible regulations. Any free marketplace needs a baseline so that a company or an individual that looks to start a business wants to ensure that the marketplace is free in the market place is fair. Professor fitzpatrick use an example in his book of the company that is struggling because there are seeds sold in south American Country and it can be no assurance that the seeds are actually going to work if the market is flooded with fake seeds and is no recourse to the legal system. That is not our problem. Above is the other one where the companies cant even begin the business because they are to comply with all of these federal and state regulations to even start a visit and once they do it, and the achieve that success, they are immediate hit with the class action. I remember a fuse a meeting with the client downtown and he was about to present to the board, it was a first class action and he was furious to get no idea why is my company being hit . We are trying to make it against some of the bigger players in this industry, and i mention i was in your lobby waiting to meet you. There was this industry magazine and i saw your big smiley face on the front of it. The reason youre hit with a class action isnt because he did in thing crumpet is because you are successful. He is view on that change the look you in ways i wasnt appreciating. He was proud all of a sudden he had a class action. I told him no, no. [laughing] this is not something to be proud of. Please dont misunderstand me. But that anecdote i think tells you a lot about the way the plaintiffs bar uses, not going after truly legitimate case of the going after deep pockets. You talk to these lawyers over beer at the end of the case, thats what youre looking to do. I also would reject the notion that Business Community has this organized lobby and is a public, has lobbyists and their trying to Lobby Congress for favorable laws. Of course thats happening. In my experience in my robe which is largely consumer class actions i find that the plaintiffs bar is far more organized and far more strategic about how they lobby our governments, particularly the California Assembly to get laws to change. Look at the california privacy act that is the past, modeled after the eu privacy regulation for which advocates freely acknowledge theres not a set of guidelines, not a set of regulations to explain companies heres what you need to do, heres how you comply. Heres a safe harbor, if you do this you will not. No, they tell you wait until we enforce it a few times. Wait until we have some scalps on the walls the way they could and then youll know how to comply with the law. That is no way to regulate in any modern economy but thats whats happening in this country. I wouldnt want any of our laws after the eu but yet thats exactly what happened. Whats interesting about this law is you look at its history, who lobbied for it, who passed it. Its the plaintiffs class action bar and you go through the details of this particular statute, theres the requiremt you show actual injury. Theres an automatic entitlement to attorneys fees if you prevail. And again what goal is at advocating for dancing a bit of consumers . Its not, its not the interest of the private class action lawyer. My third critique is several times in his book, professor fitzpatrick outlines how the conceptual decision, the 18 take case that upheld arbitration at t case are really going to lead to the demise. One point his book he even suggests that state Court Class Actions are all but irrelevant these days and that is just again from a practitioners standpoint that is just not consistent. We can all site around this table of sugar to spend the whole session discussing frivolous class actions that we have either read about or had to defend. I hear to tell you red bull does not actually gives you wings. [laughing] a multimedia tells you that froot loops does not contain actual fruit. [laughing] nor does crunch berries. Subway footlong sandwiches, example that professor fitzpatrick uses may not measure exactly 12 inches when the bread is actually make. Those are obviously once we all laugh about, we joke about and i agree, they are will tell you where it a few observations. Those are not always dismissed on the pleadings and unlike professor fitzpatrick i dont blame you if you bring a motion to dismiss and they are not. Because i can tell you most of the cases where i defended its basically a jump ball is whether the case will be dismissed on the pleadings. Notwithstanding twombly and i would note from most judges when you talk to them im interested in judge lees perspective, they have false twombly fatigue. They see them in every case. It is difficult to get a case dismissed on the pleadings before any discovery. Part of that is it isnt the skill of the advocate in making the argument in my humble experience, in my humble opinion, my experience. A lot of judges are predisposed to let these cases go into discovery. Most federal judges didnt have judge lees background with her work at a the firm and they saw the enormous costs, so the pressures to get a case into discovery, places on a defendant. Subway actually reached the Appellate Court because the settle the case and i didnt represent subway but i go assume it wasnt the lack of skill of the advocate but rather their assessment of the risks of the case going into discovery was why they settled that particular case. So there are the frivolous ones but the other ones that may be on the surface you might look and say this might have some merit. One example i would give you is our firm was defending a major Motor Vehicle manufacturer in the case involving the brakes in these hybrid vehicles. One day after the client announced a recall of those vehicles to do what youd expect any responsible for processing to do to address an issue, it wasnt a safety issue but nevertheless, it involved the vehicles brakes, they wanted to fix it, when they later at it as nouns they get hit with a class action. The class action alleges that your recall is for this generation of vehicles and when i could have claimant for those but it must be the earlier generation vehicle brakes are detected as well. It was a completely different model, a completely different brake system in the vehicles. This case went on for three years. There were multiple millions of dollars of discovery that this defendant had to face. It had to turn over its source code to the plaintiffs lawyers to allow them to probe through and try to find something to support their claims. They couldnt do it. It was only when our firm was brought in to take over for the appeal we got into the ninth circuit and the ninth circuit laughed the plaintiffs out of course. They said this is ridiculous. It has absolute no merit. The court should have thrown out on the pleadings. It didnt. But again that was only after my client had invest millions of dollars. Its a rare client that will actually do that. That has the resources and commitment to actually see those particular cases through. Again my third critique as i do not think class actions are on the road to demise. If anything i think theres more in sinister plans to bring these cases today than they were many, many years ago. I also think as a noted state Court Class Actions are just as vibrant today as they were after the passage of a class action fairness act in 2005. For those enough and they get this was a lot that Congress Passed a major one of the most signature tort reform changes at least at the federal level in my lifetime and the time ive been practicing, and the goal was to take these National Class actions and move them into federal court. Why . Because companies were finding themselves stuck in some hometown jurisdictions where the plaintiffs lawyers were really show me. I begin hearings in texarkana where im sure many of you have as well, where the judge comes out of chambers was around the plaintiffs lawyer and they are best friends. The father of the plaintiffs lawyer went to law school with the judge, and then they get on the record and the judge defers ruling on the motion to dismiss and tell all this discovery is produced, just exorbitant settlement precious place on the defendant. The goal was where you have multiple or very, very large multistate class actions, crossing state lines, those belong in federal court. The finns were able to bring this into federal court because under traditional rules of diversity jurisdiction we a citizen from different states indeed a complete diversity. You also could aggregate the claims. Each claimant had each classroom at a claim of five dollars, they were 10 million class members, thats teaching millions dollars claim by any stretch of imagination. Under the traditional rules you could aggregate. The class action fairness act change that. Everyone predicted and even judges in l. A. Predicted i spoke with many of them after this is bascom predicted we were just not have class actions anymore. As asking a practicing lawyer ty if thats the case. What youve seen as more concentration plaintiffs bursting strategic if they will bring a statewide class action in california, bring one of texas, bring one in your, illinois and other popular states and try it and see how it goes and extract the settlement as best they can. Wage and hour lawsuits exclusively in state court, not exclusively but almost. So i think that point is when we shouldnt just gloss over. Class actions are abusive anything they are continuing to rise. My fourth and final critique, im not going to defend the chambers advocacy of more federal regulation by want to give you maybe a slightly different perspective everything many businesses have when it comes to this issue. That is it very, very difficult to stay for companies to achieve global peace. It used to be if you settle a major National Class action you get the release of all class members and you could count on the fact that youre putting this issue behind you. Thats the motivation for the reason a lot of clients a really, really big dollars to settle something, just get it behind them. But again to my first point why dont think this is a dichotomy between federal enforcement and private class action enforcement, im finding its both. Our clients are being sued in class actions and in the federal or state regulars are coming after them. They are also being pursued by the federal or state regulators and then you have a copycat class actions. They really is no easy mechanism under our constitution or our laws for a company to basically by global peace alesse brings all of those people to the table. What kind of incentives does that create works you get basically an auction between the two trying to get more. Im finding local city attorneys especially in california and even state ags are partnering now with private light its class action in bringing these voucher lawsuits. In california leased under the unfair competition law, private parties cannot get civil penalty. What a civil penalty is, if you establish for example, use the crunch berries case, if a one suit and a class action to get their three dollars back, under civil penalty theory if it established that the violation of false advertising laws you can get up to 2500 per violation and there are enhancements if you are an elderly person and you purchased and you were deceived or part of some other protected category. Now each three dollars box of cereal has become a 2500 box, enormous sum of prussia. The law today is wholly Public Officials may pursue those Civil Penalties for false advertising, and that money must be directed to the enforcement of the unfair competition of false advertising laws. What has that done . The primary, as private lawyers we are always marketing ourselves to new clients, trying to pitch new cases. What is the plaintiffs bar doing . What theyre doing is making pitches to Public Officials and saying, mr. City attorney, how would you like to be attorney general and then governor and then president . Hears this statute and i can bring it on a contingency fee basis and i can actually enforce it whether or not theres a class action or settlement and i will go ahead and bring this lawsuit, and you get to keep every single dollar that we recover at 2500 a pop. You get to build this little Enforcement Unit in your office and bring all this money into the state. Now, thats glued the on the the problem with talking about today, but thats the perspective of the Business Community today and some of the risks that are facing a cup of these class actions. So it makes it very, very difficult for them to achieve global peace which you get a think as part of the conservative case for why you would want class actions, private enforcement and get some global peace. So at the most basic level, i would say again, i applaud professor fitzpatricks three. I think its created. I love the contrary country tht went behind it. Personally i dont view this as a liberal versus conservative issue. It may be a debate between capitalism and socialism. Im not of course calling professor fitzpatrick a socialist. I would never do that, please understand me, but i dont think this is necessary for conservative or liberal issue. I think this is a smart government, its may be considered probusiness perspective, but i think again from the perspective in which i operate i think the copies are trying to do the best they can to deliver great products to consumers and to survive in a hypercompetitive environment and in an over regular economy. And as he noted i dont think conservatives are for ending all class actions. Thats not my position. I think when you look at history of this country certainly during the civil rights era, class actions played a critical Important Role in bringing jesse to people who would ordinarily not have been entitled to it. If you look at where we are today versus when we were 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 online incentives amongst lawyers and amongst the Business Community and consumers. So again i would say some of the most obvious poster children for the tort Reform Movement happen to the class actions, and theres a reason for that. Thank you. [applause] thank you for the very thoughtful counterpoint. Actually want opened up to the floor as if anybody has any questions for either professor fitzpatrick or christopher chorba. Thank you for really wonderful [inaudible] [inaudible question] as an empirical matter define the movement is leading to a federal regulation or do you feared that it would be my second question is, is there kind of a rhythm were sometimes the private attorney general system works better than the public policy, and vice versa . And for that reason you need to have both, you need be working on perfecting both because at certain times one will fill in gaps for the other. I can take a stab at answering that. Ill take your second question first. Absolutely i think we need both. My book is not for private enforcement only. There are times when the government is going to be the best enforcer. Sometimes theres not a lot of profit to be made in private enforcement and those cases if we want in enforcement we will have to rely on the government. One interesting things i found in the date on the sec versus the private bar is the sec brings lots and lots of cases against very small fraudsters because they know the private bar will not go after those people. Theres an interesting synergy that is the built between the government and the private bar. I think you do need both. Chris notes sometimes you both in the same case, isnt that piling on . I think it can be piling on. I absolutely think that companies should not pay more than the harm they have caused. So if they pay out fold in case one, they ought to have offset in case two so i agree we need to make sure we are not over deterring the companies. On the first question, its an interesting empirical question of whether regulars have become more active in class actions have declined. I dont think i seen anyone tried to gather data like that. I will note after conceptual, the cfpb tanf kicked kick it ih gear for a while because they were worried that class actions going away would make it hard for consumers to get a fair shake. Since without a change in administration i dont know how active the cpb is anymore but for a while i think there was some notion that because the class action is going quite the cpb needs to pick up the slack. I guess i dont know if that thought has continued. I guess my perspective, again the book i think is a really nice job walking through the potential impact of concepcion. From my perspective litigating these cases its led if anything more litigation. What you found is the plaintiff lawyers are not just going to go away. You have a whole industry in this state in particular but other states as well that made their livelihood and made a lot of money on consumer class actions. Concepcion didnt just like those way. First of all you need to have a contractual relationship with your customer. Food and beverage is huge area of litigation in the state despite my best attempts i client still will not put an arbitration clause on the froot loops yet they are being sued for breach of warranty which the last time i checked is a but nevertheless, but what youre fine thin, number one, its only where theres an express contractual relationship with the customer. You need to have the contract of the waiver to the arbitration. Even in this case is what weve been litigating for the last ten years is the plaintiff lawyers first attack contract they argued i didnt understand the contract, i didnt read the contract. The arbitration clause was at the end instead of at the beginning. It was in black text and wasnt capitalized instead of being read in all caps, all those types you now see online the apps, the click wrap argument and the sorts of things. You also saw and this is what the two concepcion in the first place was the reason why the Supreme Court reversed the california Supreme Court in the case in the ninth circuit was because the state started using a contractual defense which is a unconscionability doctrine essentially if your contract is overly onesided or information process you didnt disclose certain things, if the state law doctor and you can and found that the contract because it is substantively or procedure unconscionably or after concepcion yet a resurrection of that doctrine and immediately thereafter the court start invalidating clauses as in the clinic contacts and a consumer context as unconscionable. Those cases made her way to the Supreme Court which said no, we really meant what we said in concepcion. Please listen to us. Theyve had to take five or six cases since concepcion. You are find more and more ways to basically attack those. At least today in the ninth circuit you dont have a single case that a think delivers a Silver Bullet went to a defendant based on a class action weber in arbitration clause. That is because in an implication youre going to find a private attorney general claim which the Supreme Court has held you cannot arbitrate pretty basic allows any individual to bring an action that is private attorney joe get their attorneys fees and it is not subject arbitration. The second is in california even more ridiculous and my own personal view is theres an argument if you as a consumer are seeking whats described as public injunctive relief, and the Food Labeling context if you want a company part of your action is to get the company to change the label in the way you a ledge or content is a longer deceptive, thats considered public conjunct a relief. That cannot be arbitrator. What you have now is even in cases where you have a rocksolid arbitration agreement, its enforceable, its an employment context, the claim is sheared off, the states in court and the public injunctive relief claim in a consumer case a shaved off and stays in court. Courts are mixed as to whether they have those go first or the arbitration go first i dont think concepcion has that impact that a lot of people have predicted. I just wanted to add one thing to that, and to think that when the dispute actually goes to the United States Supreme Court, they are going to rule that it cannot withstand arbitration and the order arbitration if the u. S. Supreme court ever rules audit but i do want to emphasize one source of agreement that chris and i have added you talk a lot about in the book, that is we do have way too many laws on our companies, way too many legal constraints on our companies. We are way beyond friedrich hide hayek. What is in the book is i agree we are over regulating, and all i advocate for his of this. I say rather than class action waivers which are a very blunt instrument, you can insulate yourself from liability for wrongdoing any kind of case with the class action waiver. Rather than allow this blunt instruments meant why do we focus on the laws we dont like and say you cant use class actions in those situations, but allow the class action and for the laws we do like, fraud, breach of contract and pricefixing. Hasnt been handed down by god. That principle. We can change it. Lets use rule 23 for the laws we think should be in place and enforced robustly. I agree we have too many laws. The answer is not get rid of all class actions which classaction waiver threatens to do. Lets just limit where we can use the classaction lawsuit. Another question . The majority of class actions and individual plate plaintiffs. To the tune of 200 and 30, generated by that. Does that trouble you in terms of the classaction mechanism . I asked classaction lawyers where they get their cases and representative plaintiffs from and i have been surprised by how often people come to them and say i have been mistreated. This cant be right but in cases where classaction lawyers figure out a problem and then find someone to stand in as representative i dont have a problem with that because we need sophisticated, intelligence, real we sourced people to undercover wrongdoing and i dont begrudge the classaction lawyer for being that type of policeman. I talked to classaction lawyers who have done years of analysis with professors to figure out whether there is pricefixing going on in an industry. Hot it is hard for any consumer to know there is pricefixing going on but if you do investigation, 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 resources and sophistication. The classaction mechanism is a specialty of the United States that didnt originate here, the concept is quite foreign. You could have an element of classaction, it would resemble the United States system and would you change it . I handled a couple cases which involve copycat cases in other countries. Brian fitzpatrick rightly describes the liberal tradition, big health small elf. Our country is founded on the liberal tradition which in todays politics would be viewed more conservative certainly in europe politically. In those countries the perspective they take on classaction the modern classaction arose out of the 1960s, what we know the classaction is called the opt out class action. You are presumptively in one a class is certified, and you have to affirmatively opt out. In these other countries it is the exact opposite in the way our system used to be, you have to affirmatively opt into the classaction. I cant represent you even if the court says i am similarly situated. You have more mass actions, the opt in and that presents challenges and benefits to the Business Community. You have smaller class actions. What you have is if people dont opt in they see how the case goes. If i were designing something i would borrow something from the uk who have an important election today, i would have a system of loser pays, brian has good ideas about how to implement these reforms. I agree with most of his reforms but there needs to be some skin in the game for lawyers bringing these cases. I understand the contingency fee is part of that, they would only be investing if they are recovering handsome some, at least the successful ones. Brian talks about how a plaintiff lawyer cant just ask bob warren is a trial lawyer and i learned under his wing. He said these discovery requests, shaking until every single penny falls out of his pocket. It is a stark image but what we experienced in civil discovery, if there was a loser paid system, if i were designing classaction system i dont know how i would feel about the opt in versus opt out, i would have the ability of our clients to get our fees back that we have to incur against these cases. Any other questions . I have a question. In your experience, a class action, what percentage of cases do you believe are frivolous and of those, how many were dismissed by the court . I will stipulate has no bearing on your ability as a lawyer. Every lawyer would say 100 meritless. 100 were meritless, it is a legally charged term meaning, there is no objective basis for bringing a lawsuit and in the consumer context i would say it is at least half of them. Im not saying frivolous in the sense that it has to arrive to the level of froot loops or something silly. There is nothing there, no good faith basis for it. There was a news report, it wants to classaction and of those 50 , many classaction lawsuits, after getting dismissed, where the dismissal was upheld, it is less then a quarter and extremely rare, it is extremely rare you get the case knocked out that early and it goes to your court and the Court Affirms it. Im not speaking anything out of turn. Most courts in this circuit view this as a high bar to get a case dismissed, they want folks to have their day in court and the operating system with most judges before whom i appeared as if a lawyer puts his or her name on this document and under rule 11 satisfies this in good faith, to question that if you are on the pleading there has been no discovery, they believe lawyers bring lawsuits in good faith. From that perspective even if it is superficially privileged frivolous, the Subway Sandwich case, lets take that as an example. Im not saying i wouldnt have moved to dismiss, i probably would have. They face an uphill battle, when advertising your sandwiches, not large submarine sandwiches, you go to the store, 12 inch subs, every line the country, every state in the country has a law that prohibits false or deceptive advertising even if not outright false, you expect, theres pictures displaying the subs already baked, they dont show a lump of dough, there is no disclaimer. Im not defending the lawsuit, what is the law or decision subway could cite to the federal judge, theyve not stated a claim, cant get the discovery, we all listen to this and say it is absurd, it is ridiculous, Everybody Knows and that is what the judge did with the starbucks case. Everyone knows when you buy a latte at starbucks, the ice will consume the volume. It wont be exactly 22 ounces or whatever it is, i applaud that but those instances are rare in my experience. That would alleviate a lot of the problems we discussed today. I want to say one thing, something i have learned on this book tour because i am a professor and dont get to practice in our courts as often as chris does. One thing i have learned is lawyers are not very careful about what they are willing to allege. I have a very good friend who is a very liberals District Court judge. He told me every year he asks his law clerk, what is the thing that surprises you most, he said every year it is almost unanimous the same answer he gets, how willing lawyers are to lie. I do think we have a problem with people not doing any investigation. Under rule 11, see what might happen and that is a problem. To strengthen rule 11 sanctions in rule 11 procedures so people cant just make up the fact that if you make up facts, it is hard to get those cases dismissed. Judges hate to order rule 11 sanctions. I dont know if you have any idea what can be done to make rule 11 sanctions more of a deterrent, i have been persuaded, elsewhere on this book tour, you may do something with rule 11 as well. You made the conservative case, and chriss rejoinder. Interesting you asked me about that. I explicitly say we advocate for reforms. One of the laws we do not allow class actions to enforce. The Telephone Consumer Protection Act says if you get a robo call a rowboat text youre entitled to 1,500 every time so this, when you combine those bounties which has no relation to how we are harmed from the robo calls, with the classaction you end up with massive over deterrence, there are some cases, when the defendant is facing, im not making this up, 1 trillion liability. That is ridiculous and it gives you incredible settlement leverage if you are the plaintiffs lawyers, you can bankrupt the company with a robo call case. I say that we should not use the loss the classaction device when it results in overturns. Triple damages cases, punitive damages cases. I will say this, ive got around to other Federalist Society audiences and mentioned the t cpa as one of the things we shouldnt use classaction for because it can result in over deterrence. The reaction i usually get is it is not resulting in over deterrence. I am still getting robo calls and rowboat text, more class action that is the theory and the reality. I suppose it is fitting we end on a point of agreement because obviously i agree. Brian fitzpatrick does walk through that in this book and shows why even those of us who practice confined areas of agreement, the purchase of statutory damages, it is very hard to quantify you are eating dinner, it is a hard damages case, we will set the statutory damages, statutory penalty. Small claims court, wherever you want to do it. It is an abuse of intent, layering the classaction procedure to lead to these, ive defended many of those lawsuits, the client asks about potential exposure here, i find out how many they sent. 90 of the time it is in response to your request to opt in and it adds up very very quickly. I want to thank professor fitzpatrick. Everyone has learned quite a bit today. It is a lot of fun. [inaudible conversations] weeknights this month we are featuring booktv programs showcasing what is available every weekend on cspan2. Tonight our focus is the founding fathers. George w. Bushs president ial speechwriter Jonathan Horn on his book washingtons end about George Washingtons final years. Then author alexis co. And you never forget your first, chronicling the life of the first president. Edward larson on franklin and washington about the relationship between Benjamin Franklin and george washington. Watch booktv this week and every weekend on cspan2. Television has changed since cspan began 41 years ago but our mission continues, and unfiltered view of government. Already this year we brought you primary election coverage, president ial impeachment process and now the federal response to the coronavirus. You can watch all of cspans Public Affairs programming on television, online, or listen on our free radio apps and be part of the National Conversation for the daily Washington Journal Program or through our social media feed. Cspan created by private industry, americas Cable Television comedy is a Public Service brought to you today by your television provider. It is an honor to sit down with howard bryant. The book is called full dissidence notes from an uneven playing field. How are you doing . Good to see you again. It is a very interesting book. We have 10 original essays, with the different worlds that exist, i think in mainstream america they are not aware of those worlds and even though