Class action and he has litigated and defended countless class actions including over 20 dismissals of less action cases. They may have a sense of what his position is on that. Is a graduate of georgetown undergraduate and University Virginia law school where he was and is also the author of the chapter in the Popular Series on claims. So please welcome christopher. [applause]. And her next panelist is a professor himself wrote this book and he is a graduate of merchant notre dame where he was the runnerup valedictorian but he made up for he went to Harvard Law School and he was the top student to graduate in his class. It is a lot easier. And he has been a lawyer and a professor. It is currently at vanderbilt. And we will hear more from him and just a bit. Our moderator today is judge on the ninth circuit, is a graduate of weltys a korean immigrants who came to this country and graduated from a Blake Cornell and also Harvard Law School. Classmates. Any worked at and was associate white House Counsel and counsel to the Jewish Community in the senate and recently appointed to the ninth circuit. Give a round of applause for the judge. [applause]. Michael thank you for the introduction. I think were going to have great debate here. We have two experts on class actions. A little bit of format, i will give the professor fitzpatrick the floor claim speak for about ten to 15 minutes to make his case. And another 15 or ten to 15 minutes to rebut and then after that we will open the floor for questions here. Michael mentioned, the brian and i were classmates in law school. Lived in the same dorm floor. I can tell you the back in the day at harvard, if you are a rockefeller republican, you are treated as if you work to the right of the hunt. Ryan in law school was actually to the right of the hunt. [laughter]. I say that, actually more libertarian but very journaling conservative journals. Wherefore senator john cornyn of texas. So this is a very long way of asking him and as a member of the vast rightwing conspiracy write a book the conservative case for class action. Brian thank you for that kind introduction. The reason that i think conservatives should support class actions is because we have to ask ourselves what the alternative is. In the alternative was told to us and a brief filed by the United States chamber of commerce and 2010. In this brief really is what inspired me to write the book that you have in front of you today. It is called at t and sub joan. I suspect many of you know about this case. The question was our class action flavors that are embedded in arbitration agreements are the enforceable. In the u. S. Supreme court said yes. My own boss justice and the court says the you can ask some bone waive the right to join the class action so long as you do it in an operation because in any state laws to the contrary are printed. As a parent everybody in 2010, that if you got rid of the class action, if you enforce these class action flavors, and people have been injured in small amounts by corporations, small frauds, small breach of contract, small pricefixing injuries. People with small farms would have a very hard time Holding Companies accountable for the storms because if you have to go on your own, not many people would do it. Everyone knew this in 2010. Chamber of commerce filed reef to calm everybody down Previous Chamber said do not worry, its a collection action goes away. Theres Something Better than class action. Federal regulators. This is supported. They should be placing art marketplaces. As judge lee mentioned. Ive been a member for a very long time. Have been going to these federal society members, 420 years. Meetings. I have never wanted any of these gatherings heard anyone say that federal regulators didnt have any problems. Theyre not a solution to this problem as well. The conservative way to police the marketplace is class action lawsuits, not federal agencies. I start the book with some quotations from milton friedman. He reminds us that for all of the virtues of the United States chamber of commerce, they are often not very conservative. It is a wonderful pass passage and equipment questions, big businesses often have the Free Enterprise system and there on a plane to washington dc asking for special legislation for the company. So i chris, i represented many members of the teams of congress when i was lawyer and i am very grateful for all of the company we do for our kind of money and our country but theyre not the best place to find with the conservative principles suggest we do should she do to police the marketplace. What is the best place to find the conservative principles say. Will my book is built upon people like milton friedman. Like gary beckman, like George Stigler and Frank Easterbrook and 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 our marketplace. Not even friedrich hayek, the Austrian School of economics believed in complete their markets. At the very least, even libertarian say that we need three rules in our markets. No fraud my no breach of contract and no pricefixing. We cannot have good markets if people can get income foods with each other. So the question is how are we going to enforce and implement the rules. What i argue in the book is that that conservative way to do it is through the private enforcement of the law reading in a back to the literature on privatization that was very popular during Ronald Reagan and margaret thatchers times, in this literature basically says that we want to privatize everything. And therefore why should we want to privatize enforcement of the law as well. I identified six reason why. This literature advocates advertising. Private solutions over government solutions. All six of these reasons apply to private enforcement of the law. Number one. We would like smart governments. Every thing else being equal, what smaller government, amys lower taxes and fewer bureaucrats looking 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, would have to hire thousands of more lawyers to pick up the slack. It is more taxes and more people looking for things to do. We like selfhelp. That is reason number two. We like to build selfreliance among our citizenry, people relying on themselves and their neighbors when things go wrong. Not waiting around for the government to save them and bail them out. This again, is consistent with private enforcement of the law. Reason number three. Better in incentives. They are motivated by profit and we think that galvanizes them to do a better job than the government bureaucrats they get paid the same no matter what they do. This is consistent with private enforcement class action lawyers earn contingency fees. These are truth terrific motivators. We would expect and i will explain in a moment the data to confirm this. We would expect class action lawyers who do a better job of enforcing the law and the government lawyers do. Number four. Budget resources. The government always this strapped for cash and budgets are always being cut enforcement budgets are the least sexy thing in the budget in 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 solution because the less centralized and government solutions. We dont want all of our eggs in one basket. If we drop the basket. And we get a bad result for everybody. We like to hedge your bets by you using decentralized solutions to problems and thats why we like federalism and what we should like different class action lawyers all of the country filing losses before different judges instead of one federal agency in washington deciding with 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 the agency capture. Conservatives have a word 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 does not have that problem. There focused on profits, there focused on contingency fees and in my view, that is pure than the government which is often focused too much on who give who money. All six of the reason we normally like to privatize, leads to the conclusion that private enforcement of the law is preferable to the u. S. Chambers federal regulators. And as i said the Empirical Data supports the theory. If you compare class action lawyers and security frauds, classaction lawyers and antitrust, you find that class action lawyers are recovering more money than the government lawyers are recovering. In securities fraud, it is ten one. In any given year, fraud lawyers are covered ten times as much as the fec does. A lot of that is because the securities lawyers filed more cases but even if you look at the exact same cases when they go after this exact same people from misconduct, the private mark still would collect four times as much. The theory supports private enforcement and the data suggest that private enforcers are doing a better job. Now of course it is true, the private sector can go too far. The profit mode can go too far. People can abuse the system in order to seek out more profits. This is not a reason to turn everything over to the government. Corporations have used the system in pursuit of profit. We dont say therefore, lets have the government to do everything instead of corporations. No, we say we are going to put rules into place, to harness the profit motive, so it is directed toward the public goods. We can do the exact same thing with classaction lawyers. We have a lot of power over class actions lawyers by regulating this contingency fees that they are the cases. Every one of those key awards must be approved by a federal judge. It is a reason to put rules in place to make sure it is pointed in the right direction. What i argue in the book, i think largely we already have rules in place. We can always improve the system and i have a few reforms of advocate in the book but for the most part i think your system is working. I consider a few of the main arguments against class actions and i bring data to bear against the arguments and i conclude the chamber is basing its advocacy against class actions against myths and realities. Number one, the chamber says we have so many meritless class actions being filed all the time, i like to point to the subway footlong case coming private about this in the paper. Some of the foot subway footlongs were only 11 inches. In classaction lawyers sued alleging Consumer Fraud. This was a frivolous lawsuit but is this subway footlong representative class action or an outlier, in one chapter i try to do a deep dive into the data and i conclude no matter how you slice it, subway footlong is an aberration, it is not a typical case. The truth of the matter is this, it is never been easier in the history of america to dismiss a meritless case in court. After the United StatesSupreme Court decided, this is the golden age of motion to dismiss, if you cannot dismiss the subway footlong case, that is on you, that is not on our classaction system. And it also take a look at the chambers own list of the ten worst cases filed every year in america, they have a ten most frivolous cases the list that they put on every year, i looked at five, there were ten classaction cases, subway footlong in a couple of cases against starbucks because there was too much ice in the ice coffee or too much foam in the latte. There were 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 is that if you use your mastercard we will donate a percentage of the purchases to charity. They did not tell people the amount of money they would give to charity was capped at a certain level and they had that point in the year, there were nine more months they were using the promotion, it was not true. This is a debatable case. Of misleading consumers. Most of the cases fall into that category. What i say in the book, if in five years the United States chamber of commerce can only find three classaction cases that are clearly meritless, we do not have a problem with meritless cases in her system. But unwilling to meet the chamber halfway so one of the things that i propose that we can clamp down further on meritless cases, there are other things that we can do. We can put an automatic stay of discovery in place when emotion dismisses plan engine pending. Most judges do this now but some dont, we can make it automatic. Im willing to give defendants an appeal when their motion to dismiss is denied just to make extra sure that the case is not meritless. I am willing to tweak the system a little bit but i dont think we have a meritless case problem. What about Attorney Fees, this is an argument the chamber makes. The only people getting any money in class actions are the lawyers. The class members get nothing. You can find one or two or three cases again were class members get nothing in the lawyers get everything, these cases exist but i submit, these are outliers, extreme outliers in my empirical work as a professor, i have added up every single dollar that defendants payout in class actions and i compared it to every single day to judges, lawyers and fees and you know what the percentage that defendants payout is awarded in fees, 15 . 1. 5 . This is not everything this is far from everything and far from a normal contingency fee. We do not have a problem with lawyers making too much, i argue in the book of the want to be good economics and conservatives were probably paying classaction lawyers too little. We have all kinds of ways to capture incentives and ways in the market no client would want their incentives to be capped. We dont have a problem with fees. It is true that not many class members recover from classaction settlement in a lot of cases. In consumer cases th the cases e lowpaid they came out with a study where the meeting claims rate and consumer classaction is 9 . It means they are marketing compensation from class action. It does not mean the monies going to the lawyers, we split the money up among the claims. Forgive leftover money to charity. It is true in a lot of cases that the classaction but two things about that. Remember the alternative, is a government. Is the government going to be better at Getting Compensation to people when they go after wrong. To begin with, most of the time the government goes after wrongdoers prohibited by law from distributing their money to the victims. It has to going to the u. S. Treasury. On the occasions where the law permits a government to distribute money to victims what do you think the government does. They hired the same people that classaction lawyers hire to distribute their settlements. They government claim rate is 9 two. It is no better at compensation. Number two, the case of the classaction is not dependent on compensation. Even when not everybody is giving their money back. The classaction serves an important function. Deterrence, if companies no they will have to pay when they do something wrong, they are less likely to do bad things to begin with. This is a conservative economic theories. Weve been teaching for 50 years. Its another reason why the classaction is valuable. There are good empirical studies that show when classaction goes up corporate misconduct goes down. So im willing to rest the case of the classaction on deterrence alone but in a lot of cases we also have to decide benefit of compensation. I think when you look at the data and the theory the conservative way to please a marketplace is not federal regulators. In my view on this was really the conservative view for most of the 20th century. We can talk the q a if you want to about why things change but until Ronald Reagans time the conservative view was private enforcement better than the government. I will give you one example. In 1978 there was a bill introduced into the congress that wouldve abolished consumer class actions. This is the chambers dream bill today. In 1978 a bill was introduced to abolished consumer classaction. This bill was introduced by ted kennedy. At the behest of jimmy carter. Because they were going to create a federal agency to do the Consumer Fraud policing instead. What i say in the book and what i say to you today is we should not be taking advice from ted kennedy and jimmy carter. Thank you very much. [applause] your response . I did not write a book on this but i been doing it for 20 years and i certainly applaud professor fitzpatrick thinking in his creative thinking on the subject but to say i respectively disagree, i do that from a conservative perspective fraid mine is one of spending the book of my career defending these types of actions, litigating them in the trenches. It is something and 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 in professor fitzpatrick besides a few highprofile examples in his book. By and Large Companies and privilege to defend mi from his privilege to defend value their relationship with the consumer value, value and much more than the classaction lawyer. I can assure you of that. From my perspective, one of the greatest threats that we face in civil litigation today is the threat of the classaction. I think its been taken from its historical intended