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

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 States Supreme 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 purposes but i dont think anybody really intended. From a conservative perspective i reject the name any state in the notion that consumers need the government whether on the form of a law or federal regulation or federal agency or in the form in a statute thats been used in private litigation. I think business in this country is considerably overregulated. We have one of the most hostile business climates in the country in this particular state. I was speaking with some folks before this program began, i dont know how a company is arrives in this climate. We have waged our laws in the state which make it impossible to comply. If you comply with one statute you are violating another regulation and you have another risk of a federal government coming in and a plaintiff lawyer is in federal statute to say thats a violation nonetheless. I think the classaction is used as a procedural mechanism to take advantage of this in the consumer context in the employment context in the antitrust context. What im describing is real, that is not something that is theoretical, it happens on a daily basis. I guess i would respond to professors thesis with four principal critiques. And let me outline them. First, i think is theory presents a false economy. You would not hear me advocate that we should have greater federal regulation. I did not write what he reference, it was not involved. I do not think the choices that we face are between class actions as they exist today or even as modified in reform versus government enforcement, there is a third way and i think its a critically important tool in the use of private enforcement and that is industry tough regulation. That can take many different forms, were all familiar with the Better Business bureau, called the National Advertising business where they can go and petition if someone crosses the line after advertising a product in a way that a competing business feels crosses the line. The industry works together in that particular scenario the resolution may often lead to file on classaction or file on lawsuits but thats a situation where the business regulates itself. Im not suggesting we replace classaction with this but this is an underutilized tool. There is also competitor litigation, many federal statutes that are used if not exclusively, almost exclusively by competitors. The false advertising law is used most often following the nad proceedings and a reference. The robinson act which is core lately often used by Small Business and businesses suing larger businesses of anticompetitive. Were all familiar with breach of contract suits, some of the largest trials we have seen and recent years have not been classaction say been between competitors, the qualcomm case that resolved earlier this year as one of the earliest examples. I view these private lawsuits where the incentives are actually perfect aligned. Companies will not go overboard. Let me give you an example of a company that may have gone overboard, a few years ago palm wonderful instituted a number of false advertising loss. Words sued all of his competitors and argued their pomegranate juice wasnt pomegranate it was flavored prethere were advertising as pomegranate when they believe they were the only ones manufactured pure pomegranate juice. They instituted all these lawsuits and had quite a bit of success in the industry got together and started going after palm wonderful and proceedings and they felt that palm was crossing the line in the weight it advertises products. So this is a private way in a free and for marketplace to regulate themselves and for businesses without distributing the windfalls from other group mainly classaction lawyers. It actually believed in this concept that we all studied which is mutually destruction which worked in the nuclear age which can work your as well. Problem we have in this country is over litigation pretheres too much litigation into much if we might disagree with the for bruce line, theres way too many instances where folks are taking advantage of very, very broad laws and regulations and their bringing classaction on that. And ive had the privilege of defending. My second critique is what i described as the law of long intended consequent is. One of the most fascinating things that i read and learned in professor fitzpatrick book is the history of the classaction. It was news that the bill to introduce abolishing was introduced by ted kennedy. I do not know that. And i dont want to take that side of this debate. But i think the world has changed quite a bit since 1978. Lets remember classaction is a procedure. You dont bring a classaction and say i bring in a crosssection. Its a procedural mechanism for a plaintiff to group together with other like similarly situated plaintiffs and bring a lawsuit for violation of law. So you have to have the substantive law underlying the procedure of using a classaction. Without it, you do not have a classaction, you dont have any lawsuit state or federal court. What does the law look like today as opposed to what it look like in 1978. I would argue we were overregulated in 1978 and today were overregulated. Thats a fundamental problem what you see in the Community React to these days is the fact that the classaction is being used in all of these different scenarios to enforce privately statutes that were never designed or intended to be enforced in a crosssection. By all objective measures, class actions are more significant crosssections and more in total number filed today than there were in 1978. Carlton field the law firm does an annual study and if you read this on an annual basis, the idea, what youre noticing is yeartoyear the aggregate filing numbers may dip and flow quite a bit. What youre finding is these are being concentrated more and more in what they call the highstakes classaction. Whafor those of you that work at law firms like mine, youd be surprised to see the way they define the most significant litigation. Theyre not talking about the multimillion dollar lawsuit, they talk about tens of millions of dollars. Thats what you are finding, if you look at the history that professor fitzpatrick lays out a thought different today than it was back then. I certainly agree as he outlines in his book that the core laws that all conservatives believe in, the laws of be under breach of contract, the laws of fraud and antitrust laws are all sensible, and needs a baseline, so a company or an individual that looks to start a business wants to ensure that the marketplace is free in the marketplace is fair. Professor fitzpatrick uses an example of a company that is struggling because they are seeds that are sold in south American Country and there can be no assurance that the seeds are actually going to work, the market is flooded with fake seeds and no recourse to the system. That is not our problem, our problem is the other one where the companies cannot even begin a business because they have to comply with all the federal and state regulations to start a business and once they do it and achieve the success, theyre immediately hit with a classaction. I remember a few years ago meeting with the client downtown and he was about to present to the board, the first classaction and he was furious, he annoyed you what my company was being hit, were good company trying to make it it wasnt because you did anything wrong its because youre successful. His view changed a little bit i told him no, not something to be proud of. You talk to the lawyers thats without to you. The Business Community has an organized lobby and is a public and has lobbyist and they are trying to Lobby Congress and of course that is happening. But in my experience in in my world which is largely consumer class actions, i find that the plaintiffs bar is far more organized and far more strategic about how they lobby the government were differently the assembly to get laws to change, look at the california privacy act that has been passed modeled after that you privacy regulation for which advocates freely acknowledge there is not a set of guidelines or set of regulations to explain companies, heres what you need to do, here is how you comply, there is a safe harbor, if you do this you will not. They tell you wait until we enforce it and wait until we go ahead and have scalps on the wall, the way they put it and then you will know how to comply with the law. That is no way to regulate an 80 modern economy. Thats whats happening in this country and i would not model our laws after the io but that is exactly what happened. What is interesting about this law you look at the history, who lobbied, who passed, the plaintiff classaction and you go through the details of the particular statute, there is no requirement that you show injury, theres an automatic entitlement to if you prevail. In what goal is the advocating on behalf of consumers. It is not, is interest of the private classaction bar. My third critique is several times in his book professor fitzpatrick outlined how the decision, the at t case the upheld arbitration had waivers in these agreements and are ultimately going to lead to the demise, at one point he even suggest that state class actions are all but irrelevant these days and that is again from a practitioner standpoint, that is not consistent. We can all cite around the table, im sure we can spend the whole session discussing classaction that we read about or had to defend. I am here to tell you red bull does not actually give you wings. Im also here to tell you that froot loops does not contain actual fruit. Nor does varies. Subway footlong sandwiches, the example that professor fitzpatrick uses may not measure 12 inches when the bread is actually baked. Those are obviously ones we all laugh about, we joke about it i agree, they are relatively rare but a few observations, those are not always dismissed and unlike professor, i dont blame you if you bring a motion to dismiss because they are not, most of the cases were i defended is basically to whether or not the case is going to be dismissed. I would note that most judges when you talk to them i am interested in judges on this, they are tired of seeing those motions because they see them not only in the frivolous cases, they see them in every case. Its very difficult to get a case dismissed before any discovery imparted that it is in the skilled advocate and make an argument in my humble experience in my opinion and there predisposed to let these cases go into discovery. Most federal judges did not have judge lees background where they worked a farm and had a normals cost and pressures of getting the case into discovery on a defendant. Subway reached the Appellate Courts because it settled the case. And i did not represent subway, i was not involved in the case but i can only assume it was not the lack of skill or the advocate but rather their assessment of the risks of the case of going into discovery is why they settled that case. They are the frivolous ones but theyre the ones that maybe on the surface you might look and say this might have some merit. One example that i would give you is our firm was defending a major Motor Vehicle in a case involving the brakes and the hybrid vehicles. One day after the client announced a recall of those vehicles to do what you would expect any responsible Corporate Citizen to do would address an issue was a safety issue but nevertheless involve the brakes and they wanted to fix it, one day later after its announced they get hit with the cox action. It alleges that while the recall is for this generation of vehicles, we are not going to have a claim to those but it must be the earlier generation vehicle brakes are defective as well, a completely different model in a completely different brake system in the two vehicles. This case went on for three years, there were multiple millions of dollars that this defendant had to face, had to turn over the source code to the plaintiff lawyers to allow them to probe through and try to find something to support their claims. They cannot do it. It was only when our firm was brought in to take over for the appeal we got into the ninth circuit and they locked the plaintiff out of court, they said the theory is ridiculous no merit in the court shouldve thrown it out on the pleadings, he did not. Again that was only after my client had to invest millions of dollars in its rear client that will actually click to that. There the resources and commitment to actually see the particular cases through. So again my third critique, i do not think class actions are on the road to demise, if anything there is more incentives for plaintiffs to bring these cases today than there were any many years ago. I also think as i noted state class actions are just as vibrant today as they were after the passage of the classaction in 2005. For those of you not familiar, this was a law that Congress Passed one of the most signature changes at least at the federal level in my lifetime and the time i been practicing in the goal was to take the National Class actions and move them into federal court, why. Because companies were finding themselves stuck in a jurisdiction where the plaintiffs lawyer was really chummy, ive been to hearings and im sure many of you have as well where the judge comes out of chambers with his arm around the plaintiffs lawyer and their best friends, the father and the plaintiffs lawyer went to law school with the judge. And then they get on the record and the judge differs the ruling to dismiss and to all of the discovery is produced, exorbitant settlement pressures put on the defendant. So the goal you have multiple or very large multistate class actions crossing state lines, those belong in federal court. Defendants were unable to bring those into the federal court because under traditional rules of jurisdiction we have citizens from different states you have an a complete diversity and you cannot aggregate the claims. So if each claimant had a claim of 5 and there were 10 million class members, thats a 50 milliondollar claim by any stretch of the imagination. But under the traditional rules you cannot aggregate. The class action fairness act change that. Everyone predicted in judges in l. A. Predicted, i spoke with many after they predicted we will not have class actions anymore, ac ask any practicing lawyer if thats the case, what you see is more concentration of them being strategic in a statewide classaction in california, one in texas, one in york, illinois and other popular states and try out and see how it goes and extracted settlement as best as i can. Wage and hour lawsuits are almost exclusively in state court in my experience, not exclusively but almost. So i think that point is one that we should not just go over. I think class actions are abusive and continuing to rise. My fourth and final critique, i will not defend the chambers advocacy of federal regulation but i want to give you a different perspective that i think many businesses have when it comes to the issue. That is very difficult these days for companies to achieve global peace. It used to be if you settle the classaction you obviously get the release of all class members and you can count on the fact that you are putting this issue behind you, that is the motivation for the reason a lot of clients pay really big dollars to settle and get behind you. But again my first point why dont think this is the economy between federal enforcement and private classaction enforcement, im finding it is both. Our clients are being sued in class actions in the federal or state regulators are coming after them, there also be pursued by the federal or state regulators. There really is no easy mechanism under our constitution or laws for company to basically by global peace unless it brings all the people to the table. What incentive does not create. He get basically an action between the two trying to get more than the last. Im finding local city attorneys especially in california and even state ags are partnering with private plaintiffs classaction lawyers and bringing these bounty lawsuits in california under the unfair competition law, private parties cannot get civil penalties. And if you establish for example and use the crunch very case, if everyone sued in a classaction and get their 3 back of material, under civil penalty if its established that thats a violation of the false advertising law you can get up to 2500 per violation. Theres enhancements if you are an elderly person in purchase and you are deceived or part of another protective category. Now each 3dollar box of cereal is become a 2500dollar box, enormous pressure. The law is only Public Officials may pursue those for false advertising. And that money must be directed to the enforcement of the unfair competition of false advertising loss, what has not done. The primary as private lawyers were always marketing to new clients and trying to pitch cases, what is the plaintiffs bar doing. What they are doing is making pitches to Public Officials and saying mr. City attorney, how did you like to be the attorney general governor and president. Here is a statute and i can bring it on a contingency fee basis and i enforce it whether or not there is a classaction or classaction settlement and i will bring this lawsuit and you get to keep every single dollar that we recover at 2500 a pop. And you get to build this little Enforcement Unit in your office and bring all this money into the state. Now, thats a little bit beyond the problem that were talking about today but thats the perspective of the Business Community today and some of the risks they are facing on top of the class actions. It makes it very difficult for them to achieve global peace which again i think as part of the conservative case of why you would want classaction private enforcement and get global peace. So at the most basic level, i would say again i applaud professor fitzpatrick siri, i think its creative and i love the contrary in thinking that went behind it, personally i do not view this as a liberal versus conservative issue, it may be a debate between capitalism and socialism, i am not of course calling professor fitzpatrick a socialist, i would never do that i dont think this is a conservative or liberal issue, thickets is more government, may be considered probusiness perspective but from the perspective in which i operate, i think companies are trained to do the best that they can to deliver great products to consumers and to survive in a hypercompetitive environment and overregulated economy. As he noted i dont think conservatives are for ending all class actions, that is not my position and when you look at the history of this country certainly during the civil rights era, classaction plays a critically Important Role in bringing justice to people who would ordinarily not be entitled to it. I think if you look at where we are today versus where 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 align incentives amongst lawyers and amongst the Business Community and consumers. So again i would say some of the most obvious poster children for the movement happened to be class actions and theres a reason for that. Thank you. [applause] thank you for the counterpoint. I want to open it up to the floor and see if anybody has any questions for either professor or Christophe Christopher chorb. [inaudible question] do you find that that ruling is leading to more regulation or do you fear my second question is there a reason to why private attorney general system works better than the public and vice versa and for that reason you need to have both and working on perfecting both because of certain times one will fully gaps. I can take a stab at answering that, to 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 there is not a lot of profit to be made a private Enforcement Unit in those cases if we want any enforcement we will have to rely on the government and one interesting thing i found the data on the sec versus the private bar, the sec brings lots and lots of cases against very small fraudsters. Because they know the private bar will not go after those people. Its an interesting synergy developed between the government and the private bar. I think you need both, chris notes you cannot both in the same case and that piling on, i think it can be piling on. I think that companies should not pay more than the harm they have caused. So they pay out fully in case one, now you have an offset in case two, i absolutely agree that we need to make sure we are not over deterring the companies. On the first question, interesting question about whether the regulators have become more active as class actions have declined, i dont think ive seen anyone try to gather data like that. I will note that the cfpb kicked it into high gear for a while because they were worried that classaction is going away would make it hard for consumers to get a fair shake, now since without a change in administration i dont know how active the cfp b is anymore but for a while i think there was a notion because classaction is going away the cfpb needs to pick up the slack. Like i said i dont know that thought has continued. I guess from my perspective again the book does a really nice job walking through the potential impact of conception as led to more litigation. What you found is a plaintiffs lawyers are not going to go away, your whole industry in the state in particular but other states as well that made their livelihood and a lot of money on consumer class actions, they do not just what those away, first of all you need to have contractual relationship with your customer, food and beverage is a huge area in the state despite my best attempts my clients will not put an arbitration clause on the froot loops. [laughter] yet theyre being sued for breach of warranty which last time i checked as a contract claim. Nevertheless, when youre finding number one its only a class which ca expressed as a contract to have the waiver to have arbitration. Even in those cases what we have litigated is the plaintiffs lawyers first attack as they argued i did not understand the contract, i did not read it, the arbitration was at the end instead of the beginning, it was in black text and not capitalized instead of being read in all caps, all those types of arguments, you also see with online, most all of us now the apps and that sort of thing, the click wrap argument and those sorts of things. You also saw, this is what led to conceptual and in the first place was a reason why the Supreme Court reversed the california Supreme Court in the case in the ninth circuit was because the states started using a contractual defense which is the unconscionability doctrine, if you are contracted overly onesided or in the formation process, he did not disclose certain things, at the state law you can validate a contract because it is procedurally unconscionable. After conception owned you had a resurrection and thereafter, the court started validating causes in the employment context in the consumer context of unconscionable. Those cases made their way to the Supreme Court and they said we met what we said, please listen to us. It had to take five or six cases since. You are finding more ways on the plaintiffs bar to attack those. Where you mostly have conception having the most forces is in the consumer context in the employmt context. Today in the ninth circuit you dont have a single case that i think deliver the Silver Bullet based on a class action and arbitration costs. That is because number one in any employment case you will find a private attorney general claim which is Supreme Court has held, you cannot arbitrate, it allows any individual to bring an action is private attorney general get their Attorney Fees and not subject to arbitration. The second in california even more ridiculous in my own personal view, an argument if you as a consumer are speaking in the Food Labeling context, if you want to company part of your action is to get the company to change the label in a way youve alleged or contended is n not consumptive. That is sought in every single classaction that ive ever seen. That cannot be arbitrated. What you have in cases with a rocksolid arbitration agreement is enforceable, in the employment context, that stays in court. In the public injunctive relief claim, the consumer cases shaved off and stays in court. Courts are mixed as to whether they have those go first or the arbitration go first. But i dont not think they had the impact that a lot of people have directed. I want to add one thing to that, i think when the panga dispute actually goes to the United States Supreme Court, they are going to rule that it cannot withstand arbitration and they will order arbitration if the u. S. Supreme court ever rules. But i do want to emphasize one source of agreement that chris and i have and i talk a lot about in the book, we do have way too many laws on our companies, we have way too many legal constraints, were way beyond contract fraud. We are over regulating. All i advocate for is this, rather than classaction waivers which are very blunt instrument, you can insulate your self from liability for wrongdoing in any kind of case in the classaction waiver. Rather than allow the blunt instrument, when we focus on the laws that we do not like. And say you cannot use class actions in those situations would allow the classaction for the laws that we do like, fraud, breach of contract and pricefixing. I advocate we should breach the principle that the rules of civil procedures based on trans substitute video, we dont have to have the exact same rules and procedure in every case, trade to what weve learned all these years, it has not been handed down by god. We can change it. Lets use rule 23 for the laws that we think should be in place and should be enforced robustly. I agree we have way too many laws, the answer is not get rid of all class action, which it threatens to do. I say instead lets limit where we can use the classaction for the laws that we like. [inaudible question] in my experience most of the majority of classaction with a plaintiff is not a plaintiff that walks against the Lawyers Office saying i did wrong, 3, 30 can you please represent me, the generated by lawyers and does not trouble you at all in terms of the classaction mechanism . It does not trouble me. I ask class actions where they get their cases and the representative plaintiffs from and i have been surprised how often people do come to them and say ive been mistreated, this cannot be right, but even in the cases where the classaction lawyers figure out there is a problem and then find someone to stand in as representative, i dont have a problem with that. We need sophisticated intelligent well resource people to sometimes uncover wrongdoing. I dont begrudge the classaction lawyer for being that type of policeman. Ive talked to a classaction lawyer who have done years and years of analysis with professors to try to figure out whether there is pricefixing going on in industry. It is very hard for any particular 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 the resources and sophistication to find the wrongdoing. The classaction mechanism seems a specialty of the United States and it did not originate here, in europe and i know its quite foreign, it is starting to arrive, if you were designing the system for european country and you could have element of classaction to which degree would you resemble the United States and what would you change about it. Its interesting because these debates are going on in europe and ive handled cases which involve copycat cases in other countries and i think its very much the professor describes a liberal tradition, big l small l. Our country is founded on the liberal tradition in todays politics would be more conservative certainly in europe politically. In those countries, the perspective that they take on classaction, the modern classaction which really rose out of the 1960s amendment to 23, what we know is today is a classaction called the optout classaction. So you are presumptively in when the class is certified and if you do not want to be part of that, you have to affirmatively opt out. In the other countries is the exact opposite, you have to affirmatively opt in to the classaction in other words i cannot represent you even if a court says that i am similarly situated to you unless you give me your permission. You have more at under mass actions and often and that presents challenges and benefits to defendants and Business Community and that have smaller classaction prewhat you have is people going to not often they see how the case goes and its a lot more difficult to get global peace. To answer your question i dont think either system is perfect and if i were designing something i would borrow from her friends in the uk who have a pretty important election today, i would borrow from them and have a system of loser pays. I think what that would do, again brian has pretty good ideas how we can implement these and i agree with most of the reforms. They are great. There needs to be skin in the game and we can see the contingency fee they are investing. They would only be investing if they were recovering a handsome some on their investments. I think for example with respect to discovery requests, brain talks about how a plaintiff lawyer cannot just ask bob is a lawyer and i learned under his wing and he said your honor these discovery requests of grabbing my client by the ankle and shaking him until every single penny falls out of his pocket. Its a pretty stark image but its what we experience in civil discovery. If there was a loser paid system or some more robust Cost Shifting if i were designing a classaction system, i dont know how it would feel about the opt in versus opt out. I see benefits to our system but i would definitely have the ability of our clients to get some of our fees back that we have to incur to defend against these cases. Any other questions. I have a question, in your experience as a classaction defense lawyer, what percentage of the cases do you believe are frivolous and of those how many of them were dismissed by the court and i will say it stipulates and has no bearing on your ability as a lawyer. Thank you i appreciate it. Thats an important caveat. Every lori would say 100 . Meritless as frivolous as a legally charge term, there is no good faith or a jet active basis for bringing a lawsuit in Internet Consumer context, its probably at least half of them. Im not saying frivolous in the sense that it has to rise to the level of froot loops or just something completely silly and red bull gives you wings. But there is nothing there and there was no bak good faith bass for bringing it. There was a news report and one customer came in complained and they launched a classaction. And of those 50 ive defended many hundreds of lawsuits, classaction lawsuits, lets say thats about 250. I would take getting it dismissed where the dismissal was upheld, thats less than a quarter. Its extremely where to get a case knocked off that early. Its extremely rare to get a case knocked off that early and goes to your court and the Court Affirms it. Im not speaking anything out of turn, most courts especially in the circuit debut it as very high bar to get a case dismissed on the pleading. They want folks to have their day in court in the operating presumption with most judges before whom either. If the lawyer puts his or her name on the document and under rule 11 certifies that is brought in good faith, i have no basis before me today to question that and if youre on the pleading there has been no discovery, usually not a basis to get that into the record. They believe the lawyers have bring lawsuits in good faith. From the perspective even if its superficially frivolous, the subway sandwiches case, lets take that as an example. Im not saying i would have moved to dismiss in that case, i probably would have. Im sympathetic with the defense lawyer they face an uphill battle, subway you are advertising nursing which is as footlong sandwiches, not large submarine sandwiches, your advertising as footlong. You go to the store and they say 12inch subs, 6inch when you look at the menu. Every law and every state has a law that prohibits false or deceptive advertising. Even if that is not outright false, its deceptive. You accept and theres pictures displaying the subs and they dont show a lump of dough, there is no disclaimer. Again im not defending the lawsuit but when we characterize that as i framed it as objectively frivolous. What is the law or decision that subway can cite to the federal judge to say they have not stated a claim, they cannot get the discovery, you must dismiss. We listen to this and say come on it is absurd, ridiculous, Everybody Knows and thats what the judge did with the starbucks case. Everyone knows when you buy event a latte at starbucks and you get it with ice, the ice is going to consume the volume and not be exactly 22 ounces or whatever it is. And i applaud that. But those instances are extremely rare in my experience. It is unfortunate, i think we need more of that and that would alleviate a lot of the problems we discussed today. I want to say one thing that i think emphasizes as an area of agreement that chris and i have. I think ive learned that ive been on this book tour that im a professor and i dont get to practice in our court as often as chris does and one thing i have learned is that lawyers are not very careful about what theyre willing to allege and i have a very good friend who is a Federal District court judge and he told me recently that every year he asks his law clerk that what is the thing that surprises you most about your clerkship. And he said every year its almost an animus, the same answer you get how theyre willing to lie. I do think that we may have a problem with people before they file complaints who are they supposed to do under rule 11 and just taken a shot and see what might happen. I think that is a problem. We probably do need to do something to strengthen rule 11 sanctions in the rule 11 procedures so people cannot make up a fact because it is true for making up facts it is harder to get those cases dismissed. I know judges hate to order rule 11 sanctions and there has been efforts in the past to try to change that and been unsuccessful. I dont know if you have any ideas what can be done to make rule 11 sanctions more of a deterrent to lawyers. I have been persuaded by things you have said and things i have heard on the book tour that we may need to do something with rule 11 as well. One last question the conservative case for t cpa classaction, i would like to hear. It is interesting that you asked me about that. I explosively say in the book in my last chapter where advocate for the reforms, the t cpa should be one of the laws that we do not allow class actions to enforce but the t cpa is a telephone Consumer Protection act, they get a robocall or robo text, youre entitled to 500 or 1500 every time. So when you combine those bounties which have no relation to how much were actually harmed from the robocalls with the classaction unit of threatening companies with massive over deterrence pretheres some t cpa cases where the defendant is facing im not making this up, a trillion dollars of liability. It gives you obviously incredible settlement revoluti e and you can bankrupt the company with a robocall case. I say we should not use the classaction device when it will result in over deterrence. Statutory damages cases, troubled damages, punitive damages are not appropriate in my view for the classaction device. I will say this however, when ive gone around to other federal society audiences and i have mentioned that its one of the things we should not use the classaction because it can result in over deterrence, the reaction i usually get is professor fitzpatrick its not resulting in over deterrent. Im still getting robocalls and robotech still the time. We need to double down or triple down. More classaction. So that puts the theory in the reality. I suppose its fitting we end on a point of agreement. Obviously i agree and professor does walk through that in his book and it shows why either of those who practice can find a lot of various of agreement with his thesis. The purpose is because Congress Said its very hard to quantify eating dinner and disruptive. Its very hard damages case to make. Were gonna set these statutory penalties and amount to encourage individuals to bring these lawsuits, small claims court, whatever you want to do it. I think its an abusive congressional at ten to the statute to layer the classaction procedural over that particular law to lead to the cholla dollar. Ive defended many of those lawsuits and the decline clientn asked was my exposure and if i know how many allegedly talks they have sent in by the way 90 of the time its in response to your request to get a text or your often and as a very, very quickly. I want to think professor fitzpatrick for a thoughtful discussion and everyone learned quite a bit today. Thank you. [applause] chris, that was a lot of fun. Agree. As a coronavirus continues to impact the country, heres a look at what the Publishing Industry is doing to address ongoing pandemic. Upcoming book festivals and conferences have been canceled with book fairs in san antonio annapolis, maryland and Charlottesville Virginia opting not to reschedule. The American Library association also announced the cancellation of the annual conference this june in chicago. The Los Angeles Times festival of books originally set to take place in april has decided to hold their 25th annual festival in october. In north america largest Publishing Industry Convention Book expo has also decided to prospective schedule date to july. However, five of the largest Book Publishers have decided not to attend regardless. Bookstores around the country are working to provide Remote Services for their customers to online sales and virtual author events using platforms like comcast and zoom. As stores have closed their doors and moved online sales, they cut back on their staffing. Many of the countries publishers have decided to delay the release of many books. Some have laid off staff and several Book Distribution centers have temporarily been closed. But to be will continue to bring you new programs and publishing news, you can also watch all of our archive programs anytime booktv. Or. Science journalist gina talks about the history of influenza, specifically the 1918 outbreak. Here is a portion of the interview. Some people say every major epidemic is swept around the world and it has begun in china. There is a reason why they think this is so the hotspot for fleas. And it can really sweep the world. Its so different from anything that you have seen in anybody in the world is susceptible to. And to have not been seen by human beans before. And birds get infected with us all the time, they do not even get sick. Bird flus are for then those that infect people and tics can be infected with that and have bird characteristics and human characteristics and can infect people. To watch arrested the program and to find other books on pandemics, visit our website book tv. Work. Type pandemic in the wordbook into the search box at the top of the page. Starting now, book tv and primetime. First up Science Writer argues that our brains are wired to focus on what is bad rather than what is good. Then u. S. News world report Kenneth Walsh looks at how different president s have handled crises, also the seeming historian adam recalls the early 20th century Rose Pastor Stokes who is a Founding Member of americas communist party. H. On book tv. You can watch them online a booktv. Org. [background sounds]