Heresy! Conservative Law Professor Thinks Class Actions Are A Pretty Good Idea

Get a load of this guy who still thinks harming consumers is bad....

If there’s one overarching theme to conservative judicial thought in the Roberts Court era, it’s that class actions are bad. Over the past decade, more doors have been slammed on class action plaintiffs than Avon sales reps. Just this Term, the Supreme Court tightened the screws on class action filings in the Bristol-Myers case. The only thing every good conservative legal thinker knows is that class actions are greedy money grabs perpetrated by slimy lawyers that help no one and only frustrate the hard-working capitalists making America great again.

But there’s a dissenter in their midst.

Professor Brian Fitzpatrick, an O’Scannlain and Scalia clerk who counseled Senator John Cornyn, thinks class actions not only work, but are the true conservative remedy to be championed.

In his paper “Do Class Actions Deter Wrongdoing?” and upcoming book The Conservative Case for Class Actions, Fitzpatrick carefully lays out how the turning away from the class action is a betrayal of the classic conservative principles championed by the law and economics movement. In a review of the paper, Alison Frankel of Reuters summarized Fitzpatrick’s logic:

Fitzpatrick argues that if you accept the proposition that corporations shouldn’t be allowed to extract even small amounts of money from hoodwinked consumers, then class actions are actually a conservative way to make sure they don’t. The other options are to provide no vehicle to litigate small-dollar claims, thus allowing businesses to steal from customers, or to rely on the government to enforce corporate honesty. I suggested that perhaps we can rely on the market to punish deceptive businesses; Fitzpatrick said class actions act as a megaphone to amplify warnings to consumers.

This is the conundrum for the anti-class action crowd. Once, in a meeting with some high-profile conservative lawyers complaining about hypothetical class actions over autonomous vehicles, I asked, “So, you think we should have top-down regulation and then bar private actions?” The response was, in a nutshell, “no we oppose that, too,” prompting me to realize we’d moved past “we think there’s a better way to serve the needs of the wronged” and into “we don’t really care about people being wronged.” Because if you’re still true to the notion that individuals shouldn’t suffer, like Professor Fitzpatrick is, class actions seem a lot truer to promoting small government.

Blaming class actions for failing to get enough recompense to victims is the fashionable criticism of the device these days — one that fierce class action critic Ted Frank’s organization often invokes, citing the huge payouts plaintiffs’ attorneys receive compared to the paltry settlement sums distributed to the class. The problem is the whole “class actions don’t get enough money to the victims” argument elides the fact that most of these victims wouldn’t get anything in a world without class actions. The few with the wherewithal to file a suit themselves over such small stakes will be made whole, but most victims won’t — and more importantly, a business acting rationally would almost always take this risk. That’s central to Professor Fitzpatrick’s argument that, even if they cannot make everyone whole (and he contends technology will improve distribution), class actions are an effective means of halting bad behavior and deterring future wrongdoing and that more than justifies their existence.

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The better argument against class actions has always been frivolity. Just collect a few good anecdotes about dumb class actions — like, say, this one — and complain that the high cost of defending frivolous lawsuits hurts American business. As Mayer Brown’s Andrew Pincus says:

“Of course companies are aware that they may be subject to class actions – that’s inevitable for anyone doing business in today’s world. But the deterrence argument works only if companies believe that lawful conduct will not trigger class action suits that impose high costs. That just isn’t true: Because class actions are almost never decided on the merits, the system does not filter out legitimate from illegitimate claims … Class action costs and settlement liability are the unavoidable cost of doing business, present no matter what steps a company takes to comply with the law, and therefore have no beneficial deterrent effect.”

That argument probably goes a little too far. Certainly companies have to factor in the risk of defending a frivolous suit, but the impact on the company of fighting (or settling) a frivolous action should be — unless the company has terrible lawyers — orders of magnitude less than the impact of walking face-first into a legitimate action. Calculating risk with an eye toward to likelihood of success or failure should ensure that, in any event, the company would strive to avoid preventable wrongdoing — wrongdoing that may be financially worthwhile in a world where the risk is low of separate lawsuits over individual harms. That gives the mechanism some beneficial deterrent effect.

And hey, frivolous lawsuits are just a side effect of liberty! We wouldn’t, say, institute commonsense gun regulations just because one guy hauls off and massacres a school, right? So why would we impose onerous restrictions on the right to pursue legal redress just because some idiot doesn’t understand how lumber works?

At the end of the day, it’s hard to get beyond Professor Fitzpatrick’s core point that class actions, whatever faults they may harbor, are the most conservative, small-government approach to protecting individual consumers. Every reform effort just increases the pressure for government intervention to protect consumers — hardly the outcome a conservative would seek.

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Today, Professor Fitzpatrick is a heretic on this front. But Galileo had his detractors too.

Do Class Actions Deter Wrongdoing? [SSRN]
Law prof (and ex-Scalia clerk): Evidence shows class actions deter corporate misconduct [Reuters]

Earlier: Lawsuit: Home Depot Selling 4x4s That Aren’t 4 Inches By 4 Inches! Everyone Else: They Aren’t Supposed To Be, Moron.


HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.