Monday, May 7, 2012
David Segal has provided blog fodder for us before, both in his role as the bête noire of the legal profession, and in his more mild-mannered guise as author of the New York Times' column "The Haggler" (lacking a public domain image depicing haggling, we have settled from an image from an open-air market, a prime locus for haggling). Nancy Kim posted most recently on the "The Haggler" column. We have posted on Mr. Segal's smack-downs on law schools here and here. Sunday's column is, once again, right up our alley.
Its topic is the fall-out from the Supreme Court's recent trilogy of arbitration decisions about which we have blogged incessantly. Mr. Segal's column will add little to our readers' knowledge base on the subject, but it's nice to have a popular column that provides a useful recap of the state of play. The main ground covered in Sunday's "The Haggler" can be summarized as follows:
- Post Concepcion, most consumer class actions are being dismissed in favor of arbitration at which class action resolution is not available;
- Businesses oppose class actions on the ground that they result in "settlements in which lawyers take home millions in fees and consumers wind up with piddling sums, often in the form of coupons";
- According to the Camber of Commerce, "the class-action system is flawed because it is designed by and for lawyers," but arbitration "can work";
- However, as Judge Posner pointed out, “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”
At this point, "The Haggler," having satisfied journalistic conventions by citing arguments from both sides, throws up his hands and suggests that there must be some better option. A fair arbitration system might work, but many people do not even know that they are entitled to make a claim, and the class action option enlightens them.
"The Haggler" misses the point. The problem with $30 claims is not that people do not know that they have them but that they have no incentive to bring them even if they know. Even if the arbitrataion is paid for by the defendant, it's just not worth the time. Moreover, class actions are a public good in that they hold corporate defendants accountable in ways that matter and can have prospective effects that help plaintiffs and others similarly situated even if the plaintiffs in the class actions end up only with coupons. Plaintiffs are not the ones complaining, litigating and lobbying to get rid of class actions.
The argument that the class action system is flawed because it is designed by and for lawyers is specious. Arbitration clauses are also designed by lawyers, and where exactly is the evidence that the class action system was desigend for lawyers? Was the criminal justice system designed for lawyers because they get paid to litigate criminal proceedings, while neither crime victims nor criminal defendants stand to gain?