Abnormal Interviews: Ted Frank of the Center for Class Action Fairness

Today, Abnormal Use continues its series, “Abnormal Interviews,” in which this site will conduct interviews with law professors, practitioners, and other commentators in the field. For the latest installment, we turn to the founder of the Center for Class Action Fairness and an Adjunct Fellow at the Manhattan Institute, Ted Frank. We have cited Mr. Frank often in connection with our work on the Stella Liebeck McDonald’s hot coffee case. He was kind enough to give us his thoughts on that famous case as well as his other projects. The interview is as follows:

1) What do you think is the most significant recent development in torts and product liability litigation?

It goes beyond tort and product-liability litigation to some extent, but the erosion of the preemption doctrine is of some concern. It’s ironic that, even as we see the federal government assert its authority over local affairs in legislation such as PPACA and cases like United States v. Arizona, we’re simultaneously seeing this administration insist that state court juries should exercise dominion over interstate commerce already fully regulated by the federal government. This seems precisely backwards.

2) The Wall Street Journal has a characterized you as a “leading tort reform advocate.” In your view, why is tort reform needed in our system, generally, and in product liability litigation, specifically?

I view tort reform as a means to an end, rather than an end in and of itself. I consider myself a consumer advocate, and it just so happens that the pendulum of the legal system has swung so far in favor of lawyers that consumers are being hurt, and tort reform is needed to restore balance. If ever the pendulum swings too far the other way, you’ll see me switch sides on these debates. As it is, if anyone asks me, I tell them I oppose collateral source reform, which just punishes individuals with the foresight to purchase insurance.

There are so many places where reform is needed. The judiciary and the bar aren’t doing enough to punish or deter fraudulent cases. We have very sensible rules that courts don’t second guess the good faith decisions of lawyers or prosecutors, or the exercise of business judgment by executives, but those rules are thrown out the window when it comes to second guessing the design decisions of engineers or the judgment calls of physicians, though there is every reason to believe that courts are even less likely to get those questions right, especially in hindsight. And uncapped noneconomic or punitive damages introduces an element of complete randomness into the system. Even when the system is considered to be “working,” the majority of the expense of the system goes to paying the administrative costs of the attorneys rather than to the putative victims: we wouldn’t tolerate that level of overhead in any other sector of the public or private economy. All of these features distort incentives, deter innovation, result in unjust punishment of the innocent, and hurt the economy and consumers in the long run.

3) Recently, we here at Abnormal Use have written several pieces regarding the Stella Liebeck hot coffee case in which we have cited some of the articles you have written on the subject. Why have you taken an interest in that litigation, and why is it important to dispel some of the “urban legends” that have arisen?

For twenty years I’ve had an interest in urban legends (I was friends with the Snopeses before there was a snopes.com), and several of them stem from the legal arena. One of my favorites involves the Baby Ruth bar: it’s a famous trivia answer that the candy bar was named after Grover Cleveland’s daughter, rather than the baseball player Babe Ruth. Snopes and I did some research in the 1990s, and concluded that the “Grover Cleveland’s daughter” story was almost certainly invented for purposes of trademark litigation against Babe Ruth, who had a competing candy bar.

The Stella Liebeck case was exactly the sort of thing that turns into an urban legend, and there are certainly a lot of inaccuracies that crept into the story as it went viral. The Liebeck case got politicized, however: it was an outrageous result and picked up as a poster child for tort reform, and, fascinatingly, the trial lawyer lobby, instead of reasonably saying “Look: the justice system is never going to be 100 percent correct, there have been a dozen hot coffee cases before this one where the courts got it right and threw it out, and you can’t make public policy based on a single anecdote just because the judge made a mistake here” decided to engage in a misinformation campaign to argue that the Liebeck case was both correct and an aspirational result for our tort system – and a disturbing number of law professors joined that cause. If you Google for the case, the vast majority of results are trial-lawyer sites filled with misstatements of the facts and laws. It’s gotten to the point that, in the majority of tort reform debates I participate in, it’s the trial lawyer who is the first to introduce the subject. I’ve been following the case and rebutting the misinformation on both sides since it first made the news, and it just so happens that the majority of misinformation is coming from the plaintiffs’ lawyer side these days. One of these days, I’ll lock myself in a room for a couple of weeks and write a law review article on the subject so there can be a one stop place for truthful information and arguments about the case.

I have a popular talk I give to law schools where I talk about the hot coffee case and a couple of other lawsuits against McDonald’s called “The Law of McDonald’s” and use that as the framework to talk about the two visions of tort law: personal responsibility versus deep pocket compensation of victims, and why I prefer the personal responsibility route.

4) As the founder of the Center for Class Action Fairness, you have sought to protect the interest of consumers in class action settlements. In your opinion, what needs to be done in order to balance the interest of consumers in class action settlements with the need for tort reform?

Assuming that the Supreme Court doesn’t do anything crazy in the Wal-Mart case, the law is, for the most part, in the right place, and it’s just a question of judges exercising their responsibility to apply it correctly – which is hard to do when the settling parties are making an ex parte presentation to the court, and good-faith objectors don’t have the financial incentive to hire a lawyer to make sure the court gets it right. That’s why I do the pro bono representation that I do: someone’s got to do it.

There are certainly some legislative tweaks possible to resolve some ambiguities in the law that class action lawyers have used to benefit themselves at the expense of consumers. I don’t think it’s a tort reform thing; it should be a bipartisan good government thing. Plaintiffs’ lawyers, as a group, should be supporting what I do, because class action lawyers like Milberg and like Kabateck Brown Kellner make them all look bad when they negotiate settlements that don’t do anything for the class but pay the lawyers millions.

BONUS QUESTION: What do you think is the most interesting depiction of products liability and/or class actions in popular culture, and why?

I have a toy figurine of Lionel Hutz on my bookshelf, but his only class action was the consumer fraud case against the makers of the film The Neverending Story. Larry Ribstein’s scholarship on why Hollywood so consistently gets these issues wrong explains why I find this question tough, but I enjoyed the first half of John Grisham’s The King of Torts for its depiction of a corrupt class action settlement that never would have survived Amchem scrutiny. I’m told I should read Gregg Easterbrook’s The Here and Now, which might well supplant Grisham if I ever get around to it. There’s also Michael Clayton, which takes me back to my days as a law-firm associate setting car bombs for adverse witnesses; it amuses me no end in the scene where the lawyer complains that the case had 85,000 documents and 100 motions. The problem with Grisham is that his books repeatedly have a critical plot point where somebody bribes a state court judge to decide a federal removal motion some way, and it just ruins the book for me when the author gets a federal jurisdiction question so wrong. They really should teach 28 USC § 1446 at the Iowa MFA program.

BIOGRAPHY: Ted Frank is an attorney licensed in Illinois, the District of Columbia, and California and a graduate of the the University of Chicago Law School. He served as the first director of the American Enterprise Institute Legal Center for the Public Interest and was an attorney for the McCain-Palin 2008 campaign. He is currently an Adjunct Fellow at the Manhattan Institute and runs the Center for Class Action Fairness, which he founded in 2009. He is a contributor to fellow legal blogs PointOfLaw and Overlawyered. You can follow him on Twitter here.

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