WORKSHOP TRANSCRIPTS

Georgetown Journal of Legal Ethics, The, Fall 2005

FTC WORKSHOP-PROTECTING CONSUMER INTERESTS IN CLASS ACTIONS

September 13-14, 2004

Panel 1: The Use of "Coupon" Compensation and Other Non-Pecuniary Redress

The following is a transcript of a panel discussion from a workshop, Protecting Consumer Interests in Class Actions, co-sponsored by the Federal Trade Commission and The Georgetown Journal of Legal Ethics.1

MS. KOLISH

Good morning, everyone. I'm the Associate Director for the Division of Enforcement in the Bureau of Consumer Protection. My division, along with many colleagues from other offices, have had the pleasure of putting together this event today.

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And now, I'd like to introduce the new chairman of the FTC, Deborah Platt Majoras. As you know, Chairman Majoras is a distinguished antitrust practitioner who also has experience doing class action litigation, but in the short few weeks she has been here she has demonstrated a great deal of interest in the consumer protection law that we practice here, and she's rapidly becoming a master of those issues.

Now, this comes as no surprise to me because I believe that all antitrust lawyers, whether they know it or not, secretly want to be consumer protection lawyers. And why not? After all, it's the stuff that vividly, directly, and personally affects all of us. And I think it just has to be more fun than figuring out whether paper cups or Styrofoam cups are in the same market. So that's my take on consumer protection and antitrust. And with that, Chairman Majoras.

CHAIRMAN MAJORAS

Good morning and welcome to the Federal Trade Commission's workshop on Protecting Consumer Interests in Class Actions. I'd like to extend a special welcome to our fellow enforcers with the states, and I'd also like to recognize our distinguished members of the judiciary who are here with us today.

The Honorable Diane Wood, Circuit Court of Appeals judge for the Seventh Circuit; the Honorable Brock Hornby, U.S. District Court judge for the District of Maine; the Honorable Vaughn Walker, U.S. District Court judge for the Northern District of California; the Honorable Lee Rosenthal, U.S. District Court judge for the Southern District of Texas; and the Honorable Ann Yahner, Administrative Law judge for the District of Columbia, Office of Administrative Hearings. We're very grateful for your participation in our workshop.

I'd also like thank the Georgetown Journal of Legal Ethics, our co-sponsor, and in particular, Jaimie Kent, the editor of the Journal. The Journal will be publishing a transcript of our proceedings, and I understand also that if you are inspired by our workshop to write, that they will, in fact, be accepting articles for publication.

I am particularly pleased to open this workshop, my first as FTC Chairman. As most of you know, and as Elaine has reminded us, I am an antitrust lawyer, and I've long understood that the goal of antitrust is to protect and enhance consumer welfare.

Since joining the FTC-Elaine is right-I have immersed myself also in the FTC's vital consumer protection mission, which has the same goal. And as I have learned in just the last month, FTC should be the acronym For The Consumer, which aptly summarizes the joint goal of both our competition and our consumer protection missions.

In holding this workshop, we continue the FTC's practice of hosting fora to discuss issues of concern to consumers. Private litigation in both the competition and consumer protection fields has always played a significant role in compensating consumers and in deterring wrongful conduct. Managed appropriately, consumer class actions can be an effective and efficient way to do both.

As consumer class actions have evolved over time however, concerns have been raised about whether some of these actions, and in particular some of the settlements of these actions, truly serve consumers' interests by providing them appropriate benefits.

Under the leadership of my predecessor, former Chairman Tim Muris, the Commission sought to address these concerns by initiating the Class Action Fairness Project. The goal of that project was simple: to ensure that when consumers have meritorious claims they get meaningful, not illusory, relief.

It's now time to evaluate the results of this project as well as to examine the benefits and shortcomings of the class action mechanism. As my colleague Commissioner Tom Leary has stated, the FTC is a very small agency with a very large mission. And as such, we have never been shy about asking for help.

To this end here, we have enlisted an impressive array of experts from the bench, the bar, and academia to help us explore the complex issues raised by class actions. And I know that the Commission will benefit from the expertise of our assembled panelists, and we hope those of you in the audience.

Since the FTC began the project, many observers have asked why the FTC is involved in the consumer class action area at all. Contrary to what some may have concluded, the FTC is not opposed to class actions. Rather, the FTC is interested in consumer class actions, and in particular, consumer class action settlements, because they raise issues that are at the core of the FTC's consumer protection mission.