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Pittsburgh, California, 2001.

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Betty Dukes is a Walmart greeter.

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She's worked there for years.

4
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She has watched men with less experience, lower performance ratings, get promoted over her
repeatedly.

5
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She files a complaint internally, nothing happens.

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She finds a lawyer.

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And what starts as one woman in one store in one town eventually becomes the largest
employment discrimination class action in American history.

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1.5 million women, every region, statistical evidence showing women paid less, promoted
less, evaluated better, and rewarded worse, systemically, nationally, at scale.

9
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And then 10 years later, 2011, the Supreme Court kills it, 5 to 4.

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Scalia writes the majority, of course.

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The reason is essentially Walmart had an official policy against discrimination and local
managers just happened to exercise their discretion in ways that disadvantage women

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everywhere, all the time, in every store.

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That's not a common question of fact.

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That's just coincidence.

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Imagine if you could resolve any legal dispute that way by saying, no, we have a policy.

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We can't discriminate a true because we have a policy that says we don't.

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But 1.5 million women, their case is just gone.

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Not because the evidence wasn't there, because the mechanism for holding them together got
pulled out from under them.

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And Betty Dukes, who started this, who put her name on a decade-long federal case against
the largest employer on Earth, she died in 2017.

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The case never recovered.

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Individual suits were theoretically still possible against Walmart alone.

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Good luck.

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And that's where we're starting today.

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Hey everybody, welcome to The Overlap.

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I'm Joshua.

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I'm William.

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Here's what today is actually about.

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And I wanna be precise because the topic gets flattened into lawyers are greedy.

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And that framing is doing a lot of work for people who benefit from you believing that.

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A lot of work.

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May 10th, 2026, a press release drops.

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Bronstein, Gerwitz and Grossman, investor rights firm, announces a class action against
Cody Incorporated, the cosmetics company, if you're not familiar, shareholders who bought

33
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between December 20th, or sorry, November 2025 and February 2026, allegedly got a steady
diet of glowing growth projections while the company's consumer beauty segment was quietly

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underperforming.

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Margins were getting squeezed.

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and the prestige fragrance business was decelerating.

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The stock drops, the people holding it lose money like we talked about in our last
episode, and the only mechanism available to them, the only one is this, a class action

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lawsuit filed by a law firm working on contingency only, meaning they only get paid if
they win.

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And I want our listeners to reflect on this for a second.

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Not the Cody case specifically, but what it represents.

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There's no federal agency swooping in to help these people.

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There's no regulator who caught this in real time.

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There's a press release and a deadline of May 22nd to join the suit.

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And that's the system.

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That's the whole system.

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And what we're doing today is tracing how we got here.

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From 1966 when Rule 23 was amended to create the modern class action through the tobacco
settlements, through Betty Dukes, through the opioid litigation that forced Purdue

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Pharma's internal emails into public daylight to right now in 2026, where the Supreme
Court has spent 15 years systematically handing corporations the tools to wrote around

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the courthouse entirely.

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The picket line is gone, the regulator is defanged, and the class action is for better or
worse, the last place where ordinary people can make a corporation answer a question in

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public.

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Today we're gonna show you exactly how that happened, who made it happen, and what it
costs when even that last door starts closing.

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Let's go.

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February 1994, Albuquerque, New Mexico.

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A 79 year old woman named Stella Lyebeck is sitting in the passenger seat of her
grandson's Ford Probe in a McDonald's drive-through.

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She puts the coffee cup between her knees to add cream and sugar.

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The lid comes off 190 degree coffee.

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Not hot coffee, not really hot coffee, but coffee held at a temperature McDonald's
internal quality guidelines mandated.

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Soaks through her sweatpants, stays against her skin.

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She suffers third degree, that's full tissue burns, across 16 % of her body, thighs,
groin, butt.

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She spent eight days in the hospital.

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She had skin grafts.

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She was partially disabled for two years.

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and she asked for $20,000.

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$20,000 in 1994 to cover her medical bills.

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McDonald's offered her $800.

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$800.

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And here's the document that changes everything about how you understand that number.

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McDonald's had received over 700 prior complaints about burns from their coffee.

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700 people had already told them.

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Their own internal QA manager testified.

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that 180 to 190 degrees was the mandated serving temperature of their coffee.

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Their own witnesses said they had no intentions of changing it.

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So they knew.

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That's not negligence anymore, that's recklessness.

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That's a spreadsheet someone looked at and decided was an acceptable risk.

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The jury awarded her $2.7 million in punitive damages.

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You know, they got that number two days of McDonald's coffee revenue in 1994.

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This was before the McCafe thing, but that's it.

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That's the math.

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The judge reduced it to $480,000.

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It settled confidentially on appeal for an amount that nobody's allowed to know.

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And for the next 30 years, it became the punchline, the symbol of lawsuit abuse.

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The reason we needed tort reform.

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A woman who spilled coffee on herself and hit the jackpot.

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The Chamber of Commerce spent millions making sure that's the story people remembered.

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They did.

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And here's what that framing basically accomplished.

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It trained an entire generation of Americans to see the plaintiff as the villain, to see
the lawsuit as greed, to look at Stella Liebeck and laugh instead of looking at the 700

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complaints McDonald's buried and asking what kind of system lets a corporation do that
math and just keep doing it.

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And she was trying to pay her medical bills.

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I that's the whole story.

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That's it.

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That's what she asked for.

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She asked for 20K, that's it.

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That case is in 1994, right?

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So go back 30 years earlier, 1966, a committee of federal judges and lawyers, the Advisory
Committee on Civil Rules, amends Rule 23 of the Federal Rules of Civil Procedure.

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It's not a law, it's just a procedural rule.

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Nobody writes a headline, but what it does is this.

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It creates a mechanism where thousands or sometimes millions of people with the same
injury, the same defendant,

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The same wrong done to them, people who could never afford to sue individually can
aggregate their claims into a single action.

102
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One lawsuit, one discovery process, one set of documents forced into daylight.

103
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And that's really the design and I'm sure we'll talk about this some more.

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But the whole point is that in a class action, all of the plaintiffs are similarly
situated.

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There are enough of them to make it worthwhile.

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And when you put that group together, it just simplifies everything for everybody.

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It makes it more efficient.

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There's one lawsuit, like you said, one discovery process.

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Everything, every motion has to be handled one time rather than 30 times or 50 times or a
hundred times or 700 times.

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But that's the explicit intent.

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It's all about an individual claim that's too small to litigate on its own.

112
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Somebody's really hurt here, but the economics don't work to have one big lawsuit for that
one person.

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The class action makes it work by making it efficient for everybody.

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Yes, exactly.

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So think about what that means from a systems perspective, right?

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You've got a corporation that has done something harmful to a million people in a way that
costs each of them $40.

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Okay.

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No individual sues over $40.

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No attorney will take a case on contingency for $40.

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The corporation has basically found a theft that's structurally immune to accountability.

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Rule 23 breaks that immunity.

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It says,

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aggregate the harm, aggregate the standing, and make the economics work.

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And for about 25 years it did work.

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Imperfectly, expensively, slowly, but it worked.

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and then we hit the 90s.

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And so I wanna spend time here because this is the moment where the class action stops
being a procedural mechanism and becomes something else entirely.

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It becomes the only functioning accountability system that we have left.

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And that's all tied to the tobacco litigation.

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Right.

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In Mississippi in 1994, Attorney General Mike Moore is sitting across from a private
attorney named Ron Motley, and they have a theory.

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The tobacco companies have internal research, research they funded, research their own
scientists produced, showing that nicotine is addictive and their products cause cancer.

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They suppressed it.

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They lied to Congress.

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They lied in advertising.

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Nine out of 10 doctors agreed.

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and the states have been paying Medicaid costs for decades to treat the people dying from
diseases the companies knew their products caused.

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Right, that's the part that everybody that votes for supposed quote unquote tort reform,
that's what they need to know.

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You're actually already paying for all of the harm that these corporations have done by
paying for the Medicaid costs for people who need it.

140
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Exactly.

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And they did, right?

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And other states joined.

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Private class action attorneys joined.

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Dick Scruggs, who was Trent Lott's brother-in-law, had already made a fortune on the
asbestos litigation, which brought organizational muscle.

145
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They knew how to do this.

146
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They knew how to pull it off.

147
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And what the litigation forced before a single dollar had been paid in that litigation was
discovery.

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Those internal documents, the Brown and Williamson documents, the

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Liggett documents, memos showing executives discussing nicotine manipulation, research
showing they'd known about cancer links since the 50s.

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So 40 years of purposeful, deliberate concealment dragged into courtrooms and onto front
pages of newspapers.

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And keep in mind, you couldn't regulate your way to those documents.

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No agency had subpoena power broad enough or political will strong enough to get there.

153
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And the FDA had tried, right?

154
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The FTC had tried.

155
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Congress had held hearings where tobacco executives stood in a row and under oath said
that they did not believe nicotine was addictive and nothing happened.

156
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The regulatory system was captured, had been captured for decades.

157
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The litigation wasn't some sort of substitute for a regulation.

158
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It was the proof that regulation had failed entirely.

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to the tune of about $206 billion.

160
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There it is.

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That's what the master settlement agreement required the companies to pay the states over
25 years.

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And again, this is reimbursing the states for the money that they laid out to pay for all
their citizens who were addicted to these little cancer sticks.

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ah But that's the pace.

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pays them for, they pay the states over 25 years and then they are restricted in their
marketing, right?

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No more Joe Camel, no more billboards near schools to get their next generation addicted.

166
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Yeah, and then 1998, right?

167
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The largest civil litigation settlement in American history extracted not by federal
agency, but by state attorneys general and plaintiffs lawyers working on contingency.

168
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So think about that for a minute.

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my former boss.

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If you're listening to this right now and you've ever heard someone say class action
lawyers are ambulance chasers, think about what the alternative to Ron Motley and Dick

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Scruggs was.

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The alternative was nothing.

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The alternative was the tobacco companies keeping those documents sealed forever.

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And then 2011 arrives and the Supreme Court starts doing something very specific and very
deliberate.

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Two decisions, same year, same justice, riding the majority in both.

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First, Walmart versus Dukes, Betty Dukes, we talked about earlier, was a Walmart greeter
in Pittsburgh, California, not Pennsylvania.

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And she had performance reviews showing she's good at her job.

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She'd been passed over for promotion after promotion.

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She started asking around and discovered a pattern.

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Women across the company are paid less than men in comparable roles, promoted at lower
rates, and the mechanism is the same everywhere.

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Local managers have discretion and let discretion run in only one direction.

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She files a class action.

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It gets certified to represent 1.5 million women, the largest employment discrimination
class action in history.

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Again, this is 1.5 million women who all have the same evidence.

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Statistical analyses showing the pattern holds in every region, every division of Walmart,
women with higher performance ratings than the men who got promoted over them.

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And Antonin Scalia writes the majority, five to four.

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There's a lot of things that are being brought into light even today with such a slim
margin.

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But he says, Walmart's official policy is against discrimination.

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The fact that local managers exercise their discretion in a discriminatory way doesn't
create a common question of law or fact across the class.

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The company's policy of allowing discretion is not itself a discriminatory policy.

191
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I'll sit with that logic for a second.

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Walmart's official policy says don't discriminate.

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One and a half million women across every region of the country experience discrimination.

194
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And the court says no common question because each of the managers in each of those
situations exercised his or her, and let's face it, it's just in discrimination every

195
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time, right?

196
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So individuals could discriminate, but as long as there wasn't a company policy, there's
no class.

197
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Right.

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No common question.

199
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And I say this with complete sincerity, one of the most elegant pieces of legal
architecture for protecting corporate wrongdoing ever constructed.

200
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Because what it means in practice, if your discrimination is decentralized enough, if you
hand the prejudice down to individual managers, instead of writing it into a policy

201
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manual, you are structurally immune to class treatment.

202
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You can discriminate at industrial scale and no class can ever form around.

203
00:15:05,478 --> 00:15:11,102
I mean, every case has to be brought individually against each specific act of
discrimination.

204
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So Betty Dukes dies in 2017.

205
00:15:13,684 --> 00:15:16,386
The case never goes back to trial as a class.

206
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Individual plaintiffs could technically still sue, like I said, individually against the
world's largest employer with an army of lawyers.

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No class resources, no shared discovery, no pooled evidence.

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That same year, AT &T Mobility versus Conception, Vincent and Liza Concepcion brought a
phone plan that advertised free phones, but AT &T charged them $30.22 in sales tax on the

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free phone.

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They tried to join a class action.

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AT &T pointed to the arbitration clause buried in their service contract, a clause that
included a waiver of the right to

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participate in any class action.

213
00:15:58,047 --> 00:16:03,484
So you're stuck suing individually for your $30, which nobody sues for $30 by themselves.

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00:16:03,484 --> 00:16:05,255
Right, Scalia again.

215
00:16:05,255 --> 00:16:16,071
The Federal Arbitration Act preempts state laws that would void class action waivers in
arbitration agreements, which means if a company puts an arbitration clause in a consumer

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contract, terms of service, credit card agreement, cell phone plan, employment offer, they
can require you to arbitrate it individually and waive your right to a class.

217
00:16:27,648 --> 00:16:29,108
And you agree to it.

218
00:16:29,108 --> 00:16:32,350
It's in the fine print you didn't read because nobody reads

219
00:16:32,612 --> 00:16:34,715
It's designed not to be read.

220
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Right.

221
00:16:35,929 --> 00:16:38,789
And again, keep in mind, this is not leaving the decision to the states.

222
00:16:38,789 --> 00:16:43,809
This is saying the states cannot write laws that contradict the federal arbitration act.

223
00:16:44,289 --> 00:16:47,089
So your state can't even help you in this situation.

224
00:16:47,089 --> 00:16:50,389
And the crazy thing is it helps the bigger companies even more, right?

225
00:16:50,389 --> 00:16:56,009
Because the more you're widespread, the more you're across state borders, you're a federal
issue.

226
00:16:56,009 --> 00:16:57,749
It's a federal issue, not a state issue.

227
00:16:57,718 --> 00:17:02,418
So the 1966 amendment to rule 23 was written to solve exactly that problem.

228
00:17:02,438 --> 00:17:12,358
You got a small individual harm, no viable individual lawsuit, and so you aggregate it
into a class, and Concepcion lets the corporations dissolve that aggregation before any

229
00:17:12,358 --> 00:17:13,758
dispute ever arises.

230
00:17:13,759 --> 00:17:23,056
By contract, before you're even injured, before you know there's anything to sue about,
you've already signed away the entire mechanism to sue.

231
00:17:23,057 --> 00:17:30,729
And the crazy part is that 60 million American workers are now covered by mandatory
arbitration clauses with class waivers.

232
00:17:30,729 --> 00:17:36,970
60 million people who, their employer does to them what Walmart did to Betty Dukes, have
no class action available.

233
00:17:36,970 --> 00:17:41,907
They have a private arbitrator paid in part by the company and the company's a repeat
player, right?

234
00:17:41,907 --> 00:17:45,892
They're going to keep hiring these arbitrators if they give them favorable decisions.

235
00:17:46,593 --> 00:17:52,654
And those decisions are confidential, create no precedent in law, and are nearly
impossible to appeal.

236
00:17:52,905 --> 00:17:57,277
room didn't replace the picket line because litigation is somehow better.

237
00:17:57,297 --> 00:18:01,980
It replaced it because everything else was methodically dismantled.

238
00:18:02,060 --> 00:18:05,261
And then they started working on the courtroom.

239
00:18:05,262 --> 00:18:13,667
So after 60 million workers, let's talk about what happens when the arbitration wall holds
and the class action is the only door left open.

240
00:18:13,667 --> 00:18:16,649
Because it still opens sometimes.

241
00:18:16,649 --> 00:18:19,550
And when it does, you see exactly what it's protecting.

242
00:18:19,551 --> 00:18:21,402
like in the opioid litigation.

243
00:18:21,402 --> 00:18:22,502
Exactly.

244
00:18:22,583 --> 00:18:27,464
MDL 2804, Northern District of Ohio.

245
00:18:27,605 --> 00:18:40,690
Thousands of local governments, hospitals, Native American tribes, individual plaintiffs,
all consolidated into one of the largest multi-district litigations in American history

246
00:18:40,690 --> 00:18:47,053
against Purdue Pharma, Johnson & Johnson, McKesson, Cardinal Health, Amerisource Bergen.

247
00:18:47,053 --> 00:18:48,323
The allegation?

248
00:18:48,367 --> 00:18:57,111
They flooded communities with prescription opioids while lying about addiction risk, not
negligently, but deliberately.

249
00:18:57,112 --> 00:19:05,108
And what the litigation produced before even a single trial verdict was the documents,
internal documents that showed the strategy the company was pursuing.

250
00:19:05,108 --> 00:19:09,555
If you've not seen this movie about the Sacklers, you should check it out.

251
00:19:09,555 --> 00:19:11,298
I forget the title of it.

252
00:19:11,298 --> 00:19:12,238
see.

253
00:19:12,489 --> 00:19:16,174
Purdue Pharma movie.

254
00:19:16,174 --> 00:19:18,156
I think it was, was it Steve Carell?

255
00:19:18,407 --> 00:19:19,105
Painkiller.

256
00:19:19,105 --> 00:19:25,106
I'm thinking Aaron Eckhart maybe or painkiller that sounds right.

257
00:19:25,312 --> 00:19:27,752
think it's on Netflix, Matt Broderick.

258
00:19:27,752 --> 00:19:28,312
That's who it was.

259
00:19:28,312 --> 00:19:29,072
Matthew Broderick.

260
00:19:29,072 --> 00:19:32,192
was the, he was in, in that movie there.

261
00:19:32,192 --> 00:19:40,872
So, uh, check out painkiller on Netflix if you haven't already, if you need to borrow your
mom's password or something to watch Netflix, give it a shot.

262
00:19:41,112 --> 00:19:51,292
But Richard Sackler, who was the former chairman of Purdue Pharma in 2001, after the news
story ran about Oxycontin addiction, he sent an email.

263
00:19:51,486 --> 00:19:59,779
His proposed solution was to, and I quote, hammer on the abusers in every way possible.

264
00:19:59,780 --> 00:20:12,465
Now that email exists because of litigation, not because of a regulator, not because
Congress, because the attorneys of those plaintiffs spent years in discovery, forcing

265
00:20:12,465 --> 00:20:17,167
document production that the FDA could not compel by law.

266
00:20:17,418 --> 00:20:24,522
Right, and there's a philosophical point buried in that which I think people miss, which
is that the courthouse at its best has a subpoena power, right?

267
00:20:24,522 --> 00:20:25,793
It has discovery.

268
00:20:25,793 --> 00:20:31,416
It can reach into a corporation's internal communications in a way that a press release or
a shareholder call cannot.

269
00:20:31,536 --> 00:20:37,309
The adversarial process for all its many dysfunctions has teeth that journalism and
regulation have largely lost.

270
00:20:37,310 --> 00:20:39,641
when the regulation even exists.

271
00:20:39,782 --> 00:20:46,460
When the regulator isn't captured, when the agency has funding, the tobacco litigation in
the 90s worked the same way.

272
00:20:46,460 --> 00:20:57,355
30 years of FDA and FTC regulatory failure, and it was state attorneys general and
contingency fee plaintiffs lawyers who finally got those documents out.

273
00:20:57,355 --> 00:21:03,429
The $206 billion master settlement agreement, not a regulator, but a lawsuit.

274
00:21:03,680 --> 00:21:07,900
And then the Supreme Court spent the next two decades making the next version of that
harder.

275
00:21:08,184 --> 00:21:09,094
Right.

276
00:21:09,235 --> 00:21:13,067
So we've talked before about the Walmart v.

277
00:21:13,067 --> 00:21:14,534
Dukes in 2011.

278
00:21:14,534 --> 00:21:21,282
um Betty Dukes being the greeter from Pittsburgh, California, mentioning her again.

279
00:21:21,282 --> 00:21:28,316
But that five to four settlement, the class action cannot proceed because Walmart's
official policy was against discrimination.

280
00:21:28,316 --> 00:21:31,788
The local managers had the discretion, yada, yada, yada.

281
00:21:31,788 --> 00:21:36,320
Scalia's reading is a common question.

282
00:21:36,778 --> 00:21:49,897
The fact that managers used that discretion in a consistently discriminatory pattern
across every region of the country was not the question that he was asking.

283
00:21:49,898 --> 00:21:51,681
So stop and think about what that standard does.

284
00:21:51,681 --> 00:21:59,333
If a company has a written anti-discrimination policy and then systematically
discriminates anyway, the written policy becomes the shield.

285
00:21:59,454 --> 00:22:03,921
The more sophisticated the paper trail of compliance, the harder it is to certify a class.

286
00:22:04,417 --> 00:22:08,576
which every corporate HR department learned immediately from that moment forward.

287
00:22:08,576 --> 00:22:16,861
Document the policy, delegate the discretion, distribute the liability until it's too
diffuse to aggregate.

288
00:22:17,234 --> 00:22:18,676
Again, not an accident.

289
00:22:18,676 --> 00:22:24,181
That's a lesson that got taught in 2011 and has been applied in every employment
discrimination case since.

290
00:22:24,471 --> 00:22:34,847
Yeah, the chamber of commerce suit uh that was filed previously that Will was talking
about, they filed an amicus brief in that Duke's case and they file in virtually every

291
00:22:34,847 --> 00:22:38,019
major class action case before the Supreme Court.

292
00:22:38,019 --> 00:22:46,183
Their Institute for Legal Reform spent $29 million on lobbying in a single recent year.

293
00:22:46,484 --> 00:22:51,086
They publish an annual list of quote, judicial hellholes.

294
00:22:51,087 --> 00:22:59,807
jurisdictions they consider to be plaintiff friendly, to pressure state legislatures into
restricting access to courts.

295
00:22:59,849 --> 00:23:08,100
They have won roughly 70 % of Supreme Court cases in which they've filed those amicus
briefs in recent uh terms.

296
00:23:08,101 --> 00:23:12,770
The 70 % success rate, those companies are getting what they paid for with their Chamber
of Commerce.

297
00:23:12,988 --> 00:23:13,778
Exactly, 70%.

298
00:23:13,778 --> 00:23:16,680
That's not a coincidence, right?

299
00:23:16,680 --> 00:23:29,066
That's an institution that has spent decades and hundreds of millions of dollars shaping
the composition of federal courts and the legal arguments that appear in front of them.

300
00:23:29,107 --> 00:23:36,590
The $1.5 billion in total lobbying between 1998 and 2022, that's across all issues.

301
00:23:36,811 --> 00:23:41,723
But the judicial reform project is its own sustained campaign.

302
00:23:41,724 --> 00:23:43,446
Here's what I the listener to actually sit with.

303
00:23:43,446 --> 00:23:45,318
Again, you're not in that room.

304
00:23:45,318 --> 00:23:47,060
You're not in the amicus brief.

305
00:23:47,060 --> 00:23:50,143
You have no institutional presence before the Supreme Court.

306
00:23:50,143 --> 00:24:02,096
What you have is one rule, a procedural rule, rule 23, which is consistently being
narrowed, carved out, know, arbitration clauses, which are being expanded, and an agency

307
00:24:02,096 --> 00:24:04,398
system that the court is actively dismantling.

308
00:24:04,399 --> 00:24:07,009
Loper-Brite in 2024.

309
00:24:07,031 --> 00:24:12,193
Roberts writes the majority here, which overturns the Chevron deference.

310
00:24:12,309 --> 00:24:21,639
40 years of doctrine that said federal agencies get deference in interpreting ambiguous
statutes within their expertise.

311
00:24:21,840 --> 00:24:22,860
Gone.

312
00:24:23,101 --> 00:24:30,595
Which means the EPA's interpretation of what counts as a regulated pollutant is
challengeable.

313
00:24:31,056 --> 00:24:37,842
The CFPB's interpretation of what constitutes an unfair lending practice, challengeable.

314
00:24:37,983 --> 00:24:42,046
OSHA's workplace safety standards, challengeable.

315
00:24:42,046 --> 00:24:47,541
Every binding industry regulation now becomes a litigation target.

316
00:24:47,542 --> 00:24:50,911
and the courts get to define their way into the facts that they want.

317
00:24:50,911 --> 00:24:54,078
And so the predicted consequence is exactly what you'd expect.

318
00:24:54,079 --> 00:24:58,272
And legal scholars started writing it before the ink was even dry.

319
00:24:58,272 --> 00:25:03,745
When agencies lose authority to set binding standards, the disputes don't disappear.

320
00:25:03,745 --> 00:25:04,605
They just migrate.

321
00:25:04,605 --> 00:25:07,777
They move into class action courts.

322
00:25:07,797 --> 00:25:15,421
Injured parties who used to have this regulatory enforcement option now only can litigate,
right?

323
00:25:15,421 --> 00:25:21,385
That's the only option they have in a litigation system that's been systematically
narrowed for over 30 years.

324
00:25:22,439 --> 00:25:26,082
Right, so the accountability doesn't go away, it basically gets privatized.

325
00:25:26,082 --> 00:25:34,189
Which means it goes to whoever can afford the contingency fee lawyer, or whose case is big
enough to be worth taking, whose harm is documentable enough to survive a motion to

326
00:25:34,189 --> 00:25:35,150
dismiss.

327
00:25:35,151 --> 00:25:36,023
Right.

328
00:25:36,023 --> 00:25:38,928
And what does that sound like?

329
00:25:39,069 --> 00:25:44,920
What political party do you hear that consistently talks about privatizing everything?

330
00:25:45,114 --> 00:25:46,652
Alright, small government.

331
00:25:46,652 --> 00:25:47,440
Exactly.

332
00:25:47,440 --> 00:25:49,421
And everyone else gets nothing.

333
00:25:49,422 --> 00:25:50,325
Nothing.

334
00:25:50,326 --> 00:25:52,106
The CFBP tried, right?

335
00:25:52,106 --> 00:26:00,286
In 2017, they finalized a rule banning mandatory arbitration clauses with class waivers in
financial products.

336
00:26:00,366 --> 00:26:09,206
Rohit Chopra, later CFPB director, has been pushing this for a number of years, but the
rule survived the rulemaking process.

337
00:26:09,206 --> 00:26:13,306
It was a direct legislative response to the Concepcion case.

338
00:26:13,306 --> 00:26:18,386
If the court won't protect the right to aggregate, then the CFPB will.

339
00:26:18,637 --> 00:26:21,665
Right, so Congressional Review Act, months later.

340
00:26:21,916 --> 00:26:24,888
Congress repealed it, 51 to 50.

341
00:26:24,888 --> 00:26:29,250
Vice President Pence at the time was the tie breaking vote.

342
00:26:29,250 --> 00:26:41,076
The rule that would have restored class action rights to millions of consumers of
financial products, credit cards, bank accounts, payday loans, gone before a single case

343
00:26:41,076 --> 00:26:42,537
was filed underneath it.

344
00:26:42,788 --> 00:26:45,403
And I want to be precise about the structural impact of that.

345
00:26:45,403 --> 00:26:48,509
The court said arbitration clauses are enforceable.

346
00:26:48,509 --> 00:26:50,532
The agency said we'll regulate that away.

347
00:26:50,532 --> 00:26:51,995
Congress said no, you won't.

348
00:26:51,995 --> 00:26:54,218
Three branches, one outcome.

349
00:26:54,219 --> 00:26:56,130
Which brings us to 2026.

350
00:26:56,130 --> 00:27:00,756
And here is where it gets specific in a way that I want you to notice.

351
00:27:01,029 --> 00:27:02,908
I'm talking about the Cody case again,

352
00:27:03,072 --> 00:27:03,972
Yes.

353
00:27:03,972 --> 00:27:11,852
So May 10th, 2026, Bronstein, Gerwitz and Grossman files a securities class actions
against Cody Inc.

354
00:27:12,052 --> 00:27:16,712
which on the New York Stock Exchange is COTY, the cosmetics company.

355
00:27:16,712 --> 00:27:19,492
The allegation is pretty straightforward securities fraud.

356
00:27:19,492 --> 00:27:30,236
During a class period from November 5th, 2025 through February 4th, 2026, Cody executives
made quote, overwhelmingly positive statements.

357
00:27:30,236 --> 00:27:34,336
about growth and profitability for the year 2026.

358
00:27:34,618 --> 00:27:38,959
Meanwhile, their consumer beauty segment was underperforming.

359
00:27:39,281 --> 00:27:42,503
Their prestige fragrance growth was decelerating.

360
00:27:42,503 --> 00:27:46,225
Their margins were being squeezed by marketing costs.

361
00:27:46,225 --> 00:27:50,747
And they didn't actually disclose any of this until they were required to.

362
00:27:50,748 --> 00:27:56,816
which is after investors bought in on the positive statements, the stock moved, and then
the reality sets in.

363
00:27:57,290 --> 00:28:01,991
And now a class action exists, not because a regulator caught it.

364
00:28:01,991 --> 00:28:10,733
The SEC has been hollowed out progressively for years, and it's continuing to be hollowed
out during this administration.

365
00:28:10,733 --> 00:28:23,336
Not because Cody's board decided that they had to act, but because a plaintiff's firm
decided the case was worth taking on contingency, meaning they only get paid if they

366
00:28:23,336 --> 00:28:26,597
recover something and filed that lawsuit.

367
00:28:26,598 --> 00:28:28,798
There's something kind of clarifying about a case like this.

368
00:28:28,798 --> 00:28:29,858
It's not opioids.

369
00:28:29,858 --> 00:28:31,758
It's not environmental catastrophe.

370
00:28:31,938 --> 00:28:36,158
It's a cosmetic company allegedly lying to investors about fragrance sales.

371
00:28:36,358 --> 00:28:37,758
And the mechanism is identical.

372
00:28:37,758 --> 00:28:41,598
The class period, the lead plaintiff appointment, the contingency fee structure.

373
00:28:41,738 --> 00:28:46,098
It's rule 23 doing exactly what it was designed to do way back in 1966.

374
00:28:46,099 --> 00:28:53,979
For investors who can get themselves appointed lead plaintiff by May 22nd, 2026, that's
the deadline.

375
00:28:54,079 --> 00:28:56,143
The machine has a deadline.

376
00:28:56,143 --> 00:28:59,958
If you miss it, you're in the class, but you're not driving it.

377
00:28:59,959 --> 00:29:01,551
which is also worth explaining a little bit.

378
00:29:01,551 --> 00:29:07,819
So if you own Cody stock during that window and lost money, you're potentially a class
member, whether you joined actively or not.

379
00:29:07,819 --> 00:29:11,063
The lead plaintiff shapes the litigation, but everyone else rides along.

380
00:29:11,063 --> 00:29:13,826
So you share in any recovery proportionally.

381
00:29:13,826 --> 00:29:15,998
You don't have to do anything except exist.

382
00:29:15,999 --> 00:29:20,983
And that structure is both genius and kind of the problem at the same time.

383
00:29:21,063 --> 00:29:26,887
It makes litigation viable for people with small individual losses.

384
00:29:27,138 --> 00:29:30,841
Nobody's hiring a lawyer over a few hundred dollars in stock losses, right?

385
00:29:30,841 --> 00:29:38,887
But it also means the people that were harmed the most often have the least control over
how the case is actually proceeding.

386
00:29:39,138 --> 00:29:41,389
The attorney is the real party in interest often.

387
00:29:41,389 --> 00:29:48,794
The contingency fee is the engine driving the litigation, which is not a criticism because
without that engine, that engine, the case doesn't exist.

388
00:29:48,794 --> 00:29:53,226
But it's worth being clear-eyed about what you're actually inside when you're inside a
class action.

389
00:29:53,227 --> 00:30:00,689
What you're inside is the last functioning public mechanism for corporate accountability
that hasn't been fully captured yet.

390
00:30:00,910 --> 00:30:04,766
That's not a celebration, it's a description of kind of what's left.

391
00:30:05,037 --> 00:30:06,597
and it's under attack.

392
00:30:06,758 --> 00:30:11,922
But the tobacco lawyers got $206 billion for the states and they got a percentage of that.

393
00:30:11,922 --> 00:30:15,945
The opioid lawyers got a percentage of the $15 billion in settlements.

394
00:30:15,945 --> 00:30:22,029
uh Peretz-Bronstein at Bronstein, Gerwitz and Grossman will get a percentage of whatever
Cody pays.

395
00:30:22,029 --> 00:30:23,971
The system runs on that incentive.

396
00:30:23,971 --> 00:30:28,053
But if you remove it, you don't get noble public interest litigation, you get nothing.

397
00:30:28,054 --> 00:30:36,174
The Sackler family extracted 10 to $11 billion from Purdue Pharma before the bankruptcy.

398
00:30:36,394 --> 00:30:48,794
They tried to use the bankruptcy reorganization to buy immunity from every civil lawsuit,
every individual plaintiff, every government, everyone with a single settlement payment.

399
00:30:48,794 --> 00:30:57,334
The Supreme Court did block it in 2024 in the Harrington versus Purdue Pharma, five to
four, so barely.

400
00:30:57,808 --> 00:31:07,011
Which means four justices would have let them buy their way out of civil accountability
entirely using the bankruptcy proceedings set forth by the federal government.

401
00:31:07,312 --> 00:31:16,835
Four sitting justices of the Supreme Court looked at a family that had extracted $11
billion while communities drowned in opioid deaths and said, eh the math works.

402
00:31:17,322 --> 00:31:18,883
They learned everything.

403
00:31:18,983 --> 00:31:20,784
They kept doing it anyway.

404
00:31:20,784 --> 00:31:22,185
The documents show that.

405
00:31:22,185 --> 00:31:23,986
The emails show that.

406
00:31:23,986 --> 00:31:26,157
The lobbying disclosures show that.

407
00:31:26,157 --> 00:31:29,309
The amicus briefs show that.

408
00:31:29,310 --> 00:31:35,840
And a cosmetics company in May of 2026 is allegedly telling investors its fragrance
business is fine when it isn't.

409
00:31:36,181 --> 00:31:41,369
Same mechanism, smaller stakes, same bet that nobody will be able to aggregate a response.

410
00:31:41,853 --> 00:31:45,593
Somebody did file, deadlines of 22nd.

411
00:31:45,594 --> 00:31:49,514
Next we have Stella Lyebeck at 79 years old.

412
00:31:49,514 --> 00:31:54,054
She was sitting in the passenger seat of her grandson's car at a McDonald's in
Albuquerque.

413
00:31:54,054 --> 00:31:55,774
She had a coffee cup between her knees.

414
00:31:55,774 --> 00:31:57,194
She added cream and sugar.

415
00:31:57,194 --> 00:31:58,914
That cup tipped over.

416
00:31:59,234 --> 00:32:06,174
The coffee served between 180 and 190, soaked through her sweatpants and held against her
skin.

417
00:32:06,425 --> 00:32:08,285
That's 180 degrees, right?

418
00:32:08,285 --> 00:32:11,465
Minimum on the conservator side, maybe up to 190.

419
00:32:11,765 --> 00:32:14,145
Water boils at 212.

420
00:32:14,345 --> 00:32:18,425
So she was holding something that was a few degrees below boiling between her thighs.

421
00:32:18,771 --> 00:32:24,783
And of course she suffered third degree, that's full surface burns over 16 % of her body,
third degree.

422
00:32:25,143 --> 00:32:29,645
That means the burn went through the full thickness of her entire skin.

423
00:32:29,645 --> 00:32:32,186
She was hospitalized for eight days.

424
00:32:32,186 --> 00:32:33,746
She had skin grafts.

425
00:32:33,746 --> 00:32:40,108
She lost nearly 20 pounds during recovery and she was partially disabled for two years.

426
00:32:40,471 --> 00:32:43,565
And again, this woman was 79 years old.

427
00:32:43,906 --> 00:32:51,477
All she asked McDonald's for when it was all said and done was $20,000, just enough to
cover her medical bills and the wages her daughter lost while taking care of her.

428
00:32:51,478 --> 00:32:53,618
And McDonald's offered her $800.

429
00:32:53,869 --> 00:32:55,889
Well, I'm sure you remember this.

430
00:32:55,889 --> 00:32:56,669
I remember this.

431
00:32:56,669 --> 00:32:58,069
Like this was like the joke.

432
00:32:58,069 --> 00:33:06,189
This was like the, the, the big lie that we've all been fed in the millennial generation
of why we are just a litigious society.

433
00:33:06,189 --> 00:33:08,189
And the only thing we ever do is Sue.

434
00:33:08,189 --> 00:33:10,969
And that's why everything is so expensive for all of us.

435
00:33:10,969 --> 00:33:13,049
And this was sold to us.

436
00:33:13,209 --> 00:33:19,817
And I remember, I could remember defending this like idea being like, you knew the coffee
was hot.

437
00:33:19,921 --> 00:33:22,601
You bought the coffee because it was hot.

438
00:33:22,601 --> 00:33:24,521
And then you complain that it was hot.

439
00:33:24,521 --> 00:33:31,481
And the reality is starkly different when you actually look at the case and the harm.

440
00:33:31,481 --> 00:33:36,221
she just, she was like, look, I just want $20,000 to pay for the medical bills.

441
00:33:36,401 --> 00:33:40,961
She's not trying to like, you know, suck all this money out of McDonald's.

442
00:33:40,961 --> 00:33:47,921
And I mean, you could see it as a, you know, that was a franchisee and you're trying to
get it from a person with a family and yada, yada, yada.

443
00:33:47,921 --> 00:33:48,944
But ultimately.

444
00:33:48,944 --> 00:33:50,815
This was a McDonald's policy.

445
00:33:51,093 --> 00:33:51,769
Right.

446
00:33:51,769 --> 00:33:52,635
Storewide.

447
00:33:52,635 --> 00:33:53,629
Countrywide.

448
00:33:53,629 --> 00:33:59,229
And here's what the company knew when they made this $800 little paltry offer.

449
00:33:59,229 --> 00:34:03,969
They knew they had received 700 prior complaints about burn injuries from their coffee.

450
00:34:04,009 --> 00:34:05,829
Like 700 times.

451
00:34:05,829 --> 00:34:06,329
Now I get it.

452
00:34:06,329 --> 00:34:07,829
It's a national organization.

453
00:34:07,829 --> 00:34:10,089
It's a national company, you know, whatever.

454
00:34:10,089 --> 00:34:18,329
700 is probably not, you know, the grandest number in this grand scheme of things when you
have billions of hamburgers sold on your sign.

455
00:34:18,469 --> 00:34:20,912
And their own QA manager

456
00:34:20,912 --> 00:34:30,536
testified that the company had no intention of changing its coffee temperature because the
executives believed the customers wanted the coffee hot for the commute.

457
00:34:30,876 --> 00:34:35,158
The internal calculation was that the number of burns was just acceptable.

458
00:34:35,158 --> 00:34:37,218
Like that's an acceptable cost.

459
00:34:37,218 --> 00:34:40,740
That's, you know, what do they call it in war?

460
00:34:40,741 --> 00:34:42,576
like accessible casualties.

461
00:34:42,576 --> 00:34:42,958
Yeah.

462
00:34:42,958 --> 00:34:47,006
So it's like, well, we know that 700 people are going to be burned.

463
00:34:47,006 --> 00:34:48,409
And that's just how it is.

464
00:34:48,840 --> 00:34:49,640
Right.

465
00:34:49,640 --> 00:34:51,700
700 out of how many millions?

466
00:34:52,060 --> 00:34:54,640
So yeah, mean, but these 700 had actually written in.

467
00:34:54,640 --> 00:34:56,060
So these are not just the people that got burned.

468
00:34:56,060 --> 00:34:57,780
These are the people who bothered to write in.

469
00:34:57,780 --> 00:35:03,820
I assuming they were going to get nothing or hear nothing from McDonald's anyway, they
just, notified them, hey, your coffee's too hot.

470
00:35:04,000 --> 00:35:11,665
Those, those complaints are in a file somewhere and all they got in return was an offer of
$800 for this woman's two years of suffering.

471
00:35:11,665 --> 00:35:25,485
Yeah, and the jury, look, the jury awarded her $200,000 in compensatory damages, which was
later reduced to $160,000 because they actually did find through this process that she did

472
00:35:25,485 --> 00:35:27,865
bear some of the actual fault.

473
00:35:28,116 --> 00:35:38,335
They awarded $2.7 million in punitive damages, which was at the time about two days of
McDonald's coffee sales revenue.

474
00:35:38,586 --> 00:35:42,316
Then the judge decides to reduce that even further down to $480,000.

475
00:35:42,316 --> 00:35:47,680
The case was settled on appeal for a confidential amount.

476
00:35:47,681 --> 00:35:49,045
And that's the part you never heard, right?

477
00:35:49,045 --> 00:35:55,029
Because the story gets rewritten by the marketing engine that is the chambers of commerce
and McDonald's and all the other big corporations.

478
00:35:55,029 --> 00:35:57,557
mean the lobbying organization that is the Chamber of Commerce.

479
00:35:57,557 --> 00:35:58,728
Exactly.

480
00:35:58,849 --> 00:36:02,213
And that's what I can't get past because the case became a punchline, right?

481
00:36:02,213 --> 00:36:07,560
Tortor reform lobbyists spent years making Stella Lieback the symbol of frivolous
litigation.

482
00:36:07,587 --> 00:36:10,223
A woman who spilled her own coffee and got rich.

483
00:36:10,224 --> 00:36:12,777
That was the version that survived in the popular memory.

484
00:36:12,860 --> 00:36:14,011
And that's what we all believe.

485
00:36:14,011 --> 00:36:25,771
Like I can remember, I can remember this like specifically, um, the U S chamber of
commerce and the Institute for legal reform spent across all tort reform efforts, hundreds

486
00:36:25,771 --> 00:36:35,349
of millions of dollars over the following decades, making that version of the story, the
one that people actually believed and it worked at least on me, the, McDonald's coffee

487
00:36:35,349 --> 00:36:41,794
case, the woman who sued over hot coffee, it became the shorthand for everything wrong
with American litigation.

488
00:36:42,023 --> 00:36:43,458
And she had third degree burns.

489
00:36:43,458 --> 00:36:46,978
She asked, Hey, can you handle my medical bills?

490
00:36:46,978 --> 00:36:48,672
And they offered her 800 bucks.

491
00:36:48,923 --> 00:36:50,716
story was weaponized, right?

492
00:36:50,716 --> 00:36:52,548
I mean, that's what happened.

493
00:36:52,548 --> 00:36:56,032
The documented facts of the case, they were readily available.

494
00:36:56,032 --> 00:36:58,175
They just weren't what got repeated at the dinner table, right?

495
00:36:58,175 --> 00:37:06,676
Instead of hearing about the real facts of the case that she had her verdict reduced down
to a modest amount, instead they're just talking about the millions of dollars that were

496
00:37:06,676 --> 00:37:08,017
awarded by the jury.

497
00:37:08,078 --> 00:37:08,928
Right.

498
00:37:08,929 --> 00:37:16,914
Betty Dukes, Walmart greeter from Pittsburgh, California, started at Walmart in 1994,
making $5 an hour.

499
00:37:17,074 --> 00:37:18,475
She was a good employee.

500
00:37:18,475 --> 00:37:21,077
Her performance reviews actually said so.

501
00:37:21,197 --> 00:37:25,860
She just wanted to move up, maybe cashier, maybe greeting manager.

502
00:37:25,900 --> 00:37:30,163
She noticed that the men around her had lowered performance ratings.

503
00:37:30,163 --> 00:37:31,924
They were being promoted.

504
00:37:32,004 --> 00:37:33,685
She raised it internally.

505
00:37:33,685 --> 00:37:36,897
She said she was retaliated against for raising it.

506
00:37:36,967 --> 00:37:43,867
In 2001, she became the lead plaintiff in what would become the largest employment
discrimination class action in American history.

507
00:37:43,867 --> 00:37:50,267
Duke v Walmart Stores incorporated, North Dakota, California, 2004.

508
00:37:50,847 --> 00:37:52,907
in ND, I don't think it's North Dakota.

509
00:37:53,887 --> 00:37:55,147
Northern District of California.

510
00:37:55,147 --> 00:37:55,775
Sorry.

511
00:37:55,910 --> 00:37:57,712
how the federal courts are broken down in the states.

512
00:37:57,712 --> 00:38:02,417
So yeah, we're talking about 1.5 million women in this class.

513
00:38:02,417 --> 00:38:04,939
1.5 million, that's working for one company.

514
00:38:04,939 --> 00:38:06,299
Think about that for a second.

515
00:38:06,299 --> 00:38:06,839
Yeah.

516
00:38:06,839 --> 00:38:10,181
I mean, they are, they are the largest employer for a reason.

517
00:38:10,241 --> 00:38:16,865
Current and former Walmart employees to be fair, but the statistical evidence was
overwhelming.

518
00:38:16,865 --> 00:38:22,327
Women were paid less than men in every single region of the country.

519
00:38:22,327 --> 00:38:27,330
Women were promoted at lower rates despite receiving higher average performance ratings.

520
00:38:27,390 --> 00:38:35,584
And the plaintiff's expert analyzed 1.5 million employment records and the pattern held up
everywhere.

521
00:38:35,585 --> 00:38:41,602
And again, what marches the fence here, and it cannot be stated too often, is we don't
have a policy of discrimination.

522
00:38:41,602 --> 00:38:43,553
Local managers have discretion.

523
00:38:43,933 --> 00:38:47,157
Which is exactly what the Supreme Court grabbed onto in 2011.

524
00:38:47,157 --> 00:38:56,927
Scalia wrote the majority opinion and the argument was that because Walmart's official
policy was against discrimination, because local managers had individual discretion, there

525
00:38:56,927 --> 00:39:02,142
was no common question of law or fact binding the class together.

526
00:39:02,142 --> 00:39:07,277
The discrimination, if it existed, was happening locally, therefore no class action.

527
00:39:07,528 --> 00:39:08,049
Right.

528
00:39:08,049 --> 00:39:10,651
So think about the logic of that for a moment.

529
00:39:10,752 --> 00:39:19,961
The very mechanism that allowed the discrimination to function was giving managers the
discretion locally became the reason that women couldn't sue together.

530
00:39:20,188 --> 00:39:20,803
I think about that.

531
00:39:20,803 --> 00:39:24,237
The description was too consistent to be a policy and too widespread to be individual.

532
00:39:24,237 --> 00:39:25,568
So it was nothing.

533
00:39:25,776 --> 00:39:38,371
Five to four, Betty Dukes could still sue individually any of the 1.5 million women could
against the largest employer in the world on their own without their shared evidence pool,

534
00:39:38,371 --> 00:39:41,412
without the shared expert, without the economics.

535
00:39:41,412 --> 00:39:53,635
They essentially forced 1.5 million women to try each of this individually with a new
discovery in every case against a company that could just.

536
00:39:53,636 --> 00:39:58,222
indefinitely keep it from ever really being tried or even going to court.

537
00:39:58,654 --> 00:39:58,884
Right.

538
00:39:58,884 --> 00:40:01,035
mean, they've got lawyers on salary.

539
00:40:01,136 --> 00:40:05,929
Like their lawyers are not paid by the hour or they're not on contingency fee.

540
00:40:05,929 --> 00:40:07,090
They're paid salaries.

541
00:40:07,090 --> 00:40:09,181
And so they can keep fighting this all day long.

542
00:40:09,181 --> 00:40:11,482
And again, keep in mind who pays the burden of these.

543
00:40:11,482 --> 00:40:17,076
Some of the costs will be borne by the company, but a lot of those costs will fall to the
taxpayers for the courts.

544
00:40:17,076 --> 00:40:21,709
And the courts will be clogged with these million cases as opposed to one large case.

545
00:40:21,709 --> 00:40:25,371
They're clogged with a million small cases if they weren't willing to sue.

546
00:40:25,632 --> 00:40:27,599
And so everybody's blocked from justice.

547
00:40:27,599 --> 00:40:29,541
That's not what we call access to the courts.

548
00:40:29,541 --> 00:40:32,803
That's the technicality of access to the courts.

549
00:40:32,803 --> 00:40:33,994
Yeah, technically the door is open.

550
00:40:33,994 --> 00:40:37,637
Technically you can file, but realistically nobody's going to.

551
00:40:37,638 --> 00:40:39,521
And that with that the case was over.

552
00:40:39,521 --> 00:40:40,923
Betty Dukes died in 2017.

553
00:40:40,923 --> 00:40:48,674
The class was never actually reconstituted and 1.5 million women never got their day in
court.

554
00:40:48,925 --> 00:40:51,933
So let's talk in some detail about the opioid case.

555
00:40:52,056 --> 00:40:54,191
What's the background situation on that?

556
00:40:54,401 --> 00:40:55,571
The situation was like this.

557
00:40:55,571 --> 00:41:00,851
Purdue Pharma began aggressively marketing OxyContin in 1996.

558
00:41:01,253 --> 00:41:10,295
Internal documents, documents that only became public because of the litigation, showed
the company knew about the addiction risk and deliberately obscured it.

559
00:41:10,295 --> 00:41:19,359
They trained the sales representatives, know, and we heard, it's funny to kind of
experience this, because we all have experienced it in one way or another.

560
00:41:19,359 --> 00:41:20,533
uh

561
00:41:20,533 --> 00:41:30,385
We at that point in time, if you went to a doctor, there were these fun pens and fun, you
know, plushies and toys and frisbees and all kinds of marketing material.

562
00:41:30,385 --> 00:41:30,765
Yes.

563
00:41:30,765 --> 00:41:34,586
Swag, um, that your doctor would give away, including samples, right?

564
00:41:34,586 --> 00:41:47,229
Like, uh, and so all of these have been changed now, um, because of, of really what Purdue
chose to do, but, um, they basically, they train the sales representatives to tell doctors

565
00:41:47,229 --> 00:41:49,770
that Oxycontin was actually less addictive.

566
00:41:49,770 --> 00:41:51,310
than other opioids.

567
00:41:51,370 --> 00:41:56,812
And they targeted high prescribing doctors, which created these pain management clinics
that you see now.

568
00:41:56,812 --> 00:42:08,575
uh Some of my family members, I won't say who, were seeing a doctor like this in Lafayette
growing up and prescribed that exact same sort of a thing.

569
00:42:08,575 --> 00:42:19,700
They used the patient advocacy infrastructure to help fund, to push back against the
addiction concerns that people were rightfully bringing up.

570
00:42:19,700 --> 00:42:29,638
And Richard Sackler, who was the chairman uh and president of the company, wrote that
email, that the solution was to hammer on abusers in every way possible.

571
00:42:29,639 --> 00:42:29,929
Right.

572
00:42:29,929 --> 00:42:38,607
And keep in mind what he's calling abusers are the actual victims of this company that was
perpetrating a fraud on them about the addictive nature of uh opioids.

573
00:42:38,666 --> 00:42:39,617
Exactly.

574
00:42:39,617 --> 00:42:41,348
And then the lawsuits came, right?

575
00:42:41,348 --> 00:42:45,420
Thousands of them, local governments, Native American tribes, hospitals, individuals.

576
00:42:45,420 --> 00:42:53,644
They consolidated in the Northern District of Ohio into one of the largest multi-district
litigations in American history.

577
00:42:54,185 --> 00:43:02,472
This was in uh regards to the National Prescription Opiate Litigation, MDL number 2804.

578
00:43:02,472 --> 00:43:05,311
Johnson & Johnson settled for $5 billion.

579
00:43:05,995 --> 00:43:12,006
And the three major distributors, which were McKesson, Cardinal Health, and Amerisource
Bergen, settled for $21 billion.

580
00:43:12,006 --> 00:43:19,559
Purdue, we know now, went into bankruptcy, but really just transferred to the Sackler
family.

581
00:43:19,966 --> 00:43:24,086
Alright, and the Sacklers tried to use the bankruptcy to buy their way out of every
remaining lawsuit.

582
00:43:24,186 --> 00:43:30,706
Every individual plaintiff, every government agency, single payment, civil immunity for
the entire family.

583
00:43:30,766 --> 00:43:34,106
They wanted to get it all done with one stroke of the pen.

584
00:43:34,146 --> 00:43:41,126
People who had never filed for bankruptcy, people who still had 10 to 11 billion dollars
that they pulled out of the company before it collapsed.

585
00:43:41,127 --> 00:43:52,485
And the Supreme Court actually blocked it in 2024, Harrington versus Purdue Pharma, five
to four, which is just a, it's a sad common recurrence.

586
00:43:52,485 --> 00:44:03,962
I really wish that the things that actually ever made it to the Supreme Court were, were
much more weighted into the pro or against kind of, and it just feels like there's so many

587
00:44:03,962 --> 00:44:08,975
things that are happening now in the Supreme Court that are these narrow, narrow margins.

588
00:44:09,743 --> 00:44:10,223
Right.

589
00:44:10,223 --> 00:44:20,090
And in this case, we had four sitting justices who looked at the structure of this deal,
which basically bails this whole family out of any responsibility for what they had done.

590
00:44:20,571 --> 00:44:23,813
And those four justices found it legally acceptable.

591
00:44:23,813 --> 00:44:31,518
The family extracts $11 billion, community is lost, and we're talking about hundreds of
thousands of deaths over the arc of the opioid crisis.

592
00:44:31,518 --> 00:44:37,112
And four justices of the US Supreme Court sit there and say, yeah, this bankruptcy math
works for me.

593
00:44:37,113 --> 00:44:41,094
The documents proved what the Sacklers knew and when they knew it.

594
00:44:41,094 --> 00:44:44,115
Those documents exist because of this lawsuit.

595
00:44:44,115 --> 00:44:53,488
Not because of a regulatory investigation, not because of congressional hearing that went
somewhere, because plaintiffs' attorneys working on contingency had the financial

596
00:44:53,488 --> 00:45:01,310
incentive to dig and the legal tools to compel the Purdue Pharma to disclose these
documents.

597
00:45:01,563 --> 00:45:05,545
And that only happens if you have the procedural mechanism of a class action.

598
00:45:05,626 --> 00:45:09,268
The engine driving this is the contingency fee.

599
00:45:09,648 --> 00:45:14,732
So they file the, for instance, the Cody case we've been talking about, there's a
percentage on the other side if they win.

600
00:45:14,732 --> 00:45:19,855
So they're rolling the dice that this is going to, you they can prove that these people
were harmed by this company.

601
00:45:19,855 --> 00:45:25,088
um But without these cases existing, you know, none of this gets exposed in the first
place.

602
00:45:25,088 --> 00:45:30,994
So you don't even have the uh incentive for anybody to expose their crimes for lack of.

603
00:45:30,994 --> 00:45:31,939
or better description.

604
00:45:31,939 --> 00:45:33,266
uh

605
00:45:33,266 --> 00:45:38,739
I think that the commonly accepted contingency percentage is something like 33%.

606
00:45:38,739 --> 00:45:39,090
Right.

607
00:45:39,090 --> 00:45:41,394
Like it's typically like a third.

608
00:45:41,426 --> 00:45:46,206
some capital at third, some 40%, but it just kind of depends on the case.

609
00:45:46,346 --> 00:45:47,286
Yeah.

610
00:45:47,706 --> 00:45:55,406
It's a lot, but at the same time, you have to consider how much they're spending to get
that evidence and how many lawyers are sending to depositions and yeah.

611
00:45:55,926 --> 00:45:56,579
Yeah.

612
00:45:56,579 --> 00:46:02,092
it's also basically just a gamble that they'll ever recover any money at all from it.

613
00:46:02,092 --> 00:46:04,403
You know, they might just be spinning this in vain.

614
00:46:04,689 --> 00:46:09,180
you can kind of compare it to use the pharmaceutical companies that we're talking about
here.

615
00:46:09,180 --> 00:46:14,322
When they go to make a new drug, like 99 % of their drugs fail in clinical testing, right?

616
00:46:14,322 --> 00:46:16,503
Before they even get to maybe phase one.

617
00:46:16,503 --> 00:46:18,203
And that's what they're doing, the same sort of thing.

618
00:46:18,203 --> 00:46:21,904
But we call that business and that's good for America, it's innovation.

619
00:46:21,904 --> 00:46:26,783
But when a lawyer does it, it's ambulance chasing and hits it, fraud and abuse and all
this sort of stuff.

620
00:46:26,783 --> 00:46:27,623
Yeah.

621
00:46:27,904 --> 00:46:32,607
The Sacklers called the addicted people abusers.

622
00:46:33,068 --> 00:46:37,450
McDonald's called 700 victims acceptable cost.

623
00:46:37,631 --> 00:46:44,155
Walmart called systemic pay discrimination, local manager discretion.

624
00:46:44,456 --> 00:46:55,663
Each of those framings was designed to make the harm invisible as a collective phenomenon,
to keep it atomized, individual, too small to fight.

625
00:46:55,914 --> 00:47:02,002
The class section says, no, what happened to you happened to enough other people that we
can give it a name and take it to court.

626
00:47:02,003 --> 00:47:04,614
That's not a celebration of our legal system.

627
00:47:04,915 --> 00:47:11,780
It's a description of what the legal system became when everything else has been
systematically dismantled.

628
00:47:11,781 --> 00:47:20,385
So Stella Liebeck, Betty Dukes, every county commissioner in Ohio who watched their
community drown and eventually found a lawyer willing to file.

629
00:47:20,636 --> 00:47:23,565
These are the people who ended up inside the last public square.

630
00:47:23,816 --> 00:47:26,598
So let's sit with what we actually just proved.

631
00:47:26,798 --> 00:47:28,519
Not argued, proved.

632
00:47:28,700 --> 00:47:35,290
When regulatory systems are deliberately weakened, and they were deliberately weakened,
right?

633
00:47:35,290 --> 00:47:38,367
Like this is not entropy, this was policy.

634
00:47:38,607 --> 00:47:44,551
The courthouse becomes the only room left where collective harm gets to have a name.

635
00:47:44,552 --> 00:47:49,525
And there's a power that comes in naming something that caused harm.

636
00:47:49,526 --> 00:47:51,137
That's what the tobacco settlement was.

637
00:47:51,137 --> 00:47:54,368
That's what the opioid MDL was.

638
00:47:54,368 --> 00:48:08,803
That's what Betty Dukes tried to do before five people decided that Walmart's official
anti-discrimination policy was more real than the statistical evidence of what Walmart

639
00:48:08,803 --> 00:48:10,153
actually did.

640
00:48:10,404 --> 00:48:18,264
There are lots of different ways to look at this, but the mechanism that makes it all
possible, the amendment to the procedural rules is a simple idea that it harms small

641
00:48:18,264 --> 00:48:23,384
enough to be unlitigable, individually becomes litigable when it happens to enough people.

642
00:48:23,384 --> 00:48:26,824
So imagine if somebody steals $5 out of your wallet, right?

643
00:48:26,824 --> 00:48:30,645
Maybe there's not a, maybe you're not going to take them to court over that.

644
00:48:30,645 --> 00:48:37,825
But if somebody steals $5 out of every wallet in America as a part of a systemic plan,
then we have something we can work with, right?

645
00:48:37,825 --> 00:48:40,025
We have something that's worth taking on.

646
00:48:40,057 --> 00:48:41,011
and dealing with.

647
00:48:41,011 --> 00:48:43,411
That's why 1.5 billion dollars.

648
00:48:43,575 --> 00:48:44,646
Right, exactly.

649
00:48:44,646 --> 00:48:54,812
so the fact is, mean, the fact that the Chamber of Commerce spent $29 million in a single
year to fight these kinds of cases shows that it's not a side project for them.

650
00:48:54,812 --> 00:48:56,593
This is infrastructure maintenance for them.

651
00:48:56,593 --> 00:49:02,886
This is how they're going to destroy the last bastion of recourse for the American public.

652
00:49:03,240 --> 00:49:04,520
Ooh, it's 1.7 trillion.

653
00:49:04,520 --> 00:49:06,901
That makes it way more litigatable.

654
00:49:06,961 --> 00:49:07,842
Ligatable?

655
00:49:07,842 --> 00:49:09,482
Lit-legatable?

656
00:49:10,103 --> 00:49:11,123
I don't know.

657
00:49:13,524 --> 00:49:16,465
Okay, so here is where I land.

658
00:49:16,465 --> 00:49:24,768
ah And here is what I would actually do first if I were someone who just spent an hour
absorbing all of this.

659
00:49:25,019 --> 00:49:29,120
Stop treating arbitration clauses as fine print.

660
00:49:29,160 --> 00:49:30,241
They're not fine print.

661
00:49:30,241 --> 00:49:31,941
They are a legal weapon.

662
00:49:32,073 --> 00:49:42,779
that's preloaded like a bullet into the chamber, into your phone contract and your
employment offer and your credit card agreement and they fire this the moment you try to

663
00:49:42,779 --> 00:49:45,320
hold someone accountable collectively.

664
00:49:45,781 --> 00:49:53,865
The first concrete thing is to go to public citizen website, citizen.org and read their
arbitration resources.

665
00:49:53,885 --> 00:50:01,849
Public citizen has been litigating and lobbying against forced arbitration longer than
most advocacy organizations have even existed.

666
00:50:02,215 --> 00:50:11,171
They will tell you which bills are live, which senators are on the fence, and what a
constituent call actually needs to say to move the needle.

667
00:50:11,172 --> 00:50:13,432
And I'll add a little bit of texture to that.

668
00:50:13,432 --> 00:50:21,352
The CFPB, which is the Consumer Financial Protection Bureau, I believe, tried to ban
arbitration clauses in financial products in 2017.

669
00:50:21,572 --> 00:50:29,012
And this gets real when, you're a Wells Fargo customer who had an account open without
your permission, you know a little bit about how this works.

670
00:50:29,372 --> 00:50:34,152
But Congress killed that effort with the Congressional Review Act within just months.

671
00:50:34,152 --> 00:50:37,232
mean, when's the last time Congress moved on anything in months?

672
00:50:37,233 --> 00:50:41,246
The same playbook is in motion right now around the 2024 rulemaking attempts.

673
00:50:41,247 --> 00:50:50,654
If you have a Senator on the Senate banking committees, and you can find out in about 45
seconds at senate.gov slash committees, that is a specific targeted place to put pressure.

674
00:50:50,654 --> 00:50:54,718
Not a general call, but a specific call about the forced arbitration ban.

675
00:50:54,718 --> 00:50:56,599
Refer to it by name when you call.

676
00:50:56,850 --> 00:50:57,890
I want to mention something here.

677
00:50:57,890 --> 00:51:05,385
You know, the CFPB is essentially run by Russ Vought of the Heritage Foundation and
Project 2025 fame right now.

678
00:51:05,585 --> 00:51:15,531
So if you're, if you're concerned about why all of this is related and how all of this is
related to our current administration or currently what's going on in our world, it was

679
00:51:15,531 --> 00:51:25,326
not an accident that the Heritage Foundation, uh, former director was placed as the
director of the Consumer Financial Protection Bureau.

680
00:51:25,468 --> 00:51:31,450
The person who wants to gut the entire government and have everything be a private
subscription service.

681
00:51:31,701 --> 00:51:42,786
So for people who want to go deeper on the structural picture, on how Loper-Bride and the
collapse of the Chevron deference is going to push more more accountability disputes into

682
00:51:42,786 --> 00:51:55,759
courts that are simultaneously being made harder to access, the Constitutional
Accountability Center publishes genuinely readable analysis at the usconstitution.org.

683
00:51:57,210 --> 00:52:04,282
Report on the chamber's Supreme Court win rate is something that I keep seeing in all of
these results.

684
00:52:04,282 --> 00:52:05,045
70%.

685
00:52:05,045 --> 00:52:11,449
The chamber filed amicus briefs and won 70 % of the time in recent terms.

686
00:52:11,449 --> 00:52:17,113
That number should change how you think about every Supreme Court nomination fight you've
ever watched.

687
00:52:17,333 --> 00:52:25,678
And I know watching the Supreme Court shift and change is boring, but it really does
matter.

688
00:52:25,929 --> 00:52:27,451
It's boring until it isn't, right?

689
00:52:27,451 --> 00:52:32,762
I once you start seeing this stuff come through, you'll realize why they spent all that
money pushing these people into the Supreme Court.

690
00:52:32,762 --> 00:52:33,534
Right.

691
00:52:33,535 --> 00:52:40,777
Here's a version of the action that I think creates the most durable change over time, and
it requires patience, but it does compound.

692
00:52:40,897 --> 00:52:43,557
State courts still matter enormously in this fight.

693
00:52:43,557 --> 00:52:49,859
CAFA moved the big federal class actions into federal court, but state attorneys general
retained independent authority.

694
00:52:49,859 --> 00:52:56,220
And in many states, their authority is broader than what the federal agencies currently
have, especially post-Loper-Brite.

695
00:52:56,360 --> 00:53:03,462
The National Association of Attorneys General isn't a household name, but the Mississippi
AG was the person who cracked the tobacco case wide open.

696
00:53:03,710 --> 00:53:07,137
Your state AG's Consumer Protection Division is a real lever.

697
00:53:07,137 --> 00:53:08,439
Find out who runs it.

698
00:53:08,439 --> 00:53:12,696
The NAAG.org has the directory of State Attorneys General.

699
00:53:12,947 --> 00:53:21,490
And if you're someone who lost money in Cody stock between November 2025 and February
2026, we uh mentioned the the Bronstein case.

700
00:53:21,490 --> 00:53:25,892
The deadline to request lead plaintiff status is May 22nd, uh 2026.

701
00:53:25,892 --> 00:53:27,513
That's coming up very quickly.

702
00:53:27,513 --> 00:53:29,273
So that's not an abstraction.

703
00:53:29,273 --> 00:53:34,177
That is like two weeks from now, give or take 10 days, right?

704
00:53:34,177 --> 00:53:40,519
B G and G.com B G A N D G.com slash.

705
00:53:40,519 --> 00:53:44,022
Capital C, capital O, capital T, capital Y.

706
00:53:44,022 --> 00:53:52,507
I'm not endorsing the law firm, but I'm telling you that the deadline is real and it
passes whether or not you act on how much money that you've lost.

707
00:53:52,508 --> 00:53:56,669
And that case is also a pretty clean illustration of something worth naming directly.

708
00:53:56,709 --> 00:54:04,231
Securities fraud class actions get criticized as lawyer enrichment vehicles, again,
because of that contingency fee percentage.

709
00:54:04,271 --> 00:54:05,652
Sometimes that criticism is fair.

710
00:54:05,652 --> 00:54:10,453
I'm not going to say that I don't know the facts of the Cody case well enough to know
whether that's what's happening here.

711
00:54:10,453 --> 00:54:18,786
But the Cody complaint alleges that executives issued overwhelmingly positive statements
about growth and profitability while the underlying numbers, which they had access to,

712
00:54:18,786 --> 00:54:20,706
were deteriorating.

713
00:54:21,000 --> 00:54:25,443
slowing consumer beauty sales, margin pressure, decelerating prestige, fragrance growth.

714
00:54:25,443 --> 00:54:29,545
Those are the same mechanics as every corporate fraud case that ever mattered.

715
00:54:29,545 --> 00:54:34,938
Executives knew, the public didn't, the litigation forces disclosure of what they knew.

716
00:54:34,939 --> 00:54:37,410
And the contingency fee is not a bug.

717
00:54:37,450 --> 00:54:42,733
It's the only reason any of this works for people who are not already rich.

718
00:54:42,953 --> 00:54:45,955
Ron Motley didn't have tobacco money.

719
00:54:45,955 --> 00:54:48,736
Betty Dukes did not have Walmart money.

720
00:54:48,736 --> 00:54:57,460
The contingency fee is the structural equalizer that exists inside a system that has been
methodically stripped of equalizer.

721
00:54:57,711 --> 00:55:02,513
So this week, find out if you have a forced arbitration clause in your employment
contract.

722
00:55:02,573 --> 00:55:04,024
Most people don't even know, right?

723
00:55:04,024 --> 00:55:06,951
They just walk you through those things on your first day orientation.

724
00:55:06,951 --> 00:55:10,186
They're teaching you where the bathrooms are and how to log into the computer.

725
00:55:10,186 --> 00:55:15,638
And then they just quickly hand you this document to sign, but read those documents.

726
00:55:16,019 --> 00:55:25,322
The Economic Policy Institute at epi.org has a worker rights section that explains what
you're looking at and what, if anything, you can do about it.

727
00:55:25,322 --> 00:55:27,213
Some states still have protections.

728
00:55:27,213 --> 00:55:29,556
Some employers under pressure have removed them.

729
00:55:29,557 --> 00:55:34,621
This year, pay attention to your state attorney general race, like it's a federal race.

730
00:55:34,621 --> 00:55:36,663
I'm paying attention to mine here in Oklahoma.

731
00:55:36,663 --> 00:55:49,783
We have our current AG who's right about 50 % of the time on things that I care about
running for, to be governor, uh which means that the AG spot and the AG seat is going to

732
00:55:49,783 --> 00:55:50,593
be open for us.

733
00:55:50,593 --> 00:55:55,537
And so I'm, I want you to pay attention like I'm paying attention because

734
00:55:55,538 --> 00:56:04,188
It's as important in a post-loper bright world as any federal race that's happening for
midterms.

735
00:56:04,189 --> 00:56:14,589
And remember, like this may not seem relevant to you because maybe you don't invest in
Cody stock or maybe you don't, you've never had a McDonald's coffee, although that's

736
00:56:14,589 --> 00:56:15,929
vanishingly unlikely.

737
00:56:16,009 --> 00:56:24,609
But the reality is the people who end up in this public square, the people that end up
being talked about on podcasts like this, didn't choose this.

738
00:56:24,609 --> 00:56:27,969
Estella Lieback asked for $20,000 for our medical bills.

739
00:56:28,049 --> 00:56:32,181
The counties in Ohio just wanted to repair their communities after all the people they had
lost.

740
00:56:32,455 --> 00:56:37,711
What they got instead was years of litigation and eventually a settlement that proves what
everyone already suspected.

741
00:56:37,712 --> 00:56:43,013
The isn't whether the courtroom is a good substitute for a functioning democracy.

742
00:56:43,013 --> 00:56:43,544
It isn't.

743
00:56:43,544 --> 00:56:44,554
We know that.

744
00:56:44,554 --> 00:56:49,475
The question is what do do while you're still inside this shitty one that exists?

745
00:56:49,726 --> 00:57:01,028
So, uh like we've been doing here for the past couple of months, we talk about something
that stuck with us through our research phase of this podcast.

746
00:57:01,029 --> 00:57:06,610
So the thing that's been sitting with me is the McDonald's number.

747
00:57:06,610 --> 00:57:07,970
Not like the verdict, right?

748
00:57:07,970 --> 00:57:09,330
The 700.

749
00:57:09,331 --> 00:57:15,751
McDonald's had received 700 complaints about coffee burns before Stella spilled her cup.

750
00:57:16,151 --> 00:57:20,271
And 700 people told them this coffee is too hot and it's causing injuries.

751
00:57:20,471 --> 00:57:27,951
And then the company's counteroffered to a 79 year old woman with third degree burns on 16
% of her body was 800 bucks.

752
00:57:28,331 --> 00:57:31,651
The class action didn't create the outrage.

753
00:57:31,651 --> 00:57:34,269
It just made the outrage visible.

754
00:57:34,269 --> 00:57:38,107
in a language that corporations are required to respond to.

755
00:57:38,358 --> 00:57:41,669
Yeah, for me this week, it's the Sackler email, right?

756
00:57:41,669 --> 00:57:43,630
2001, Oxycontin addiction is making the news.

757
00:57:43,630 --> 00:57:44,400
People are dying.

758
00:57:44,400 --> 00:57:47,391
And I mean, it's an epidemic, right?

759
00:57:47,391 --> 00:57:48,831
Across the country.

760
00:57:48,851 --> 00:58:00,194
And Richard Sackler writes an internal email writing that the solution to this problem is,
and I'm quoting, to quote, hammer on the abusers in every way possible.

761
00:58:00,435 --> 00:58:01,875
That wasn't a slip of the tongue.

762
00:58:01,875 --> 00:58:03,225
That wasn't a typo.

763
00:58:03,225 --> 00:58:05,756
That's a documented strategic posture.

764
00:58:06,112 --> 00:58:09,696
That email exists because litigation forced it into the public record.

765
00:58:09,757 --> 00:58:10,998
A regulator didn't find it.

766
00:58:10,998 --> 00:58:12,620
Congress didn't find it.

767
00:58:12,620 --> 00:58:14,942
Discovery during litigation did.

768
00:58:14,943 --> 00:58:19,629
The $50 billion in opioid settlements is the headline, but the email is the evidence.

769
00:58:19,629 --> 00:58:21,831
That's what the courthouse actually produced.

770
00:58:22,082 --> 00:58:25,245
And as always, you know, you can find us at FOF foundation.

771
00:58:25,245 --> 00:58:31,310
ah That's where our Casto pod is, but you can subscribe to us on Apple podcasts and
Spotify.

772
00:58:31,410 --> 00:58:41,499
If this episode has made you feel something useful, not comfortable, maybe useful, share
it with a person who would rather not think about this.

773
00:58:41,499 --> 00:58:45,322
Those are actually the most important people that we need to reach out in the world.

774
00:58:45,323 --> 00:58:48,524
And remember, the courthouse was never supposed to be the last resort.

775
00:58:48,524 --> 00:58:51,186
It was supposed to be one option within a system of many.

776
00:58:51,186 --> 00:58:53,415
And it was a procedural mechanism that we're talking about today.

777
00:58:53,415 --> 00:58:56,478
mean, how, there's anything more boring than a change in procedural rules?

778
00:58:56,478 --> 00:58:57,748
I don't know what it is.

779
00:58:57,748 --> 00:58:59,629
Even lawyers' eyes glaze over.

780
00:58:59,629 --> 00:59:06,632
But that has now become the last, the court of last resort for people who are abused by
these massive corporations.

781
00:59:06,872 --> 00:59:14,005
So the fact that the courthouse is now doing the work of the picket line and the
regulatory agency and the congressional hearing all at one time.

782
00:59:14,187 --> 00:59:24,077
It's not a sign that the system is working, but the people inside it, the Betty Dukes and
the Alaskan fishermen and the Ohio counties, they didn't wait for a system, a better

783
00:59:24,077 --> 00:59:25,098
system to materialize.

784
00:59:25,098 --> 00:59:28,581
They used the one door they had open to them and that's worth something.

785
00:59:28,721 --> 00:59:30,973
Maybe it's worth more than we give her credit for.

786
00:59:31,224 --> 00:59:36,691
Or maybe the building is on fire and the door leads to a slightly less burny room.

787
00:59:36,692 --> 00:59:39,094
Either way, we'll see you next week.

788
00:59:39,376 --> 00:59:40,917
That's the overlap.

789
00:59:41,168 --> 00:59:42,295
Bye.

790
00:59:42,295 --> 00:59:43,555
Bye.