#champerty

That makes binding arbitration another key weapon in the conservative movement's war on choice: not just jobs you can't quit and politicians you can't vote out of office, but also companies you can't sue. Binding arbitration is a creation of the Federalist Society and their champion Antonin Scalia, who authored a series of Supreme Court dissents and (ultimately) decisions that opened the door for binding arbitration everywhere:

https://pluralistic.net/2025/10/27/shit-shack/#binding-arbitration

Given the Fedsoc's role in shoving binding arbitration down every worker and shopper's throat, it's decidedly odd that they invited Ashley Keller to be their keynote debater in 2021, where he argued that "concentrated corporate power is a greater threat than government power":

https://www.youtube.com/watch?v=aY5MrHGjVT8

Keller is a powerhouse lawyer, and an avowed conservative, who has pioneered many tactics for overcoming binding arbitration clauses. He helped create "mass arbitration," bringing thousands of arbitration cases on behalf of Uber drivers who'd had their wages stolen by the company. Since Uber has to pay the arbitrators in each of those cases, they faced a much larger bill than they would face in any possible class action suit:

https://www.reuters.com/article/otc-uber-frankel-idUKKCN1P42OH/

Mass arbitration cases spread to all kinds of large firms that used petty grifts to steal from thousands or even millions of people, like Intuit, who deceive – and rip off – millions of Americans every year with their fake Turbotax "free file" system:

https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks

Mass arbitration worked so well that Amazon actually revised its terms of service to remove binding arbitration from their terms of service, because they realized that they'd be better off facing class action suits:

https://pluralistic.net/2021/06/02/arbitrary-arbitration/#petard

Of course, the point of binding arbitration was never to create a streamlined system of justice – it was to bring about a world of no justice, where you have no right to sue. It's part of the decades-old "tort reform" movement that the business lobby has used to take away your right to sue altogether. Any time you hear about a seemingly crazy lawsuit (like the urban legends about the McDonald's "hot coffee" case), you're being propagandized for a world without legal consequences for companies that defraud you, steal from you, injure you, or kill you:

https://pluralistic.net/2022/06/12/hot-coffee/#mcgeico

That's why companies (like Bluesky) are now trying terms of service that also ban you from mass arbitration, while retaining the right to consolidate claims into a mass arbitration case if that's advantageous to them:

https://pluralistic.net/2025/08/15/dogs-breakfast/#by-clicking-this-you-agree-on-behalf-of-your-employer-to-release-me-from-all-obligations-and-waivers-arising-from-any-and-all-NON-NEGOTIATED-agreements

But Keller keeps finding creative ways around binding arbitration. He's currently bringing thousands of arbitration claims against Google, on behalf of advertisers whom Google stole from (Google is a thrice-convicted monopolist, and they lost a case last year over their monopolization of ad-tech, where they were found to have defrauded advertisers).

He also just argued before the Supreme Court in a case against Monsanto over the company's attempt to escape liability for causing cancer in farmworkers with their Roundup pesticide:

https://www.npr.org/2026/04/27/nx-s1-5793804/supreme-court-monsanto-roundup-arguments

Keller appears in the latest episode of the Organized Money podcast, for a fascinating interview about his work and outlook, and how he reconciles his work fighting corporate power with his identity as a movement conservative:

https://www.organizedmoney.fm/p/the-conservative-who-torments-big

Keller's first big, important point is that (basically), capitalists hate capitalism (see above). He cites Milton Friedman, who "always said that the tort system is the best way to ensure that companies behave and follow the rules." For Keller (and Friedman) the alternative to private litigation against bad businesses is "government regulation and the alphabet soup of Washington, DC agencies [that] try and police these companies."

But, of course, the businesses that want binding arbitration and tort reform (so they can't be sued) also want to "dismantle the administrative state" (so they can't be regulated). They're the impunity movement, the "when the president does it, that means it is not illegal" movement, the "heads I win, tails you lose" movement. They're the caveat emptor movement, the "that makes me smart" movement:

https://pluralistic.net/2024/12/04/its-not-a-lie/#its-a-premature-truth

They don't want efficient markets, with the ever-present threat of a better competitor putting them out of business. They want feudalism. They want to go meta. They want to have the kind of self-determination you can only achieve by taking away everyone else's self-determination.

I was very struck by Keller's claim to be engaged in an exercise that Milton Friedman identified as the best one for making markets work. One of Keller's most forceful points is that class action suits are especially important for reining in petty, recurrent grifts, the junk fees that are the hallmark of enshittification.

He quotes his old boss, the archconservative judge Richard Posner, who said "Only a lunatic or a fanatic sues for $20." But if you multiply a $20 junk fee by ten million purchases, a company can use that fact to make hundreds of millions of dollars. That's real folding money, which is why every company has figured out a way to whack you for a $20 junk fee.

There are two ways to end this racket: one is litigation, the other is regulation, and the capitalism-hating-capitalists who run the world want to kill both. That's why the business lobby smears lawyers like Keller as being "vultures." But as Matt Stoller says, "vultures look aggressive and whatnot, but when you actually get rid of vultures out of an ecosystem, all sorts of things go haywire."

I love this point. Vultures live off the disgusting, rotting crap that would otherwise pile up around us, breeding disease and emitting an unbearable stench. If plaintiff-side, no-win/no-fee lawyers are vultures, then junk fees, wage theft, and the million petty frauds they fight are the disgusting, rotting crap that vultures feed off of – and the harder we make it for our noble vulture lawyers, the more disgusting, rotting crap we have to live with, hence the unbearable stench that is all around us.

Listening to Keller was a fascinating exercise. I thoroughly disagree with him about many things – the way he characterized Section 230 of the Communications Decency Act couldn't have been more wrong – but it's quite bracing to hear a capitalist who doesn't hate capitalism defend it against the vast majority of capitalists, who hate capitalism more than any socialist ever did.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

Incentives matter. Companies above a certain size become too big to fail and too big to jail. They capture their regulators and ensure that any damages the government extracts are less than their profits — a fine is a price.

Juries, on the other hand, can and do really whack a company for its bad conduct. They understand that incentives matter. They understand that a company that saves $1,000,001 by cutting back on workplace safety can’t be driven to improve its behavior by a fine of $1,000,000 after it kills a bunch of workers. If profit outstrips penalties, penalties aren’t effective.

A dirty $1m profit needs to be met with a $100m judgment. As the Untouchables MBA teaches us, this is just sound business: “They pull a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue.”

https://www.youtube.com/watch?v=xPZ6eaL3S2E

But suing these giant companies is hard. They can tie you up in court for years — decades, even. They can outspend and outwait you. The more profits a company has racked up through its evil deeds, the more claims it can fend off. Incentives matter, so if you’re gonna commit corporate murder, you’d better do a lot of it to build up the cash needed to scare off your victims and their survivors.

However: the bigger a company is, the more cash it has, the more money there is to extract from it if you can prevail in court. If the company has genuinely injured you, and if you can mobilize the capital and resources to pursue it to final judgment, there’s a huge payoff at the end of the process — and a lesson for all the other companies contemplating their own course of action.

That’s the Voltaire MBA: “you have to execute an admiral from time to time, in order to encourage the others.”

For hundreds of years, rich, powerful people have observed their colleagues’ abuses and thought, “They only pull that shit on peasants — but if they did it to me, I could sue them for everything!”

This led to an obvious course of action: strike a bargain with the mutilated, ruined peasants to finance their suit against the toff that so abused them, in exchange for a (large) share of the proceeds. Medieval courts called this champerty; today, we call it litigation finance: investing in other peoples’ grievances against deep-pocketed monsters, in the expectation of reaping huge cash payouts.

On paper, litigation finance seems like a neat solution to a messy problem. The bigger a company is, the worse the abuses it commits — and the more it can be made to pay for its sins. The normal economics of litigation are turned upside-down: rather than avoiding the largest companies, you pursue them. This is the Willie Sutton MBA: “That’s where the money is.”

Litigation finance is a large and growing chunk of the finance sector. For about a decade, hedge funds and private equity have been bankrolling law-firms that represent people who’ve been mangled by corporations, keeping the money flowing through whatever delays and entanglements the target throws up:

https://www.nytimes.com/2015/10/25/magazine/should-you-be-allowed-to-invest-in-a-lawsuit.html?smid=tw-share

Litigation finance can be thought of as the no-win/no-fee “ambulance chaser” business on steroids. While a local lawyer can make a tidy living going after slip-and-falls and fender-benders, splitting the proceeds with their clients, a firm backed by a huge investment fund can do the same to companies with billions in the bank and hundreds of millions on the line.

Litigation finance is also closely related to impact litigation, which is when a nonprofit uses charitably raised funds to chase corporations and governments through the courts to establish precedents that overturn bad laws or pave the way for future judgments. Impact litigation can be thought of as the trailblazer for litigation finance: for-profit lawsuits are risk averse and stick to pursuing cases that have a high likelihood of eventually succeeding, while impact litigators are a kind of legal entrepreneur, advancing new, uncertain legal theories in the hopes of making new law. Once that law is created, litigation finance can drum up thousands of similarly situated plaintiffs and sue tons of companies on the same theory, citing the new precedent.

Litigation finance’s first big scores was going after med-tech and pharma companies. A lax regulatory environment allowed medical companies to market deadly products that maimed or killed people wholesale — think Vioxx, vaginal meshes or metal-on-metal hip replacements (a doc about this, The Bleeding Edge, will give you persistent nightmares):

https://en.wikipedia.org/wiki/The_Bleeding_Edge

Suing the companies that killed your family or permanently disabled you is a slow and ugly process, but it’s a lot more certain than asking Congress to patch the loopholes the company that hurt you exploited, or hoping that a future President will appoint an agency head who gives a shit, and that the Senate will confirm them. And since money talks and bullshit walks, corporations that can’t pay dividends or do stock buybacks because they owe all their cash to their victims will suffer in the stock market, and their rivals will clean house and tread carefully.

Which brings me to the latest turn in litigation finance: climate litigation. As more and more money has sloshed into ESG funds that are supposed to make money by investing in ethical, climate-friendly businesses, the idea of suing giant oil companies and other wreckers has grown more attractive. 18 months ago, Businessweek covered the nascent-but-growing phenomenon:

https://pluralistic.net/2022/02/09/grievance-factory/#champerty

That growth has only continued. With more and larger ESG funds chasing returns, there’s a lot more money available to represent, say, poisoned indigenous people in the global south whose ancestral lands have been rendered an uninhabitable hellscape by a mining or petrochemical company. The returns from these cases aren’t correlated with wider economic trends: whether the market is up down, it makes no difference to the size of the judgment or settlement that is extracted in the end.

A new piece in the Financial Times by Camilla Hodgson does an excellent job rounding up the state of play in litigation finance, starting with the oil giant PTTEP paying $102m to 15,000 Indonesian farmers to settle claims stemming from a massive, ocean-killing oil spill in 2019:

https://www.ft.com/content/055ef9f4-5fb7-4746-bebd-7bfa00b20c82

The firm that financed the suit is Harbour Litigation Funding, and they paid for a lot of shoe-leather lawyering, sending reps on off-road motorbikes to each of the farmers’ plots to sign them up. The case cost more than $21m, and Harbour creamed $53.5m off the top of the settlement from PTTEP — about 40% of the total.

Those numbers are pretty compelling investment story: there aren’t a lot of opportunities to make a >100% return on a $21m investment in 15 years — let alone investments that let you claim to be bringing justice to poor farmers who’ve been abused by rapacious corporate murderers.

Other cases are still ongoing: mining giant BHP is facing a £36b class action case over the 2015 collapse of Brazil’s Fundão dam, which released poisoned mine-tailings into waterways serving millions of people. 700,000 plaintiffs are in the class, and the investors, Prisma Capital (Brazil) and North Wall Capital (UK) have already fronted £70m pursuing the case.

There is a vast inventory of cases like these, just lying around, waiting for someone to stake a claim. One barrier is that most of the world’s large law firms are conflicted out of pursuing these cases — they represent these same companies in other actions. But a new sector of specialized, un-conflicted firms is growing up, and tackling more and more of these cases.

These firms are chasing relatively easy claims, but there’s an even bigger fish out there, waiting to be caught: class actions against carbon-intensive companies, especially coal and oil companies, for their knowing contributions to the global climate emergency. These corporations are sitting on hundreds of billions of dollars, and they have inflicted trillions in harms. There’s gold in them thar wildfires.

The FT cites experts who predict a massive wave of litigation finance climate suits in the next 2–3 years, and notes an increasing tempo of shareholder motions demanding that big oil and mining companies disclose their litigation risks in their investor reports. This is a very compelling idea, a kaiju boss-fight in which we recruit monsters to fight other monsters. It’s such a fun idea that I actually wrote a novel about it, 2009’s Makers, in which corporate misconduct that has not yet reached the statute of limitations becomes the new oil, prompting a huge investment bubble:

https://craphound.com/category/makers/

But is the answer to a bad guy with a law firm a good guy with a law firm? There are certainly some ways this can go very wrong (many of which end up in Makers). Back in 2015, Cathy O’Neil published an excellent critique of litigation finance in the context of vaginal mesh cases:

https://mathbabe.org/2015/09/01/litigation-finance-a-terrible-idea/

O’Neill’s point is that incentives matter. The incentive for a litigation finance fund is to extract settlements, not win justice. Time and again, we’ve seen how a financial tactic can be severed from a societal strategy — like how GDP can be goosed to spectacular heights without improving national prosperity.

There’s even a name for this phenomenon: Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.” The finance sector is spookily good at decoupling positive societal outcomes from positive investor outcomes. The real answer to medical companies that mutilate women with vaginal meshes, or destroy the planet with CO2, is criminal sanctions and regulation, not private lawsuits.

That said, I think there’s a case for the one leading to the other. Right now, climate wreckers devote very large sums to preventing effective action on climate. Suborning regulators and politicians all over the world isn’t cheap. If we take away the money they’ve saved up for this project through stonking, eye-watering judgments, and if we convince the capital markets not to give them any more money lest it be immediately extracted to pay for more redress of a litany of grievances, then perhaps we can deprive them of the capacity of corrupt our political process.

One way to understand whether something is a genuine threat to a company’s power is to look at how viciously the company attacks it. If you doubt that unions could do good for workers, just take a peep at the all-out violent blitzes that Amazon and Starbucks mount in the face of union drives. I mean, imagine if the Democratic Party took unions half as seriously as the GOP!

The corporate lobby exhibits the same terror over plaintiff-side lawsuits as it does over unions. A massive, decades-long campaign to villify plaintiff-side lawyers has convinced many of us that corporations are the victims of the legal system, rather than its masters. The PR campaign is surprisingly effective, despite its reliance on lies about the “McDonald’s hot coffee lawsuit” and other urban legends:

https://pluralistic.net/2022/06/12/hot-coffee/#mcgeico

Corporate plunderers are terrified of being dragged into court by their victims, and devote titanic amounts of blood and treasure into making it harder and harder to do so. On the “the more scared the are, the better” metric, litigation finance is a slam dunk.

But winning a case isn’t the same as getting a judgment or disciplining a firm. When Steven Donziger won a landmark judgment against Chevron on behalf of indigenous people whose lands and bodies had been permanently poisoned, the company struck back:

https://pluralistic.net/2020/09/02/free-steven-donziger/#free-donziger

Chevron bribed a judge in Ecuador to claim that Donziger had rigged the case, then brought a case in the US against Donziger for racketeering, judge-shopping to get judge Lewis A Kaplan on their case. Kaplan is a former tobacco industry lawyer who never met a corporate criminal he didn’t love, and when the SDNY prosecutor declined to press charges against Donziger because the case was absurd, Kaplan appointed a private lawyer — whose firm also acted for Chevron! — to act as prosecutor. The case against Donziger was obviously trumped up — the Ecuadoran judge who accused him of corruption later recanted and multiple countries’ Supreme Courts upheld the judgment Donziger won against Chevron. Nevertheless, Kaplan got Donziger locked up under house arrest for years, and even got him banged up in Riker’s for a time. Donziger’s lost his law license and his clients are still awaiting judgment.

This is the best law that money can buy, and Chevron has a lot of money. The massive expenditures needed to railroad Donizer were a pittance compared to the $9.5b judgment Chevron owed its victims in Ecuador.

The lesson of Donziger is that these companies won’t go genrly to their graves. They are enormously, unimaginably wealthy and act with the ruthlessness born of greed, which makes mere sadism pale by comparison. Litigation finance is exciting and promising, but it’s only a tactic — and it’s a tactic that’s always in danger of being turned against the goal it nominally serves. The people funding litigation finance don’t want to save the world — they just want to get rich. They can and will change sides if someone can make the business case for doing so.

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2023/06/06/thats-where-the-money-is/#champerty

[Image ID: A mirrored office tower bearing the Exxon logo. One face of the office tower is a graffiti-covered ATM. Before the tower is a giant pile of bricks of oversized US $100 bills in paper wrappers. The ATM screen depicts a smouldering Deep Water Horizon oil platform.]

Image:

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