TWO YEARS ago, Jenna Marie Duncan walked into a Cold Stone Creamery in Levittown, N.Y., and bought some pistachio ice cream. Some time thereafter — it's not clear when — she decided to make a stink about the fact that the pistachio ice cream sold by Cold Stone Creamery doesn't contain actual pistachios. By "make a stink," I don't mean that she yelled at the store manager or demanded a refund. I mean that she engaged a law firm that specializes (according to the firm's website) in "class action and false advertising litigation" and sicced its litigators on the ice cream company.
Last August, the lawyers filed a lawsuit on behalf of Duncan and "all residents of New York" who purchased Cold Stone Creamery's pistachio ice cream in recent years. How many consumers is that? "At a minimum, there are likely tens of thousands of class members," the complaint asserts. And how many of those ice cream buyers were upset because their ice cream didn't include real pistachios? There is no way to know for sure, but my guess, in round numbers, would be zero.
I base that guess on my own experience with class action suits, which perhaps mirrors yours. From time to time, an invitation arrives by mail to notify me that I am eligible to be added as a plaintiff in a suit that has been filed on behalf of everyone who bought product X or used service Y within a certain time period. I may have been perfectly satisfied with product X or service Y — I may not even remember the transaction — but that makes no difference. All I have to do to join the class and get a share of any eventual payment is sign my name.
Typically in such cases, a class member can expect to receive a nominal sum if the suit leads to a settlement. The Institute for Legal Reform, citing a study by the federal Consumer Financial Protection Bureau, noted last fall that the average award to a consumer in such cases is about $32. It's a very different story, though, for the plaintiffs' lawyers. For them, the average payout is nearly $1 million.
In 2023, for example, Keurig agreed to pay $10 million to settle a class action lawsuit in which it was accused of wrongly describing its coffee pods as recyclable. Class members were eligible to receive a maximum of $36 per household. The attorneys, on the other hand, received $3 million in legal fees, plus an extra half million in costs.
 Cold Stone Creamery makes its pistachio ice cream with artificial flavoring. Should that be grounds for a federal lawsuit? |
Of course there are cases of significant wrongdoing that class action lawsuits are ideally suited to redress, from civil rights abuses to stock-market collusion to violations of privacy. But too many class action cases are little more than legalized extortion for "offenses" that are trivial at worst. Who exactly was harmed because they tossed their used Keurig pods into the recycle bin instead of the trash bin? Or because the "footlong" sub they bought at Subway's sometimes measured slightly less than 12 inches? Or because the pistachio ice cream they bought one summer's day was made with artificial pistachio flavoring instead of actual pistachios?
In the American legal system, nothing prevents cranks and screwballs from filing absurd lawsuits. In one notorious instance, a plaintiff in Washington, D.C., sued his neighborhood dry cleaner for $67 million because it misplaced the pants he had brought in for alterations. He later reduced his claim to $54 million, and the case went to trial in the D.C. Superior Court. When he lost at trial, he appealed. Then he appealed and lost again. Only then was he sanctioned for engaging in frivolous litigation — the plaintiff, who happened to be a lawyer, was suspended from practicing law for 90 days.
Granted, that case was unusually egregious. But outrageous or malicious lawsuits are filed all the time in this country, and they cost Americans vast sums in money and time. A pervasive fear of being sued makes life more expensive, more frustrating, less productive, and less free for all of us.
Chief Justice Warren Burger warned 45 years ago that America was turning into "a society overrun by hordes of lawyers, hungry as locusts." At the time, the United States had around 450,000 attorneys. Today the number of lawyers in the United States has soared to more than 1.3 million. With so many locusts — I mean lawyers — at large in the country, who can be surprised that litigation, regulation, and disputation have metastasized beyond reason?
The Federal Rules of Civil Procedure authorize district court judges to sanction lawyers who file frivolous lawsuits. Rarely do they do so. In this case, Judge Gary R. Brown not only ruled that the class-action suit against the ice cream company may proceed, he contributed to the general absurdity of the case by issuing what ABC News called a "sometimes tongue-in-cheek court ruling" that was "sprinkled with song lyrics about ice cream — from Louis Prima's 'Banana Split for My Baby' to Weird Al Yankovic's 'I Love Rocky Road.' "
Brown described the lawsuit as a "delightful dispute" and declared that "it raises a deceptively complex question about the reasonable expectations of plaintiff and like-minded ice cream aficionados." The judge didn't explain what is so "delightful" about litigation that will waste copious amounts of time and money. Nor did he clarify how it is "reasonable" to make a federal case — literally — out of a minor grievance that could surely have been resolved amicably. Duncan could have asked for her money back. She could have resolved not to go back to Cold Stone Creamery. She could have suggested to the company that it add nuts to its pistachio ice cream. Any of those options would have been more prudent and restrained than going to court. But Duncan and her lawyers decided to spin the class-action roulette wheel in hopes of a lucrative jackpot. Their lawsuit makes a mockery of the legal system, but what else is new?
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The Celtics' championship and the tax collector's bonus
More than a million revelers showed up for Friday's "rolling rally" in downtown Boston to celebrate the Boston Celtics' 18th NBA championship. Apart from the Celtics players and staff, perhaps no one had more reason to rejoice than the government of Massachusetts, which will reap a windfall of more than half a million dollars in tax revenues thanks to the team's record-breaking achievement.
For winning the championship, each of the Celtics will be paid a bonus of $804,000. Those earnings will be taxed, of course. The regular Massachusetts tax rate is 5 percent, so the state's share of each player's championship bonus will be a hefty $40,200. But that's not all.
As policy analyst Mitchell Scacchi of the Josiah Bartlett Center in Concord, N.H., noted in a commentary last week, the millionaires surtax approved by Bay State voters in 2022 will take a much bigger chunk out of the bonuses paid to 16 of the Celtics — the ones whose income this year will top $1 million. Under the new tax law, everything they make above $1 million is to be taxed at 9 percent. That means those players will have to give the Department of Revenue an additional $32,160 of their bonus, for a total of $72,360 in state income taxes. Thanks to the millionaires tax, Massachusetts will thus be helping itself to its own championship bonus — an extra $514,560 paid by those 16 players.
 Because of the 'millionaires tax' Massachusetts voters approved in 2022, the championship bonuses paid to Boston Celtics players will generate an additional half-million dollars for the state. |
The players earned their bonus by outplaying every other team. What has the Commonwealth done to deserve such a lucrative premium?
"You might think that millionaire NBA players aren't sympathetic figures, so who cares?" Scacchi writes. But the surtax is grounded in a fundamental unfairness: It penalizes people who have been especially productive because their numbers are so few and they can be targeted with impunity. Even worse, the millionaires surtax makes no distinction between the sliver of ultra-rich earners who pocket seven- or eight-figure incomes every year and the much larger population of "millionaires" whose high income is a once-in-a-blue-moon event.
"Some Celtics players earn tens of millions of dollars a year, but most don't," Scacchi notes. "The lowest-paid players might enjoy an income of more than $1 million for just this year, or for a few years. They'll have to continue making a living outside the NBA for many decades. Being able to invest an additional $32,160 this year could make a big difference in their lives." The same goes for other Massachusetts residents who happen to experience one or two exceptionally good years.
Celtics players have no choice about working in Massachusetts, but many high-earning Bay State residents can choose to relocate if they find the millionaires tax too onerous.
Which is exactly what they have been doing.
According to a survey released last week by the Massachusetts Society of Certified Public Accountants, high-income earners and businesses are leaving the state at an "alarming" rate. Much of that outmigration is being fueled, the MassCPAs report concludes, "by the millionaires tax and other tax burdens that make Massachusetts less competitive than neighboring states."
It is an unshakable article of faith among Bay State progressives — especially those who campaigned for the millionaires tax — that high earners won't flee Massachusetts to escape unreasonable taxes. Yet the state's CPAs report that they are doing so in "daunting" numbers:
Two-thirds of those surveyed reported that at least one of their clients has already established their domicile away from Massachusetts within the last 12 months. Many high-income residents are seriously considering changing their domicile, with 90 percent of respondents indicating that their high-income clients are considering moving from Massachusetts in the next year.
People move from one state to another for many reasons, but the CPAs' survey found that the millionaires tax is a "significant factor in clients' decision to relocate from Massachusetts." More than 60 percent of the accountants reported that the new surtax is one of the reasons their clients decided to get out. One-third said it was the primary reason.
Even before the millionaires tax was approved, Massachusetts ranked high on the list of states that residents are leaving. Proponents of the tax point to the extra funds the surtax has generated and gloat that it is working as intended. But realists see that whatever short-term gains the surtax brings in is no match for the long-term losses caused when high-income earners move out. When tax rates bite, more of the well-to-do leave. It's nice to live in a state with championship sports teams. But fans can easily root for the Celtics from New Hampshire — and pay no income tax at all.
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The Last Line
"Let us therefore brace ourselves to our duties, and so bear ourselves that, if the British Empire and its Commonwealth last for a thousand years, men will still say, 'This was their finest hour.' " — Prime Minister Winston Churchill, Address to the House of Commons (June 18, 1940)
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(Jeff Jacoby is a columnist for The Boston Globe).
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