Head of the Class Action

Brad Seligman was nervous. He and his girlfriend, Sara, were about to have their “Tell me your deepest, darkest secret” talk, and Seligman had a whopper. Sara knew he was founder and executive director of the Impact Fund, a do-gooder nonprofit that granted money to public-interest lawyers and organizations to help them bring class action lawsuits. She was also aware that prior to that he’d worked for 11-plus years at Saperstein, Seligman, Mayeda & Larkin, an Oakland law firm that specialized in class action anti-discrimination suits. She knew he was a previously married ex-hippie who drove an old car and lived in a modest house. She liked all that, so he didn’t know how she’d react to this. But, adopting a hushed, somewhat embarrassed tone, Seligman confessed. “I have something to tell you,” he said. “I have A LOT of money.” 

Millions, actually. While Seligman had done well, helping Saperstein win employment discrimination cases against State Farm Insurance and Lucky Stores, involving hiring, salary and promotional policies against women, the big money, the money that necessitated the confession, had come when the firm bought out his partnership. One day his 9-year-old daughter, whom he was raising by himself, came home from school and told him, “I’m bored with you being a lawyer. I want you to quit.” And that was it. He quit Saperstein, and after the firm bought out his partnership, the resulting riches made him so uncomfortable that his first thought was “How can I give this away?”

So, in December 1992, a dozen social-activist friends of Seligman’s gathered in his living room for an unusual mission: to figure out how best to distribute the $1.25 million with which Seligman had seeded his new Impact Fund. When the dust settled, the plan called for giving away $250,000 a year in directed grants until the fund was depleted. Due to good investments and fundraising, that day has yet to come. Seligman, 55, still runs the fund out of a nondescript main-floor office overlooking the Berkeley Marina.

After setting up the fund, Seligman felt good. Making big bucks was never part of his plan. He grew up in a Hollywood household where every Sunday evening over dinner, his father, Selig J. Seligman, ran a seminar on current events, quizzing and discussing issues with the children. 

Selig had served in the Army during World War II as a non-commissioned officer because, he said, the other side “aims for officers.” Later, he served as a junior prosecutor at the Nuremberg Trials, but only signed on after he was assured he could come aboard as a civilian. 

“What my father told me was reminiscent of Hannah Arendt’s line about ‘the banality of evil,’” Seligman says, from his office along the Berkeley Marina. “In preparing for the trials, he interviewed these Nazis, and they would say things that were just chilling, but they appeared completely normal. That was an important lesson he was trying to tell us: evil doesn’t wear a sign announcing itself.” 

The apple didn’t fall far from the tree. One Sunday evening in 1968, father and son got into a heated debate over the upcoming Democratic primaries. “I made the argument for Eugene McCarthy versus Hubert Humphrey, who my dad backed. Afterwards he went to my mother and said, ‘I just lost my first debate with Brad,’ and he was really proud.” 

Just a few years later, on the same night Seligman won the National High School Debate Championship, his father, just 51, died in his sleep of a heart attack. What happened next helped radicalize Seligman.

“My dad had been an incredibly successful production executive for ABC for almost 20 years, and when he died, he was two weeks short of vesting his pension. Of course, they didn’t honor it. This began a process for my mom of being downwardly mobile.” 

The Vietnam War was raging, and Seligman, now attending University of California Santa Cruz, joined the Santa Cruz Radical Union (SCRU) and drove to Berkeley frequently to partake in anti-war demonstrations. One year later, he transferred to UC Berkeley wholesale.

Still not knowing what he wanted to do with his life, he dropped out and drifted around, until one day, walking around the campus at Sonoma State University, he spotted a sign advertising the school’s “alternative major in English.” 

“I apparently came in with an enormous chip on my shoulder. I said, ‘You mean you’re going to give me college credit doing exactly what I’m doing?’ Dick Hendrickson, head of the Alternative Studies department told me, ‘You sound exactly like the kind of person we’re looking for.’” 

So Seligman moved with his then-girlfriend into a cabin on the Russian River that rented for $10 a month. “It was only worth $9.90,” Seligman jokes. The roof leaked, the place lacked insulation, and the toilet didn’t work. Then one day he went to his mailbox and pulled out $130 in bills. “I only had $80 in my bank account.” This, as much as anything, prompted him to apply to law school. 

He found out the applications deadline had passed, so he climbed into his VW bus and drove around California, trying to convince schools to admit him. Hastings College of the Law wait-listed him and then granted him admission on the first day of classes. 

Once there, though, Seligman rarely attended classes. After the first semester, a lot of school days were passed playing bridge in the cafeteria. 

Still, he managed to obtain his law degree and get a job with Saperstein. When he joined, the State Farm suit was already in progress. 

Plaintiffs accused State Farm of not hiring women as sales agents, then the best paying job in the field. Seligman describes State Farm’s reaction to being sued as a “scorched-earth defense.” To keep the small firm going, the partners mortgaged their houses several times. The case lasted 14 years. “They tried to break us. They came close. They’ll never know how close they came.” Finally, State Farm came to a $250 million settlement. “Success is in large part staying at it and surviving,” Seligman says. 

The first case in which Seligman was co-lead counsel came in 1985, against Lucky Stores, Inc. The suit alleged that the supermarket chain discriminated against hiring women into blue-collar jobs. Seligman brought the case to settlement after only one week of testimony. The firm made a motion to collect attorney’s fees on August 25, 1986. Lucky asked for a continuance.

“I remember the date because the firm had a line of credit for $600,000 that was totally tapped out and was due on August 27. Nothing motivates you as much as bankruptcy. We told the judge, ‘If you continue this, we’ll go under.’ The judge ruled from the bench and awarded us the fee. That saved us.”

A second case against Lucky (Stender v. Lucky Stores) resulted in the third-largest sex discrimination class action recovery in history ($107.25 million).

Those first few years, Seligman also handled a number of individual wrongful-termination cases. “Then I realized if I took that 1,000 hours of time I’d spent on the case, I could do something good for 500 people instead of one.”

He preferred class action suits for tactical reasons, too. “Individual cases rise and fall on your client. On some fundamental level, you’re defensive. The defendant is going to challenge your client and say, ‘He was a terrible, awful employee blah blah …’ In class action, the focus is on the defendant. I can really be on the offensive, looking at the defendant’s conduct and keeping a searchlight on that.” 

Still, the firm was bucking a decided trend. While class action suits were one of the great engines in the Civil Rights movement, by the mid-’90s, they had almost disappeared. A chart outside Seligman’s office dramatically illustrates this point. Federal court class action filings from 1976 to 2001 dropped from 2,000 cases to 238. Employment discrimination cases dropped from 1,174 to 73.

Seligman blames the decline on tougher legal standards that discourage class action cases, coupled with the arrival of more conservative judges to the bench. 

After he left Saperstein, he set up a trust fund for his daughter, bought a small house and helped support his younger brother, Adam, a jazz critic with Tourette syndrome who died in 1999. Then he decided it was time to get rid of all that icky excess money. Today the “short term” Impact Fund has given out more than $4 million and is still awarding the same quarter-million annually, usually in $10,000 and $15,000 increments. It employs 12 staff members, including three lawyers and a paralegal. Seligman’s sister supervises the nonlegal staff and fundraising. Remarkably, eight members of the original group that convened that day in 1992 still serve on the board, which has expanded to 16. For the first 10 years, Seligman took no salary whatsoever. The Impact Fund now pays him $85,000 annually. 

The fund’s grants go for a firm’s out-of-pocket expenses, such as the cost of depositions and investigations, but not for attorney’s fees or staff. “The formula is simple: if you win, you pay us back. If you lose, you pay us nothing.”

One of its first grants went to stop the Department of the Interior from transferring government land to a private company to create a nuclear waste dump in the Mojave Desert, where the desert tortoise was an endangered species. The case went on 10 years before resolving in the reptile’s favor. 

These days the Impact Fund has bigger tortoises to fry. In the largest civil rights class action ever, the fund sued Wal-Mart for sex discrimination against women, alleging unequal pay and promotions. The suit has 2 million class members. 

Impact’s involvement began in January 2000, when Stephen Tinkler, a New Mexico attorney, asked Seligman to look into a case he was working on involving the retail giant.

Not knowing much about the company, Seligman made two phone calls. The first was to a friend who represented retail clerks. “I said, ‘Wal-Mart,’ he said, ‘Evil empire.’ He told me it was a very centralized organization, which is important because it indicates that their policies will be the same everywhere.” His next call was to an economist who had a database of reports about company work forces, and Seligman says, a similar reaction. This prompted him to launch a year-and-a-half investigation during which time he interviewed many Wal-Mart employees. 

Impact also has cases pending against Costco and Taco Bell. One sign to Seligman that he’s doing something right is getting dissed by The Wall Street Journal editorial page, which belittled his suits: “If mere statistical imbalances can trigger a class action, companies will be forced to make pay decisions based on statistics. … Ultimately, that leads to racial and gender quotas, all in an effort to avoid frivolous lawsuits.” 

Aside from giving grants and filing lawsuits, the Impact Fund also holds an annual two-day conference and training for class action plaintiff attorneys, is engaged in a pilot program to train novice class action attorneys to litigate big cases, and has set up a sabbatical fund through the Vanguard Public Foundation to let public-interest “warriors” take three months off to recharge their batteries. In addition, Seligman teaches a “How to Do Class Action Civil Rights Litigation” class at Hastings.

In case you’re in suspense, Sara didn’t recoil when Seligman broke the news about his wealth. The couple married in 1994, have two girls, Mariana, 12, and Sofia, 8, and now live in Berkeley. (His daughter Corina, who convinced him to quit the law firm, is now 25.) Seligman learned that while money can’t buy you love, having it isn’t a deal-breaker either. What it can buy you, however, is a career you love—especially when that career entails giving a portion of that money away.