Home / General / Chamber of Commerce’s Court Makes Class-Action Suits Much More Difficult

Chamber of Commerce’s Court Makes Class-Action Suits Much More Difficult

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The Supreme Court has handed down its ruling in Wal-Mart v. Dukes, a case I’ve discussed earlier. The Court unanimously held that the suit should not proceed. There are, however, major differences in the reasoning that matter going forward.

Every member of the Court agreed that the class could not be certified under rule 23 (b)(2) of the Federal Rules of Civil Procedure, which require that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” The Court held that the class was too diverse to qualify under this standard. Where the Court broke along familiar ideological lines, however, is one the question of whether the Wal-Mart employees might qualify as a class under rule 23 (b)(3), which permits suits to go forward if “the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” The Court’s five Republican appointees rejected this claim out of hand. Ginsburg’s dissent argues that because the question was not before the Court, whether the suit could qualify under 23 (b)(3) should be sent back to the lower courts. As Ginsburg notes, there is good reason to believe that in this suit “questions of law or fact common to class members” would “predominate over any questions affecting only individual members”:

Women fill 70 percent of the hourly jobs in the retailer’s stores but make up only “33 percent of management employees.” “[T]he higher one looks in the organization the lower the percentage of women.” The plaintiffs’ “largely uncontested descriptive statistics” also show that women working in the company’s stores “are paid less than men in every region” and “that the salary gap widens over time even for men and women hired into the same jobs at the same time.”

The District Court identified “systems for . . . promoting in-store employees” that were “sufficiently similar across regions and stores” to conclude that “the manner in which these systems affect the class raises issues that are com-mon to all class members.” The selection of employees for promotion to in-store management “is fairly characterized as a ‘tap on the shoulder’ process,” in which managers have discretion about whose shoulders to tap. Vacancies are not regularly posted; from among those employees satisfying minimum qualifications, managers choose whom to promote on the basis of their own subjective impressions.

Systematic discrimination at a large corporation such as Wal-Mart simply cannot be addressed piecemeal. I could have lived with a ruling that focused on the unique facts of this case. But in their broad ruling, the Court’s five most conservative justices have made it much more difficult for civil rights laws to be meaningfully enforced in practice. It will be part of the classic conservertarian bait-and-switch: individuals filing lawsuits will not have enough evidence to prove discrimination, and class action suits that develop systematic evidence will be thrown out for not having enough in common.

[X-Posted to TAPPED.]

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  • wengler

    Isn’t this going to throw the lower courts into disarray though? The amount of lawyers isn’t going to go down, the amount of discrimination in Corporate America isn’t going to go down, so these cases are simply going to be filed as tens of thousands of individual cases clogging up the court system.

    Obviously the worker is getting screwed the most here, but without class action suits how the hell is the court system going to deal with hundreds of thousands of individual cases?

    • rea

      The answer, of course, is that it won’t. Pursuing most of these cases won’t be economic wthout a class action–which of course is exactly why the right hates class actions.

      • Goes beyond even that: the plaintiffs here needed class certification to establish statistically that discrimination was so prevalent that it amounted to WalMart policy.

        • Warren Terra

          Exactly; even if you ignored the problem of each plaintiff having too small a claim to justify action (perhaps by hoping punitive damages to pay for the case), in many class-action cases it’s hard to prove the unjust harm done to each individual plaintiff, while the harm done t othe average plaintiff can be demonstrated. Take for example lung cancer: smoking increases your chance of getting it by a huge degree (for the purpose of argument I’ll make up the number 10-fold) – but a smoker suffering from lung cancer and suing Philips-Morris still has a 9% chance they’d have gotten lung cancer without having smoked.

        • L2P

          Well, OK. We make that argument because class actions are obviously needed and useful, and there’s literally not good reason for denying them in cases like this. For practical reasons, we need class actions for cases like this.

          But those are PRACTICAL reasons – logistics, finances, etc. As a strictly legal matter, attorneys can and do often plead (and prove) statistical claims of discrimination with a single plaintiff. This happens all the time (well, relatively speaking – there’s not a ton of these cases).

          Can you explain why it would be impossible (or even difficult except for the money of course) for me to file a case on behalf a single mid-level manager at Walmart based on statistical discrimination? I can’t figure out how the case would be any different. Is Walmart going to be able to argue that their nationwide practices don’t have any tendency or reason to lead to admissable evidence? Has that already been ruled on and I missed it? (Always likely – I’m in a pretty specialized area these days.)

          What am I missing here?

        • David M. Nieporent

          That’s not right as a procedural matter. Setting aside the merits of the case, the plaintiffs don’t need class certification to make a statistical argument.

          (The problem is that the gravamen of plaintiffs’ case is that Walmart didn’t have a policy, rather than that it did.)

          • Warren Terra

            Walmart had a systemic pattern of discrimination against female employees. Such a widespread pattern that the plaintiff alleged that it should be considered actionable despite its existence being contrary to the noble values of sexual equality their official policies purported to pursue.
            I’m not terribly well informed on these issues, but I’m willing to guess that in most discrimination cases the plaintiffs aren’t so fortunate as to discover an official doctrine of “discriminate!”. Rather, they try to prove the existence of discrimination, even when the official policies would seem to have tried to prevent it.

    • BigHank53

      Hundreds of thousands of cases filed by whom? How many law firms in this country can take on Wal-Mart? Wal-Mart can easily deliver a semi filled with paperwork and force the plaintiff to dig the evidence out of it. Good luck.

      • L2P

        Well, the ACLU could, if they cared about things that improve peoples lives as much as if homeless people can poop in public

  • wsn

    Any chance of a legislative fix a la Ledbetter?

    I mean, I know there’s 0 chance with this Congress, but easy language that could be put in or voted on if/when the D’s get Congress back?

    • Hogan

      I don’t think Congress writes the Federal Rules of Civil Procedure.

      • Paul Campos

        As a practical matter they do (or at least they could) in that they have final approval over all proposed changes.

        • L2P

          See also, Title 28, Parts IV and V.

          They could just say suck it, Roberts, whenever they wanted to.

  • Joe

    Query (half-serious): “Ginsburg’s dissent argues that because the question was not before the Court, whether the suit could qualify under 23 (b)(3) should be sent back to the lower courts.”

    Is the majority, therefore, practicing “judicial activism” in holding contrary?

    Largely rhetorical. I don’t really take the term (as typically used) that seriously. See also, “empathy.”

  • p j

    And then there’s poor Stan Chesley about to be disbarred on top of all this. The magnificent era when corporations sweated bullets is now officially over http://blogs.forbes.com/danielfisher/2011/06/09/superlawyer-stanley-chesley-faces-reckoning-tuesday/

    Thanks for the memories.

  • matth

    “Where the Court broke along familiar ideological lines, however, is one the question of whether the Wal-Mart employees might qualify as a class under rule 23 (b)(3), which permits suits to go forward if [common questions predominate].”

    I think you’re mis-reading the dissent: it accuses the majority of mixing up the predominance analysis from (b)(3) with the (b)(2) “common question of law or fact” analysis. See the second-to-last sentence of Ginsburg’s partial dissent: “The Court errs in importing a ‘dissimilarities’ notion suited to Rule 23(b)(3) into the Rule 23(a) commonality inquiry.”

    As I read the opinion, Ginsburg and the Court agree that there can be no individualized back-pay claims in a (b)(2) class action, and that common issues must predominate in a (b)(3) class action.

    Ginsburg differs from the majority in that she would leave open the possibility of a (b)(2) class with no money damages.

    Since Ginsburg agrees with the majority’s analysis of the need for individualized damages hearings, allowing a (b)(3) class would be a hollow victory for the plaintiffs, anyway. The class would clearly be unworkable if the trial court had to conduct hundreds of thousands of individualized damages hearings.

    • matth

      Ahh, never mind… Please disregard my comment above.

  • Theophylact

    I’d call it “Catch-22” rather than “bait-and-switch”.

    • Anonymous

      Agreed. I came here to say the same.

    • The bait-and-switch creates a Catch-22!

  • rea

    The class would clearly be unworkable if the trial court had to conduct hundreds of thousands of individualized damages hearings.

    Far easier, of course, to conduct hundreds of thousands of individualized damages hearings in hundreds of thousands of individual cases.

  • DrDick

    Systematic discrimination at a large corporation such as Wal-Mart simply cannot be addressed piecemeal

    This is a feature, not a bug, to the conservative majority on the court.

  • David M. Nieporent

    Systematic discrimination at a large corporation such as Wal-Mart simply cannot be addressed piecemeal.

    Of course, that completely begs the question. It has to be addressed piecemeal because there isn’t “systemic discrimination.”

    • DocAmazing

      Guess we’ll never know now.

  • jeer9

    Anyone able to understand the “systemic discrimination” of the DoJ which has the money, time, and effort to prosecute Edwards’ horrific misuse of campaign funds but doesn’t seem terribly troubled by a SC justice’s apparent tax evasion (not to mention his unethical attendance at conservative retreats or his unsanctioned raising of funds for hometown charities)? It’s not as if he doesn’t hold an important position and replacing him wouldn’t change the balance of power on a whole number of a consequential legal issues. Of course, that process might involve some political hardball – even if the charges turned out to be well-founded. It would probably be torture to sensitive bipartisan types and might alienate the independent voter.

    • David M. Nieporent

      Anyone able to understand the “systemic discrimination” of the DoJ which has the money, time, and effort to prosecute Edwards’ horrific misuse of campaign funds but doesn’t seem terribly troubled by a SC justice’s apparent tax evasion (not to mention his unethical attendance at conservative retreats or his unsanctioned raising of funds for hometown charities)?

      I see that birtherism style idiocy is not confined to the right. Tax evasion? WTF are you talking about? (Googling, I see that the moonbat left seems to have confused something about judicial disclosure forms, which have nothing to do with taxes and don’t even ask about income, with tax returns.)

      (And what is “unsanctioned raising of funds”? Who do you think “sanctions” it and what would one “investigate”?)

      Nor, as has been widely reported — perhaps if you got your news from somewhere other than Democratic Underground — did Thomas (or Scalia) “attend” “conservative retreats.”

      • jeer9

        Thomas appears to have “knowingly and willfully” filed falsified Financial Disclosure Forms which withheld disclosure of nearly $700,000 his wife received from the rightwing Heritage Foundation for the better part of the last 20 years. Only once it was pointed out publicly this year did Thomas bother to file “self-initiated amendments” to the forms he had signed just above the legal warning in bold and all caps which reads: “NOTE: ANY INDIVIDUAL WHO KNOWINGLY AND WILLFULLY FALSIFIES OR FAILS TO FILE THIS REPORT MAY BE SUBJECT TO CIVIL AND CRIMINAL SANCTIONS (5 U.S.C. app. § 104)” There has been little indication that law enforcement is actually investigating the crimes of the U.S. Supreme Court Justice (which, as we pointed out in January, are punishable by up to $50,000 and/or 1 year in jail for each instance of falsification).

        You’re right. No tax evasion. Just a bit of sloppy fudging of the rules by a lawyer. Nothing to see here. No penalties to worry about. Move along.

        • David M. Nieporent

          You’re right. No tax evasion.

          Indeed I am. That has literally nothing to do with taxes. You are very very confused.

          (The quote is also false — the forms don’t require income to be disclosed, but sources of income, and his wife’s employment was public knowledge, so while the forms were incorrect, there was nothing hidden.)

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