Future of class actions in play

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By Kimberrly Atkins
Lawyers USA

When the U.S. Supreme Court rules in the case Wal-Mart Stores v. Dukes, it will not only decide whether more than 1.5 million female Wal-Mart workers can proceed as a class in a lawsuit alleging that the company systemically paid them less than male employees.

The court will also decide a broader, hotly contested legal issue: Just how similar must plaintiffs’ claims be in order for a case to be certified as a class action?

Plaintiffs’ lawyers argue that class actions are a crucial vehicle for stopping tortious wrongdoing that may not cause each individual substantial economic harm, but does great collective damage.

“No one would think to bring a small value [unequal pay] claim as a single plaintiff,” said Adam T. Klein, a partner in the New York office of Outten & Golden who specializes in wage and hour class and collective actions. “Also, without class actions there is no way to reform the company’s practices.”

But defense attorneys argue that class actions are meant to be an efficient way to deal with lawsuits brought by identically situated plaintiffs, and are ill-suited for claims such as employment discrimination.

“Defendants should be allowed to present their own defenses to each individual claim,” said R. Matthew Cairns, who wrote an amicus brief in the case on behalf of DRI — The Voice of the Defense Bar. “Defendants are entitled to assert individualized defenses. And with these overly broad class actions, they don’t get that chance.”

More broadly, they say, if the Supreme Court allows class certification in cases as wide-ranging as Dukes, class actions will become a tool to force the hands of companies before they even get to trial.

“There is little doubt that the only reason the plaintiffs’ lawyers sought class certification was to coerce the defendant into settling the case without regard to the merits of the plaintiffs’ claims,” said Richard Samp, chief counsel at the Washington Legal Foundation, which filed an amicus brief in the case on Wal-Mart’s behalf. “Class actions of this magnitude are virtually never appropriate because they could never be brought to trial; yet they serve the purposes of the plaintiffs’ bar by imposing tremendous settlement pressure on defendants.”

The case involves a group of women who currently or previously worked at Wal-Mart, who sought injunctive relief, declaratory relief and back pay on a claim that company-wide policies resulted in lower pay and fewer promotions for female employees in violation of Title VII.

The district court certified a class encompassing all women employed by Wal-Mart at any time after Dec. 26, 1998.

Wal-Mart appealed, arguing that the class failed to meet Rule 23’s commonality and typicality requirements.

But the 9th Circuit affirmed.

“[The] plaintiffs produced substantial evidence of Wal-Mart’s centralized firm-wide culture and policies, thus providing a nexus between the subjective decision-making and the considerable statistical evidence demonstrating a pattern of lower pay and fewer promotions for female employees,” the 9th Circuit reasoned.

The Supreme Court agreed to review the case, and oral arguments are scheduled to take place March 29. If the justices rule in the employees’ favor, it would allow the largest civil rights class action in U.S. history to proceed.