Tuesday, June 21, 2011

Supreme Court Nixes Mega-Suit Against Wal-Mart; So What’s the Bottom Line?

For years we’ve been hearing about this case against Wal-Mart.  Not just a lawsuit, but THE lawsuit.  The largest class action in the history of the United States.  As many as 1.6 million women in the class.  That’s big.  Really big.

We’ve also gotten the hype from both sides.  On the one hand, some pro-business advocates warned that allowing the case to proceed with a certified class of that magnitude would be wrong on virtually every level.  Words like “twisted” and “perverse” were bandied about.  Ardent employee and women’s advocates, on the other hand, insisted that anything less than certification of the full class was unacceptable because it would irreparably impair the ability of individuals to fight corporate America.  Rhetoric and self-promotion ran high on both sides.  P. T. Barnum would have been proud.

When the Supreme Court finally ruled yesterday, the decision likely disappointed many observers and commentators who had cast the dispute as an “us-against-them” morality play.  The justices unanimously – yes, all nine of them – determined that certification of the class had been improper, based on the nature of the damages sought for the class.  Five of the justices, led by Antonin Scalia, went on to decide that, because there was no evidence of a company-wide policy that encouraged discrimination, the certification issue was effectively over.  The plaintiffs, the majority said, could not demonstrate that they suffered a common “injury.”  That they may “have all suffered a violation of the same provision of law” was not sufficient.  In that regard, Scalia wrote, “[the plaintiffs have] no cause to believe that all their claims can productively be litigated at once.”  “Their claims must depend upon a common contention – for example, the assertion of discriminatory bias on the part of the same supervisor,” and the determination of the truth or falsity of that common contention must resolve the issue as to all class members “in one stroke.”  Thus, in the majority’s view, the fact that the case was not properly certified effectively ended the lawsuit in its present form.

The remaining four justices, led by Ruth Bader Ginsburg, determined that, although the case had been improperly certified under one particular procedural rule, there might be another rule under which certification of the mega-class would be proper.  In their view, the matter should have been sent back to the lower court for further consideration.

When all was said and done, both the majority and dissent spent an awful lot of time wrestling with technicalities and procedural issues that most of the world neither understands nor cares to understand.  There was no “takeaway” to help HR professionals go about the day-to-day business of employee management.  The case turned on interpretations of rules, hardly the kind of sensational stuff that sells newspapers or makes for good sound bites.

Yet, it probably was the right approach for this case.  Employment discrimination and class action litigation both are statutorily-created concepts.  That is, neither would exist but for an intricate network of statutes and rules that control almost every aspect of the litigation.  Rules matter, and they can’t be bent or broken simply because one or both parties has a particular agenda.  That’s the real takeaway of Wal-Mart Stores v. Dukes.

Several blogs already are calling for Congress to pass legislation that would undo much of the decision.  Indeed, recent years have seen several new federal employment laws spring from precisely that sort of Monday morning quarterbacking.  With another election year rapidly approaching, it will be interesting to see whether Congress again succumbs to such political pressure.  If it does, that might actually be more newsworthy than this week's decision . . . but not necessarily in a good way.

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