NU Online News Service, June 20, 2:58 p.m. EDT
The U.S. Supreme Court dismissed a class-action lawsuit alleging sex discrimination against Wal-Mart, and lawyers say the ruling narrows the grounds on which class-action status can be sought, whatever the issue.
The ruling that the lawsuit was too broad to be classified as a class action was unanimous.
But, the court split 5-4 along conservative-liberal lines on the issue of whether the case could be narrowed to remain a class action for 1.5 million women employees of the company.
The case is Wal-Mart v. Dukes, No. 10-27.
It deals with the decision both by a lower court and the 9th Circuit Court of Appeals to certify as a class “all women employed by Wal-Mart at any time after Dec. 26, 1998.”
The suit alleges that Wal-Mart, as a policy, pays women less, gives them fewer promotions and that these promotions take longer to obtain.
Lawyers for Seyfarth Shaw, a New York law firm, said after the decision, “In workplace law circles, today is ‘D-Day.’
“Today's ruling confirms what we predicted—Dukes creates a new landscape for Rule 23 certification issues and is apt to impact employment-discrimination litigation for years to come,” Seyfarth Shaw lawyers Gerald Maatman Jr. and Laura Lamechtlen say.
They note that the opinion, authored by Justice Antonin Scalia, addresses two primary questions: whether the order certifying a class conforms to the requirements of Federal Rule of Civil Procedure 23(a); and whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2) and, if so, under what circumstances.
In the opinion, Scalia says, “The workers provide no convincing proof of a companywide discriminatory pay and promotion policy.”
"Scalia's repeated references to the need for a ‘common policy’ that is unlawful, not just common, should be very helpful in all class-based cases," says Elise Bloom, co-hair of the Labor & Employment Law Department at Proskauer and co-head of the firm’s Class/Collective Action Group in New York.
But Justice Ruth Bader Ginsburg says the court would have returned the case to a lower court and let the workers try to press ahead with a class action under a different legal theory.
Maatman and Lamechtlen say, “In short, the Supreme Court’s opinion re-positions the goal posts on the playing fields of how workplace class actions are structured, defended and litigated.”
They say that in the majority ruling, the Supreme Court held that the plaintiffs failed to demonstrate commonality under Rule 23(a)(2) and unanimously held that the back-pay claims could not be properly certified under Rule 23(b)(2).
“The impact of the ruling will be significant to employers for their approach to employment-discrimination litigation,” Maatman and Lamechtlen say.
As such, Dukes determines how much, for purposes of Rule 23(a), class members must have in common for a class action to be certified and the extent to which claims for money damages can ever be certified under Rule 23(b)(2).
Robin Conrad, executive vice president of the U.S. Chamber of Commerce’s National Chamber Litigation Center, says, “We applaud the Supreme Court for affirming that mega-class actions such as this one are completely inconsistent with federal law.”
She adds, “Every single Supreme Court justice disagreed with the 9th Circuit’s decision, which radically lowered the standard for certifying class actions and opened the door to even more bet-the-business blockbuster class actions.”
Amanda Dealy Haverstick, special employment law counsel at Proskauer in Newark, N.J., says, “The Supreme Court’s emphasis that a class cannot be certified based on statistical disparities and vague social framework analysis alone constitutes a strong blow to the plaintiffs’ class action bar. The days of plaintiff-side employment attorneys almost guaranteeing a class certification award simply by hiring an expert to submit a report are now over. Statisticians and social scientists will have to seriously recast their canned expert reports if they are to have any chance at persuading a court to certify a class after Wal-Mart."
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