Yesterday, the Senate Judiciary Committee, led by Senator Patrick Leahy, held hearings on a series of recent Supreme Court decisions, including Wal-Mart Stores, Inc.v. Dukes, et al,. Wal-Mart is one of the most important class action cases in generations. There, the Court clarified the standard required to bring a class action for sex discrimination under Title VII of the Civil Rights Act of 1964. In the wake of the Committee's criticism of the Court as "pro-business," it is worth stepping back to consider what Wal-Mart was really about.
To be sure, the Court drew -- for the first time in a long time -- significant limits on how diffuse a class of would-be plaintiffs can be before they can sue as a group and be entitled to group-wide remedies. The Court explained that the plaintiffs must have something in common beyond the ability to make a general allegation of having suffered the a violation of the same federal statute at the hands of the same defendant. But this is not a radical decision. Rather, it imposes a common-sense limitation on class action litigation in order to ensure that the court system remains focused on the resolution of disputes between identifiable parties, rather than general issues of social policy or even corporate management styles. (The plaintiffs did not argue that Wal-Mart had any policy against the promotion of women, but that the company's decision to delegate most employment decisions to local managers created an environment that led to subconscious discrimination somewhere between ".5 percent [and] 95 percent" of the time.)
The proposed class in Wal-Mart was, as Justice Scalia explained, "one of the most expansive class actions ever." The class at issue was composed of 1.5 million women -- every woman who had ever worked at any Wal-Mart store in the entire country within the last 13 years. The legal theory necessary to support certification of such a large class was correspondingly broad: that is, that Wal-Mart had necessarily and uniformly discriminated against all women in the proposed class in the same way, to the same degree, over the same period of time, and for the same reason, thereby creating the same injury to all. The signs carried by protestors from the National Organization of Women on the Court's steps on the day of oral argument themselves illustrated just how extreme the plaintiffs' position was: "Wal-Mart ALWAYS discriminates."
The Court's response to this breathtakingly broad theory served up by the plaintiffs' bar was clear, direct, and ultimately not surprising: claims this far-reaching must be supported by actual facts, not statistics, anecdotes, or expert testimony based on flawed methodology that fails to answer the linchpin question whether the defendant actually operated under a general policy of discrimination. With rigorous analysis by courts, the wheat of such claims will more likely be separated from the chaff, thereby protecting the integrity of the class action procedure. Misuse of the class action procedure could ultimately limit access to it for those most in need of its benefits. And in all events, the members of a proposed class can bring their claims individually and might even prefer to do so. After all, class actions are the exception to the American legal tradition of individualized adjudication, not the rule.
The Court also ruled -- by unanimous vote -- that the plaintiffs' monetary claims for back-pay could not proceed in the particular class action vehicle chosen in the case. Importantly, the Court did not hold that claims for back-pay may never be brought in a class action -- only that they must be brought pursuant to a different section of the class action rule that includes greater procedural protections for class members, including the right to notice of the action and the opportunity to opt out of it. Thus, members of a proposed class seeking monetary relief -- such as the women in the Wal-Mart case -- will now have the opportunity to decide for themselves whether they wish to be part of the class action, instead of being automatically "defined into" the class by plaintiffs' lawyers they have never even talked to (and likely would not ever talk to even as a class member).
The original purpose of class actions was to allow similarly situated parties to jointly -- and thus more efficiently -- litigate their claims. When confronted with a proposed class whose members had little in common apart from their sex and their employment at a Wal-Mart store somewhere in the country at some point in time since 1998, the Court quite reasonably called it out of bounds. This does not make the Court either "pro-business" or "anti-consumer," but pro rule of law.