This week the US Supreme Court decided the case of Wal-Mart Stores, Inc. v. Dukes, 2011 WL 2437013 (June 20, 2011), a case up on appeal after the Northern District of California and the Ninth Circuit Court of Appeal certified a nationwide class of 1.5M female employees seeking injunctive relief, declaratory relief, back pay and punitive damages.
The named Plaintiffs contended that local store managers exercised their discretion over pay and promotions disproportionately in favor of men, creating an unlawful disparate impact on female employees; and that Wal-Mart's refusal to cabin its managers' authority amounted to disparate treatment against women.
Justice Scalia, in an opinion joined at least in part by every other member of the bench, reversed the lower courts' certification of a nationwide class, finding that the prospective class did not come close to meeting the exacting requirements of Federal Rule of Civil Procedure 23 for class treatment. Specifically, the Court held that for the burden of "commonality" to be met, the conceptual gap between an individual's discrimination claim and the existence of a class of persons who have suffered the same injury must be bridged by significant proof that an employer operated under a general policy of discrimination. In this case, Wal-Mart had a nationwide policy of equal employment opportunity. The named plaintiffs attacked the decisions of a mere handful of local managers, and attributed those decisions to Wal-Mart generally for failing to take greater control over the managers' decisions. This was insufficient evidence that other local managers were making similarly biased employment decisions.
Further, the Court held that class certification was improper because the plaintiffs' monetary claims would all required indvidualized assessments of damages.
The fact that this class had been certified by the lower courts has had employment litigation attorneys scratching their heads for over a year. The Supreme Court clearly got this one right. This is not to exonerate the employment practices of Wal-Mart, which are notoriously horrid, or to say that the named plaintiffs do not have valid claims (which they may still pursue individually).
The truth is that class actions are not the heroic ventures depicted in movies like "A Civil Action" or books like "The Appeal" by John Grisham where the attorneys risk their livelihood for the sake of fighting injustice on behalf of victims who cannot stand on their own. More often than not they are purely attorney-driven claims asserted purely for the sake of exacting enormous settlement pressure on defendants. The plaintiffs in this case will have their day in court if they want them, and their case will focus on the individual facts of their employment, not a three-ring circus where an attorney tries to prove that local managers across the country are acting in one unified biased manner.
Attorney Craig Salner is a partner with the Miami, Florida, litigation law firm of Clarke Silverglate, P.A. He has been with the firm since graduating from Vanderbilt University Law School in 2003. He specializes in employment litigation, commercial litigation, product liability and insurance defense. Mr. Salner produces a daily blog on legal issues and beyond which can be found at http://csalner.wordpress.com.