Much rides on Wal-Mart case 

Justices of the Supreme Court this week considered a pivotal aspect of a sex-discrimination lawsuit — Wal-Mart Stores v. Dukes — against an icon of American industry.

Most lawsuits involve individuals or small groups. They bring a case as plaintiffs, and if the court has jurisdiction over the defendants, then all parties are bound by the court’s judgment. That’s a cornerstone of due process.

There’s a special exception called a class-action lawsuit. It takes four things.

First, plaintiffs must show there are so many people who could be additional plaintiffs that it’s not practical for them to all be separate parties.

Second, they share common facts.

Third, the plaintiffs are typical of all the people implicated in the case.

And finally, if these plaintiffs win, it will adequately protect the interest of the class they represent.

Class actions typically arise in product-liability suits, where let’s say 100,000 people took a medicine over five years and 300 people suffered serious side effects. One of these patients could sue the manufacturer and ask for the case to be certified for all 300 injured people. If there’s a settlement or court judgment, it will be split between them.

Wal-Mart is America’s largest private-sector employer, with 1.1 million employees in its 3,400 stores. In this case, three women are claiming sex discrimination against Wal-Mart.

They also claim they are typical of all women working at Wal-Mart, asking a lower court to certify them as a class representing potentially 500,000 women, all of whom can supposedly sue for back pay and changes in Wal-Mart’s policies involving promotions and wages.

The trial court certified these women as a class, and the 9th Circuit appeals court affirmed. The issues before the Supreme Court are whether this certification is appropriate (versus individual women filing separate lawsuits), and whether the proper standards were applied.

The lower court decided to use a statistical model to assess how often women are denied promotion at Wal-Mart and how much they should be paid. It would apply this model companywide.

Chief Justice John Roberts poked the most serious holes in the plaintiffs’ arguments. Asking a question to which he knew the answer, Roberts asked Wal-Mart’s lawyer, Theodore Boutrous, if an individual woman with a serious claim would be able to bring her own lawsuit if the current case continued forward as a class action. Boutrous answered that the woman could not, because class actions cover the claims of everyone represented by the plaintiffs.

Then Roberts teed up a key point by asking, “What if the class does not prevail? Does that bar an individual woman at a particular Wal-Mart from bringing these same claims?” Boutrous answered, “Yes.” If the class loses in court, then every woman who could have sued loses her claim.

Later, Roberts raised another key point by asking a question of the plaintiffs’ lawyer, Joseph Sellers. “Is it true that Wal-Mart’s pay disparity across the company was less than the national average?”

In other words, if Wal-Mart is discriminating, then it suggests most companies in America could likewise be sued.

Justice Anthony Kennedy also was skeptical of the discrimination claims, with these plaintiffs saying that Wal-Mart had established a discriminatory policy, but that the “policy” was to allow local mangers too much independence and individual decision making. Kennedy seemed to think they were trying to have their cake and eat it too.

Sellers’ reply led to Justice Antonin Scalia jumping in, saying, “I’m getting whipsawed here. On the one hand, you say the problem is that [individual supervisors] were utterly subjective, and on the other hand you say there is a strong corporate culture that guides all of this. Well, which is it?”

Justice Ruth Bader Ginsburg said the lower court here found that ordering uniform back pay would result in some women getting more money than their job would have involved, while others would receive less.

Justice Scalia followed up, challenging Sellers on how such an outcome squares with the class action requirement that plaintiffs must share common facts.

This lawsuit will continue either way. Certifying a class happens early in litigation. The question here is whether there are three plaintiffs against Wal-Mart, or potentially a half-million. If this certification order stands, it could have serious implications for large employers.

Examiner legal contributor Ken Klukowski is on the faculty of Liberty University School of Law and a fellow with the American Civil Rights Union.

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Ken Klukowski

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