Wal-Mart class action was just a shakedown 

Class action attorneys nationwide probably thought they had struck gold when they brought a discrimination case against Wal-Mart on behalf of all current and many past female employees.

A panel of the 9th Circuit Court of Appeals in San Francisco allowed this mammoth case against the country’s biggest retailer to go to trial in Wal-Mart v. Dukes, reasoning that the cases of the many and varied alleged victims could be adjudicated in a one-size-fits-all litigation. The 9th Circuit panel did so over the objections of its chief judge, who wrote that the plaintiffs had “little in common but their sex and this lawsuit.”

The lawsuit — citing statistics, anecdotes and sociological testimony — claimed that Wal-Mart’s “corporate culture” had fostered rampant nationwide discrimination against 1.5 million women across the nation, all of whom the plaintiffs claimed to represent. The suit did not identify a specific Wal-Mart policy that led to the discrimination, or a common question whose answer could decide all of the individual cases “at one stroke.”

This defect led a 5-4 majority of the U.S. Supreme Court on Monday to decertify the class for failing to state a claim common to its members. Individual employees who suffered discrimination at Wal-Mart remain free to sue separately — or as members of more precisely defined classes — and to recover damages and back pay should they prevail.

Justice was served, but this lawsuit was not so much intended to prove large-scale discrimination or to right a wrong as it was to demonize Wal-Mart and intimidate the company into agreeing to an onerous out-of-court settlement. Such a settlement would have probably forced Wal-Mart to pay millions of dollars worth of court fees. That is evident from the high court’s second ruling.

By a unanimous vote, the court held that the plaintiffs’ lawyers had improperly gamed the rules of civil procedure by invoking a rule that let them claim representation of 1.5 million Wal-Mart employees without first obtaining their consent.

Importantly, the nine justices pointed out that if the lawsuit had been allowed under those procedures, it would have undermined many of those employees’ legal rights and financial interests by depriving them of the opportunity to opt out and pursue their own cases separately.

Had the attorneys used the correct procedures, it is highly unlikely they could have cobbled together a class nearly as large.

It is doubtful, however, that anybody who is even passingly familiar with the abuses of class action plaintiff lawyers was surprised that they gambled that no federal court would call them for gaming the procedures.

After all, it’s much easier to force a multibillion-dollar settlement if you can claim to represent more than a million plaintiffs even though most did not participate in preparing the case, or even ever hear of it.

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