Supreme Court Rules That a Class Action Can Be Too Big
As we previously reported, the Supreme Court was going to decide if a sex discrimination lawsuit potentially impacting 1.5 million former and current Wal-Mart employees was too big. Yesterday, in Dukes v. Wal-Mart Stores, Inc., the Court ruled that the class of employees suing the retail giant was too large and that the claims were too diverse.
The employees and their lawyers argued that despite their differences in compensation, position and circumstance, the 500,000 female employees shared the burden of facing a company-wide pattern of discrimination against women. They claimed that this allowed them to be certified as a class for the purpose of pursuing their unified class action against the company.
The Supreme Court disagreed in an opinion, authored by Justice Scalia, that was split 5-4 on some aspects of the case, and unanimous on others. From the ruling, this much is clear:
- The Court unanimously agreed that the group of people suing the company should not have been certified for a "class" action under Federal Rule 23(b)(2). This rule requires that a class action not be one where the ruling on claims by individual class members would dispose of, impede or interfere with the interests of non-class members.
- A majority of the Court (5-4) ruled that the plaintiffs also failed to satisfy Rule 23(a)(2), which requires "questions of law or fact common to the class." Justice Scalia specifically noted that the workers "provide no convincing proof of a company wide discriminatory pay and promotion policy."
- Justice Ginsburg, joined by Justices Breyer, Sotomayor and Kagan, filed an opinion concurring in part, dissenting in part. While those judges agreed the class should not have been granted under Rule 23(b)(2), they criticized the majority opinion for "disqualify[ing] the class at the starting gate."
This case was one of the most closely watched cases in a long time, as the Court had not addressed the standards for class certification in over ten years. The case is expected to have far reaching implications, both in discrimination cases, as well as wage and hour and other class/collective cases, and may result in a dramatic reduction of class-based claims in those areas.