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Supreme Court dismisses women's class action lawsuit against Wal-Mart

The Supreme Court decision, seen as a victory for Wal-Mart and corporate America, makes it more difficult for employees to join together in a common lawsuit unless they are able to identify a common injury.

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Justice Ginsburg and her fellow dissenters joined the second part of Scalia’s decision, holding that the Wal-Mart women’s claims for back pay should not have been approved for class-wide litigation.

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In discrimination cases seeking back pay, an employer has the right to raise individual affirmative defenses on a case-by-case basis to attempt to demonstrate that each challenged employment action was taken for legitimate reasons.

“The court of appeals believed that it was possible to replace such proceedings with Trial by Formula,” Scalia wrote. “We disapprove of that novel project,” he said.

Under an approach upheld by the lower courts, a sample set of class members would be selected to have their claims of discrimination and eligibility for back pay scrutinized. The percentage of claims determined to be valid would then be applied to the entire million-member class. With no further individualized proceedings, the amount the company would have been ordered to pay would have been determined by the number of valid claims multiplied by the average back pay award.

In striking down that approach, Scalia said: “A class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims.”

The case stems from a 2001 lawsuit filed by three named employees on behalf of all current and former women who worked at Wal-Mart since December 1998.

The suit charged that women at Wal-Mart received lower pay and were promoted less often then men in comparable positions. It claimed that despite a corporate-wide policy prohibiting gender discrimination, the company allowed managers at the regional and local levels significant discretion in hiring and promotion. It also alleged that Wal-Mart maintained a corporate culture that fostered gender stereotyping.

At issue in the Supreme Court appeal was whether the lower court had properly certified the massive lawsuit as an appropriate case for a class action. Under court rules, class action lawsuits must satisfy certain requirements to prevent lawyers from attempting to use that form of litigation to by-pass due process safeguards in the civil justice system.

Class action lawsuits are justified in cases involving numerous individuals who have suffered a common injury that can be adequately represented in court by a few typical plaintiffs.

Patterns of discrimination

Lawyers for Wal-Mart argued that the number of potential plaintiffs in the class was too large to permit the corporation to adequately defend itself from charges that virtually every female employee faced illegal discrimination. The company’s lawyers said employment decisions were not uniform across the company, with significant differences from region to region, store to store, and supervisor to supervisor.

The lawyer representing the female workers, Brad Seligman of Berkeley, Calif., has said the class action suit was warranted because Wal-Mart operated a centralized management system. A statistical analysis found patterns of discrimination were consistent across 41 regions, he said.

Voting with Scalia, were Chief Justice John Roberts, and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito.

Joining Justice Ginsburg in her dissent were Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan.

The case is Wal-Mart v. Dukes (10-277).


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