U.S. Supreme Court

Huge Companies Gain Protections in Wal-Mart Decision, But Pelosi Wants a Legislative Fix

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Lawyers for Wal-Mart employees say they will press on despite a U.S. Supreme Court ruling Monday making it more difficult to bring bias class actions against huge companies that delegate job decisions to local managers.

The Supreme Court opinion by Justice Antonin Scalia said there was no “glue” holding together the claims of the plaintiffs to satisfy a federal requirement that class actions have common questions of law and fact. The plaintiffs had contended Wal-Mart was biased against women because of the discretion given local supervisors in pay and promotions throughout its 3,400 stores.

SCOTUSblog sees this message in the ruling: “The bigger the company, the more varied and decentralized its job practices, the less likely it will have to face a class-action claim.” The court’s ruling was based primarily on its interpretation of Rule 23 of the Federal Rules of Civil Procedure, “but there were overtones of constitutional protection for companies facing money claims in a class-action case,” SCOTUSblog says.

Business groups applauded the decision while women’s groups and civil rights organizations criticized it, according to the New York Times and Bloomberg News. Meanwhile, House Minority Leader Nancy Pelosi is calling on Congress to pass legislation that effectively reverses the decision.

Joseph Sellers, one of the lawyers for the Wal-Mart plaintiffs, told the Times that the ruling will result in more class actions at the store or regional level. He sees the possibility of “checkered” legal standards in such cases, where conduct will be found lawful in one jurisdiction and unlawful in another. As for the Wal-Mart litigation, it will now be “splintered into many cases that may take longer and be harder to resolve,” he said.

The Supreme Court decision dealt with two parts of Rule 23, one requiring commonality in claims and the other with a section that plaintiffs use in some jurisdictions to piggyback back pay claims in suits for injunctive or declaratory relief.

Scott Burnett Smith, who worked on an amicus brief in the case for the Defense Research Institute, summed up the holding this way for the Huntsville Times: “First, the disparate claims of thousands or millions of plaintiffs across the country cannot be vacuumed up into one lawsuit,” he said. “Second, Rule 23(b)(2) means what it says. … Individual claims for monetary relief can no longer be hidden inside a complaint for injunctive relief.”

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