Tuesday, June 21, 2011

More Coverage on Wal-Mart - Law Professors at the NY Times

The NYTimes Room for Debate feature has a series of short posts from various law professors about the Wal-Mart case.  There are a few good ones there from Richard Banks, Melissa Hart, Tanya Hernandez, and Suzette Malveaux.

I was especially taken with Richard Primus' take on the individualism espoused by the decision versus the potential for social reform that a more collectivist view permits.  This is the same argument (albeit in a different area of the law) as that made most forcefully by David Rosenberg in the mass tort context (see his article Decoupling Deterrence and Compensation Functions in Mass Tort Class Actions for Future Loss).

In a series of recent decisions the Supreme Court has shorn up the individualist approach to litigation.  Examples include Taylor v. Sturgell last term (rejecting a theory of 'virtual representation' in preclusion doctrine) and Smith v. Bayer this term (limiting the reach of the federal courts who have denied class certification to enjoin allegedly "copycat" state court class actions).  Sam Issacharoff has written about this phenomenon in the October 2007 Term in his article Private Claims, Aggregate RightsWal-Mart v. Dukes is of a piece with this trend.

The problem of course is that the political economy of litigation and the structure of a mass consumption society does not fit well with the individualized approach that the Court prefers.   This lack of fit raises a deeper question - what sources should the Court use to determine these questions when it has a choice between adopting an interpretation of a procedural rule that is more friendly to aggregation and one that is more hostile?  A formalist would respond by saying that the Court was interpreting the law.  But the split between the Justices on the commonality question indicates that there are multiple interpretations available and the choice between them is based on something other than the clear language of the Rule.  That "something other" I think is a policy preference for individualism over aggregation, and there are good reasons for this preference, but also good reasons to be wary of formal individualism that ends up preventing the functional vidication of rights.

ADL

June 21, 2011 in Class Actions, Mass Tort Scholarship | Permalink | Comments (2) | TrackBack (0)

The NYT on Big Cases

Steven Greenhouse of the New York Times has an article today entitled "Wal-Mart Case is a Blow for Big Cases & Their Lawyers".  He quotes Heidi Li Feldman, of Georgetown, on the impact on other types of cases, especially those relating to the mortgage crisis:

 “A big mortgage broker might say, ‘At the national level, we have policies to abide by all of the rules and regulations that are applicable, and we delegate a lot of discretion to our branches,’ ” she said.

He also quotes John Coffee of Columbia Law on the effect of this case on securities actions: none.  The article is worth reading, with some good quotes from both sides in the case. 

Joe Sellers, attorney for the plaintiffs, is quoted as explaining that the ruling will break up the actions against Wal-Mart to a store or regional level.  This will be more expensive for plaintiffs, but as Sellers points out, if plaintiffs stick with it, the fragmented litigation will become much more expensive for Wal-Mart, which will have to defend on multiple fronts.  Had Wal-Mart permitted the class action to go forward and won on the merits, everything would be over.  Now there is the potential for multiple jurisdictions to issue different rulings not only because the facts of the cases will be different in different places, but also because of different views on the law.  Of course, for all this to be the case plaintiffs have to have the stomach and the resources to pursue the litigation; they say that they will.  It is the economics of litigation that make this case so troubling.

There has been a big debate in the academy over whether disuniformity is a good or bad thing, and the Court here has come out in favor of it by rejecting the centralization of these claims against Wal-Mart.    If you're interested, you might check out Amanda Frost, Overvaluing Uniformity or my own Recovering the Social Value of Jurisdictional Redundancy.

ADL

 

 

June 21, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, June 20, 2011

Some Links to Analysis of the Wal-Mart Opinion

Wal-Mart around the blogs:

Adam Steinman's recap of the case is available on Civil Procedure & Federal Courts Prof Blog.

Sergio Campos analyzes the case on Prawfsblawg.

Lyle Dennison's analysis is on Scotusblog.  Dennison points out the concrete importance of Wal-Mart v. Dukes for mass torts, particularlyPhilip Morris USA, Inc., et al., v. Jackson (docket 10-735) :

That is a case that turns entirely on constitutional questions — a massive class-action lawsuit against the nation’s major cigarette companies in Louisiana state court that resulted in an award of $270 million to a class of former smokers.

Justice Scalia stayed that ruling last September.  The Court has been holding the case until it decided the Wal-Mart case.  It now is expected to take action on that case; its options include granting the case, or sending it back to Louisiana courts to consider the impact of the Wal-Mart decision.   Since the Wal-Mart decision turns mainly upon the meaning of a federal court rule (Rule 23) that does not apply to class-action lawsuits in state court, it is unclear how much specific guidance state courts could take from Monday’s decision.

ADL

June 20, 2011 in Class Actions, Resources - Other Blogs of Interest, Tobacco | Permalink | Comments (0) | TrackBack (0)

Wal-Mart v. Dukes - (b)2 is not to be.

As Erichson writes below, the Wal-Mart employment discrimination class action was decided today.   Here are some preliminary thoughts on two surprising things about the decision.

Most suprising.The thing I found most suprising about the decision was the unanimous agreement on limiting the scope of Rule 23(b)(2).  As our loyal readers know, two commonly used types of class actions were at issue in the case: injunctive class actions (brought under FRCP 23(b)(2)) and money damages class actions (brought under FRCP 23(b)(3)).  Because getting a class action certified under the money damages part of the rule - (b)(3) - is harder and more costly than the injunctive part - (b)(2) - it matters which one the plaintiffs are allowed to seek.  Here 9 agreed that claims for back pay need to be certified as a (b)(3).  This means that they need to meet the hightened requirements of superiority and predominance, which are exactly what they sound like - is the class action superior to individual actions? Do the common issues predominate over individual ones?

Title VII class actions seeking certification as injunctive actions and also asking for back pay are common.  Does every Title VII class action seeking pack pay now need to be certified as a money damages class action and meet these additional requirements? I am not sure. On the one hand, the Court wrote that a b(2) class action is not appropriate where plaintiffs seek an "individualized award of monetary damages." (Slip Op at 21).  Since all back pay awards are somewhat individualized, even if easily calculated, this would argue in favor of requiring (b)(3) certification of all back pay claims.  On the other hand, the Court left open the possibility of money damages in a b)(2) class action where money damages as "incidental".  Here the Court was particularly concerned about the fact that some class members for the back pay claims are no longer class members for the injuctive claim because they have left Wal-Mart's employment.  The Court explained that continually reevaluating the class to see who was still in Wal-Mart's employ & therefore entitled to both an injunction and back pay was inefficient.  Might it be then that a class could be structured so that every member of the class was still entitled to back pay and an injunction? What if the back pay was really small? 

The implication of the Court's rejection of "trial by fomula" (Slip Op at 27) in this case is very important for the survival of (b)(3) back pay claims. If the back pay claims are individualized and require individual hearings, then no class action will lie because these claims won't be certified as a b(3) either.  And this would have a genuine negative impact on persons entitled to back pay who would have had their claims vindicated in the class context.  The people who would suffer most under this would be people with legitimate claims for smaller amounts of back pay - in the $2,500 like the Dukes plaintiffs - because they would readily meet the superiority requirement (the only way they will be vindicated is through a class action mechanism) but are unlikely to meet the heightened predominance requirement. 

Second surprise & one for the academy. The majority relied heavily on the work of the late Richard Nagareda. It was good to see Richard's work recognized in this way, if sad to know that he is not alive to appreciate the compliment.  It was also interesting in light of the recent bruhaha over C.J. Robert's statements, in sum and substance, that the academy adds nothing to the practice of law or the work of judges. 

More on the applicability of Richard's work and where I disagree with him, as well as the implications of the Court's rejection of "trial by formula" for mass torts, a bit later. 

ADL

June 20, 2011 in Class Actions | Permalink | Comments (0) | TrackBack (0)

Wal-Mart v. Dukes Decision

The Supreme Court today decided Wal-Mart v. Dukes (opinion here), rejecting the massive gender discrimination class action. The Justices unanimously agreed that the class action could not be certified under Rule 23(b)(2) because the monetary damages claims were not "incidental" to the claim for injunctive relief. A 5-4 conservative majority (Scalia, Roberts, Kennedy, Thomas, Alito) went a huge step further, however, ruling that the class action also had to be rejected for lack of commonality under Rule 23(a)(2). Thus, even if the plaintiffs had sought certification under Rule 23(b)(3), or even if they had sought certification under Rule 23(b)(2) and limited their claims to injunctive relief, the class action would have to be rejected. In mass tort litigation, both the 23(b)(2) and the 23(a)(2) rulings will make it more difficult to obtain class certification. I know my co-bloggers have followed this case closely and I look forward to seeing their thoughts as well.

HME

June 20, 2011 in Class Actions, Procedure | Permalink | Comments (1) | TrackBack (0)