The U.S. Supreme Court set reasonable parameters this week for class-action lawsuits. It rejected — unanimously — a radical attempt by plaintiff attorneys to allow lawsuits using a questionable standard.
Under that standard, a company could be sued over discrimination claims not on the basis of individual cases but on the basis of statistical claims alone. Such an extreme approach is impossible to square with the due process to be shown a defendant, whether an individual or a corporation.
The technical specifics: The plaintiffs’ attorneys were seeking back-pay claims for female employees of Walmart under a process the courts have said should be used when seeking an injunction to stop a company’s policies. As a legal analyst stated in the New York Times: “It is not all that controversial to say that claims for back pay are individualized in a way that claims for company-wide injunctive relief to correct an alleged policy are not.”
The point isn’t that mistreated employees should be denied the ability to seek legal redress against a company’s actions. Rather, it’s that the legal process for such action needs to be sound.
Plus, the court ruling this week doesn’t at all mean the end of class-action lawsuits. As legal reporter Lyle Denniston explained, the ruling “had little practical impact other than clarifying when a class-action lawsuit could pursue a money remedy.” But the general public wouldn’t know that to judge from the hyperbolic language critics have used in blasting the court decision.
This case stemmed from charges of discrimination by a group of female workers at Walmart. (The attorneys for the plaintiffs were widely described as representing 1.5 million women, but the attorneys were hired by a small number of female plaintiffs and then asserted a claim on behalf of the more than 1 million women who had worked for Walmart over a decade.)
Legal analyst Walter Olson rightly pointed to a fundamental contradiction in the attorneys’ claims: “One of the plaintiffs’ complaints against Walmart was that its personnel practices were too decentralized, giving too much discretion to store managers, not all of whom could be trusted to use it fairly. The more you accept that contention, the less a pattern of bias at Store No. 423 says anything about Store No. 187, a thousand miles away.”
In other words, under the approach urged by the plaintiffs, there was less cause to use statistics and more reason to look at individual cases — but that contradicted the plaintiff attorneys’ contention that the court should rely on statistics. It’s no wonder the court rejected their arguments.
Again, class-action lawsuits, including those on discrimination issues, will remain part of the legal landscape. Appellate lawyer John Elwood said in the New York Times: “The court did not rule out lawsuits on behalf of groups of employees affected by the actions of some identifiable corporate policy, for example, or by particular managers or supervisors or offices. And even suits by individual employees against big companies regularly demand, and sometimes get, million-dollar damages.”
In the case this week, plaintiff attorneys were reckless in their claims and overreached the situation. The Supreme Court rightly rejected their gambit. The result was a victory for sound law.