Wal-Mart to Have Day in Nation's Highest Court

December 30, 2010

The United States Supreme Court has agreed to hear an appeal by Wal-Mart over the certification of a class in a class action lawsuit alleging that that Wal-Mart discriminated against female employees.

At issue in the Wal-Mart appeal is whether or not the discrimination case can proceed as a class action lawsuit, not whether or not the discrimination occurred. Once the court determines whether the case can move forward as a class action lawsuit t, the discrimination case(s) can be heard.

Wal-Mart's Argument

The class action lawsuit for discrimination against Wal-Mart was originally certified under a standard used for seeking injunctive relief and not monetary damages. The standard used for injunctive relief has a lower threshold for class certification than the standard for seeking monetary damages. Wal-Mart contends that to move forward, the class action should meet this stricter standard. In her dissent to the Ninth Circuit Court of Appeals ruling that upheld the class certification, Judge Sandra Ikuta stated: "never before has such a low bar been set for certifying such a gargantuan class."

Standards for a federal class action lawsuit dictate that the members of the class action raise a common question and that the interests of the members of the class are adequately protected by the named plaintiffs of the lawsuit. Wal-Mart argues that any discrimination was isolated occurred under different managers -- men and women alike -- and that the claims of all of the women involved would be too varied because they held different positions within the Wal-Mart company structure and these positions were held all across the county.

Proponent's Argument

Proponents of certifying this class action lawsuit contend that Wal-Mart is fighting the certification of the class because of the potential number of members of the class. Writing in concurrence of the Ninth Circuit's decision, Judge Susan P. Graber notes that: "Certification does not become an abuse of discretion merely because the class has 500,000 members."

The majority in the Ninth Circuit's decision stated that the claims of the women were "similar enough" that a class action was "efficient and appropriate," as opposed to "clogging the federal courts" with all of the individual lawsuits of the class members.

The Supreme Court's ultimate resolution of this case could have a wide-ranging impact on the way that victims of discrimination are able to fight back against companies. Because of the size of the potential pay-outs of class actions, many companies or defendants of class actions lawsuits are open to settlement. If aggrieved workers or victims of discrimination at a company can more easily band together for form a class action lawsuit, that group may be able to reach a settlement to benefit the members of the class more easily. If the threshold remains high for class certification, many victims of discrimination may never recover for the wrongs done to them, as the cost of an individual lawsuit against a large company may be prohibitive.

Article provided by Blumenthal, Nordrehaug & Bhowmik
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