The Supreme Court voted to hear Wal-Mart v. Dukes, granting Wal-Mart’s petition for certiorari. The Supreme Court will decide whether a class-action rule designed to allow people to bring claims for injunctive relief based on a uniform policy by a defendant can be twisted into a weapon for demanding billions of dollars in damages over conduct at thousands of different Wal-Mart stores by thousands of different managers.
The Wall Street Journal earlier criticized the 6-to-5 ruling by the Ninth Circuit that the Supreme Court is reviewing. That controversial ruling, Dukes v. Wal-Mart, available here, allowed just six employees to bring a multibillion dollar class action lawsuit against Wal-Mart in the name of 1.5 million other Wal-Mart employees they had little in common with. As the dissenting opinion written by Judge Sandra Ikuta noted, the lawsuit was based on junk science that violated the Supreme Court’s Daubert decision, and let a few employees whose situation was anything but typical sue in the name of countless employees they shared nothing with but gender. The plaintiffs’ lawyers originally sought $450 billion.
The Ninth Circuit’s disingenuous ruling rubber-stamped a national class-action even though Wal-Mart’s hiring and promotions are decentralized and not done on a company-wide basis, and Federal Rule of Civil Procedure 23 says that national class-actions are supposed to challenge a company-wide practice. The Ninth Circuit essentially treated the absence of a company policy (one limiting managers’ individual discretion) as itself being a company policy, twisting the language of the rule inside out. Its ruling against Wal-Mart flouted longstanding legal rules and principles.
Although the lawsuit will affect employees across the country (and the ultimate verdict may reduce the value of your retirement plan, since the mutual funds in your 401(k) probably own Wal-Mart stock), a verdict will be rendered by a left-leaning jury drawn from the San Francisco Bay Area, since the plaintiffs sued Wal-Mart in one of the most anti-employer judicial districts in America, the Northern District of California.
The Ninth Circuit judges were split largely along ideological lines, with only hard-core liberal judges in the majority, and a dissent joined in by all the moderate and conservative judges (as well as one Democratic appointee, Judge Silverman).