BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Supreme Court expected to overturn Wal-Mart ruling


WASHINGTON—The U.S. Supreme Court is expected to overturn the appeals court ruling that approved a massive class action lawsuit alleging gender discrimination by Wal-Mart Stores Inc., many experts said after last week's hearing on the issue.

But how it will do so is unclear, observers said. The court could dismiss the case altogether or approve creation of a smaller class or classes.

Many observers anticipate the court's decision, which is expected in June, will be narrowly focused and provide little guidance in litigating future class actions.

“It's always difficult to get a precise read on how their ruling will come down,” said Mary-Christine Sungaila, an attorney with Snell & Wilmer L.L.P. in Costa Mesa, Calif., whose firm submitted an amicus brief in the case on behalf of the Chicago-based International Assn. of Defense Counsel in support of Wal-Mart.

Wal-Mart Stores Inc. vs. Betty Dukes et al., originally filed in 2001, involves allegations that Bentonville, Ark.-based Wal-Mart promoted and paid female employees less than males in comparable positions despite females' higher performance ratings and seniority. The suit, which seeks injunctive and declaratory relief, lost pay and punitive damages, could involve up to 1.5 million people and cost Wal-Mart billions if successful.

In 2007, a divided three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco upheld a lower court's 2004 ruling that granted class action status to women who work or have worked at Wal-Mart's 3,400 stores since 1998.

In its April 2010 decision, the en banc 9th Circuit ruled 6-5 to uphold most aspects of the district court's ruling in a technical opinion. It concluded that the proposed plaintiffs in the case had enough in common to create a class despite their varying jobs and worksites.

The Supreme Court is considering two questions in the case, both of which relate to federal rules of civil procedure as to when class actions can be formed and technical issues as to when members of a proposed class have enough in common.

The high court is focusing on procedural issues and not directly considering the merits of the plaintiffs' charges, observers say.

“If the court rules for Wal-Mart, no plaintiff goes away,” said John R. Wester, an attorney with Robinson Bradshaw & Hinson P.A. in Charlotte, N.C., who is not involved in the case. “Each plaintiff's case is as viable as it ever was.”

Observers generally expect the 9th Circuit's decision to be overturned.

Gerald L. Maatman Jr., a partner with law firm Seyfarth Shaw L.L.P. in Chicago, said the justices' questions “tended to be very aggressive and very averse to the theoretical underpinnings of the plaintiffs' case.”

Mr. Maatman's firm submitted an amicus brief in the case supporting Wal-Mart on behalf of the Alexandria, Va.-based Society for Human Resource Management and the Washington-based HR Policy Assn. and another brief on behalf of Issaquah, Wash.-based Costco Wholesale Corp.

Observers said one factor arguing in favor of a Wal-Mart win was some justices' apparent discomfort about the plaintiffs' contentions that while managers have discretion in making personnel decisions, there also is a strong corporate culture that supported gender discrimination.

For instance, Justice Antonin Scalia said at one point, “I'm getting whipsawed here...Well, which is it? It's either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.”

“There appears to be a consensus of at least five justices that the class does not satisfy even the minimum threshold requirements for any class action under the federal rule,” said Felix Shafir, an attorney with Horvitz & Levy L.L.P. in Encino, Calif., who was not involved in the case.

Jonathan F. Cohn, a partner with Sidley Austin L.L.P. in Washington, whose firm submitted an amicus brief on behalf of Chicago-based DRI-the Voice of the Defense Bar, said the justices also seemed troubled by how to determine back pay and injunctive relief. “There isn't going to be the opportunity to really drill down and see the merits of each claim,” he said.

Mark W. Batten, a partner with Proskauer Rose L.L.P. in Boston, who was not involved in the case, said Justices Sonia Sotomayor, Ruth Bader Ginsburg and Elena Kagan seemed to suggest that one solution would be to take “the money out of the case so that what was left was a claim for injunctive relief.”

Many observers anticipate a narrowly worded opinion.

“They seemed to be harping upon the specific circumstances of this cases,” which suggests their opinion may be narrow and the court will not “issue a broad ruling that's going to affect every class action out there,” Mr. Cohn said.

“I don't see them giving any broad guidance,” said Paul E. Starkman, a partner with Arnstein & Lehr L.L.P. in Chicago, who is not involved in the case. “They really try to decide on the most narrow grounds possible.”

The high court will not necessarily dismiss the case, some observers say.

“I think they will vacate the 9th Circuit's en banc ruling and send it back to the trial court to evaluate whether some smaller kind of class action can proceed,” said Mr. Wester.

The case could be divided into classes by region or even by store, Mr. Starkman said.

“The plaintiffs haven't asked for a smaller class action,” although “no matter how the court rules, there's always the possibility of bringing a more manageable class action,” said Richard Samp, chief counsel of the Washington Legal Foundation, which submitted an amicus brief in support of Wal-Mart.