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Judge rejects class-action attempt in Wal-Mart gender bias case

Judge rejects class-action attempt in Wal-Mart gender bias case

Employers' efforts to dismiss, settle or discourage class-action litigation gained ground with a federal judge's rejection of a smaller group of workers still alleging gender discrimination by Wal-Mart.

In the most recent ruling in the 12-year-old case, this month U.S. District Court Judge Charles R. Breyer in San Francisco ruled in Betty Dukes et al. v. Wal-Mart Stores Inc. that the proposed class of 150,000 plaintiffs faces the same problems that led the U.S. Supreme Court in 2011 to reject a 1.5 million-member class: They did not identify a “common mode of exercising discretion that pervades the company,'' as the high court had ruled two years ago.

The smaller group of women that worked in the California area, as did the larger group, alleged they were paid less and promoted less often than men.

In the ruling, Judge Breyer basically said that while there may be a certifiable class in the group of 150,000, “it has to be a whole lot smaller,” said Michael W. Fox, a shareholder at law firm Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Austin, Texas.

Charles W. Pautsch, a partner with Arnstein & Lehr L.L.P. in Chicago, said the plaintiffs may have been successful had they restricted the suit to the Sacramento, Calif., area, for example, with one particular vice president who “had a discriminatory bent.”

“The days of courts certifying class actions without taking a good look at the evidence are over,” Kenneth Sulzer, a partner with Proskauer Rose L.L.P. in Los Angeles, said of Judge Breyer's ruling in light of the earlier Supreme Court decision.

Meanwhile, the high court's 2011 ruling in Dukes has significantly affected similar federal and state court cases.

Attorney Gerald L. Maatman Jr., a partner at law firm Seyfarth Shaw L.L.P. in Chicago, said in 2010, the year before Dukes, the 10 largest settlements of private plaintiff employment discrimination class actions totaled $346 million, according to the law firm's Annual Workplace Class Action Litigation Report.


In 2012, the 10 largest settlements totaled about $45 million. Post-Dukes, employers can drive harder bargains with plaintiffs attorneys, Mr. Maatman said.

Mr. Fox said the Supreme Court's ruling in Dukes “means we're not going into an era where we're going to take massive classes and sort of bootstrap them into big settlements.”

“The courts in general are scrutinizing these class actions, and I think that putative class actions that would have been certified just a few years prior to Wal-Mart will not be now,” and courts in general “are more mindful as far as looking at the evidence that is available” to satisfy the requirement of commonality among class members, said John B. Lewis, a partner at Baker & Hostetler L.L.P. in Cleveland.

The Supreme Court ruling in Dukes is “just another iteration in the trend of courts curbing class actions,” said Proskauer Rose's Mr. Sulzer, who cited the Supreme Court's 2012 ruling in Stolt Nielsen S.A. v. AnimalFeeds International Corp. In that 5-3 ruling, the high court said imposing class arbitration on parties, who have not agreed to authorize it, is inconsistent with the Federal Arbitration Act.

“You would need to have very strong evidence of a corporate policy or practice of discrimination” before taking the leap to say it should be litigated as a class, Kevin M. McGinty, a member of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo P.C. in Boston, said of Dukes.

Most employers like Wal-Mart have a written policy forbidding discrimination, Mr. McGinty said. Such a policy suggests when discrimination does happen, it is based on individual factors and does not reflect a corporatewide decision, he said.

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  • Wal-Mart discrimination case prompts smaller groups to seek class certification

    Since the U.S. Supreme Court's 2011 ruling in Betty Dukes et al. v. Wal-Mart Stores Inc. in which the court said a proposed gender discrimination class failed to identify a “common mode of exercising discretion that pervades the company,” smaller groups of plaintiffs have filed lawsuits around the United States seeking class certification.