Class actions

  • June 29, 2011

    by Jeremy Leaming

    The Senate Judiciary Committee heard testimony today on how several recent Supreme Court decisions are undermining corporate accountability and limiting individuals’ abiilty to seek justice through the courts.

    The hearing focused on three cases: Wal-Mart v. Dukes, which blocked some 1.6 million women alleging discrimination by Wal-Mart from asserting their claims as a class, AT&T v. Concepcion, which upheld an arbitration clause banning consumers from disputing an AT&T charge as a class, and Janus Capital Group v. First Derivative Traders, which halted a lawsuit by investors alleging that Janus Capital knowingly made misleading statements.

    “In my view, each of these decisions gives corporations additional power to act in their own self-interest and limits the ability of Americans to have their day in court,” said Senate Judiciary Chairman Patrick Leahy at the start of the hearing.

    University of Colorado law professor Melissa Hart, who authored an ACS Issue Brief on state elimination of equal opportunity programs, echoed these concerns in her testimony about Wal-Mart and Conception, lamenting the court’s “hostility” toward the class action device.

  • June 27, 2011

    by Jeremy Leaming

    Following today’s latest U.S. Supreme Court opinion striking a campaign finance law, a growing number of court-watchers are noting the Court’s tendency to side with corporate interests.

    “There seems to be, according to a growing number of court-watchers, a troubling trend of victories for corporate interests,” ACS Executive Director Caroline Fredrickson said. “For example, critics are already noting that the Supreme Court has ended its latest session with another decision overturning a campaign finance regulation – this time an Arizona law intended to help candidates who forgo private donations.

    “This latest decision undercutting campaign finance regulation,” Fredrickson continued, “follows last year’s Citizens United v. FEC that turned aside longstanding precedent upholding the government’s ability to regulate corporate influence of our elections.”

    She added, “The current high court session also included the decision in Wal-Mart v. Dukes, which shut down the ability of millions of former and current Wal-Mart women workers to band together in class action litigation to challenge alleged discrimination.”

    The high court ruling 5-4 invalidated the Arizona Citizens Clean Elections Act which, in part, provided public dollars to candidates who agreed to limit their personal spending. The majority, led by Chief Justice John Roberts Jr. said, “Laws like Arizona’s matching funds provision that inhibit robust and wide-open political debate without sufficient justification cannot stand.” Roberts was joined by Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito Jr., the same majority that invalidated campaign finance regulation law in Citizens United v. FEC.

    Justice Elena Kagan, joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor, lodged a dissent. Kagan defend programs like Arizona’s writing, it “does not discriminate against any candidate or point of view, and it does not restrict any person’s ability to speak. In fact, by providing resources to many candidates, the program creates more speech and thereby broadens public debate.”

    In a piece for Slate, Paul Clement, former U.S. Solicitor General during a portion of the George W. Bush administration, wrote that it appears “that 5-4 divisions over campaign finance laws are here to stay. The newest justices – Kagan and Sonia Sotomayor – are passionate defenders of such laws.”

    And Clement said the majority “seems undeterred, maybe even energized, by criticism of its First Amendment holdings in the campaign-finance realm. The dissenters seem equally resolute.”

    For more material regarding the high court’s rulings involving corporate interests, see the ACS Web page, “Corporations and The Courts.” This Thursday ACS will host a Supreme Court review at the National Press Club.

  • June 20, 2011

    The U.S. Supreme Court today blocked an expansive sex discrimination class action lawsuit lodged against the nation’s largest retailer Wal-Mart.

    The decision by the high court reverses a ruling by the U.S. Court of Appeals for the Ninth Circuit that permitted the massive class action litigation from moving forward. “The lawsuit could have involved up to 1.6 million women, with Wal-Mart facing potentially billions of dollars in damages,” The Associated Press stated.

    Writing for the Court in Wal-Mart v. Dukes, Justice Antonin Scalia said the “crux of this case is commonality – the rule [Rule 23(a)(2) of the federal rule of civil procedure] requiring a plaintiff show that ‘there are questions of law or fact common to the class.’”

    Scalia continued, “Commonality requires the plaintiff to demonstrate that the class members ‘have suffered the same injury.’ This does not mean merely that they have all suffered a violation of the same provision of law. Title VII [of the Civil Rights Act], for example, can be violated in many ways – by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention – for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution – which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”

    In this instance, the plaintiffs, Scalia concluded could not meet commonality by presenting evidence that Wal-Mart operated under a general policy of discrimination. Instead Scalia maintained that such evidence is “entirely absent here.”

    Justice Ruth Bader Ginsburg, joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan lodged an opinion concurring in part and dissenting in part. The four justices dissented from the conclusion that the Wal-Mart plaintiffs’ complaint lacked commonality. “Wal-Mart’s delegation of discretion over pay and promotion is a policy uniform with the women plaintiffs," Ginsburg wrote.

    ACS held a telephone media briefing today on the decision, featuring Catholic University law professor Suzette Malveaux, Skalet & Mehri founding partner Cyrus Mehri and DePaul College of Law professor David Franklin. Audio of the briefing is available here.

    In March an ACS panel discussion explored the Wal-Mart litigation and its impact on class action causes, in which Professor Malveaux also participated. Following the discussion, Malveaux talked with ACSblog about the case, saying at the time that there was a real risk that the standard for bringing such an expansive class action lawsuit could become much more diffiuclt to meet, making it harder “for employees and consumers and many people with small claims and few resources to collectively come together and challenge systemic discrimination.”

    Her interview and the ACS panel discussion are available here.

    Marcia D. Greenberger, co-president of the National Women's Law Center, blasted today’s opinion, saying the high court “has told employers that they can rest easy, knowing that the bigger and more powerful they are, the less likely their employees will be able to join together to secure their rights. The women of Wal-mart – together with women everywhere – will now face a far steeper road to challenge and correct pay and other forms of discrimination in the workplace.”

     

  • April 27, 2011

    The Supreme Court led by its conservative wing issued an opinion limiting states’ ability to nullify contracts that prohibit class action arbitration.

    In AT&T Mobility v. Concepcion, Justice Antonin Scalia writing for the 5-4 majority concluded that a provision of the Federal Arbitration Act (FAA) bars enforcement of a California law that nullifies contracts that prohibit class-action arbitration. Scalia was joined by Chief Justice John Roberts, Anthony Kennedy, Clarence Thomas and Samuel Alito. The opinion overturns a ruling by the U.S. Court of Appeals for the Ninth Circuit, which found that the FAA provision did not preempt the California law.

    Scalia wrote that the “overarching purpose of the FAA … is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings. Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.”

    Justice Stephen Breyer, joined by Justices Ginsburg, Sotomayor and Kagan, lodged a dissent, arguing that California’s law “is consistent with the federal Act’s language and primary objective.”

    Breyer added, “California is free to define unconscionability as it sees fit, and its common law is of no federal concern so long as the state does not adopt a special rule that disfavors arbitration.”

    The Associated Press says today’s opinion “could greatly restrict the use of class actions, in which a party represents a much larger group, in disputes over contracts.”

    In a guest post for ACSblog, Public Justice’s Paul Bland Jr. charged that the “corporatist idea that the FAA preempts all state law limiting class-action bans hasn’t caught on in the lower courts because there is no serious legal or intellectual basis for it. If the Supreme Court decides to completely federalize the law in this area, it will have to invent from whole cloth new federal law that is not supported by anything in the language of the FAA or in its history.”

    Bland also participated in an ACS briefing on the AT&T Mobility v. Concepcion case. Video of the briefing, which included a panel discussion, is available here.

    Update: Senate Judiciary Chairman Patrick Leahy, in a statement on the opinion, said, "The opinion of five Supreme Court Justices in AT&T v. Concepcion will further weaken protections for consumers. The divided court decided that state laws which would protect consumers' rights to band together are preempted by Federal law. This is the latest in a series of cases where five conservative justices have hampered the rights of consumers to be protected by state laws. Class actions are an effective way to ensure consumer protection, but today's opinion by the Roberts Court continued to move in a direction that undermines this access to justice for hardworking Americans."

     

  • March 31, 2011
    Video Interview

    Workers, consumers and many other individuals without the means to lodge lawsuits on their own against massive corporations may find an important avenue to courts cut off if the Supreme Court rules in favor of Wal-Mart in its effort to shut down a class action employment discrimination lawsuit, according to constitutional law experts following the case.

    Adam Klein, a partner at Outten & Golden, and chair of the law firm’s class action practice group, told ACSblog in an interview following a recent event examining the case, that a decision in favor of Wal-Mart may indeed limit class actions.  

    “What it comes down to is whether employees who don’t earn a lot of money, who don’t have access to lawyers to prosecute their cases on an individual basis can find a way back into the court system without the right to bring class actions,” Klein said. “That’s the core issue, I think, in the Wal-Mart case. The hope is that there are ways around whatever limitations the Supreme Court places on class action employment cases.”

    Klein noted that smaller class actions would likely still be an option even if Wal-Mart successfully defeats the large gender discrimination class action it faces. Watch his entire interview below or download a podcast of it here.