Procedural Barriers to Court

  • February 8, 2012

    by Nicole Flatow

    The U.S. Supreme Court’s decision last term rejecting a class action gender discrimination lawsuit against Wal-Mart was seen as a major blow to corporate accountability in discrimination cases. But the case is also proving its impact in areas outside of the employment or discrimination context.

    As Greenwire’s Lawrence Hurley reports, the Wal-Mart v. Dukes decision has been cited in several environmental decisions in both federal and state court, in just the first seven months since the case came down.

    Hurley provides details on three of the decisions, all of which deny class certification to plaintiffs attempting to band together to sue large companies that they allege had contaminated their water supplies.

    “The post-Wal-Mart court rulings so far also illustrate how keen the defense bar is to make the most of the Supreme Court case,” Hurley writes, quoting Richard Samp, a lawyer at the conservative Washington Legal Foundation.

    "The decision is being cited by virtually every defendant who is opposing class certification," Samp said.

    During a Senate Judiciary Committee hearing in June on the impact of Wal-Mart and a second case decided last term, AT&T v. Concepcion, University of Colorado law professor Melissa Hart warned:

  • January 17, 2012
    Guest Post

    By Ann C. Hodges, a professor of law at the University of Richmond


    In the past 20 years the Supreme Court has interpreted the Federal Arbitration Act broadly, allowing businesses to require consumers and employees to arbitrate, rather than litigate, many legal claims. Businesses frequently use arbitration agreements to bar class actions, which can be costly and time-consuming. Just last term, in AT&T v. Concepcion, the Court enhanced this business tool, striking down a California law that prevented businesses from barring class actions in cases involving small claims brought by less powerful parties bound to arbitrate by contracts of adhesion. Although the case involved consumers, it offered employers a vehicle to restrict employee class actions.

    The NLRB’s decision in D.R. Horton, issued in early January, significantly limited the effectiveness of this tool for employers by invalidating an arbitration agreement that banned class actions. This case is likely to generate significant controversy, provoking even more attacks on the agency by its vocal critics, but experienced labor lawyers will recognize the case as an unremarkable application of long-settled legal principles.

    Class claims frequently offer the only vehicle for consumers or employees to challenge unlawful actions that cause limited damages to each individual while often reaping millions for the business. For each person injured, the cost of litigating a claim outweighs the potential benefit.  Without class actions, these claims often go unremedied. In the workplace, Fair Labor Standards Act cases seeking minimum wage or overtime payments are most likely to be abandoned on this basis and Horton involved such a claim, alleging that the nonunion employer misclassified employees as exempt from overtime pay.

  • January 11, 2012
    Guest Post

    By Sarah Crawford, Director of Workplace Fairness, National Partnership for Women & Families


    The U.S. Supreme Court is hearing oral argument today in Coleman v. Maryland Court of Appeals – a case that could erode the right of millions of state workers to take job-protected, unpaid leave under the Family and Medical Leave Act (FMLA) when faced with a serious illness.

    The FMLA set an important family and medical leave standard that guarantees eligible workers – both women and men – up to 12 weeks of job-protected, unpaid leave to recover from a serious illness or medical condition, including pregnancy or childbirth, or to care for a newborn, a newly adopted child or a seriously ill family member. The FMLA offered leave on a gender-neutral basis rather than creating a special right to self-care leave for medical illness surrounding pregnancy, in part to avoid creating perverse incentives for further discrimination against women.

    Since its enactment 18 years ago, workers have used the FMLA more than 100 million times. The law has helped workers disabled by pregnancy or recovering from childbirth, workers with new babies and dying parents, workers who have had heart attacks and hysterectomies – in short, workers for whom job-protected leave is of critical importance. An adverse decision from the Supreme Court could put access to FMLA self-care leave at risk for millions of state workers. At stake is their fundamental right to take time off to address their own serious medical needs, including pregnancy and childbirth.

    Petitioner Daniel Coleman was working for a Maryland court when his doctor ordered bed rest due to serious illness. Within hours of requesting medical leave, Coleman was fired. He then filed a lawsuit alleging a violation of the FMLA. Contrary to the plain language of the statute, the lower courts ruled that the state of Maryland could not be sued for monetary damages under the FMLA’s self-care provision.

  • December 21, 2011
    Guest Post

    By Jonah Gelbach, a senior research fellow at the Yale Department of Economics Program in Applied Economics and Policy and a Yale Law School student.


    The Supreme Court’s 2007 and 2009 opinions in Bell Atlantic v. Twombly and Ashcroft v. Iqbal upended Conley v. Gibson’s famous rule that a complaint attacked by a Rule 12(b)(6) motion to dismiss for failure to state a claim should be dismissed only if there is no set of facts under which the complaint’s claims could entitle the plaintiff to relief. Instead, Twombly and Iqbal require a plaintiff’s complaint to include allegations making entitlement to relief not just logically possible, but plausible.

    Critics have attacked Twombly and Iqbal for both raising pleading standards and injecting subjectivity into Rule 12(b)(6) adjudication. Kevin Clermont and Stephen Yeazell characterize the post-Iqbal situation as “Pleading Left Bleeding.” Civil rights and employment discrimination cases have raised special concern. Their plaintiffs might be especially unable to meet elevated pleading standards without discovery, setting up a need-discovery-to-get-to-discovery Catch-22. Joshua Civin & Debo P. Adegbile wrote in an ACS issue brief that Twombly and Iqbal might “create an undesirable safe harbor that effectively places some defendants beyond the reach of civil rights laws.”

    Not everyone is disappointed, to be sure. For example, attorneys Mark Herrmann and James Beck have written that “out-of-control litigation prompted the Supreme Court in Twombly to adjust the threshold pleading requirements for unleashing the legal process.”

    Normative questions aside, some observers cite a report the Federal Judicial Center (FJC) issued in March 2011 for the proposition that Twombly and Iqbal haven’t actually affected much. The report found that “there was no increase in the rate of grants of motions to dismiss without leave to amend,” including among civil rights and employment discrimination cases.

    But the FJC report also found that the share of filed lawsuits that face a Rule 12(b)(6) motion to dismiss increased substantially after Twombly and Iqbal — more than 50 percent --  depending on the type of lawsuit involved. In my paper, “Locking the Doors to Discovery?,” forthcoming as a student Note in volume 121 of the Yale Law Journal, I argue that the increase in the proportion of Rule 12(b)(6) filings is evidence of a “defendant selection effect.” Defendants who are more confident of victory at the 12(b)(6) stage will file motions to dismiss against cases that are more strongly pleaded and that the defendants would have answered before Twombly/Iqbal. Clermont and Yeazell express this point colorfully, writing that a defense attorney “commits legal malpractice if he or she fails to move to dismiss with liberal citations to Twombly and Iqbal.”

    Thus, defendant selection should increase the average quality of complaints that face Rule 12(b)(6) motions to dismiss after Twombly/Iqbal. Given that there was little change in the rate at which these motions to dismiss were granted, the result is that the FJC report is actually powerful evidence in favor of the contention that Twombly and Iqbal have had a substantial impact. If defendants file motions to dismiss against a stronger set of complaints but win just as often, then judges must be dismissing complaints that they would not have dismissed before. The end result is that more cases fail to reach discovery than would have before Twombly and Iqbal.

    In my paper, I use an economic model to try to quantify the impact that Twombly and Iqbal have had in preventing claims from reaching discovery.

  • October 14, 2011

    by Nicole Flatow

    This week, the U.S. Supreme Court heard oral argument in a case about whether a consumer protection law that explicitly says “you have a right to sue” can be overridden by the fine print in a credit card contract.

    The case, in which plaintiffs are challenging hidden fees of as much as $257 on a card with a $300 limit, is the latest to test individuals’ ability to hold corporations accountable in the courts.

    Over the past few years, several important decisions have limited that right. In Wal-Mart v. Dukes, the court limited the scope of class actions in discrimination cases. In AT&T Mobility v. Concepcion, the court upheld a provision prohibiting class action lawsuits in a phone service contract. And in Ashcroft v. Iqbal and Bell Atlantic Corps v. Twombly, the court made it more difficult to initiate a civil lawsuit in court.

    But these are just a few of the decisions in which the Supreme Court has empowered corporations through “seemingly small” procedural rulings, explains Alan B. Morrison in his new ACS Issue Brief, “Saved by the Supreme Court: Rescuing Corporate America.” In fact, “[s]ince the late 1980s, on almost every occasion where big corporations have had a case of major significance in the High Court, the Court has ruled in their favor.” He explains: