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U.S. Supreme Court 2010-11

Dukes v. Wal-Mart: A Case About Class Actions

Can a suit involving 1.5 million employees proceed?

It’s the biggest employment discrimination lawsuit in American history, but for now the issue in Dukes v. Wal-Mart is whether the case can go forward as a class action on behalf of more than a million individuals. The nine-year-old case potentially involves more than 1.5 million female employees, current and former, of Wal-Mart and Sam’s Club stores. Wal-Mart argues that the women must file their claims individually or in smaller groups.

What’s at stake. The court’s decision in Dukes v. Wal-Mart, experts say, will almost certainly affect all class-action lawsuits that follow it, including age discrimination, consumer protection, and securities cases.

Where AARP stands: AARP, siding with the plaintiffs in the case, has argued that requiring them to seek individual hearings “would not only completely undermine the purpose of a class action, but also eviscerate the enforcement system designed by Congress to deter, remedy, and eventually eliminate employment discrimination.”

How the Court Ruled

In a decision issued on June 20, the Court ruled 5-4 that the lawsuit against Wal-Mart cannot go forward as a class action.

The plaintiffs had sought certification as a class under two different federal rules, and the Court was divided as to how those rules should be applied to the case.

The Court’s opinion (PDF), written by Justice Antonin Scalia, held that the first federal rule does not permit such lawsuits “when each individual class member would be entitled to a different injunction or declaratory judgment.”

The justices were split, however, on the question of whether the plaintiffs might qualify as a class under the second rule. Scalia, writing for the Court’s conservative majority, said the plaintiffs had failed to show that Wal-Mart “operated under a general policy of discrimination,” noting that the company’s announced policy forbids sex discrimination.

Justice Ruth Bader Ginsburg, in a partial dissent for the Court’s four liberal justices, wrote that there was enough evidence of “commonality” to send the case back to the lower court for consideration and said the majority’s decision wrongly “disqualifies the class at the starting gate.”

The court's decision, a big victory for Wal-Mart, will force the plaintiffs in the case to pursue discrimination claims individually.

Next: Is a company liable if a biased employee engineers a colleague's dismissal?

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