The Wal-Mart class-action-lawsuit decision by the Supreme Courtlast week was a likely “strong-blow to the plaintiffs' class actionbar,” according to attorneys at an international law firm.

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In the decision, the Supreme Court narrowed substantively thegrounds on which class action status can be sought, whatever theissue, lawyers say.

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The ruling that the lawsuit brought against Wal-Mart was toobroad to be classified as a class-action was unanimous.

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But the court split, 5-4 along conservative-liberal lines, onthe issue of whether the case could be narrowed to remain a classaction for 1.5 million women employees of the company.

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The case is Wal-Mart v. Dukes, No. 10-27.

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It deals with the decision both by a lower court and the entire9th Circuit Court of Appeals to certify as a class “all womenemployed by Wal-Mart at any time after Dec. 26, 1998.”

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The suit alleges that Wal-Mart, as a policy, pays women less,gives them fewer promotions and that these promotions take longerto obtain.

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Amanda Dealy Haverstick, special employment law counsel atProskauer in Newark, N.J., says the decision's “emphasis that aclass cannot be certified based on statistical disparities andvague social-framework analysis alone constitutes a strong blow tothe plaintiffs' class action bar.”

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She adds, “The days of plaintiff-side employment attorneysalmost guaranteeing a class-certification award simply by hiring anexpert to submit a report are now over.”

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Statisticians and social scientists ''will have to seriouslyrecast their canned expert reports if they are to have any chanceat persuading a court to certify a class after Wal-Mart,”Haverstick said 

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Lawyers for Seyfarth Shaw, a New York law firm, said after thedecision, “In workplace law circles, today is 'D-Day.'”

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Seyfarth Shaw lawyers Gerald Maatman Jr. and Laura Lamechtlencontend, “The ruling confirms what we predicted—Dukes creates a newlandscape for Rule 23 certification issues and is apt to impactemployment discrimination litigation for years tocome.” 

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They say that the opinion, authored by Justice Antonin Scalia,addresses two primary questions: whether the order certifying aclass conforms to the requirements of Federal Rule of CivilProcedure 23(a); and whether claims for monetary relief can becertified under Federal Rule of Civil Procedure 23(b)(2) and, ifso, under what circumstances.  

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In the opinion, Scalia says, “The workers provide no convincingproof of a companywide discriminatory pay and promotionpolicy.” 

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But Justice Ruth Bader Ginsburg, writing on behalf of thecourt's liberal wing, says the court should have returned the caseto a lower court and let the workers try to press ahead with aclass action under a different legal theory. 

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Elise Bloom, co-chair of the Labor & Employment LawDepartment at Proskauer and co-head of the firm's Class/CollectiveAction Group in New York, says the “ruling is, obviously, very goodnews for all employers, but especially for those that operate inmultiple locations.”

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Bloom says, “The decision reinforces the importance of having astrong EEO policy, but also validates an employer's delegation ofdiscretion to individual managers at the local level.”

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She adds, “Scalia's repeated references to the need for a'common policy' that is unlawful, not just common, should be veryhelpful in all class-based cases.”

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Maatman and Lamechtlen, say, “In short, the Supreme Court'sopinion re-positions the goal posts on the playing fields of howworkplace class actions are structured, defended andlitigated.”

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They add, “The impact of the ruling will be significant toemployers for their approach to employment-discriminationlitigation.”

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Haverstick concludes, “It will be interesting to see how theSupreme Court's rejection of the district court's plan onclass-wide damages calculations will play out in other contexts,especially in FLSA [Fair Labor Standards Act] and state lawovertime representative actions.”

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Systemically Significant Update

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A major concern of large insurers is whether they will beidentified in federal regulation as “systemically significant” tothe nation's financial health.

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Two new buzz words/phrases recently have arisen around theissue: “SiFi” (systemically important financial institutions) and“making yourself insignificant.”

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The release of a long-awaited Financial Stability Board paper onsystemically important institutions is expected at the end ofJuly. 

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