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

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

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

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

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

It deals with the decision both by a lower court and the entire 9th Circuit Court of Appeals to certify as a class “all women employed by Wal-Mart at any time after Dec. 26, 1998.”

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

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

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

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

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

Seyfarth Shaw lawyers Gerald Maatman Jr. and Laura Lamechtlen contend, “The ruling confirms what we predicted—Dukes creates a new landscape for Rule 23 certification issues and is apt to impact employment discrimination litigation for years to come.”

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

In the opinion, Scalia says, “The workers provide no convincing proof of a companywide discriminatory pay and promotion policy.”

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

Elise Bloom, co-chair of the Labor & Employment Law Department at Proskauer and co-head of the firm's Class/Collective Action Group in New York, says the “ruling is, obviously, very good news for all employers, but especially for those that operate in multiple locations.”

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

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

Maatman and Lamechtlen, say, “In short, the Supreme Court's opinion re-positions the goal posts on the playing fields of how workplace class actions are structured, defended and litigated.”

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

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

Systemically Significant Update

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

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

The release of a long-awaited Financial Stability Board paper on systemically important institutions is expected at the end of July.

Special Reports /

Wal-Mart Class Action Decision A &lsquo;Strong Blow&rsquo; To Plaintiffs&rsquo; Bar

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