April 26, 2010

Ninth Circuit joins the War on Wal-Mart

By Ninth Circuit joins the War on Wal-Mart

Author: Timothy Sandefur

It’s no secret that anti-free market groups, particularly intellectuals and labor unions, have declared war on Wal-Mart. The company’s tremendous success in providing consumers with products they need at prices they can afford–and rendering unions superfluous by treating their workers well–is a major threat to those who would use a pretended compassion for the working man as a cover for their efforts at expanding government control over our economic choices.

One major battle in the left’s assault on Wal-Mart is a lawsuit called Dukes, which has the distinction of being the largest class action lawsuit ever filed. The attorneys claim to represent the interests of 1.5 million past and present female Wal-Mart employees, claiming that the company discriminated against them (in hiring and promotion decisions) because they’re women. The evidence of this alleged discrimination: 120 affidavits from Wal-Mart employees, expert witness testimony from statisticians, and a statistical test that shows that women are less represented in management positions.

Among the many problems with the allegations, though, is that Wal-Mart has no central policy regarding hiring and promotions–such decisions are made by local managers. The trial lawyers who filed the case aren’t letting that deter them, though. They claim that that is the discriminatory policy for which Wal-Mart can be sued. This means that the women who are suing allege a wide variety of different claims, based on very different facts and circumstances–all of which makes this case inappropriate for class action procedures. 

Nevertheless, the trial court allowed the lawsuit to proceed by “certifying the class”–that is, allowing the plaintiffs to assert claims on behalf of 1.5 million people and not just themselves. That decision was upheld by three judges on the Ninth Circuit, and in today’s decision, the full “en banc” court upheld that decision in an opinion by Judge Michael Hawkins. The next stop is the U.S. Supreme Court. 

PLF filed a fiend of the court brief–that’s right, we’re one of the briefs Judge Hawkins labeled “business related amici”–which you can read on line here.

As we argue in our brief, if courts don’t adhere to the strict requirements of class action rules, activists will pursue their (baseless) political and economic vendettas against companies like Wal-Mart without the disciplines appropriate to legal process. The consequences are not just higher costs for consumers–who end up paying the bill for the suits against Wal-Mart–but less economic opportunity for all–and particularly for female employees.

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