16 December 2010

Class action lawsuits and common sense

Let's say I purchase a product which turns out to be defective and causes some sort of injury to me.  I can file a lawsuit against the manufacturer to recover damages.  Now presume that 10,000 people also purchased the same product and were similarly injured.  The courts would be overwhelmed with 10,000 lawsuits that alleged the same general facts about how the product was defective.  The answer is the class action lawsuit, which brings together many claims into one.  This improves the efficiency of the court because there is no need to repeat the same general facts over and over and over again.

A problem with a class action lawsuit when the circumstances surrounding the injury are different in each case.  This is precisely the problem with Dukes v. Wal-Mart, which will be heard by the Supreme Court this term.  This case is the largest class-action lawsuit ever, and involves alleged discrimination against women in promotion decisions at Wal-Mart.  The legal issue is not about whether the discrimination occurred, but whether or not it should be a class-action case in the first place.  The Ninth Circuit (en banc) affirmed the class certification of the District Court (6-5) in a decision that is almost certain to be overturned.

At the Supreme Court level, the decision will be about the intricateness of Rule 23 of the Federal Rules of Civil Procedure (the rule concerning Class Actions).  From a common-sense perspective, class action lawsuits make sense when they provide efficiency to the courts, but not at the expense of the rights of the parties involved.

For a similar perspective, see the article Manhattan Moment: Courts shouldn't ignore due process to create class actions in the Washington Examiner.
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