04 January 2011

Los Angeles Times is wrong about the Wal-Mart class-action lawsuit

The Los Angeles Times editorializes about the Wal-Mart class-action lawsuit today, and to no surprise, they've read the issue entirely wrong:
There is currently no limit on the size of a class, nor should there be...In other words, Wal-Mart's size shouldn't immunize it to a lawsuit that otherwise meets legal standards.
But this case isn't simply about the size of the class.  Experts acknowledge that a class this large could conceivably go forward if Wal-Mart had a nationwide policy that equally affected all of the women in the class.  But as Ted Frank wrote in the Washington Examiner:
...the theory of the Dukes lawsuit is exactly the opposite: the plaintiffs claimed that Wal-Mart's central office did not exercise enough authority over each of its 3,400 stores; each of the individual managers' discretionary employment or promotion decisions--whether made by male or female managers--was, on average, discriminatory; and thus Wal-Mart was responsible for a policy that "fosters or facilitates" discrimination.
One can quickly see why this does not work as a class action. In the words of Professor Richard Epstein, the procedural tail is wagging the substantive dog.
The discrimination laws permit Wal-Mart to defend itself by demonstrating that the challenged job decision was made for a reason other than gender. For example, looking at Betty Dukes, the named plaintiff, alone, we learn that she had a female manager and that she was repeatedly disciplined for returning late from lunch breaks.
Yet if a court ties together claims that are not alike, it will have trouble trying the case as a single class action--unless it pretends that the parts that are not alike are not part of the lawsuit. Wal-Mart is stripped of its defense because the individualized defense would be inconvenient to trying the case as a class action.
But that is precisely backwards. If there are too many individualized issues to permit a defendant to defend itself adequately in a class action, that means the correct ruling is not to have a class action.
Emphasis is mine.  The case isn't about the size of the class, per se.  The size of the case is only relevant because it brings together claims that are not alike, and therefore prevents Wal-Mart from defending itself from disparate, individualized claims.
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