Wal-Mart, Class Action, and Rules Without Remedies

One of the daunting realities of modern life is that we as individuals are confronted by far more powerful corporations. When we want to buy a product, get a job, or seek to hold a large corporation accountable for its misdeeds, our negotiating power is limited by the fact that we are individuals. In contrast, due to its eternal life, its being composed of thousands or even millions of people, and its many state-granted benefits such as limited liability, corporations have consolidated vast resources that would be impossible for any living person attain.

So when that corporation does wrong against individuals – when it engages in a pattern of illegal discrimination, sells defective products, or cheats its customers – the victims often are powerless to hold the corporation accountable unless they, too, can consolidate their resources.

That’s why class actions are so important – and why Big Business keeps asking the Roberts Court to sabotage people’s ability to band together in class actions. Earlier this term, the Corporate Court undercut class actions against consumer fraud in AT&T v. Concepcion. And Monday, it struck out against women employees seeing to hold Wal-Mart accountable for illegal employment discrimination.

Wal-Mart is the nation’s largest private employer. Several women sued the corporate giant on behalf of themselves and similarly situated women around the country - anywhere from 500,000 to 1.5 million employees. To sue as a class, they would have to show that they have claims typical of the whole group.

So that’s what they did. As Justice Ginsburg’s dissent pointed out, the district court that had certified them as a class had identified systems for promoting in-store employees that were sufficiently similar across regions and stores to conclude that the manner in which these systems affect the class raises issues that are common to all class members. The women showed that Wal-Mart has a national corporate climate infused with invidious bias against women. Wal-Mart’s policy is to have personnel decisions made by local managers, all of whom are products of that toxic corporate climate.

But the conservative majority’s 5-4 opinion, authored by Justice Scalia, went out of its way to overlook that obvious commonality, focusing instead on the differences that will inevitably be present when a corporate giant targets so many people. The Roberts Court accepted Wal-Mart's assertion that the women cannot be designated a class because the representative plaintiffs do not have claims typical of the whole group.

What this 5-4 opinion states is that Wal-Mart is so large – and the discrimination it has allegedly engaged in is so great – that its victims cannot unify as one class to hold the company accountable. Individuals or small groups are much less likely to have the resources to seek justice.

Large corporations may be licking their chops at the opportunities the Roberts Court has opened to them to violate the law. They realize that a rule without a remedy is no rule at all.

PFAW