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Class Action Lessons from Wal-Mart v. Dukes
The Supreme Court in Wal-Mart Stores, Inc. v. Dukes, No. 10-277 (U.S. June 20, 2011), provided much-needed guidance to lower courts on the law of class actions. Class actions can be used to seek damages on behalf of millions of class members, and they can pose a great risk to the solvency of a business. Therefore, if a court certifies a class (in other words, determines that the plaintiffs can sue together instead of separately), a business can be forced to settle a case even if the plaintiffs' claims do not have merit.
In Wal-Mart v. Dukes, the Supreme Court decertified a class action in which more than a million female employees were attempting to sue Wal-Mart for gender discrimination in pay and promotion. The Court's decision to reverse the lower court was unanimous, but the Court split 5-4 on whether the class could be certified for the purpose of seeking an injunction. Justice Antonin Scalia wrote the majority opinion. Justice Ruth Bader Ginsburg dissented in part, joined by Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan.
The Supreme Court's decision draws bright lines that will redound to businesses' benefit and limit the size and scope of class actions in the future.
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