Wal-Mart’s 2011 high court win shapes class-action trendsNews added by Benefits Pro on January 21, 2014

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By Dan Cook

A comprehensive review of class-action rulings last year reveals that a 5-4 U.S. Supreme Court ruling in a 2011 Wal-Mart case has had a substantial influence in discrimination matters.

However, the law firm that produced the review cautions that the pendulum could be about to swing the other way as lawyers adjust to the ruling.

The Workplace Class Action Litigation Report, an annual publication by the Chicago law firm Seyfarth Shaw, examined 1,123 class-action rulings on a circuit-by-circuit and state-by-state basis handed down in 2013 by federal and state courts. The actions included private plaintiff and government enforcement actions.

The law firm said Wal-Mart v. Dukes, in which the U.S. Supreme Court ruled in Wal-Mart’s favor by a 5-4 decision, continues to shape the class-action landscape. Now, though, it is shaping plaintiff attorneys’ strategies as much as those who represent corporations targeted by class-action discrimination suits.

“In the past two years, we have seen a combination of Supreme Court decisions help create a defensive barrier for employers in class-action cases,” said Seyfarth’s Gerald L. Maatman Jr., co-chair of its Class Action Defense group and author of the report. “Enough time has passed, however, that plaintiff lawyers have begun to breach this barrier with new theories and approaches and, combined with increasing and aggressive government enforcement litigation, employers may once again find themselves facing bet-the-company-type class-actions in 2014.”

Maatman co-authored one of two amicus briefs submitted by Seyfarth to the Supreme Court in Dukes.

The Supreme Court in that case ruled in Wal-Mart’s favor, saying the plaintiffs did not have enough in common to constitute a class. Critics of the opinion allege that the decision makes it incredibly difficult to certify a class without a prohibitive amount of work on the part of plaintiff attorneys.

Maatman culled out the following class-action trends from the welter of rulings reviewed:
  • Government enforcement litigation in 2013 increased over levels in 2012. As an inevitable byproduct of the economy’s unemployment rates, more discrimination charges were filed with the EEOC in 2013 than in all but three previous years since the founding of the commission in 1964. The EEOC’s systemic investigation program expanded yet again over prior years. This development is of critical importance to employers, for it evidences an agency with a laser-focus on high-impact, big stakes litigation.
  • The continued dislocations in the economy during 2013 fueled more class-action and collective action litigation over wage and hour laws.
  • The U.S. Supreme Court decided its first case under the Class Action Fairness Act of 2005 last year in Standard Fire Insurance Co. v. Knowles. It rejected the increasingly frequent tactic of the plaintiffs’ bar to stipulate to damages of less than $5 million, the CAFA’s amount-in-controversy requirement, in an effort to prevent removal of class-actions from state court to federal court.
  • The Supreme Court’s ruling in 2013 on class arbitration issues in American Express Co. v. Italian Restaurant informed an ever-growing body of case law that allows employers to utilize carefully crafted workplace arbitration agreements to manage their class-action litigation risks.
See also: Walmart suffers another PR black eye

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