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In the wake of the oral argument in the mega class action, Wal-Mart v. Dukes, <a href="http://www.nytimes.com/">The New York Times </a>ran an interesting April 3, 2011 article by Adam Liptak entitled &ldquo;<a href="http://www.nytimes.com/2011/04/03/weekinreview/03liptak.html?_r=1&amp;scp=1&amp;sq=When%20a%20Lawsuit%20Is%20Too%20Big&amp;st=cse">When a Lawsuit Is Too Big</a>.&rdquo;&nbsp; The subtitle, &ldquo;Class-action suits can be large and impersonal.&nbsp; Critics say this is why they are often unfair to everyone involved,&rdquo; actually presents the theme.&nbsp; And while we might not normally look to The New York Times for legal commentary, this article identified several legitimate issues applicable to many employment-related class actions, including Dukes.&nbsp; These issues negatively impact claimants and companies alike and include deprivation of due process, decision making by formula and settlements that only benefit plaintiffs&rsquo; counsel.&nbsp; The article summarized the concerns Justice Antonin Scalias raised during oral argument in Dukes, that reliance &ldquo;on statistical formulas rather than testimony and personnel records to decide how much money the company would have to pay&rdquo; is not due process.&nbsp; (<a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2011/04/here.pdf">Transcript.pdf</a> of the March 29, 2011 argument.&nbsp;Justice Scalias&rsquo; comments can be found on page 48.) The New York Times&rsquo; article also quoted Judge Richard Posner of the United States Court of Appeals for the Seventh Circuit writing in <a href="https://employmentclassactionreport.bakerhostetlerblogs.com/wp-content/uploads/sites/8/2011/04/Randall-v.-Rolls-Royce-Corporation.pdf">Randall v. Rolls-Royce Corporation.pdf</a>&nbsp;(case No. 10-3446, decided March 30, 2011).&nbsp; In Randall Judge Posner expressed reservations about the Plaintiffs&rsquo; use of Rule 23(b)(2) of the Federal Rules of Civil Procedure which is to be applied only when any monetary payment is incidental to a grant of injunctive or declaratory relief.&nbsp; But as Judge Posner recognized, Rule 23(b)(2) deprives class members of notice and opt-out protections found in a Rule 23(b)(3) actions.&nbsp; Rule 23(b)(2) is the same section relied upon by the Plaintiffs in Dukes.&nbsp; Indeed, since Rule 23(b)(2) actions can secure back pay in addition to injunctive relief, calculating the monetary relief can be an overwhelming obstacle.&nbsp; (See Employment Class Action&nbsp;Blog's related <a href="http://www.employmentclassactionreport.com/flsa/seventh-circuit-affirms-denial-of-certification-in-equal-pay-acttitle-vii-gender-case/">post</a>&nbsp;on the Randall decision from 4/14/2011).&nbsp; Judge Posner noted in Randall that &ldquo;calculating the amount of back pay to which members of the class would be entitled . . . would require 500 separate hearings.&nbsp; The monetary tail would be wagging the injunctive dog.&rdquo; The underpinnings of the Dukes case&nbsp;illustrate the&nbsp;concerns expressed in&nbsp;The New York Times article regarding overreliance on statistical evidence in the name of expediency and some purported &ldquo;higher calling.&rdquo; &nbsp;In Dukes, the "higher calling" that purportedly justified exclusive reliance on statistical data was&nbsp;some subjective notion of &ldquo;social justice&rdquo; for&nbsp;low-wage employees.&nbsp; In essence, the Dukes plaintiffs insist that Wal-Mart uniformly and systemically undervalues and discriminates against its female employees on the basis of their gender.&nbsp; These claims will be litigated, if Plaintiffs&rsquo; counsel have their way, on behalf of more than one million women, none of whom will have the option of declining to participate in the case. What form of discrimination have these class members claim to have experienced?&nbsp; Well &hellip; that varies from person to person.&nbsp; For some individuals, it&rsquo;s promotions.&nbsp; For some, it&rsquo;s wages.&nbsp; For others, it&rsquo;s discipline.&nbsp; Which policy or policies do they claim are discriminatory?&nbsp; That&rsquo;s another hard question.&nbsp; It&rsquo;s not really a policy per se that they claim to be discriminatory.&nbsp; It&rsquo;s the fact that Wal-Mart doesn&rsquo;t have enough policies, and, if they did, they supposedly may have kept discrimination out of the workplace.&nbsp; Who, according to the Plaintiffs&rsquo; lawyers, carries out all of these discriminatory decisions?&nbsp; That depends, too.&nbsp; Typically, it&rsquo;s the thousands of individuals Wal-Mart employs in local store management positions.&nbsp; But, that&rsquo;s a problem itself, because more than 500 of those individuals are also female class members, having been promoted during the relevant timeframe.&nbsp; And, that raises a potential conflict of interest that Judge Posner cautioned against in Randall.&nbsp;&nbsp;&nbsp; We should at least know what kinds of unlawful considerations Wal-Mart managers took into account and how often they did so, right?&nbsp; Not really.&nbsp; What we know is that the sociologist hired by Plaintiffs&rsquo; counsel really and truly believes that Wal-Mart, at least theoretically, might possibly have discriminated against someone at some point somewhere on the basis of her gender.&nbsp; And, how does he know this?&nbsp; Is it based on actual evidence pertaining to current or former Wal-Mart employees? &nbsp;Not at all.&nbsp; It&rsquo;s based on what the sociologist claims to be &ldquo;a large body of social science research on the impact of organizational policy and practice on workplace bias.&rdquo; What it really comes down to is this particular sociologist&rsquo;s firmly held belief that all managers, not just those employed by Wal-Mart will invariably discriminate in violation of the law if they have discretion in personnel matters. All meager attempts at humor aside, this theory and the appurtenant lack of supporting evidence raise very serious questions regarding the use of the class action device in the Dukes case and others of its kind.&nbsp; There appears to be precious little evidence in Dukes of intentional discrimination on Wal-Mart&rsquo;s part.&nbsp; Rather, Wal-Mart is presumed by the Plaintiffs to have discriminated by virtue of the simple fact that it is an employer.&nbsp; On the other hand, the courts thus far have rejected Wal-Mart&rsquo;s evidence demonstrating that it does not discriminate, finding that such evidence will only be relevant at the &ldquo;merits stage&rdquo; of the class action.&nbsp; The logic behind this dichotomy seems curious to say the least. As noted above, the section of the Federal Rules under which the Dukes case was certified (Rule 23(b)(2)) does not entitle absent class members to notice or an opportunity to opt out of the case.&nbsp; Even worse, Plaintiffs&rsquo; counsel have defended this surprising anomaly on the basis that most women may be too intimidated to file suit on their own or to remain in the suit if given a chance to opt out. In short, stripped to their essence, Dukes and cases similar to it stand on three assumptions: 1) That all employers, particularly large employers, are guilty of discrimination; 2) That the victims of employment discrimination do not understand or complain about the discrimination they&rsquo;ve suffered. 3)&nbsp;That, because employers discriminate and because their victims will not defend themselves, social justice can only be achieved by allowing broad license to the plaintiffs&rsquo; bar to use Rule 23 to correct those conditions they perceive as unjust. This paternalistic co-opting of the class action device will allow neither facts nor law to stand in the way of punishing those who were in a position to do something wrong, regardless of whether they actually did so. &nbsp;To state that such proceedings trample the due process rights of absent plaintiffs and defendants alike is to state the obvious. Finally, as the Times noted: &ldquo;Class actions can also distort the usual incentives in the adversary system, offering more rewards for lawyers than for plaintiffs.&rdquo;&nbsp; And, no one can seriously doubt that because of cost, class actions coerce settlement even when valid defenses may exist. The Bottom Line: In this instance, The New York Times essentially got it right &ndash; &ldquo;In a class-action suit, a lawyer can represent your rights without your consent.&nbsp; Such suits test the limits of the Court&rsquo;s role in society.&rdquo; Authorship credit: John B. Lewis and Todd A. Dawson

Too Big to Succeed – Are Class Actions a Proper Procedural Tool or a Means to Coerce Settlements and Enrich a Few?