September 19, 2020

When a Lawsuit Is Too Big

Justice Antonin Scalia seems to think so, judging by his comments on Tuesday during the Supreme Court argument in the biggest employment discrimination class action in history.

“We must have a pretty bad judicial system,” he said, reflecting on what he had just heard from a lawyer for hundreds of thousands of women suing Wal-Mart over what they say was unfair treatment on pay and promotions. The lawyer had said that a trial judge could rely on statistical formulas rather than testimony and personnel records to decide how much money the company would have to pay each plaintiff if it lost.

“Is this really due process?” Justice Scalia asked.

In other words, does the impersonality of the suit threaten its ability to be fair to each plaintiff and to Wal-Mart, the country’s biggest private employer?

The mass production of justice through class actions can indeed test the limits of the role that courts play in society. But the enormous size of modern institutions, it has been argued, requires efficient, streamlined procedures like class actions to address their failures.

“We are in the domain of mass litigation in mass society, where the private lawsuit is a regulatory enterprise,” said Samuel Issacharoff, a law professor at New York University.

“You need to have mechanisms of enforcement that correspond to the scale of the economic activity.”

Suzette M. Malveaux, a law professor at Catholic University in Washington, agreed that class actions have an important role to play in many cases, particularly those involving fraud and discrimination.

“It’s a balancing act between efficiency and fairness,” she said.

The issue tends to divide lawyers and scholars along ideological lines.

Conservatives and business groups say class actions are a form of regulation through litigation and insert courts into matters better left to administrative bodies. Consumer and civil rights lawyers counter that without class-action treatment, grave but widely dispersed wrongs would never be addressed.

The day after the Wal-Mart argument, a prominent federal appeals court judge issued an opinion in a similar but smaller case, this one brought by about 500 women against Rolls-Royce.

How far class-action procedures “can be stretched is the issue in the gigantic class action against Wal-Mart now before the Supreme Court,” Judge Richard A. Posner of the United States Court of Appeals for the Seventh Circuit in Chicago wrote for a unanimous three-judge panel, ruling against class-action treatment.

“The present case is not as big a stretch,” he said, “but it is big enough.”

Judge Posner said he was concerned about the due process rights of so-called absent class members: women who would be bound by the result in the case even though they had not volunteered for it and had no right to opt out and sue on their own. And he added that something more than a “mechanical computation” was needed to decide who gets how much money should the women win. Rather, he said, the case would require “500 separate hearings.”

Perhaps the most counterintuitive wrinkle in the typical class action is that only a handful of named plaintiffs have agreed to be represented by the lawyers who brought the case. Yet all of the class members will be held to the results those lawyers achieve.

“Ordinarily, you enforce your own rights,” Professor Malveaux said. “Here, someone is representing you without your consent. We only allow that in exceptional circumstances.”

She added that the Wal-Mart case qualified for the exception. “The idea of every woman coming forward and challenging their store manager is really unlikely,” she said.

Richard Epstein, a law professor at New York University, disagreed, noting that the plaintiffs in the Wal-Mart case are suing over “decentralized personnel decisions” in thousands of stores.

“You want to wring your hands,” he said. “This case is so crazy.”

At the argument last week, some of the justices appeared sympathetic to the plaintiffs’ complaint but wary about the courts’ ability to handle so large a case.

Article source: http://feeds.nytimes.com/click.phdo?i=3d615787244effa2e9b7f341e935ea91

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