Friday, June 24, 2011

How will the Supreme Court's Wal-Mart decision affect future class-actions?

Lawyers and legal commentators are buzzing this week about the Supreme Court's decision in Wal-Mart v. Duke, which held that a nationwide class-action against Wal-Mart alleging gender discrimination could not go forward because it did not meet the requirements for class treatment.  Specifically, the Court ruled that the plaintiffs' claims did not raise common issues of fact and law sufficient to meet the requirements of Rule 23 of the Federal Rules of Civil Procedure.  The result has many people asking if some companies are simply too big to be sued on a class-wide basis.  Others have pointed out the Court's apparent inconsistency in emphasizing Wal-Mart's corporate policy prohibiting gender discrimination while finding that the individual store managers had too much discretion for the plaintiffs to show any common practice or policy.  The actual effect of the decision on nationwide class-actions remains to be scene as lower courts interpret and apply the decision.  This was the second significant decision by the Supreme Court this year on class actions, the first being the AT&T case where the Court decided that state law could not be used to prohibit a company from restricting a customer's right to pursue a class-action.

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