Lawyers for Wal-Mart and the 1.5 million women suing the company for gender discrimination weren’t the only ones waiting anxiously for the U.S. Supreme Court’s ruling on whether the case can proceed as a class action. As OTC has previously reported, class action plaintiffs lawyer David Sanford of Sanford Wittels & Heisler and class action gadfly Ted Frank of the Center for Class Action Fairness both also had a lot riding on the high court’s ruling in Dukes v. Wal-Mart. On Monday, both reported disappointment—of a different sort—in the aftermath of the Court’s historic opinion.
Frank, you may recall, invested 10 percent of his net worth in Wal-Mart futures contracts, based on his conviction that the market hadn’t factored Wal-Mart’s inevitable Supreme Court win in Dukes(in Frank’s view) into the company’s share price. He turned out to be right about Wal-Mart’s win and wrong about the market. Wal-Mart’s share price bumped up right after Monday’s ruling, Frank said Monday, but he was stuck in court in a fairness hearing on the $3.4 billion Cobell Indian trust class action settlement. By the time Frank got out, the bump had dissipated.
“I'll take a 50-60 percent loss today or tomorrow depending on when [the Cobell] hearing ends,” Frank told OTC. “The Greek crisis pretty much destroyed the path to profit. Three things had to happen--SCOTUS ruling, price bump, and luck that fewer bad things than good things happened to [the] global market. Four if you include not being stuck in court when [the] ruling [came down].” He declared himself right on the first two, unlucky on the others. Frank says he’ll have to forgo the new Prius he was hoping to buy with his Dukes profits, but so it goes. “C'est la guerre,” Frank wrote in another e-mail.
For David Sanford of Sanford Wittels, the Court’s ruling in Dukes may have longer-term consequences. Sanford, who specializes in employment class actions, has a half-dozen sex discrimination cases underway in various federal courts. All are in relatively early stages, so Sanford’s going to have to account for the Supreme Court’s new and extremely high bar for employment class certification.
“This is a debacle,” Sanford said. “It is very bad.”
In Sanford’s view, the Court has essentially given a pass to large companies that engage in anything short of blatant, corporate-sanctioned discrimination, which most businesses are savvy enough to avoid. Sanford said any company that simply adopts a corporate anti-discrimination policy will have a strong defense against class certification, under the Court’s ruling. “This is going to make it much, much more difficult for civil rights litigants,” he said.
Sanford said he’s hoping for Congress to revise the laws to undo the Court’s decision. ( In OTC’s experience, plaintiffs lawyers in the last five years have had the same hope about a lot of Supreme Court rulings, including Stoneridge, Iqbal, and Concepcion, but Congress has yet to come through.) In the meantime, Sanford said, “We’ll have to be creative. We’ll have to look at things anew.”
(Reporting by Alison Frankel)