The appellate argument I went to hear yesterday was in the matter of Dukes, et al. v. Wal-Mart. The larger case is an employment discrimination claim raised by several female Wal-Mart workers. But this hearing was focused exclusively on whether the lower court judge had erred in giving the lawsuit class action status.
A class action lawsuit generally means that one case can be argued, and the result will apply to any individual who is part of the class. In one sense it's efficient: if there are many people who have suffered the same harm, there only needs to be one lawsuit. On the other hand, class action lawsuits can be very expensive for defendants to settle or lose because they'll have to compensate all the people affected, as opposed to just a few who managed to have their suit(s) brought.
That ability to bring a lawsuit in the first place is also one reason class action lawsuits can be useful (or harmful, depending on your perspective). Complex litigation, particularly against large corporations, can be very expensive and it's hard to get an attorney to take the case if there's not a possibility of being compensated for the effort at the end. Most individual people can't afford to pay an attorney a straight hourly rate, so attorneys often take cases like these on contingencies, meaning that they get about a third of the money if anything is recovered as compensation. But for just one client – or maybe even a handful of clients – there may not be enough to recover that a third would sufficiently compensate for the labors of the attorney. Also, a lower amount of potential damages may induce the defendant to stretch out the litigation – something very expensive for the plaintiff's lawyer that hasn't been paid yet but possibly cheaper for a company, who may hope that if they can just outlast the plaintiff the matter will go away. With a class, however, the damages pot gets increased and so it becomes more economically feasible for the attorney to take the case. Not only would there be the possibility of a greater reward at the end, but because a loss would be so expensive for a defendant it may induce it to settle. Having a class action thus increases the certainty that the plaintiff's attorney will be paid at all, as well as increasing the likelihood that it will be paid well.
But while it may help plaintiffs get lawyers, it also may reduce their total rewards. One argument raised yesterday was that it may not be in every client's interest to be part of a class because she might be entitled to a greater reward if her case was heard on its own. (Whereas for a class action, the ultimate result will probably be somewhat amortized over all the people in the class and less tailored to each individual's actual losses.) On the other hand, as mentioned before, the class status does help induce settlement, and for many plaintiffs it's better to get some money with certainty than risk getting no money at all. Plus the possibility of class status may be an important factor in whether a wronged plaintiff can even get her case heard in court at all.
So the plaintiffs in this case were very interested in having the lower court's decision granting class status stand. And Wal-Mart was very interested in having it overturned.
Wal-Mart had three arguments for why it should be, although I believe only one was fully vetted in court. (The others are likely argued in their written briefs.) Class status can only be granted when there is "commonality and typicality," and, Wal-Mart argued, here there was not. Their argument then focused on some of the evidence that the lower court had used to make that determination, and the methodology by which it was collected. In particular the discussion focused on whether the statistical data the plaintiff's provided aggregated from Wal-Mart stores across the country was as valid as data gleaned from each store individually, as Wal-Mart proposed doing. The appellate court did question, however, why the individual data would have yielded a different result, to which Wal-Mart said that the aggregation data "masked" what's really going on at each store.
Part of the tension in this entire case stems from each individual store having discretion in hiring decisions. Wal-Mart believes that because each store has discretion in whom it hires that it is not possible for the company as a whole to be discriminatory in its hiring practices. But the plaintiffs argue that there is still enough structure in the process originating from the company that causes Wal-Mart to, across the board, pale in its salaries for women compared to its competitors.
The answer to this conflict does seem to bear on the class action status. As a class action lawsuit predicated on Wal-Mart potentially having a discriminatory corporate hiring policy, the evidentiary scrutiny will be paid to those corporate policies themselves. Whereas in an individual discrimination lawsuit, it's the hiring supervisor's actions that would be most scrutinized. Wal-Mart argued that it was denied due process by turning the case into a class action because it meant it would not have a chance to individually dispute each discrimination claim, something that would not matter as much if the root of any discrimination was from a central corporate policy, as the plaintiffs claim.
In a sense, whether or not this case is a class action or not determines which case will be argued: the one proposed by the plaintiffs or the one by the defendants. But that's not what the appellate court is considering. The hearing yesterday was focuses exclusively on deciding whether the lower court judge had erred in giving it class status. The inquiry first needs to resolve what standard of review the court should use to consider the correctness of the lower court judge's decision, and then decide, using that standard whether the decision should be allowed to stand or not. In this case the plaintiffs argued that the correct standard should be "clear error," meaning that unless the lower court judge had made a huge mistake in interpreting evidence or law, the appeals court couldn't undo it (even if it disagreed with it.) Wal-Mart, for its part, preferred that the appeals court look at the totality of evidence and reconsider the question, necessarily reaching the opposite result.
Either way it's a tricky case, and the arguments yesterday tended to end up considering the merits of the entire case, or discussing the wider policy reasons for or against having class action lawsuits at all. One such complaint about class actions that was raised is that they can get unwieldy if it is a very populous class (as this one is suspected to be). On the other hand, individual lawsuits can also be unwieldy, and at least one of the judges seemed dismissive of Wal-Mart's argument that potential difficulty in managing this case as a class action would be justification for overruling the class status.
In the end, however, on the issue of whether the lower court judge erred in awarding class status I don't think the appeals court will overturn the decision. Unless there was some crucial argument in Wal-Mart's brief that was not raised during the oral arguments, Wal-Mart didn't seem to explain why the appeals court should use anything other than "clear error" as the standard to evaluate the decision, nor demonstrate that one in fact had been made.