Wal Mart Lawsuit Class Action Limitations Used In Comcast Lawsuit Stragety
Comcast Corp. (CMCSA) and Amgen Inc. are to ask the U.S. Supreme Court today to further limit class actions following a decision last year in the landmark Wal-Mart Stores Inc. (WMT) discrimination case that restricted such group litigation.
In 2011, the court rejected class certification for a lawsuit brought on behalf of more than 1.5 million female workers alleging discrimination in pay and promotions at Wal- Mart, the world’s largest retailer (WMT). The justices, dividing 5-4, said the women failed to point to a common corporate policy that led to discrimination, preventing them from suing as a group.
Plaintiffs often seek to sue as a class to pool resources against wealthy corporate defendants, gaining leverage to force a settlement or win at trial. The ruling in Wal-Mart v. Dukes, cited in a series of lower-court decisions -- most favoring companies -- will influence the Supreme Court’s view of the antitrust class action facing Comcast and the securities fraud class action involving Amgen, said Gerald Maatman Jr., of Seyfarth Shaw in Chicago.
“Dukes is the 800-pound gorilla in the courtroom,” Maatman, a lawyer who represents defendants in class actions, said in an interview. “Between June 2011 and Dec. 31, 2011, there were 260 rulings in state and federal court applying Wal- Mart.” Since then, at least 800 more cases have cited the case, he said. “There has been no hesitation by courts to apply Wal- Mart to other types of class actions.”
Steeper Road
While some decisions citing Wal-Mart have allowed class actions to survive, the road for plaintiffs has become steeper, said Deborah Hensler, a law professor at Stanford Law School in California.
The Wal-Mart decision “is making it more and more difficult to certify class actions,” she said. “You need to prove a lot about the merits at the certification stage.”
This requirement may lead to a reversal of class certification in one of the two cases being argued today before the Supreme Court, she said.
“Comcast is the next step on the road after Wal-Mart,” she said.
Comcast, the nation’s largest cable company, is trying to stop an antitrust lawsuit that seeks $875 million on behalf of as many as 2 million Philadelphia-area customers.
The company contends a federal judge improperly certified the case as a class-action lawsuit without first resolving whether proof of damages could be determined for the plaintiffs as a group. A Philadelphia-based federal appeals court let the case go forward.
Comcast Case
The Comcast case “could be very significant if the court decides that plaintiffs always need to prove common injury through admissible evidence” before a class can be certified, said Michael Waterstone, a law professor at Loyola Law School in Los Angeles.
“In antitrust, that’s going to make it very expensive” to pursue such claims, he said.
Courts are already requiring pre-certification evidentiary hearings, Hensler said.
In the past,