CLASS ACTIONS, STATISTICS, COMMONALITY, TYPICALITY, & 1.5 MILLION TRIALS: WALMART
Suing a big retail chain that rakes in billions of dollars is not apt to attract its attention unless you have 1.5 million plaintiffs suing for even more billions of dollars. You need deep pockets to play this game. After you get your class certified in U.S. District Court alleging, in Dukes v. Wal-Mart gender discrimination, expect the company to fight back, and not always under the Marquis of Queensbury rules of fair play.
There's either going to be a trial of dueling statisticians or, if Wal-Mart has its way, 1.5 mini trials.
I attended the argument before the Ninth Circuit yesterday in the Marble Palace at 7th and Mission, where the overflow crowd was accommodated in another marble courtroom presided over by, in addition to Judges Andrew Kleinfeld, Harry Pregerson, 81, and Michael Hawkins, a purple clad goddess of justice with the Ten Commandment tablets next to her leg, with Hebrew lettering. Barely constitutional, I thought, under McReary County v. ACLU and Van Orden v. Perry (2005), on historical, humanitarian, and allegorical, grounds, plus no big complaints.
What interested me enough to walk over to the federal appellate courthouse was the question of what it took to get a big retailer to pay attention to complaints from employees and and other small entities, such as customers.
Theodore Boutrous of big LA firm Gibson, Dunn & Crutcher, representing Wal-Mart caught a faceful of flak from Judge Pregerson over the nasty tone of his brief, critical of the trial judge who ruled against his client. The judge suggested that perhaps Boutrous hadn't personally written all the parts of his brief, but that he owed an apology to Judge Martin Jenkins.
We never like judges who rule against us, figuring it's THEM who're nuts, not us. That doesn't mean it's a good idea to say so in print where the stink tends to hang in the air for a long time, or even orally.
The best thing to do is never to say nuttin' about a judge, ever. That way you don't have to eat your words or worry about them coming back and biting you.
No one cares what the losing lawyer has to say about the winning judge, anyway, and judges always come out on top, even when they're wrong.
Your job is to be able to come back and fight again another day. Hard to do when you've burned your judge. You might get remanded and find yourself standing before the same judge someday, wondering whether he, or worse, she, has it in for you. You won't sleep as well at night and you'll wonder whether you lost the next decision because you screwed up because your client's side didn't have it on the merits or it was a close case and what made the difference was that you'd ticked off the judge and s/he just somehow couldn't find the merits in yours.
[Later: The controversial brief (PDF) is here.]
Before a class can be certified, the plaintiff must prove that the plaintiffs all have some issue of fact or of law in common with each other such that the active plaintiffs will well-represent the absentee plaintiffs. The active participants must be typical of the class. Hence the headline issues of commonality and typicality.
Trying to slay the dragon with a huge class that could win big and cost the giant billions was Brad Seligman who knows what he's doing.
Boutrous seemed to be holding the spectre of interminable trials (maybe 1.5 million or so) before the judges, while Seligman seemed to think otherwise. Judge Kleinfeld suggested that maybe Wal-Mart should just settle.
It was difficult to say which way the court might decide. Kleinfeld suggested that even though Wal-Mart left hiring decisions to its 3,400 local store managers, he wasn't sure there was anything wrong with this even if it did produce gender inequality in hiring because this is the way he and other federal judges hire law clerks. If Kleinfeld rules for Seligman he may have to come to the realization that the federal judges have been doing the wrong thing themselves for a long time. He noted with some apparent relief that judges, at least, have immunity. Or at least qualified immunity. No one mentioned in oral argument whether the statistical disparity cited by plaintiffs in hiring, by gender, amounted to discrimination that was intentional, which is the requirement of Washington v. Davis, or whether unintentional discrimination was sufficient to merit a damage award.
Judge Kleinfeld was on top of the idea that both sides were arguing the meaning of statistics and the trial might become a battle of statisticians. Statistical inferencing is an interesting subject and this is a good case for the proposition that we need to make the subject a part of our intellectual war chest. There are all sorts of good tutorials on the Internet, as I learned when I had to come up to speed to cross-examine the medical examiner in a multiple murder-conspiracy case. With the help of a medical expert who was himself an expert in statistical inferencing I was able to a creditable job in the sense that on questioning, the ME admitted to enough mistakes to get the case thrown out. The truth was in the numbers, and my client escaped justice by a tenth of a billionth of a gram, or achieved justice, as the case may be according to viewpoint.
Bob Egelko of the San Francisco Chronicle reports on the case below:
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Wal-Mart fights to split sex bias suit
Class action status inhibits fair defense, retailing giant claims
- Bob Egelko, Chronicle Staff Writer
Tuesday, August 9, 2005
Wal-Mart tried Monday to derail the nation's largest-ever discrimination suit, arguing that a single trial on the claims of 1.6 million women would be neither fair nor manageable.
But the retailing giant got little apparent sympathy from a three-member federal appeals court.
The 45-minute hearing before the Ninth U.S. Circuit Court of Appeals in San Francisco was critical to the future of the suit, which claims the company had a systematic bias against women in pay and promotions. The court took the case under submission and gave no hint of when it might rule.
At issue is whether Wal-Mart must defend against lawsuits by six individual plaintiffs or against a single, colossal class action on behalf of nearly every woman who has worked at one of its 3,400 stores nationwide -- including 16 stores in the Bay Area -- since Dec. 26, 1998.
If a San Francisco federal judge's decision last year to grant class action status is upheld, Wal-Mart will face the financial uncertainty of a jury trial, unless it reaches a settlement that could run into the billions of dollars.
Theodore Boutrous, lawyer for the retailer, said U.S. District Judge Martin Jenkins' class action ruling stripped Wal-Mart of its right to defend itself by effectively erasing the differences between individually managed stores. The trial would be a battle of statistics, and women who were paid less than some national average would get damages even if they had suffered no discrimination, Boutrous said.
"Wal-Mart would then not be allowed to put on live testimony by a (store) manager who said, 'I didn't discriminate,' '' Boutrous said. "That violates due process.''
But two of the three judges on the panel seemed dubious.
Wal-Mart would still be able to present "an honest, complete statistical survey that showed there was an absence of gender discrimination,'' said Judge Michael Hawkins.
He cited one of the plaintiffs' most important statistics -- that women make up two-thirds of Wal-Mart's hourly employees but only one-third of its managers. The judge also found that higher management positions were more male- dominated, that women were paid less than men in every region and in most job categories and that women take longer than men to reach management positions.
Boutrous countered that a study commissioned by Wal-Mart showed no pay disparities at more than 90 percent of its stores and that the company-wide statistics failed to reflect thousands of local decisions on pay and promotions. But Hawkins responded, skeptically, that Wal-Mart seemed to be insisting on an individual suit by each employee.
A second panel member, Judge Harry Pregerson, said the trial judge had heard experts on both sides and issued a painstaking, detailed ruling that is entitled to some deference by the appeals court. Pregerson also said Boutrous owed Jenkins, the trial judge, an apology for the company's written brief, which criticized Jenkins' writing style and accused the judge of trampling on Wal-Mart's rights.
Plaintiffs' lawyer Brad Seligman said individual store managers' decisions can add up to company-wide discrimination. He cited Jenkins' findings of a company culture, movement of managers between stores, and a failure to set standards for local decisions.
But the third appellate court panel member, Judge Andrew Kleinfeld, said, "I have trouble getting from there to sex discrimination without solid statistics.'' He said federal judges use the same subjective system as Wal- Mart when they hire their law clerks.
After the hearing, the lead plaintiff in the case, Betty Dukes, said, "I think we are on the road to victory.''
Dukes, 55, an 11-year employee who now works as a greeter of customers in Wal-Mart's Pittsburg store, alleged that she frequently trained men for positions that were never offered to her and that her complaints were met by unfair discipline, a demotion and a pay cut. Her goal in the suit, she said, is a system "where all women can be treated equally and fairly.''
E-mail Bob Egelko at begelko@sfchronicle.com.
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