The U.S. Supreme Court, heeding calls from companies to consider curbing class actions, agreed to decide whether Wal-Mart Stores Inc. must face a gender-bias suit on behalf of potentially 1 million of its workers.
The justices today said they will review a federal appeals court decision that approved a single suit to cover the claims of women who worked at the retailer’s 4,400 Wal-Mart and Sam’s Club stores since 2001. The suit, which threatens Wal-Mart with billions of dollars in liability, would be the largest-ever U.S. employment class action.
The dispute looms as perhaps the biggest business case of the court’s nine-month term. Nineteen companies, including Bank of America Corp. and Microsoft Corp., urged the justices to take up the Wal-Mart appeal. They said the lower court opinion makes it too easy for workers challenging employment practices to secure class-action status and then extract large settlements.
The lower court ruling “would dramatically broaden the circumstances where classes can be certified in all types of cases against all types of companies,” Wal-Mart’s lawyer, Theodore Boutrous, said in an interview.
Wal-Mart of course wants one million plus separate cases, in anticipation that the legal costs of doing that would overload the system, take decades to process, and assure that a huge single settlement can't be leveled against the company. In effect, it's asking for SCOTUS to define an upper boundary on the size of class-action suits in general.
Banks have Too Big To Fail. Wal-Mart wants to be Too Big To Sue.
The idea is that if companies perform something egregious enough, a limit on class-action suits and what can be turned into a class-action suit will allow them to basically get away with it because of the prohibitive cost of suing.
SCOTUS could go a couple ways on this, but what Wal-Mart (and the major companies backing it here) are looking for is for the Roberts court to make class-action suits as difficult as possible to create.
That should be disturbing to everyone.
[UPDATE] More on this from the always excellent SCOTUSblog.