The Anti-Constitutional Culture of Class Action Law: An Expected Supreme Court Case Involving Wal-Mart May Radically Alter the American Legal Landscape
Moller, Mark, Regulation
The culture of class action law discourages constitutional scrutiny of class action litigation. But that culture is fraying. The Supreme Court may pull the thread that unravels it in Dukes v. Wal-Mart, a mammoth sex discrimination class action.
In 2000, Betty Dukes sued Wal-Mart under Title VII of the Civil Rights Act of 1964, alleging gender discrimination. The suit grabbed headlines because of its posture: Dukes sought court approval of a class action seeking remedies for 1.5 million women who worked for Wal-Mart since 1998. Dukes claims the women, like her, lost promotions and pay because of their gender. The suit, in turn, threatens Wal-Mart with, according to some estimates, as much as $510 billion in punitive damages.
The trial court "certified" (that is, authorized) a class in 2004. On February 6, 2007, a three-member panel of the Ninth Circuit affirmed class status by a 2-1 vote. It is the single largest class action certification in history.
Wal-Mart has requested that the full Ninth Circuit review the case--a preliminary step toward a request for review by the U.S. Supreme Court. In clever bid to enhance the chances of Supreme Court review, Wal-Mart's lawyers, led by Theodore Boutrous of Gibson, Dunn, and Crutcher, have challenged the constitutionality of "class-wide" punitive damage awards on this gargantuan scale. Wal-Mart's argument relies on Supreme Court decisions in BMW of North America v. Gore and State Farm Mutual Automobile Insurance Co. v. Campbell, which bar awards of punitive damages that are not proportional to compensatory damages assessed on an individual basis. Because plaintiffs do not seek compensatory damages, however, it is impossible to measure the ratio between punitive damages and compensatory damages, as the Supreme Court's cases require. Hence, Wal-Mart argues, those cases throw serious constitutional doubt on Dukes' punitive damages request.
While these arguments are worthy, Dukes, in its very scale and ambition, raises concerns that go well beyond the punitive damages precedents. Why are any class actions on the scale of Dukes constitutional? That is a question that is rarely, if ever, asked by serious students of the class action.
This constitutional know-nothing-ism is the product of three pervasive myths about the nature of class actions, with deep roots in the culture of class action litigation. The myths, however, are due for critical reassessment. If Wal-Mart successfully appeals to the Supreme Court and wins there, Wal-Mart's victory would set the stage for that critical reassessment.
MYTH 1: THE CONSTITUTION DOES NOT RESTRAIN CIVIL "REMEDIES"
The first myth is perhaps the most invidious. Class action lawyers reflexively treat class actions as a discretionary "remedial" device that falls outside the scope of serious constitutional attention. The logic follows the "rights-remedy" distinction, a traditional way of legal thinking with roots in the 19th century. It goes like this: The Constitution cares about how "rights" are defined by courts in the constitutional context and how they are created by Congress in the legislative context. By contrast, "remedies" are a matter for judicial discretion; the Constitution simply does not constrain this power beyond guaranteeing parties minimal notice and a meaningful chance to participate in remedial proceedings. The rights-remedy distinction infects the debate over class actions, which are commonly viewed as a form of "remedy." The distinction is apparent in the Ninth Circuit's Dukes opinion, which shows a total lack of concern about the trial court's assertions of "broad" discretion to authorize class treatment.
Under current Supreme Court precedent, however, this distinction is not a very useful way of thinking about the class action. To see why, let us consider punitive damages in more detail. Punitive damages are also a "remedy," but one that, as we have discussed, receives heightened attention under the Due Process Clause. …