High court handling of Wal-Mart appeal will have wider implications

Reporting from Washington —  The fate of the largest job bias lawsuit in the nation’s history — a claim that Wal-Mart Stores Inc. shortchanged women in pay and promotions for many years — hinges on whether the Supreme Court will let the class-action case go to trial.

The court is likely to announce as soon as Monday whether it will hear the retail giant’s appeal asserting that a single lawsuit cannot speak for more than 1.5 million employees.

Business lawyers and civil rights advocates are closely following the Wal-Mart case for its implications for class-action litigation.

“This may sound like just a technical, procedural issue, but because of the economics of it, class-action certification is often the most important issue to be decided,” said Washington lawyer Roy T. Englert Jr.

If the high court permits the Wal-Mart case to proceed as a class action, it will put enormous pressure on the retailer to settle, he said. The plaintiffs have not specified the damages they would seek, but given the size of the class, it could mount into billions of dollars.

The U.S. Chamber of Commerce and several large corporations have joined with Wal-Mart, the nation’s largest employer, in urging the high court to hear the appeal and to restrict the use of class-action claims. They argue it is unfair to permit plaintiffs’ lawyers to lump together many thousands of employees from stores spread across the country and to rely on statistics to prove illegal discrimination.

But civil rights advocates say the only effective way to challenge systemic discrimination in a large company is to bring a claim on behalf of all of the affected employees.

“If the Supreme Court takes this case, it will signal this business-friendly court is hostile to class actions against corporate defendants,” said Stanford Law School professor Deborah Hensler, an expert on civil litigation.

Earlier this month the Supreme Court heard another case that could decide the fate of class-action suits involving consumers and their purchases.

Lawyers in San Diego filed a class-action suit against AT&T Mobility alleging that its ads promising free cellphones were fraudulent because the buyers had to pay $30 for sales tax.

In its defense, AT&T said the fine print that came with its phones said that all claims must be handled individually through arbitration, not through a class-action suit.

If the high court agrees with AT&T and decides that the Federal Arbitration Act trumps the buyer’s right to sue, consumer advocates fear it could mean the end of class-action claims involving products and services.

The Wal-Mart case began in 2001, when lawyers filed suit in San Francisco on behalf of six current and former employees, led by Betty Dukes, a greeter at the Wal-Mart store in Pittsburg, Calif.

They alleged the Arkansas-based retailer had hiring and promotion policies that allowed male managers to award higher pay and better jobs to men. They sought lost wages and benefits for a class of more than 1.5 million women who had worked at Wal-Mart and Sam’s Club stores since 1998.

“We found Wal-Mart to be an outlier” based on salary data for men and women employees, said Joseph M. Sellers, a Washington lawyer for the plaintiffs. “Wal-Mart was so preoccupied in growing its business that it left in place personnel policies that were a throwback to practices from 20 or 30 years ago.”

A federal judge in Northern California said the suit could be tried as a class action, and a divided U.S. 9th Circuit Court of Appeals upheld that decision in April by a 6-5 vote.

In its appeal, Wal-Mart’s lawyers said it was unfair and unconstitutional to force the company to defend itself against the broad allegation that discriminatory decisions were made in 3,400 stores.

“The company’s policies forbid discrimination and support diversity,” said Los Angeles lawyer Theodore J. Boutrous Jr., who filed Wal-Mart’s appeal.

If the case is allowed to proceed, he said, the class of plaintiffs would be larger than the combined number of active-duty troops in the Army, Navy, Air Force, Marines and Coast Guard.

david.savage@latimes.com