WASHINGTON (Reuters) - The Supreme Court said on Monday it would decide if the largest sex-discrimination class-action lawsuit in U.S. history against Wal-Mart Stores Inc can proceed, a case involving women workers who seek billions of dollars in damages.
The nation’s highest court agreed to hear an appeal by the world’s largest retailer and the largest private employer arguing the claims of as many as 1.5 million current and former female employees were too diverse to proceed as a single class-action lawsuit.
The justices decided to review a ruling by a appeals court in California that upheld the class-action certification in the lawsuit alleging discrimination against every woman employed over the past decade at the company’s 3,400 U.S. stores.
The Supreme Court is expected to hear arguments in the case, which immediately became the most important business dispute before the justices this term, in March, with a ruling likely by the end of June.
The ruling could affect other class-action lawsuits. Anthony Sabino, a professor of law and business at St. John’s University in New York, said the case “will test the very limits of class litigation.”
Bentonville, Arkansas-based Wal-Mart said in a statement it was pleased the court granted review in the important case and it looked forward to the court’s consideration of the appeal.
“The current confusion in class-action law is harmful for everyone — employers, employees, businesses of all types and sizes and the civil justice system. These are exceedingly important issues that reach far beyond this particular case,” Wal-Mart said.
The original lawsuit by seven women, filed in 2001, claimed that Wal-Mart paid female workers less than male colleagues and gave them fewer promotions. Wal-Mart denied that it discriminated on the basis of sex.
At issue in the Supreme Court appeal is the question of class certification, not the merits of the sex-discrimination allegations. The lawsuit has not yet gone to trial.
Large class-action lawsuits make it easier for big groups of plaintiffs to sue corporations and have led to huge payouts by tobacco makers, and oil and food companies. Companies have sought to limit such lawsuits to individual or small groups of plaintiffs.
The Supreme Court, with a conservative majority that has often ruled for businesses, in recent years has been highly skeptical of large class-action lawsuits.
WAL-MART: EMPLOYEES IN DIFFERENT STATES
In its appeal to the Supreme Court, Wal-Mart sought to undo the class-action certification and said the female employees held different jobs in different states under the supervision of different managers.
“The class is larger than the active-duty personnel in the Army, Navy, Air Force, Marines and Coast Guard combined — making it the largest employment class action in history by several orders of magnitude,” the company said.
Attorneys for the lead female plaintiffs in the case opposed the appeal and urged the Supreme Court to reject it.
Wal-Mart’s ultimate real argument is that “it is too big to be held accountable,” they said. “The class is large because Wal-Mart is the nation’s largest employer and manages its operations and employment practices in a highly uniform and centralized manner.”
Business groups like the Chamber of Commerce and a number of large corporations, including tobacco company Altria Group Inc, software giant Microsoft Corp and chipmaker Intel Corp, supported Wal-Mart’s appeal.
They said improper class certification puts inappropriate settlement pressure on defendants and that the appeals court’s ruling threatened to harm American business by imposing “staggering costs of class-action litigation.”
Attorneys for the plaintiff female workers rejected such concerns. They said Wal-Mart has never suggested it will have to settle the case because of the class-certification order.
They also rejected the argument that the appeals court’s ruling could trigger a landslide of class-action litigation and said Wal-Mart, a uniquely large and unusually uniform, centralized company, was different from the typical employer.
The Supreme Court said in a brief order that it would decide whether claims for monetary relief can be certified under a federal rule and whether the class certification ordered in the case was proper under that rule.
The lawsuit received class-action status under a provision designed primarily for plaintiffs who seek other forms of legal relief, such as an injunction, rather than money damages.
Reporting by James Vicini, Editing by Derek Caney, Dave Zimmerman