Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Wal-Mart’s yellow smiley-face icon, known for rolling back prices at the nation’s largest retailer, may not be grinning so broadly these days, now that a court has certified a massive gender discrimination class action suit against the Bentonville, Ark.-based chain. The case, Dukes v. Wal-Mart Stores Inc., 222 F.R.D. 137 (N.D. Calif. 2004), involves 1.6 million female employees alleging discrimination in promotions and pay, and the potential threat of a billion-dollar resolution. However the case is resolved, it is likely to have a significant impact on how such class actions are handled in the future. The Daily Report invited a panel of experienced employment attorneys to discuss the potential ramifications of the Wal-Mart suit, and strategies they’ve used and seen in other large class actions of this type. Led by Charles A. Shanor, a professor at Emory University Law School, the panelists were R. Lawrence Ashe Jr. of Ashe, Rafuse & Hill; Harlan S. Miller III of Miller Billips & Ates; Joshua F. Thorpe of Bondurant, Mixson & Elmore; and C. Geoffrey Weirich of Paul, Hastings, Janofsky & Walker. The group tackled a variety of subjects, including factors affecting settlement dynamics, the utility of mediation and arbitration in resolving large class cases, forum shopping and judge shopping, and the feasibility — and cost — of paying higher settlements to “worthy” plaintiffs. The discussion also ventured into the controversial and — pardon the pun — highly charged topic of the fees plaintiffs’ lawyers earn in class action suits. Ashe represented The Coca-Cola Co. in Ingram v. The Coca-Cola Co., 200 F.R.D. 685 (N.D. Ga. 2001), which settled for $192.5 million. He postulated that the effective hourly rate for plaintiffs’ counsel was $1,500 to $2,000 an hour. Thorpe, who represented the plaintiffs in that case, countered that fees were closer to the $900 range and noted that big fees are needed to compensate plaintiffs’ attorneys for the big risks they run in taking cases on contingency. The discussion has been edited for length and clarity. — Janet L. Conley, Assistant Managing Editor, Fulton County Daily Report
SHANOR: The class certification in Dukes v. Wal-Mart of 1.6 million female employees alleging gender discrimination in promotions and pay has generated significant public attention due to the employer’s renown and the size of the class. The 9th Circuit has granted an immediate appeal from the class certification by the district court, and plaintiffs’ counsel recently filed another class action, this one against Costco, making similar allegations. Whatever the final decision in the Wal-Mart case is, it could have important implications for plaintiffs and defendants in class discrimination claims. It also could change employers’ compensation and promotion practices and alter corporate cultures. By way of background, the framework — which started with the Civil Rights Act of 1964 — is that race and sex discrimination cases always have been viewed, in a way, as class discrimination cases because race and gender are class characteristics. Initially, a number of courts certified across-the-board challenges to all employment practices at various places of employment because race or sex discrimination is inherently class-based, regardless of whether the named plaintiffs and class members were similarly situated by job groupings, but eventually the U.S. Supreme Court said no in private Title VII class actions. These actions must meet the class requirements under Federal Rule of Civil Procedure 23. The Supreme Court actually said that in two different cases, the Rodriguez case and later the Falcon case. [ East Texas Motor Freight System Inc. v. Rodriguez, 431 U.S. 395 (1977), and General Telephone Co. of the Southwest v. Falcon, 457 U.S. 147 (1982)]. The usual and noncontroversial class action under Title VII involves an employer that has a rule or a widespread, articulated practice, an employer that gives a test that had a disparate impact or some other decision made at the top of the corporate hierarchy. More controversial are cases like Dukes v. Wal-Mart, in which the company is alleged to have delegated personnel decisions to its stores, leaving it to the subjective discretion of store managers and supervisors to make a variety of personnel decisions. In these cases, plaintiffs’ attorneys — typically with the assistance of expert witnesses — aggregate things that happen in the place of employment. For example, in the Wal-Mart case, more than 50 percent of lower-level store employees were females, and a much smaller percentage of store managers and assistant managers were female. The circuits are split at this time as to how Rule 23 applies in these cases. The 5th Circuit in Allison v. Citgo Petroleum Corp. [151 F.3d 402 (5th Cir. 1998)] established a fairly high bar for plaintiffs’ attorneys, while the 2nd Circuit in Robinson v. Metro North Commuter R.R. [267 F.3d 147 (2d Cir. 2001)] made certified class actions more easily available. And both of these cases looked at questions under Rule 23(b)(2) of whether injunctive relief predominates over monetary relief. Additionally, there are some constitutional questions concerning the operation of the 7th Amendment right to a jury trial in civil cases where compensatory and punitive damages claims are available to plaintiffs as a result of the 1991 amendments to the Civil Rights Act of 1964. Another issue is the commonality and typicality of these claims across groups of employees. And, finally, we have adequacy of representation issues cropping up under Rule 23(a)(4), in which conflicts are alleged between plaintiff class members who are female and management females who have, at least to some extent, made it through various promotional processes of the company and are now making promotional decisions involving and affecting class members. Beyond the legal issues today, our intention is to cover aspects of lawyering in these cases. What do plaintiffs do? What do defendants do? What strategies are adopted? Strategies not just legal but factual. Strategies including publicity and management of public relations matters. Let’s start with this: What should plaintiffs’ counsel look at in order to decide whether or not to file a class action of the Wal-Mart sort? THORPE: The first consideration is to get a handle on the employer’s policies. You want to find out how broadly the policies apply. Do they apply in every location or are they specific to certain locations? Within the policies, what kind of subjectivity/discretion is allowed? That obviously is the focus of the Wal-Mart case, and it’s also the focus of non-rule-based class action cases. Also, you need to find out whether there is classwide discrimination. Probably the two best ways to do that are to talk to as many potential class members as you can, and look at publicly available documents to the extent that you could get FOIA requests to the Office of Federal Contract Compliance Programs and other government agencies. SHANOR: You might also seek government and any available EEO-1 data. THORPE: Right. And I think in Wal-Mart there’s a lot of benchmarking data that one of the plaintiffs’ experts used. That kind of data can be very helpful. SHANOR: Harlan, you’ve had a lot of experience with a variety of employment discrimination cases. How do the EEOC and its processes fit into a class case of this sort? And secondly, how do you decide where to file a case against an employer that has facilities in many different locations? MILLER: I’ll answer the second question first. Take the venue issue in the Wal-Mart case. Obviously, the plaintiffs’ lawyers don’t want to try that case in Bentonville, Arkansas, because there would be no chance of a plaintiffs’ verdict there. SHANOR: There was an earlier decision, before the class certification decision, saying that the Wal-Mart case could remain in the Northern District of California rather than being moved to Bentonville. MILLER: Right. So the plaintiffs’ lawyers made a rather calculated, and I’m sure well thought out, decision to try and bring the case within the 9th Circuit Court of Appeals. They probably could have brought it just about anywhere given Wal-Mart’s far-flung nature. The most important part of deciding where to file is to look at the recent circuit court decisions to determine whether there’s a very conservative trend in a particular court. And, of course, the 9th Circuit has a reputation of being less conservative than other courts. I think it’s quite obvious if you look at the decisions in the 11th Circuit that there’s a team of conservatives cutting back on the rights of plaintiffs to bring large lawsuits. SHANOR: When dealing with a district court — like the Northern District of California or the Northern District of Georgia — where some judges are viewed as more conservative and others as more liberal, are there any techniques that you can think of for trying to pick the judge you want? MILLER: Not that I’m aware of. If you know something that I don’t, I sure would like to learn something here today. SHANOR: Geoff, have you ever seen a situation in which judges were cherry-picked by plaintiffs’ lawyers? WEIRICH: Yes. There has, in fact, been a situation in a court in the South where there’s been an intervention by the senior judge over allegations that a particular plaintiffs’ firm was finding a way to get all of their class action cases before the district judge they perceived as favorable. That investigation lead to some changes in the practices in that court. There’s also the related case doctrine, which is one that can be legitimately used if there is a truly related case already before the court. Then you can bring a second case that is related in some factual or legal way and get it assigned to the same judge. But that doctrine is one of the ways that plaintiffs’ lawyers have found to abuse the system from time to time. SHANOR: With Wal-Mart, for example, there are over 5,000 cases pending nationwide against the company. Presumably some of those cases involve allegations of sex discrimination by an individual plaintiff with respect to promotion and compensation. So you’re saying that if one of those cases lands before a very favorable judge from a plaintiffs’ perspective, that might well be where the plaintiff would seek to file a nationwide or broad class action, checking the box on the federal form saying there’s a related case. WEIRICH: We’ve seen that. We’ve also seen the plaintiffs move to amend the original case to transform an individual case into a class action. ASHE: Well, it’s public record, so I don’t mind mentioning what I’m confident Geoff was talking about. It’s in the Northern District of Alabama, and there were alleged maneuverings by the plaintiffs’ bar to get Judge U.W. Clemon, who has a very favorable track record for plaintiffs over the years, and subsequently some case law on employers alleging maneuvering to avoid Judge Clemon by hiring his nephew’s law firm to represent them. The allegations have been that plaintiffs’ attorneys there would file their case individually, see if they got a judge they liked and then immediately, within the 15-day rule, simply amend as of right to add class allegations. And that met with success despite defendants’ objections on a number of occasions. I think forum shopping is something that is done by both sides, but it’s a lot easier for the plaintiff to do it because they can choose where they file the lawsuit. If I were representing a plaintiff in a class case, I certainly would go looking for either the 9th Circuit or the 2nd Circuit. For Harlan to say that the 9th Circuit is less conservative than other circuits is like describing somebody as being less shy than Madonna. The 9th Circuit is the most reversed circuit by a factor of several orders of magnitude. And there’s almost a presumption of reversal if it gets to the Supreme Court. THORPE: The Desert Palace Inc. v. Costa case [539 U.S. 90 (2003)] is an interesting exception to that. The 9th Circuit went against, I guess, almost every other circuit and was affirmed 9-0, I think. ASHE: Correct. But their batting average overall is very poor compared to any other circuit. It would seem that the Supreme Court is going to need to take the stark difference of class certification case law between, for instance, the 5th Circuit in Citgo and the 4th Circuit and some would even say parts of the 11th Circuit versus the 2nd Circuit and the 9th Circuit and resolve that conflict. The D.C. Circuit on occasion has been somewhat plaintiff-friendly as well. But if you’re suing a very large employer and you’re patient and careful, the plaintiffs’ attorney ought to be able to get at least initial jurisdiction most anywhere they want to go. On the other hand, you’re going to want to try to choose a plaintiff that potentially is the poster child for your case, and so you’ve got to combine that with it as well. SHANOR: In the Wal-Mart case, following the certification decision, the company took the position that the court’s ruling was not a merits-based decision. It’s simply class certification. But the plaintiffs’ lawyers were gleeful at the certification, and many who work in this field say certification in many cases is the most important decision in a class action. Why is that so important in terms of the dynamics of settlement and of further litigation? MILLER: Let’s talk about the economics of it. The decision on certification is going to make the difference in whether you’ll take the case. In a lot of cases, particularly cases that aren’t gender discrimination cases but they may be FLSA cases or equal pay cases, the damages for any one particular plaintiff — or even if you take a dozen or two dozen of them and aggregate them — are not going to be adequate to justify the kind of resources that you’re going to have to spend as the attorney litigating against a company like Wal-Mart, which in my experience is a company that takes the approach that they’re going to spend whatever it takes to fight such a case. So it is a threshold decision on viability from an economic standpoint. SHANOR: From the company’s perspective, how important is this decision? WEIRICH: It’s obviously the major battle of the case. Historically since the 1991 Civil Rights Act, very, very few class actions that have been certified have gone to trial. Boeing recently tried one in Seattle where both compensatory and punitive damages were at stake. But most employers are very unwilling to risk rolling the dice on a compensatory or punitive damages judgment even if they think they have strong appellate arguments. It’s critically important for settlement purposes for the plaintiffs to get certification. THORPE: Having settlement discussions before certification is ruled on can be helpful because there is the uncertainty that can drive a settlement. Obviously there’s a leverage change if the class is certified or certification is denied. ASHE: Certification is a critically important decision in the dynamics of the progress of the case and whether or not it will be settled, and, if so, at what level. For example, if the Wal-Mart trial court class certification decision sticks, my impression from afar and not based on any inside information is that any resolution of it will be north of a couple of billion dollars. It’s not a lot of money for any particular individual person, but when you’ve got a class of 1.6 million, it doesn’t take much per capita to reach very large numbers. WEIRICH: Let me return to the point that Josh made about the dynamics of settlement — both before and after certification. For a number of years there were a lot of pre-certification settlements, and, in fact, as Josh pointed out, a good leverage point in the negotiations was while the class certification papers were pending. With the advent of the Supreme Court’s decision in AmChem v. Windsor [521 U.S. 591 (1997)] that approach has become much more difficult to justify because the Supreme Court ruled in a situation where there was a conflict between two subsets of the class that in order for the class settlement to be approved, you had to satisfy all of the elements required for class certification except manageability. I once settled pre-certification on behalf of a company, and we ended up being asked by the district court judge to brief class certification issues. We had to write a very, very tricky brief not to create a bad record for ourselves in future cases for that employer while at the same time supporting a settlement that we had crafted. It’s a very difficult situation for the employer. SHANOR: Another factor affecting settlement dynamics is if the company is successful, of course, a huge judgment against it could have a dramatic effect on shareholder value or conceivably even drive a company into the protection of the Bankruptcy Court, and no employer wants that risk. Also, if the company is profitable, roughly half of the settlement is cost-free to the company because of the corporate taxation rates. ASHE: Frequently whether or not a class case is settled though is driven by how much pressure the plaintiffs are able to apply on a particular employer, often through the media. Some plaintiffs’ attorneys are superb media relations people and extremely good at sound bites, much better than most defense counsel. For example, Cyrus Mehri, one of the lawyers opposing Coca-Cola, has excellent media skills and relations. Putting that kind of pressure on a company that sells its product to the general public — including to groups that are embodied by the class in question — is going to put a lot more pressure on the employer to consider settlement than if you’re suing a Lockheed Martin. The public probably is not going to affect Lockheed Martin very much by boycotting buying C-130s. SHANOR: A final factor that comes into play is the employer’s ability, under the terms of the settlement, to steer injunctive and other equitable relief in directions that the employer finds consistent with ongoing business efficiency and profit making. Specifically, I’m talking about the employer’s ability to distribute money within the class to employees it believes are more deserving, as opposed to making simply a classwide distribution, which might include people the employer views as deadbeats. I’d like to hear what your experience has been with the mediation processes in class cases. How did they work? Did they work well or poorly? THORPE: I think they work very well. The Coke case was difficult to mediate, but the mediation was critical to getting that settlement. WEIRICH: The ethical conflict issues that arise between class counsel and their clients — who are generally not present at the bargaining table — almost demand that a mediator be there. THORPE: It circles back to what you were talking about in AmChem because AmChem is very critical of collusive settlements, so having a mediator who can testify that there were arms-length negotiations is really important. ASHE: The advantage of mediation normally is that, to the extent the employer wishes to retain control of its human resources practices, you can negotiate in mediation changes or evolutions that you deem acceptable by definition. Whereas if you’ve got a federal judge doing it for you — well, if you like the way the public schools have turned out under federal court supervision, you’ll probably like the way your company’s HR practices will turn out as well. Also, some employers have strong feelings about the deserving plaintiffs getting money and the nondeserving ones not. I agree with that, although frequently one’s clients don’t see a lot of deserving plaintiffs on the other side. SHANOR: This is relative, not absolute, Lawrence. ASHE: However, in the dynamics of a settlement, the transaction costs of determining who’s deserving and who’s not are so high that it is almost always done by some kind of formula approach. Coca-Cola was entirely formulaic. I mean, different amounts for different kinds of people, but it was seniority-driven and level-driven. Even in [ Kraszewski v. State Farm General Ins. Co., 912 F.2d 1182 (9th Cir. 1990)], which was an early class case involving their insurance sales agents — a gender case — they tried several hundred cases and finally even State Farm got tired after something like $200 million in attorneys’ fees. State Farm negotiated a settlement with the rest of the plaintiffs, even though the company was winning over two-thirds of the cases they were taking to trial. The judgments were very high in the ones they were losing, and under the court’s decision they were paying both sets of attorneys for all of the cases — winners and losers. SHANOR: I wouldn’t say that large employers are going to try to drive these settlement amounts to particular members of the class, but rather to members of the class that have characteristics that they think make them more attractive recipients of money. For example, someone who had applied for promotions would be viewed by the company no doubt differently than someone who was in a pool of potential applicants for a promotion. Someone who had indeed gone through certain management processes or management development processes but not been promoted might be viewed as more attractive than someone who had never attempted to do those things, and, as you say, seniority and other factors might be viewed as more attractive. I’d like to let the plaintiffs’ and defense lawyers address the issue of attorneys’ fees to successful plaintiffs’ lawyers through settlement or trial processes. Do these lawyers deserve these big fees? THORPE: It’s very interesting to me that in the employment discrimination context defendants and employers are all up in arms about the attorneys’ fees, which are generally a lot lower in percentage terms or on a lodestar basis than you’d see in securities class actions where, you know, your individual shareholder is getting 45 cents and the attorneys are getting 30 or 40 million dollars. I think that because of AmChem the federal district courts are much more rigorous in scrutinizing settlements — including attorneys’ fees — and I think between the judge and any objectors you’ve got a process for making sure that the fees are fair. MILLER: Not only that, but the fact is that very few of these certification attempts are going to succeed. The plaintiffs’ lawyers take incredible risks. The plaintiffs’ lawyers in these positions, the plaintiffs’ lawyers that are representing the plaintiffs in the Wal-Mart case, are able to do the kind of work that they are because they get rewarded for the risks that they take, and that’s only appropriate in my opinion. ASHE: I would respectfully disagree with Josh about whether courts are really taking a rigorous look at the attorneys’ fees data in reviewing them and in approving settlements. In the Coca-Cola case, it was a common-fund approach. A percentage allocation was made that was based on the evaluation of the case including an evaluation on equitable relief. So it settled for $192 million, but the cash value was about $105 million. The court awarded percentages of those numbers and reviewed them to see if the percentages were within the ballpark of percentages that had been awarded in other cases, which indeed they were. That was carefully evaluated. However, there was no scrutiny of individual time entries, tasks performed or potential write-offs as that would happen under a lodestar analysis. My estimate of the effective attorney hourly rate achieved by plaintiffs’ counsel on that case was somewhere between $1,500 and $2,000 — from the rawest rookie associate up — and with no time written off for meetings in which eight and 12 lawyers attended, which no corporate defendant would normally pay for. So you’ve got a realization rate that’s somewhere in the stratosphere. THORPE: The defense side in Coke and in all of these cases had two times as many defense lawyers as plaintiffs’ lawyers. When you talk about the effective hourly rate you’re recognizing that there’s a multiplier, which is what you get for taking the risk. WEIRICH: Notwithstanding that the Supreme Court has ruled that the risk multiplier is not appropriate. ASHE: Which is part of what’s driving this kind of attorneys’ fee work. Frankly, for the Supreme Court to say that there’s no premium ever appropriate for a contingent fee case is blind to the economics of law practice. I mean, no economically sane, sensible lawyer is going to take a case that’s contingent when the alternative at the same hourly rate is to send a bill every month and get paid every month. That just makes no sense. THORPE: My point is you can’t complain about the percentage if you’re not going to allow a risk multiplier. MILLER: You have individual defense lawyers even in Atlanta charging sometimes in excess of $400 an hour for their time who have a defendant or a client who’s going to send a check each month. The comparison is that the plaintiffs’ lawyer doesn’t get to bank on that $1,500 an hour, and it’s going to happen only a few times over a space of a career. Daily Report: Josh, as someone who was involved in the Coke case, do you want to confirm or correct the $1,500-an-hour estimate? THORPE: I think Lawrence is way wrong about $1,500 an hour. I would have to look at the settlement agreement. [After the discussion, in an e-mail message to the Daily Report, Thorpe estimated that the plaintiffs' lawyers in the Coke case had an effective hourly rate of less than $941. This was based on a $20.7 million fee award, divided by the 22,000 hours logged by his firm and one other firm. However, two more plaintiffs' firms also worked on the case, and Thorpe noted that this would further lower the effective hourly rate. He also noted that the fee award was 20 percent of the current cash settlement fund and 13 percent of the value of the settlement as a whole. Ashe responded that the 22,000 hours included thousands of paralegal hours, and that nothing was written off or down. He stood by his original estimate for the lawyers' effective rates.] In other class actions, you have lawyers getting 25 percent. And your effective hourly rate when you lose certification is zero. MILLER: It’s less than zero. SHANOR: Assuming that the certification stands and assuming that there’s either a large settlement or perhaps a successful trial by the plaintiffs, how is the Wal-Mart case likely to change employment practices? In the certification decision, the district court judge says that Wal-Mart’s policies governing compensation and promotion are similar across all stores and build on a common feature with subjectivity. This provides a conduit for gender bias that affects all class members in a similar fashion. There’s a lot of controversial stuff in that particular characterization, but I guess my concern would be: Will decisions like this drive employers towards more objective standards, and, if so, is that good or bad? MILLER: I think the answer is clearly that the effect of a decision like this is going to be an employer’s adoption of mandatory arbitration policies. And I’m sure that everybody is aware that the employer, by sending out a notice in some jurisdictions, does away with any liability or any chance that an employee can even bring a class action. I’m not sure exactly how far back in time this case against Wal-Mart goes. But you have to ask yourself as a defense lawyer, why didn’t they send out notices to their employees 10 years ago saying that by continuing to work here or by accepting employment here, you agree to arbitration that does not include any kind of class action mechanism. You know, the discussion that we’re having here today, if that continues to be, is going to be moot. SHANOR: With one exception, of course, in terms of the EEOC’s special status. The EEOC can bring class litigation notwithstanding any particular arbitration provision that employer/employees might have. MILLER: One real example I can give from my own experience is this: I settled a large, collective-action, age discrimination case where the employer had not put in place that kind of arbitration policy. But while discussions about settling that case were under way, the notices went out to the existing employees who are now SOL on their ability to have any kind of court action if that arbitration policy sticks. It just writes Rule 23 and all the other collective-action mechanisms out of existence. ASHE: Geoff, I’d be interested in your perspective, but from mine I don’t consider arbitration the wonderful panacea for employers in any but a few states. Now, if you’re in California, sure I’d like to have mandatory arbitration, but in Georgia I’ll deal with the court system. Arbitration, in order to stick, has to have many of the common characteristics — discovery, employer paying for the arbitrator, et cetera. Also, my experience in arbitration is that arbitrators will never grant the equivalent of either a motion to dismiss or summary judgment, and they always seem to only have one or two days of time. And so you keep having sets of hearings after sets of hearings, and you save no money. WEIRICH: You trade getting rid of class actions for having a much more viable individual action by many employees than they ever would have had in federal court, and very much less opportunity for the employer’s lawyers to get summary judgment or a dismissal. MILLER: Summary judgment is the one thing that I would agree with. You’re going to get that in 75 or 80 percent of your defense cases in federal court in a lot of jurisdictions. But I will trade my ability to be in front of a jury on a sexual harassment case or even in an age discrimination for that to be in front of an arbitrator who’s not going to award a million dollars in punitive damages in a typical discrimination case. But the effect of these arbitration policies is to make FLSA collective actions and a lot of other class actions go away. WEIRICH: One of the things we haven’t mentioned, Charlie, is that in the Wal-Mart case and many others that have been certified, plaintiffs’ lawyers have waived compensatory damages at the time that they sought class certification. Those cases where class certification has been denied often are ones with lawyers who are not wise enough to do that and sought the whole hog. That raises an interesting question as to whether that causes a right to opt out of the class for the putative class members at the time that the class certification is sought. Can the plaintiffs’ lawyers just go ahead and waive those remedies on behalf of the class members? Also in Wal-Mart, the punitive damages issues are very complicated, particularly under the 9th Circuit decision in Beck v. Boeing [320 F.3d 1021 (9th Cir. 2003)], which held that punitive damages awarded at the liability trial stage are not proper because you have to show individual liability to each class member. SHANOR: And if punitive damages become serious problems for class certification, it may well be that punitive damages will also drop out of these claims, and there will be more back pay and equitable remedies. ASHE: I would think that would be more true in a Wal-Mart case where their monetary claim is alleged disparities of pay. If you don’t accept the explanations from Wal-Mart, I have read that there is a 6 percent pay disparity. Wal-Mart has an explanation for that, but 6 percent of Wal-Mart’s national payroll is a stunning amount of money, and who cares about compensatory or punitive damages if you are able to achieve that? THORPE: Well, the employer has to be pretty big to make those economics work. SHANOR: But there is an economic difference. Congress, I think in 1991, tried to make it worthwhile for plaintiffs’ attorneys to bring individual cases by adding the compensatory and punitive damages to remedies available under Title VII even though caps were imposed for a large employer of $300,000 per individual. And in a race case, there’s no cap because of 42 U.S.C. � 1981, and state law is much more plaintiff-oriented in California than it is here in Georgia, so you can get uncapped damages, too. So, I guess to some extent in a class action context, do you need the class action mechanism as much as you might in say a securities case — where for most individuals who’ve lost some money in the market it’s a relatively small, individual amount? THORPE: Well, two points. You certainly need it for purposes of obtaining injunctive relief. Also, there is a real difference between how plaintiffs’ lawyers and employers look at the viability of individual employment discrimination claims even with compensatory and punitive damages available. The economics of both are tough because let’s assume that you have a case where there are $30,000 or $40,000 in actual damages and you have a possibility of getting punitives. Maybe you get two or three times that amount, and so let’s say that it’s going to be a $150,000 recovery. To litigate that case for a lot of plaintiffs’ lawyers, it’s going to cost you $100,000 to $150,000. So, what you’re really litigating for is a chance to get your fees back if you win. You’re taking an awful big risk for a payoff that in percentage terms isn’t that large. I think in the real world it is very hard for employees to get good, competent attorneys to bring individual cases because of the economics. MILLER: Charlie, you asked whether the class action mechanism is essential given the increased remedies started in 1991. I think the answer to that is plainly yes, and Wal-Mart is a perfect example. Only a case like this — that is worth upwards of $50 billion or whatever it is — will be noticed by the people in Bentonville. And that’s obvious because they can afford to litigate individual discrimination cases that result in, let’s say, $300,000 or $400,000 verdicts against them all day long. Eighty percent of them are going to get thrown out on summary judgment, and of the ones that go to court, they’re going to win some of those, and they can afford to do that all day long. The only way that you’re going to change what the plaintiffs allege in this case is historic discrimination is through this kind of litigation.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.