Earlier this week, the Supreme Court agreed to hear an appeal in a $6 million class action lawsuit against Tyson Foods — an employment case about whether the company paid its workers for all the time they spent putting on and taking off safety equipment. On Thursday, the justices will decide whether to hear another class action appeal — an antitrust suit against Dow Chemical, about whether buyers of their products were negatively affected by the way the company announced price increases.
These cases have probably escaped your notice — after all, they’re not about gay marriage or Obamacare. But they could turn into landmark decisions for America’s civil law. Each represents an opportunity for the Supreme Court to show that it is really serious about preserving the integrity of the class action system.
Civil lawsuits are normally tried in America one at a time. The concept of “class action” exists to accommodate those less common cases in which large numbers of people have been wronged in the same way by the same defendants. But class action suits — even those in which the individual plaintiffs cannot hope to recover more than a few dollars — are especially attractive for plaintiffs’ lawyers, because the sheer volume lets them reap enormous contingency fees if they win. What’s more, the threat of losing such large cases is a nightmare for large companies, who would often sooner pay out an extortion-settlement than face the expense of litigation and the possibility of losing billions at trial. Thus, the potential for abuse is heightened in these cases
So when is it appropriate for a class to sue? This exact issue arose in a famous employment case called Walmart v. Dukes. At the turn of this century, a group of clever plaintiffs’ lawyers had found a handful of women who claimed they were discriminated against by the mega-retailer, and then tried to sue on behalf of all 1.5 million women who had worked for Walmart stores since 1998. The overarching, vague allegation in the case was that the company’s “corporate culture” had somehow fostered discrimination against all of these women, even if in vastly different ways and even if they had never noticed. No specific allegations were made against the company that were common to all of them.
All nine justices agreed that the class of 1.5 million people in this case should never have been certified by the lower courts. The court’s opinion upheld the common-sense principle that for plaintiffs to be lumped together as a class in the same case, they must be similarly situated, having suffered similar, specific wrongs from the same defendant. Class action cases must resolve “common questions of law or fact.” Otherwise, defendants are not only at a disadvantage in mounting a defense, but they also face paying damages to thousands or even millions of people who never actually suffered any wrong.
In both the Dow and the Tyson cases, lower courts essentially ignored this ruling and held the class certification process to much lower standards. The Dow case is especially important, as many of the buyers in the class were not harmed by Dow’s action — they actually saved money because they reacted to the company’s announced price increases by taking their business elsewhere.
Dow and Tyson both offer the justices an opportunity to tackle problems with class certification once and for all. Ideally, they will decide both cases in a way that allows those who have been wronged to receive compensation, but also prevents businesses from being blackmailed by slick, unscrupulous trial lawyers using the sheer volume of whatever motley classes they can vaguely justify cobbling together.
