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Appeal court allows lawsuit against Wal-Mart to proceed

Court clears way for largest sex discrimination complaint

Published: February 7, 2007

Wal-Mart Store's efforts to block the largest sex discrimination lawsuit in the United States suffered a big setback when an appeals court in San Francisco ruled that the case should proceed as a class action.

In a 2-to-1 ruling Tuesday, the 9th U.S. Circuit Court of Appeals rejected Wal-Mart's argument that the lawsuit, which involves at least 1.5 million current and former women employees, was too unwieldy to handle in a single case.

Legal specialists said the ruling would increase pressure on Wal-Mart to settle the case, in which the retailer is accused of discrimination in pay and promotions. Wal-Mart executives said they would appeal, voicing confidence that the decision would be overturned.

The court ruled that the lawsuit should proceed as a class action because it raised common questions of law and fact, because the six named plaintiffs were typical of the class and because there were so many women that it was impractical to handle the matter in individual cases.

The majority wrote, "Plaintiffs' expert opinions, factual evidence, statistical evidence and anecdotal evidence present significant proof of a corporate policy of discrimination and support plaintiffs' contention that female employees nationwide were subject to a common pattern and practice of discrimination."

Wal-Mart's lead lawyer, Theodore Boutrous Jr., said the decision was not based on the merits of the case.

"Wal-Mart has a strong anti-discrimination policy," he said.

Arguing that the ruling contained factual and legal errors, Boutrous said Wal-Mart would ask the three-judge panel to reconsider the case and would also ask a full panel of 15 of the 9th Circuit judges to consider it.

Boutrous said the decision conflicts with rulings by the Supreme Court of the United States and other circuit court rulings.

"We are optimistic about the chances of getting further review," Boutrous said.

He said that the named plaintiffs were not typical of the class and that the case involved no common questions of law or fact.

In the majority ruling, Judges Harry Pregerson and Michael Daly Hawkins wrote that due process does not require individualized hearings to determine damages.

Brad Seligman, the plaintiffs' lead lawyer, estimated that the class  which includes all women who have worked at Wal-Mart at any time since Dec. 21, 1998  encompasses more than two million people.

"Simple math, given the size of the class and the types of disparities we've shown, indicates that the losses to women are in the billions," Seligman said.

He said the ruling showed that "it is time for Wal-Mart to face the music."

Peter Hillman, a partner at Chadbourne & Parke who represents management in employment law cases, said the ruling "obviously puts pressure  incredible pressure  on Wal-Mart to consider a settlement." He said the chances were slim that a higher court would agree to hear the case.

John Coffee Jr., a law professor at Columbia University in New York, said: "I don't believe any other circuit in the country would certify a class this large and sprawling. The tendency in employment discrimination litigation has been to restrict class actions to particular job categories or particular plants."

Andrew Kleinfeld, the dissenting judge, cited a Supreme Court decision in writing that it was unrealistic to conclude that illegal discrimination was the sole cause of women failing to advance to better jobs. He wrote that the majority decision would lead to "rough justice" and would violate due process rules by not allowing for individualized determinations of punitive damages.


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