Tuesday, February 06, 2007

Complex Civil Litigation Thoughts

Bad day for Wal*Mart. The Ninth Circuit upheld the district court's class certification. Being the Ninth Circuit, it's a 2-1 opinion. The Judge Kleinfeld opinion ends in a particularly stinging way (somewhat undercutting the dissent's earlier "respectfully") :

The district court calls this class certification “historic,”31 a
euphemism for “unprecedented.” In the law, the absence of
precedent is no recommendation. This class certification vio-
lates the requirements of Rule 23. It threatens the rights of
women injured by sex discrimination. And it threatens Wal-
Mart’s rights. The district court’s formula approach to divid-
ing up punitive damages and back pay means that women
injured by sex discrimination will have to share any recovery
with women who were not. Women who were fired or not
promoted for good reasons will take money from Wal-Mart
they do not deserve, and get reinstated or promoted as well.
This is “rough justice” indeed. “Rough,” anyway. Since when
were the district courts converted into administrative agencies
and empowered to ignore individual justice?
Seems to me that Judge Kleinfeld's already filled the boiler with coal for the en banc or cert petition.

19 Comments:

Blogger Isaac Zaur said...

This is a fascinating opinion in many ways. Pages 1360-68 are a great tour of Rule 23(b), and reflect The Impact Fund's (i.e. Brad Seligman and Jocelyn Larkin's) elaborate care in balancing the scope of requested relief against the chances for certification. This deliberate hybridization of (b)(2) and (b)(3) is really something pretty remarkable.

I have lots of questions about this decision; here's one to start with:

The court decides that injunctive and declaratory relief "predominate" over the claim for back-pay, notwithstanding the billions of dollars in liability Wal-Mart may face. Would the result be the same if the case were brought by for-profit employment lawyers rather than by the non-profit "Impact Fund?" We would hope not, right?

Tom is certainly right that this won't be the end of the story. But--at least for the geeky proceduralist--what terrific drama!

2/06/2007 12:22 PM  
Anonymous Anonymous said...

Tom - so this is what you do during Complex Civil Litigation?

2/06/2007 1:01 PM  
Blogger Tom Fletcher said...

Yes.

Spring training hasn't started yet.

2/06/2007 6:44 PM  
Anonymous Anonymous said...

Speculation is that the delay in the opinion (it was argued almost 2 years ago), was due to Kleinfeld’s *deliberate* writing style. But 20 months seems like a remarkable time to write all of 8 pages in dissent. Wonder what was really going on. Were they fighting for Hawkins?

Also, note Boalt’s very own Amanda Rose, who taught sec reg last semester and is an ’02 grad, is on the briefs for Gibson Dunn/Wal-Mart and second-chaired the argument at the 9C. Not too bad for an associate.

With all the drama, and regardless of your views on the case, you gotta hope for pure spectator sport that Rose and the lead GDC partner on the case, Ted Boutros, have a chance to go up against Seligman one more time for all the marbles at SCOTUS. That’d be a fun one to watch. (+/- couple billion $ at stake).

(Although it looks like, as of a few hours ago, Wal-Mart is going to try en banc appeal first.)

2/06/2007 8:23 PM  
Blogger Armen said...

Although I love Boutrous and Rose, I think Ted Olson would argue the case if it went up to the SCOTUS.

2/06/2007 8:45 PM  
Anonymous Anonymous said...

That's a good point. Why would GDC have a former SG if not to use him on the big ones? They'd probably round out the chairs at the table though -- and get those funky fake quills. That makes it worth it. I want one of those damn quills. Do they work when dipped in ink?

2/06/2007 9:02 PM  
Blogger Isaac Zaur said...

Hard to argue with the Ted Olson logic, although given the bizarre and somewhat mean-spirited treatment Boutros got at Pregerson's hands during the 9th Cir. oral argument, I feel like he's sort of earned his spot in the sun.

Since no one has responded (yet) to query number one, let me pose an alternative puzzler: As part of its strategy to maintain the chances for class certification, the Impact Fund elected not to pursue compensatory damages. Do you think most (any?) class members understand that these lawyers are pursuing some but not all of the relief potentially available to them? Does anyone think there are women out there pursuing individual claims for compensatory damages? According to the California Court of Appeal, class counsel can be liable in malpractice for failing to plead ancillary claims. Janik v. Rudy, Exelrod & Zeiff LLP, 119 Cal.App.4th 930 (2004). Anyone think that a malpractice suit against the Impact Fund is likely?

2/06/2007 10:22 PM  
Blogger Isaac Zaur said...

Note: I believe the answer to query number two is no. Want to know why?

2/06/2007 10:22 PM  
Anonymous Anonymous said...

Tom, you've outdone yourself. You are a fatuous blowhard who should never try, even by implication, to associate yourself with the Ninth Circuit, especially given your stated Federalist preferences.

2/06/2007 10:47 PM  
Anonymous Anonymous said...

One thing that mitigates the Impact Fund's decision to jettison the compensatory claims of absent class members is the district court's decision to permit opt outs. But if opt outs are needed, it probably shouldn't be certified as (b)(2) class--(b)(2) is designed for cases raising cohesive claims for injunctive relief with few individualized issues to deal with (hence no manageability inquiry required by the rule and no requirement for opt outs). The Ninth Circuit's focus on the plaintiffs "intent" in bringing the suit (judged by the plaintiffs' own self-serving statements) makes no sense.

2/06/2007 10:55 PM  
Anonymous Anonymous said...

10:55PM: It seems that the concern Issac raises isn't that people wouldn't be able to opt-out - rather it's that they'd think the class action covered any economic claims they might have against WalMart and then sit back while the statute of limitations is running on any potential claims they might have.

2/06/2007 11:21 PM  
Anonymous Anonymous said...

What does the Federalist Society have to do with this case? Did they file an amicus brief?

2/07/2007 12:27 AM  
Anonymous Anonymous said...

Isaac, why is a malpractice claim not likely for failing to assert monetary claims?

2/07/2007 7:38 AM  
Blogger Isaac Zaur said...

Excellent question! The reason I think this is that the District Court issued a class cert order which both: 1) extensively discussed the structure of the certified class and 2) approved the adequacy of class counsel. Most (but not all) courts to have considered this topic have held that an adequacy finding in a class action court raises a strong inference of non-malpractice, such that a trial court in a subsequent malpracice action essentially acts as a reviewing court, applying an "abuse of discretion" standard.

I'm not saying I think this makes sense in either prudential or logical-procedural terms, but it is the majority view.

Now, it's also the case that there was a class cert order in the Janik case, but there 1) the cert order did not discuss the omitted ancillary claim and 2) the availability of the claim did not become clear until a Cal. Supreme Court decision handed down AFTER the class cert order.

I guess I'm not exactly convinced that no one would bring a case. I just think it would be a pretty uphill battle. The Janik court made it clear that courts hearing class malpractice cases should consider the degree to which a certifying court in the underlying action considered specific aspects of class counsel's conduct. The structure of the class and the type of relief sought was at the center of the cert order (and, for that matter, the 9th Cir.'s opinion). So that's why I think Larkin and Seligman are on fairly safe ground.

2/07/2007 11:03 AM  
Blogger Isaac Zaur said...

Anonymous 11:21 has correctly described my concern about the potential harm to absent class members. There is (at least in California courts) something called _Alaskan Pipeline_ tolling, which might protect plaintiffs in this situation if they reasonably assume that all their claims are being pursued, but this is an equitable doctrine and not uniformly applied.

2/07/2007 11:11 AM  
Anonymous Anonymous said...

Actually Issac, it's my understanding that the equitable tolling doctrine hasn't been applied to in CA courts. See Jolly v. Eli Lilly & Co.

2/07/2007 12:55 PM  
Blogger Isaac Zaur said...

Thanks for your comment, Anonymous 12:55. Actually, I made at least two errors, since the name of the doctrine (and the case) is American Pipe, not "Alaskan Pipeline." See American Pipe & Construction Co. v. Utah, 414 U.S. 438 (1974).

More substantively, looking at Jolly v. Eli Lilly & Co., 44 Cal. 3d 1103 (1988), I agree that California courts would not apply American Pipe tolling in the Wal-Mart situation--since the Wal-Mart plaintiffs didn't receive express notice that claims for damages were being pursued. In fact, The Impact Fund maintains a fairly comprehensive website describing the lawsuit and what it aims to accomplish. I don't, however, read Jolly to say that American Pipe tolling is never available in California courts. See, e.g., the discussion of Bangert v. Narmco Materials, Inc., 163 Cal. App. 3d 207 (1984) (applying the doctrine under facts somewhat closer to those in American Pipe).

Anyhow, good catch.

2/07/2007 2:41 PM  
Anonymous Anonymous said...

I know we're supposed to be doing our best to perpetuate the "white & nerdy" stereotype a la Weird Al, but can this blog ever discuss something interesting...like sex, for example? I want Disco Stu and Armen to post about sex. Sex in general. Or sex at Boalt (of which there is allegedly none). Whatever floats your boat. Either way, Valentine's Day is coming up and many hapless Boalties could use at least a vicarious experience. Thank you in advance.

2/08/2007 12:42 PM  
Anonymous Anonymous said...

Good catch indeed. I wonder how many things haven't been caught on this blog since posters started practicing their legal memo-writing skills?

2/08/2007 7:17 PM  

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