June 20, 2011

Wal-Mart Ruling: Blow to Judicial Activism

Statement of CFJ Executive Director Curt Levey on today’s Supreme Court decision in Wal-Mart Stores v. Dukes:

We applaud the Supreme Court’s ruling decertifying a class action lawsuit in which three named plaintiffs tried to represent a class of 1.5 million women who allegedly suffered gender discrimination while working for Wal-Mart. The decision is an important victory against the abuses of trial lawyers, a milestone in the fight against judicial activism, and good news for the economy.

While the debate over judicial activism tends to focus on dramatic expansions of the law—Roe v. Wade and decisions discovering a constitutional right to gay marriage, for example—judicial activism often occurs in small steps. The courts’ expansion of class actions from their intended use as a tool for judicial efficiency into a wide-open get-rich-quick scheme for trial attorneys is a classic example. That dangerous expansion suffered a big setback today.

Though the Court ruled that the 1.5 million women “have little in common but their sex and this lawsuit” and thus can’t pool all their claims into a single class action, the women remain free to bring both smaller class actions and individual suits against Wal-Mart. Thus, today’s decision promotes individual justice while discouraging the enormous class actions that can be used to intimidate businesses into settling meritless claims and often result in tens of millions of dollars for trial lawyers but just a few dollars, or a coupon, for the individual plaintiffs.

Whenever a Supreme Court decision is perceived to be a plus for American business, liberal critics of the Court stomp their feet and scream about the Court’s alleged pro-business bias, regardless of the legal basis for the decision. When you see that predictable reaction again today—despite a unanimous 9-0 decision in part—keep this in mind: At a time when economic growth is hampered by the perception of an anti-business bias in the executive and legislative branches—see, for example, ObamaCare’s mandates, the maze of new financial regulations, and the NLRB’s attack on Boeing—it is good news for the economy that American businesses can still get a fair shake in the courts.