I was privileged to present today on cutting-edge class action litigation issues at the American Conference Institute program on Employment Discrimination Litigation. Representatives of the EEOC and the plaintiffs’ class action bar were also in attendance.
In brief, I commented and analyzed a new plaintiffs’ “paradigm” we are seeing from the plaintiffs’ bar.
Class certification law is in flux, especially in the context of employment discrimination litigation. Since Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 2013 U.S. LEXIS 2544 (U.S. Mar. 27, 2013), lower federal courts and litigants alike are confronting novel Rule 23 issues, as the plaintiffs’ bar attempts to “re-boot” and find winning certification approaches. The tides certainly seem to be turning, and employers are doing quite well in confronting and defeating these “re-booting” approaches.
BUT, an increasingly popular approach with plaintiffs’ class action lawyers is to down-scale their class claims and craft smaller, tighter cases in an effort to certify at least one issue, even if that one issue is for injunctive relief. Plaintiffs, of course, invoke McReynolds v. Merrill Lynch & Co., 672 F.3d 482 (7th Cir. 2012), perhaps the leading post-Wal-Mart ruling certifying an employment discrimination disparate impact class claim for injunctive relief under Rule 23 (c)(4).
Yet, the iron fist in the silk glove so to speak is the quest for attorneys’ fees and a large pay-out. Plaintiffs angle to certify something – even one issue – and then posit a settlement demand that details a parade of horribles for the employer to defend – a tangent on the “pay us or else…” theory. While under Comcast, a stage II damages proceeding is not apt to be certified, plaintiffs then cite Teamsters v. United States, 431 U.S. 324 (1977), for the notion that individual class members (after a stage I liability finding) are entitled to a presumption that that were discriminated and their individual damages can be heard in mini-trials per Teamsters. They then argue that the mere transaction costs will bury the employer – fees and costs for each hearing; the time spent by company witnesses in preparing and testifying at each mini-hearing; the additional attorneys’ fees plaintiffs’ counsel will earn for each successful hearing; and on and on. They even go so far as to say “we can win this war of attrition” by hiring contract attorneys to do all the preparation work.
The soft under-belly of plaintiffs’ argument is how many actual, living and breathing class members will show up in the courtroom for their stage II hearing. Plaintiffs, for example, will argue there are x-thousands of alleged victim class members, but how many will travel to the court, prepare, and testify is speculation. Maybe some, perhaps a significant number, but nowhere near the size of the class.
This new paradigm is in its embryonic stage. The plaintiffs’ class action bar is refining and re-booting all the time. Defense strategies have to adjust, as the high stakes world of employment discrimination litigation shows no signs of going away.