Has the Roberts Court Killed Class Actions?

The Nation recently made the claim that the Supreme Court has made it virtually impossible to file a class action lawsuit. As evidence, several key cases were cited from the 2010-2011 term which are said to have had “far-reaching” implications on other would-be litigants who want to come together to pursue claims against big companies.  The cases included Wal-Mart v. Dukes and AT&T Mobility v. Concepcion.

The outcomes of these two cases arguably made it more difficult for plaintiffs to satisfy the rules for a class action and may be responsible for forcing some plaintiffs into filing individual claims that must be resolved in arbitration. The ability of file a class action lawsuit, however, still exists and some types of class actions actually have been increasing. In 2013, for example, plaintiffs filed 166 federal class actions in securities cases, which is 14 more than the number of securities class actions filed in 2012.^[1]

Class actions remain a viable approach to resolving legal issues, making it easier for plaintiffs to get compensated and for defendants to resolve multiple claims in a timely manner. An experienced NY litigation lawyer should be consulted for assistance in filing or defending a class action. An attorney with litigation experience can also provide guidance on what the options may be available for pursuing a civil claim for damages or for responding to such a claim.

Class Action Rulings Affect Litigant Rights

In AT&T Mobility v. Concepcion, cell phone customers were promised a free cell phone but sued after they were charged a $30.22 sales tax. The customers had signed a contract that contained an arbitration clause and that waived the right to file a claim as a class, which meant each individual plaintiff would need to pursue arbitration independently. The lower courts said the clause was unconscionable and thus unenforceable. The Supreme Court, however, upheld the class action waiver in the contract and upheld the arbitration clause limiting dispute resolution to arbitration.

Following the decision in AT&T Mobility v. Concepcion, the percentage of companies prohibiting class actions in their arbitration clauses more than doubled, from 21.4 percent of companies before the decision to 45.8 percent after the decision.  In addition, more than 85 percent of contracts now include class-action waivers and tens of millions of contracts have mandatory arbitration clauses. In many of these company contracts, clauses broadly preclude class actions in any type of legal proceeding, not just in arbitration or litigation.

In Wal-Mart v. Dukes, the Supreme Court addressed class certification. Current and former female employees of Wal-Mart claimed that the company had a corporate culture fostering gender stereotypes, which affected pay and promotions.  Lower courts said the class action could proceed, but the Supreme Court overturned these decisions. Within six months of the Supreme Court’s ruling, judges in hundreds of cases denied class certifications and cited Wal-Mart v. Dukes.  The women who had initially attempted to sue the company filed separate regional lawsuits, most of which are still pending.

The Nation argues that these two decisions collectively helped businesses by making it more difficult for plaintiffs to file class actions and by making it less likely that a class action would be certified, even if an arbitration clause and/or class action waiver did not prevent it from being filed in the first place.  Despite these setbacks however, hundreds of class action lawsuits continued to be filed every year alleging employment discrimination, defective products, and other wrongs.

A NY litigation lawyer understands the rules for class actions and for other types of civil litigation and can provide invaluable assistance to those who need help navigating the complex legal system.  Contact an attorney as soon as possible for assistance with your case so you can make informed choices about what your rights are under the law and get advice on how to proceed with making strategic decisions to protect your interests when litigation arises.