I've been dreading the opinion that came out today in the Walmart case. Here it is, now, and it's even worse than most people probably realize.
It's bad for individual employees. It's even worse for the legal system as a whole. Next time you hear someone talk about how overburdened the system is, you remember this opinion. You ain't seen nothing yet.
What Walmart and the conservative Supreme Court majority want is for plaintiffs to give up suing so much. Lawyers won't give it up, of course, if there's money to be made. But if you make it harder for people to bring their cases collectively, then the low stakes in each individual case means that big-time plaintiff's lawyers won't take the cases.
What Walmart forgets is that some of us stubborn SOBs will -- over and over and over again.
NOTICE: This material is not intended as legal advice or as a solicitation to anyone to establish an attorney-client relationship. Got it?
In California, at least, a plaintiff who prevails in court in a gender discrimination lawsuit can get an award of attorney fees. Fee awards are what keep large plaintiff's firms rich. They don't need to get 40% (the standard in employmeny law cases) or 33% of a damage award to keep themselves going.) Even 20% of a huge number of claims is a tremendous amount. (Of course, this is a speculative business. Sometimes the Supreme Court can step in at the last minute and void your award, as has happened to the unfortunate attorneys in this case, who probably had shelled out everything out of pocket to pursue this case.)
So Walmart wants to disaggregate then. Given that the amount that one might win in an individual case like this may be just a few thousand dollars, it's not worth the time of most lawyers to pursue them. Problem solved!
Not so fast, corporados. You have forgotten that class-action suits exist not only to protect the interests of plaintiffs, but of defendants. Walmart wants to have its experts and managers deposed once, not 1.5 million times! They want their in-house counsel responding to the demand letters and negotiating with one plaintiff's attorney, not millions of them! But by requiring that individual suits be brought, they invite thousands, maybe tens of thousands, small lawsuits -- maybe even more than that.
"But they aren't worth the money!", Walmart figures. Not for the big sharks. But we small practitioners -- we're not sharks. We're piranhas. I don't bring illegitimate cases; some lawyers do. Walmart will no longer be able to tell them apart. Each small case now becomes more dangerous because Walmart's defenses will now be spread so thin. And remember, if they lose in court (in my state and I believe many others), they don't just pay damages, they can be ordered to pay attorney fees. And for a small piranha like me, it doesn't take too many morsels from fee awards to fill my belly.
Of course, what sucks for everyone is that the court system may become clogged. It may take three, five, seven years to get to trial. That hurts everyone, but that was the Supreme Court's decision about how to spend our tax dollars, not mine.
As a small, low-overhead plaintiff's lawyer, waiting a long time for a verdict is a pain in the butt. Walmart and other big corporations know this -- they tell it to lawyers lime me all the time when encouraging us to settle for a pittance. But now they've hoist themselves on their own petard. You see, when they're sued, they have to set aside a reasonable reserve to cover potential losses. That money doesn't go to operations, it doesn't go to salaries, it doesn't go to stockholders. It just sits around. You get too many potentially legitimate cases lying around and they really start to suffer. The pressure grows on them to settle. And, as a negotiator, I can use that.
So, this decision a terrible outcome for almost everyone. I wish they had had basic common sense and come out the other way. It hurts the courts, it hurts the large plaintiff's firms that create so much important law, and it even hurts consumers who will be paying more for Walmart products. (Personnel costs may rise, for example, when your store managers have to spend three days a week being deposed. And good defense lawyers aren't cheap -- even when purchased in bulk.)
But it's actually not such a bad decision for one small group of people: piranhas like me. So thanks, Justice Scalia; thanks, conservative majority; thanks, Walmart -- from piranhas everywhere. You've really asked for it this time -- and there are lots of hs lawyers who chose our area of practice not because we want to get rich but because WE REALLY HATE DISCRIMINATION -- who are going to make sure that you get it.
4:07 PM PT: Please read this comment, followed by everything else Attorney at Arms has written below. The comments section is great generally, but he's tossing out some real gems.
Tue Jun 21, 2011 at 9:51 AM PT: Spelling of "Walmart" (in title and elsewhere) changed. Didn't it used to be "Wal-Mart"?
Also, if you want to contact them, see this page. I don't see an general contact e-mail address, though (let's not bother their charitable people) -- anyone have one? I'll update if so.