Will the US Supreme Court Clarify Whether Its Decision in Wal-Mart Stores, Inc. v. Dukes Applies to All Class Actions (Including Wage and Hour Class Actions)?
That’s certainly what the Retail Litigation Center (RLC) and a group of business associations are hoping. This group recently filed a “friend of the court” (amicus curiae) brief with the US Supreme Court urging the Court to hear an appeal of the Seventh Circuit’s decision in RBS Citizens, N.A. v. Ross.
The group explained its rationale for filing the brief: “Because these business [represented by amici curiae] are frequently targeted by class action lawsuits, amici curiae have a substantial interest in the development of the law of class certification, particularly in the commercial and employment contexts, and in ensuring that this Court’s guidance on issues of class certification is followed by lower courts.”
The guidance the business group wants followed was laid out by the Supreme Court in Wal-Mart Stores, Inc. v. Dukes. Essentially, the Dukes opinion instructed lower courts not to certify a class of plaintiffs (1) if doing so would deprive a defendant of its right to litigate its defenses to each individual claim or (2) if the plaintiffs fail to show that their claims hinge upon common answers to common questions. The upshot of Dukes from the perspective of businesses was that it became more difficult for individual plaintiffs to pursue litigation as a class action.
But despite the admonition in Dukes that lower courts should not employ analytical “short cuts” to certify class actions, the business group’s brief contends that lower courts, and most egregiously the Seventh Circuit in Ross, are failing to follow that admonition. For example, in Ross the Seventh Circuit held that Dukes was inapplicable because the size of the class at issue was smaller than that in Dukes and because of the disparate underlying claims (wage and hour in Ross; discrimination in Dukes).
Overturning the Ross decision seems to be of particular importance to this business group because the underlying claim involved a failure to pay overtime compensation in violation of Illinois law to a class of employees allegedly misclassified as “exempt” from overtime pay. The Illinois law closely parallels the federal Fair Labor Standards Act (FLSA) and numerous other state statutes, meaning the survival of Ross might expose businesses to a potential flood of wage and hour class action lawsuits.
The business group acknowledged what was at stake from its perspective: “[T]he proper interpretation of Rule 23’s class certification requirements—particularly in the rapidly growing area of wage and hour class actions—are of significant importance to American businesses, which routinely are forced to settle improperly certified class actions regardless of the merits of the certified claims.”
If the Supreme Court reverses Ross and clarifies that Dukes applies to all class actions, it would provide businesses with a strong bulwark against any future class action lawsuits attempting to adjudicate “exemption misclassification claims” en masse.