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Archive for the ‘Class Action’ Category

Facebook has settled a class action suit arising out of the display of sponsored advertisements using profile photos of Facebook users when the users’ friends accessed Facebook. The plaintiffs claimed that these sponsored ads, which resulted from their “liking” a brand on Facebook, violated their right of publicity.

Facebook to settle class-action suit over Sponsored Stories

As a follow–up to our March 29, 2011 blog post, “Will the United States Supreme Court Declare an Open Season for Class Actions Against Business? – Wal-mart v. Dukes,” concerning the then-pending United States Supreme Court case, Wal-mart Stores, Inc. v. Dukes, Betty, et al., 10-277, we are happy to report that the Supreme Court yesterday reversed the Ninth Circuit Court of Appeals decision, and held  that class certification was not appropriate.   In Wal-mart, plaintiffs wanted the Court to affirm certification of a “nationwide class action consisting of all current and former female employees of Wal-Mart Stores, Inc., estimated at the time to comprise at least 1.5 million women.”  Petition for a Writ of Certiorari, 2010 WL 3355820, *1 (U.S. 2010).  Despite the fact that class members in Wal-mart would seek billions of dollars in back pay, the Ninth Circuit found plaintiffs’ monetary claims were not “‘superior in strength’” to the injunctive claims, and could be certified under Rule 23(b)(2).  Petition for a Writ of Certiorari, 2010 WL 3355820 at *5 (citations omitted).    The Ninth Circuit’s approach essentially allowed the plaintiffs to by-pass the more demanding requirements of F.R.C.P. 23(b)(3), which “‘imposes strict requirements of predominance, superiority and manageability…’” Id. at 9-10(citations omitted).

Justice Scalia authored the Court’s opinion which held that certification was improper, because 1) plaintiffs could not meet the commonality requirement of F.R.C.P. 23(a)(2), and 2) plaintiffs’ back pay – monetary claims could not be certified under F.R.C.P. 23(b)(2), “at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief.”  Slip Op. at 20.  The Supreme Court recognized the limited purpose of class actions and reiterated that “class action is ‘an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.’” (citing Califano v. Yamasaki, 442 U. S. 682, 700–701 (1979)).  Slip Op. at 8.  By recognizing that class action practice is the exception not the rule, the Supreme Court closed the litigation floodgates that could have resulted had it agreed with the Ninth Circuit’s approach.

• The Los Angeles Times in its coverage of Wal-mart Stores, Inc. v. Dukes, Betty, et al., 10-277, ”Supreme Court hears arguments in Wal-Mart sex discrimination case,” calls the Supreme Court “skeptical.”
• Meanwhile, The New York Times in its story, “Justices Take Up Class-Action Issue in Wal-Mart Bias Suit,” says the Supreme Court “appeared closely divided on Tuesday during arguments over the theory put forth by the plaintiffs.”
• Bloomberg sees an emerging gender gap on the Supreme Court bench, “Wal-Mart Discrimination Case Reveals Gender Gap at High Court.”

The United States Supreme Court heard oral arguments today in a case that could have an enormous impact on business in the United States.  In Wal-mart Stores, Inc. v. Dukes, Betty, et al., 10-277, plaintiffs seek to affirm certification of a “nationwide class action consisting of all current and former female employees of Wal-Mart Stores, Inc., estimated at the time to comprise at least 1.5 million women.”  Petition for a Writ of Certiorari, 2010 WL 3355820, *1 (U.S. 2010). “The millions of class members collectively seek billions of dollars in monetary relief under Title VII of the Civil Rights Act of 1964, claiming that tens of thousands of Wal-Mart managers inflicted monetary injury on each and every individual class member in the same manner by intentionally discriminating against them because of their sex, in violation of the company’s express anti-discrimination policy.” Id. at 3355820.  The lower courts certified and affirmed the enormous class.  Id.at *1.

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