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Class Action Countermeasures Discussions of the Strategic Considerations Involved In Class Action Defense

Is the New Group Action Bill Cause for Concern?

Posted in Strategy

 Last week, Senator Al Franken (D-Minn) proposed a bill that would partially reverse the Supreme Court’s opinion in Wal-Mart Stores, Inc. v. Dukes.

According to Senator Franken’s press release, the Equal Opportunity Employment Restoration Act (good title) would add a section 4201 to 28 U.S.C.:

Section 4201(a) creates a new judicial procedure – called “group actions” – that workers can use when bringing employment discrimination cases. The requirements for establishing a group action are the same as the pre-Dukes requirements for maintaining a class action under Rule 23 of the Federal Rules of Civil Procedure—namely, clarifying that the merits of the case need not be proven to certify the group action.

Section 4201(b) provides that group actions can be used regardless of whether the group is challenging an objective employment practice, a subjective employment practice, or a mixed employment practice (such as the use of a written test to qualify for an interview). It also provides that employers’ written anti-discrimination policies can be considered as a defense to certification only insofar as the employer demonstrates that the policy actually has been implemented in practice.

Section 4201(c) says that the group actions authorized by this section are subject to the same procedural requirements as class actions authorized by Rule 23. These include notice and opt-out requirements. This section also preserves the application of the Class Action Fairness Act and the availability of appeals.

Section 4201(d) says that courts can use statistical analyses and any other procedures they deem necessary to provide justice to prevailing plaintiffs.

The bill has a number of cosponsors, but is unlikely to pass a heavily Republican House of Representatives. Nonetheless, it’s worth considering what the effects of the bill would be if it were passed as is.

And it’s hard to tell what those effects are, because the bill as proposed seems pretty confused about Rule 23 practice. (This is not surprising. It was apparently drafted in conjunction with civil rights leaders rather than Rule 23 experts, so it makes sense that it might not be all things to all people.) The largest sources of confusion:

  • It appears unclear what the law is surrounding "merits inquiries." Class actions, even Title VII class actions, have traditionally allowed inquiries into the merits to the extent they overlap with the rigorous analysis required by Rule 23.  And, in fact, most judicial circuits except the Ninth had already reached the conclusion that the Supreme Court did in Dukes.
  • It claims that Rule 23 requirements will apply, but seeks to remove the latest clarifications to the commonality requirement. It’s not clear how this will work out in practice. One of the largest potential problems is that class actions face is that, if there are not truly common issues, class trial gets extremely messy. This was the experience that informed the Dukes opinion on commonality; it seems kind of silly to pull back from it unless the legislators don’t intend for there to actually be trials of Title VII actions.
  • It would make labor and employment cases even more complicated. There are already "collective actions" under the Fair Labor Standards Act, and controversy over how they interact with Rule 23.

None of these issues, should they arise, are reasons for panic. They’re more just, well, inelegant. Rule 23 works as well as it does because it applies equally across various different kinds of lawsuits, and because, over time, courts have figured out how it actually works in real cases. Taking a outlier case like Dukes and building a bill around it is a great way to create lots of unforeseen consequences in litigation.

So it appears that the primary benefit of this bill is rhetorical: it allows Democratic legislators to claim that they are standing up for civil rights, while not really standing a chance of amending Rule 23 in any significant way. Instead, they can claim that they tried to address the primary talking points of Dukes critics, and were stymied.

So Senator Franken’s proposal is a competent political tactic, but would make for a lousy solution to civil rights problems.