class actions

Supreme Court Overturns Certification of Class-Action Lawsuit Against Wal-Mart in Multi-Billion Dollar Lawsuit

by Hans Bader on June 20, 2011 · 5 comments

in Economy, Employment, Features, Labor, Legal

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Yahoo! News reports that “the Supreme Court has ruled for Wal-Mart in its fight to block a massive sex discrimination lawsuit on behalf of women who work there.  The court ruled unanimously Monday that the lawsuit against Wal-Mart Stores Inc. cannot proceed as a class action, reversing a decision by the 9th U.S. Circuit Court of Appeals in San Francisco. The lawsuit could have involved up to 1.6 million women, with Wal-Mart facing potentially billions of dollars in damages. Now, the handful of women who brought the lawsuit may pursue their claims on their own, with much less money at stake and less pressure on Wal-Mart to settle.”

I earlier explained why the class-action lawsuit against Wal-Mart was baseless, how it was based on politically-correct junk science (like a sociology “expert” hired by the women’s lawyers falsely claiming that white male managers are somehow more sexist than managers of other races, which is hard to square with the fact that women have long had more legal rights in European countries than in the Third World, where practices like female infanticide and marriage by abduction occur), how it ignored the plain language of the Federal Rules of Civil Procedure, and was effectively a form of forum-shopping.

Letting a San Francisco judge and jury hear a class-action against Wal-Mart over its employment practices all over the country amounted to forum-shopping, in that the lawyers suing Wal-Mart deliberately picked one of the most liberal, anti-employer jurisdictions in which to file their lawsuit (the San Francisco Bay area) in order to have that idiosyncratic region effectively decide a national case against the company. This effectively deprives Wal-Mart of a representative jury and judge in the case against it, and it inflicts the jurisprudence of one region on an entire national company, to the exclusion of other regions, whose judges would effectively be unable to apply their long-established precedents limiting the use of junk science in discrimination cases, to the Wal-Mart stores within their region. (Judges vary a lot from region to region in how they handle discrimination cases and how they interpret the rules regarding class-action lawsuits.)

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Supreme Court to Hear Wal-Mart v. Dukes

by Hans Bader on December 8, 2010

in Economy, Employment, Labor, Legal

The Supreme Court voted to hear Wal-Mart v. Dukes, granting Wal-Mart’s petition for certiorari.  The Supreme Court will decide whether a class-action rule designed to allow people to bring claims for injunctive relief based on a uniform policy by a defendant can be twisted into a weapon for demanding billions of dollars in damages over conduct at thousands of different Wal-Mart stores by thousands of different managers.

The Wall Street Journal earlier criticized the 6-to-5 ruling by the Ninth Circuit that the Supreme Court is reviewing. That controversial ruling, Dukes v. Wal-Mart, available here, allowed just six employees to bring a multibillion dollar class action lawsuit against Wal-Mart in the name of 1.5 million other Wal-Mart employees they had little in common with. As the dissenting opinion written by Judge Sandra Ikuta noted, the lawsuit was based on junk science that violated the Supreme Court’s Daubert decision, and let a few employees whose situation was anything but typical sue in the name of countless employees they shared nothing with but gender. The plaintiffs’ lawyers originally sought $450 billion.

The Ninth Circuit’s disingenuous ruling rubber-stamped a national class-action even though Wal-Mart’s hiring and promotions are decentralized and not done on a company-wide basis, and Federal Rule of Civil Procedure 23 says that national class-actions are supposed to challenge a company-wide practice. The Ninth Circuit essentially treated the absence of a company policy (one limiting managers’ individual discretion) as itself being a company policy, twisting the language of the rule inside out.  Its ruling against Wal-Mart flouted longstanding legal rules and principles.

Although the lawsuit will affect employees across the country (and the ultimate verdict may reduce the value of your retirement plan, since the mutual funds in your 401(k) probably own Wal-Mart stock), a verdict will be rendered by a left-leaning jury drawn from the San Francisco Bay Area, since the plaintiffs sued Wal-Mart in one of the most anti-employer judicial districts in America, the Northern District of California.

The Ninth Circuit judges were split largely along ideological lines, with only hard-core liberal judges in the majority, and a dissent joined in by all the moderate and conservative judges (as well as one Democratic appointee, Judge Silverman).

Class Action Lawyers Ripped Off Their Clients, With Approval From Federal Judge

by Hans Bader on April 26, 2010

in Legal, Personal Liberty, Politics as Usual, Sanctimony, Zeitgeist

Class-action lawsuits all too often benefit only the lawyers, not the allegedly victimized consumers they claim to represent.  The Center for Class Action Fairness takes aim at such abuses.

Today, it filed a brief with the Ninth Circuit Court of Appeals “appealing a district court’s controversial approval of a class action settlement where attorneys recovered a $850,000 fee for themselves despite failing to provide any benefit to the class.” The lawsuit, “In re Bluetooth Product Liability Litigation, No. 07-ML-1822, alleged that three manufacturers of Bluetooth headsets for cell phones committed consumer fraud because consumers might not be aware that extensive use of headsets at high volume could cause hearing loss. Before the district court could rule on a pending motion to dismiss, the parties settled, with $100,000 going to charity, minor changes to defendants manuals and websites, and $850,000 to the attorneys — an 850% contingency fee. The purportedly injured class members received nothing.” Despite objections, “the district court approved the settlement and the entirety of the fees.”

In short, the lawyers ripped off their clients, with the trial judge’s blessing.

Earlier, I wrote in the Washington Post about how class-action lawsuit “settlements intended to benefit consumers get paid instead to groups that lobby for affirmative action, hate-crimes laws, undocumented immigrants, and public funding for abortions.”  (See Hans Bader, “Not Their Money to Give Away,” Washington Post, December 22, 2007, at A16).

The Washington Post similarly lamented how federal judges use such settlements for purposes unrelated to the underlying lawsuit, giving the money to “religious organizations,” “law schools,” and other organizations that “hire lobbyists” to influence judges  (See Editorial, “When Judges Get Generous,” Washington Post, December 17, 2007, at A20).

The practice seems to be even worse in state court than federal court.  As I noted in 2007, “In California state court, leftover money from a consumer class action settlement is commonly given not to consumer groups, but to groups that have nothing to do with consumers, like the left-wing La Raza Legal Center; the politically correct Employment Law Center of the San Francisco Legal Aid Society (which seeks to curb employers’ First Amendment rights); the ever-litigious Lawyers’ Committee; and groups that specialize in advocating affirmative action, broader definitions of ‘hate crimes’ (at the expense of civil liberties), or expanded access to welfare programs for illegal aliens. This ripoff of consumers is magnified as a result of practices like ‘fluid recovery.’”

EverBank Can Multiply Your Financial Woes

by Hans Bader on October 7, 2008 · 74 comments

in Legal

Is any of our readers an expert on banking laws and customs?  The reason I ask is that recently, EverBank World Markets, after agreeing to renew a CD denominated in Icelandic Krona, suddenly closed it, purportedly because the “currency stopped trading.” 

The bank then “converted” my CD from Icelandic Krona into dollars at an eye-popping rate of 171.98 per dollar on October 6, cutting the value of my CD from $5691.11 to $3744.68 — a loss of two thousand dollars — by assigning the krona an extraordinarily low value.

What is extremely odd about this is that the exchange rate that EverBank recorded — 171.98 per dollar — is strikingly different from the rate of 112 Krona per dollar cited on EverBank’s own web site yesterday, and the rates cited by other financial information sources, like exchange-rates.org.   (Even those rates were themselves a huge drop for the Krona, which traded at around 60 per dollar at the beginning of 2008).   The net result of EverBank’s using this bizarre currency exchange rate was to reduce the value of my CD by nearly $2,000.  Icelandic currency traded at much higher rates on October 6 than the rate that Everbank used.

The rate EverBank used also finds no support at Bloomberg, the nation’s leading source of financial information, which shows the Icelandic Krona ranging from 96.68 per dollar to 128.17 per dollar in the period of October 3 through October 7.

Can any of our readers explain why EverBank did this?  And what remedies may exist under banking or contract law for what it did?

ADDENDUM, NOVEMBER 11: To all the folks who have emailed me about this: I apologize for this, but I am so busy now that I can’t respond to all your emails. I believe that one avenue for you to pursue is to file a complaint with the Office of Thrift Supervision. Another option would be to file a class action lawsuit in court. I received an email a long time ago from an attorney, Mike Millen of 119 Calle Marguerita #100, Los Gatos, California 95032, expressing interest in learning more about this situation (MikeMillen-at-aol.com). Mr. Millen might be able to provide you with some advice or assistance if you write to him.

SECOND ADDENDUM, DECEMBER 12: Attorney Mike Millen asks if anyone who suffered at the hands of EverBank lives in California. Please let me him, or me, know if you are. You can reach him at MikeMillen-at-aol.com, or me at hbader-at-cei.org. Thanks.