The Supreme Court stepped into two major controversies on Monday, agreeing to sort out when a class-action lawsuit may be filed when employees are seeking back pay for alleged workplace discrimination, and to clarify whether companies claimed to be a major source of global warming can be sued under the law of nuisance.  The first issue is raised in an appeal by the discount retailer, Wal-Mart Stores; the second an appeal by four large  electric generating companies that have been sued by a group of state governments.  The cases are likely to be heard in March or April.

A federal judge in San Francisco has cleared the way for a class of at least 500,000, and perhaps as many as 1.5 million, present and former women employees of Wal-Mart to sue the huge chain over alleged sex bias throughout its 3,400 stores in the U.S.   The Court agreed to hear one issue raised by the company, and added a question of its own.  The outcome will not decide whether the company did engage in  discrimination, but only whether the lawsuit may proceed as a class-action.  Potentially, billions of dollars are at stake.

The first question will be whether, under Federal court Rule 23, a lawsuit may seek a money verdict — in this case, a claim for back pay — when the class was created under a provision that limits remedies to corrective court orders, not money.   Besides agreeing to hear that, the Court told the parties to file briefs and prepare to argue on a second question — whether the class was a proper one, under Rule 23, when it was cleared to go forward under Rule 23(b)(2).   It is unclear whether the Court, if it answered that second question in the negative, would be signaling that the class case might still proceed under a different part of Rule 23 — part (b)(3), which does allow money claims.

Wal-Mart’s petition had raised a second question that embraced the broader argument that no class should have been approved at all, since the claims made by the women employees were so disparate and so diffuse that they really had nothing in common, and that, as a result, Wal-Mart would not have been able to mount a defense to such claims.   The Court rewrote Wal-Mart’s second question, without making it clear exactly what arguments the lawyers should now be making in addition to whether a money claim could be made in this case.

The class approved in this case is the largest ever certified in a job bias context, but is also among the largest of any class certified in any case in federal courts.  The Wal-Mart case has attracted widespread interest, and the company claimed in its petition that the judge’s class order “is one of the most important…since the modern Rule 23 was adopted in 1966.”  The order, the company said, reaches a multitude of individual workers “who held different jobs in different stores under the supervision of different managers.”

The sex discrimination class-action case against Wal-Mart was actually started more than nine years ago as a race bias case involving a single company employee — Betty Dukes, a black woman who is a “greeter” at the company’s store in Pittsburg, Calif.  It later became a class-action lawsuit with six original plaintiffs, including Dukes, contending that the company has engaged in pay and promotion discrimination against women throughout the chain.  (The case is Wal-Mart Stores v. Dukes, et al., 10-277.)

The Court will be hearing the Wal-Mart case with a full bench, but only eight Justices will be hearing the global warming case that was also granted on Monday.  Justice Sonia Sotomayor is recused from the case of American Electric Power Co., et al., v. Connecticut, et al. (10-174), apparently because she, as a Circuit Court judge earlier, was a member of the Second Circuit Court panel that heard the case, although she was named to the Supreme Court before the Circuit Court released its decision.

The case is one of several around the country in which states, and others, are seeking to hold someone to blame for climate change, including global warming due to emission of greenhouse gases, in the face of the federal government’s previous reluctance to regulate such pollution.  The U.S. Environmental Protection Agency, reacting to a 2007 Supreme Court ruling finding that EPA did have authority to regulate greenhouse gases under the Clean Air Act, has begun a series of actions under the Act to start regulating such pollution.   The alternative lawsuits, including the one the Court will now hear, are based not on that Act, but on the common law theory of nuisance — a more open-ended legal basis for holding someone to account for creating a threat to public health or safety.  (The law of nuisance is recognized both under federal common law and some states’ common law.)

In the American Electric Power case, the five entities that were claimed to be the largest sources of greenhouse gases — four electric power companies and the Tennessee Valley Authority — were sued by eight states, New York City, and three land conservation groups.  Their lawsuits were filed under the federal common law of nuisance, a judge-made theory.  The Second Circuit agreed that the lawsuit could proceed on that theory.  The case, however, has not yet gone to trial.

When the electric generating companies appealed to the Supreme Court, the Justice Department, speaking for TVA, urged the Supreme Court to send the case back to the Circuit Court for another look instead of ruling on it now.  The Department argued that the EPA was now moving on several fronts to regulate greenhouses gases under the Clean Air Act, so this activity might displace any claims made under common-law theories.  The Court, however, chose on Monday to take on the case itself at this point, presumably with the aim of deciding whether such a nuisance lawsuit may now go forward as a way of attacking global warming.

The Second Circuit case is one of a number filed in courts around the country on the public nuisance theory in the climate change context.  In asking the Supreme Court to step in now, the electric companies argued that the nuisance claims could result in billions of dollars in nuisance-abatement measures.   Recalling the hundreds of billions of dollars reached in a nationwide lawsuit of health claims against the tobacco industry, the American Electric petition said “the potential compensation for climate change impacts would make the tobacco payouts look like peanuts.”

Calling the potential impact of the nuisance theory “staggering,” the companies’ petition said that virtually every entity and industry in the world can be found to be partly responsible for some emissions of carbon dioxide, so they are potentially liable to be sued in climate changed nuisance lawsuits.

In one other action of note on Monday, two justices dissented as the Court denied review of an Arkansas death penalty case, Williams v. Hobbs (09-10382).  Justice Sotomayor, in a dissent joined by Justice Ruth Bader Ginsburg, argued that the Court’s denial left intact a federal appeals court ruling that a state need not raise an objection to a hearing to gather evidence in a federal habeas case until after such a hearing has been held, has been completed, and the state has lost.   The Court’s order and the dissenting opinion can be read here.

Posted in Featured, Merits Cases

Recommended Citation: Lyle Denniston, Rulings set on Wal-Mart, warming (final UPDATE, 11:58 a.m.), SCOTUSblog (Dec. 6, 2010, 10:09 AM), http://www.scotusblog.com/2010/12/rulings-set-on-wal-mart-warming/