WSJ Doesn't Bother To Read Class-Action Opinion, Criticizes It Anyway

The Wall Street Journal criticized a recent class-action opinion but completely misrepresented its holding, all while falsely accusing a group of federal appellate judges of “ignoring Supreme Court precedents” in a series of decisions that would allow consumers to hold huge corporations liable for selling defective products.

The WSJ, hardly the first right-wing media outlet to support pro-business legal reforms that would make it nearly impossible for consumers to sue large corporations, painted the appellate courts' decision to allow the class actions to proceed as inappropriately partisan, despite the fact that a diverse group of judges agreed that the suits were appropriate. It also rather egregiously misunderstood the ruling in the Scott v. Family Dollar case, which did not, as the WSJ asserts, “grant[] class certification” to the plaintiffs.

From the October 24 editorial:

Elections have judicial consequences, and nowhere is that more evident than on the Fourth Circuit Court of Appeals, which last week brushed off a Supreme Court class-action ruling like a lapful of cracker crumbs. The case has damaging consequences for business and highlights a growing trend of lower-court rejection of High Court precedents.

In Scott v. Family Dollar Stores, 51 current or former managers allege that the low-cost retail chain uses “subjectivity and gender stereotyping that causes disparate impact to compensation paid to female store managers.” A Fourth Circuit panel by 2 to 1 overturned a lower court ruling and granted class certification despite clear rules set down in 2011 by the Supreme Court in Wal-Mart. v. Dukes.


This latest ruling continues a troubling trend of lower appellate courts ignoring Supreme Court precedents, perhaps on the assumption that the Justices can't take every case. Think of it as a war of attrition against lover-not-a-fighter Chief Justice John Roberts.

Similar behavior was in evidence recently in the Sixth Circuit's Whirlpool v. Glazer and the Seventh Circuit's Sears v. Butler over whether to certify class actions among consumers with allegedly moldy washing machines. In Sears, Judge Richard Posner clearly disregarded the Supreme Court's certification guidelines. The High Court vacated those judgments and remanded them in light of their ruling in 2013's Comcast v. Behrend, but the lower courts simply reinstated their prior decisions. Both cases are now bidding for another High Court hearing.

The Family Dollar majority was made up of Obama appointee Barbara Keenan and Clinton recess-appointee Roger Gregory, who was later renominated by George W. Bush as an olive branch to Senate Democrats. Democratic Presidents have appointed 10 of the 15 active Fourth Circuit judges, including six by President Obama.

Consider this disdain for precedent a preview if Mr. Obama gets a new majority on the Supreme Court. Chief Justice Roberts and his colleagues need to deliver some remedial instruction in class-action law and legal hierarchy.

As an initial matter, the October 16 decision in the Family Dollar case explicitly states (in the first paragraph of the opinion) that the court had issued its ruling "[w]ithout resolving the class certification issue," and remanded it “for the district court to consider whether, based on our interpretation of Wal-Mart, the proposed amended complaint satisfies the class certification requirements of [the Federal Rules of Civil Procedure].”

Even if the WSJ had analyzed the Family Dollar case correctly, its characterization of the recent class-action cases as a “troubling trend” indicative of “disdain” for the law is odd -- especially given the fact that the judges who wrote these decisions were appointed or nominated by Democratic and Republican presidents alike. 

For example, reliably conservative Judge Richard Posner, a Reagan appointee and veteran judge on the Seventh Circuit U.S. Court of Appeals, has argued in favor of the continued necessity of class-action lawsuits because they are the most economically efficient way to litigate a large number of claims on the same issue. Posner reiterated that view in the Sears case the WSJ finds so objectionable:

It would drive a stake through the heart of the class action device, in cases in which damages are sought rather than an injunction or a declaratory judgment, to require every member of the class have identical damages. If the issues of liability are genuinely common issues, and the damages of individual class members can be readily determined in individual hearings, in settlement negotiations, or by creation of subclasses, the fact that damages are not identical across all class members should not preclude class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous aggregate magnitude but so widely distributed as not to be remediable in individual suits. As we noted [in a prior case], “the more claimants there are, the more likely a class action is to yield substantial economies in litigation. It would hardly be an improvement to have in lieu of this single class 17 million suits each seeking damages of $15 to $30. ... The realistic alternative to a class action is not 17 million suits, but zero individual suits, as only a lunatic or a fanatic sues for $30[.]”


A class action is the efficient procedure for litigation of a case such as this, a case involving a defect that may have imposed costs on tens of thousands of consumers, yet not a cost to any one of them large enough to justify the expense of an individual suit.

How Posner's opinion serves as a “preview” for President Obama's potential future Supreme Court picks, as the WSJ apparently fears, is not altogether clear. This decision is hardly ignorant of Supreme Court precedents -- Posner did not “simply reinstate[]” the Seventh Circuit's prior decision, and neither did the judges in the Sixth Circuit Whirlpool case that the WSJ similarly attacked. Both courts carefully reviewed the Supreme Court's decision in Comcast and both courts concluded that it did not affect the certification of the classes in the washing machine cases. As both the Sixth and Seventh Circuit opinions point out, the Sears case is distinct from the Supreme Court's recent decision in Comcast. The class in Sears wants the courts to determine liability for an injury that all class members share. By contrast, Comcast was not solely about liability, but about damages -- the class in Comcast was ultimately decertified because the damages owed to the class members were not based on a common, class-wide injury.

Given the WSJ's concern about judicial bias, it's curious that it would ignore the influence conservative groups have had over the American legal system. One group in particular, the pro-business lobbying powerhouse U.S. Chamber of Commerce, has spent millions of dollars in its fight to end “frivolous” lawsuits and to make class actions even more difficult for consumers to bring. The group has been uniquely successful in not only getting its cases in front of the Supreme Court, but in finding a sympathetic ear in Chief Justice John Roberts and his conservative cohort.

As Emily Bazelon at Slate explained, the appellate court decisions allowing the two washing machine class actions to go forward have “made these cases the latest whipping boys of corporate defense lawyers and the U.S. Chamber of Commerce.” She continued:

Both have wildly cheered as over the past few years, the Supreme Court, usually by a 5-4 vote of conservatives vs. liberals, has made it harder and harder to bring a class action. As Yale law professor Judith Resnik puts it, “The rule for class actions, written in 1966, was designed to make it easier to get into court, by banding small-value claims together. But the 2013 Supreme Court is unraveling those bands, piece by piece.”

Defense lawyers and the Chamber of Commerce -- the group that is the most successful, hands down, in getting the Supreme Court's attention -- are pushing hard for the Supreme Court to hear the moldy washing machine cases. “The Sears case clearly has defense lawyers rattled,” Forbes writer Daniel Fisher wrote in May. “They've mounted an aggressive public relations campaign to get reporters like me to write about it.” Fisher did, along with the Wall Street Journal editorial page ... and the Washington Times in multiple pieces.

I guess the Chamber is only looking for a certain kind of pro-business coverage, though: When I called and emailed its press office over a couple of days, no one responded. Oh well.

For all its consternation surrounding partisanship in the federal judiciary, the WSJ seems strangely unconcerned with the pro-business, conservative leanings of the Roberts Court. 

Photo by Flickr user Joe Gratz