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Wal-Mart sequel pushed

Arguing that the Supreme Court’s new ruling in the Wal-Mart Stores case will lead lawyers pressing class-action claims to turn increasingly to the state courts, four major tobacco companies on Tuesday made a new plea to the Justices to take on a state case and answer the constitutional issues that did not get decided on Monday.   The Justices are scheduled to consider the tobacco case at their private Conference on Thursday; the case, Philip Morris USA Inc., et al., v. Jackson, et al. (10-735), has been on hold until the case of Wal-Mart v. Dukes (10-277) was decided.

The constitutionality of using the class-action approach, especially when a large group of individuals file the case against a major company, was in the background of the Wal-Mart case, but the final decision did not directly confront that question.   Moreover, the Wal-Mart case turned mainly on the meaning of a court rule that governs class-action lawsuits only in federal, not state, courts, so there were no indications how the Court would now react to a state case.   That reaction is what the tobacco companies’ lawyers were seeking in their supplemental brief (found here).  Lawyers for the smokers who sued in the case from Louisiana answered (their new brief is here), urging the Court to deny review and allow a state court verdict setting up a $270 million smoking-cessation fund to go into effect.

That verdict was blocked temporarily by Justice Antonin Scalia last September, as he expressed concern about “abuse of the class-action device.”  Scalia was the author of the Court’s Wal-Mart ruling on Monday.  In the most significant part of that opinion, the Court, splitting 5-4, shut down a massive class-action lawsuit by hundreds of thousands of women who work now or formerly worked for the big discount retailer, claiming sex bias in pay and promotions.

The tobacco firms’ lawyers, responding quickly to the Wal-Mart ruling, said in their new brief that the Court, “by recognizing restrictions on the use of class actions in federal courts,…increased the incentives for class-action lawyers to push the limits in state court.”  Thus, they went on, the need for clarification of constitutional limits on at least some forms of class-action litigation is “more pressing than ever.”

The Louisiana case, the brief asserted, “is an ideal vehicle for providing such clarification. The decisions [in state court] reflect a radical deviation from the model of class-action litigation reflected in the conception of Rule 23 reaffirmed in Wal-Mart.”  The requirements of federal Rule 23 (applied by the Court in Wal-Mart), plus other restrictions on federal court authority, the brief said, “forbid in federal court [what] was openly embraced in the decisions below.”

Now that the Wal-Mart ruling has come down, the tobacco firms’ lawyers said, the Court has two obvious options: either return the Louisiana case to state courts to see how, if at all, the Wal-Mart decision might apply, or to grant review of the tobacco petition and move forward to decide it, at the Court’s next Term.  A grant “is clearly the proper” option, the brief suggested.

It is unclear just how state courts would apply the Wal-Mart ruling, since it was so closely focused on the federal Rule 23.  In fact, in the response to the new tobacco brief, lawyers for the individuals who filed the Louisiana case argued that state courts have no obligation to mimic Rule 23 in the way they conduct class-action lawsuits under state law.   The tobacco lawyers, the attorneys on the other side contended, were seeking to “conflate Rule 23” with constitutional due process requirements.

“This Court,” the Louisianans’ lawyers contended, “has repeatedly rejected the claim that Rule 23 is the only method compatible with Due Process to prosecute a class action.”  The Court, they added, has ruled consistently that the Due Process Clause does not compel the states to adopt rules appropriate for federal courts.

The Court could act on the tobacco appeal as early as next Monday.

Recommended Citation: Lyle Denniston, Wal-Mart sequel pushed, SCOTUSblog (Jun. 21, 2011, 3:41 PM),