By Robert Barnes
Washington Post Staff Writer
Tuesday, December 7, 2010; A03
The Supreme Court on Monday agreed to hear two major challenges brought by corporate interests, including whether more than 1.5 million female employees of Wal-Mart can go forward with the largest discrimination class-action suit in the country's history.
The court accepted Wal-Mart's petition seeking to stop before trial a suit that alleges women were turned down for promotions and paid less than men. The business community has said whether such a huge and diverse group can pursue a class-action suit is one of the most crucial issues facing the court this term.
In addition, the court said it would review a massive environmental suit by eight states, New York City and others targeting power companies for carbon dioxide emissions the states say contribute to global warming.
In both cases, corporations are challenging decisions by federal appeals courts that the suits can go forward. They come before a court that traditionally has been sympathetic to business interests, but is sensitive about recent criticism from the left that it favors corporations over consumer and environmental groups.
In the Wal-Mart case, the justices will not decide the merits of the claims, but look at the question of whether a single suit is proper when the charges are spread across thousands of stores across the country and involve women in many different jobs.
But the decision about whether a class-action suit is allowed could be as important as the veracity of the discrimination claims, and business groups and civil rights activists are squaring off over the implications of the case.
Business groups say certification of a class action puts enormous pressure on a company to settle, regardless of whether the charges can be proved, because of the cost of the litigation and the potential award. For Wal-Mart, the nation's largest employer, the sum could be billions of dollars.
But civil rights groups say class-action suits are the most effective and cost-efficient way to make sure a business ends discriminatory practices and pays a price for its actions.
Theodore J. Boutrous Jr., lead counsel for Wal-Mart, said Monday in a statement that "the current confusion in class-action law is harmful for everyone - employers, employees, businesses of all types and sizes, and the civil justice system."
Laywers for the women said they were "confident that the court will agree that the women of Wal-Mart are entitled to their day in court."
The plaintiffs' lead co-counsel, Joseph M. Sellers of Washington, said the decisions of a district judge in California and the U.S. Court of Appeals for the 9th Circuit allowing the suit to move forward were "based on a vast body of evidence [and] we are confident that the decision to certify the class was sound."
The case began in California in 2001, when lawyers filed suit on behalf of six current and former female employees led by Betty Dukes, an employee in Pittsburg, Calif. They represent women who have worked at Wal-Mart and Sam's Club stores since December 1998.
Wal-Mart corporate executives "were aware of the adverse impact of Wal-Mart's policies on female employees, but failed to take steps to eliminate these discriminatory barriers," wrote Brad Seligman of the California-based Impact Fund, one of the women's attorneys.
Wal-Mart lawyers said the unique size of the potential suit requires the involvement of the Supreme Court.
Boutrous noted that Wal-Mart has a corporate policy against discrimination. The case is Wal-Mart v. Dukes and will be heard in the spring.
The global warming case began in 2004, when New York, California and others attempted to sue the power companies under public nuisance laws for the emissions. The utilities named are the American Electric Power Co., Cinergy Co., Southern Co. of Georgia, Xcel Energy Inc. of Minnesota, and the federal Tennessee Valley Authority.
The companies argue that individual states spread across the country cannot set emission standards for them. That is the job of the federal Environmental Protection Agency, the say.
A federal judge initially threw out the case, but the U.S. Court of Appeals for the 2nd Circuit in New York said it could continue.
The Obama administration angered environmentalists when its lawyers sided with the power companies in the case. It said the EPA was working on the problem of carbon dioxide emissions and its efforts should be allowed to continue without intervention.
But environmental groups say the protections are not yet in place and states should be free to act until that happens.
Environmentalists won an important victory at the Supreme Court in 2007 when it ruled that Massachusetts and other states had standing to insist that the EPA enforce the Clear Air Act. That case involved motor vehicles.
Only eight justices will hear the case accepted Monday, American Electric Power Co. v. Connecticut. Justice Sonia Sotomayor recused herself because she heard the case as a member of the 2nd Circuit panel. She was nominated to the Supreme Court before the decision was rendered.