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  #1  
Old 06-30-2004, 12:48 PM
mikemover's Avatar
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Wal Mart lawsuit...nonsense or not?

Once this suit is over and has cost Wal Mart tens of millions or more, I guarantee you that more than half of the people advocating this lawsuit will STILL be shopping at Wal Mart, and will then be moaning and groaning about its rising prices, claiming that Wal Mart is "gouging" prices or some such nonsense.

If you want a store that has almost unlimited selection while having ultra-low prices, then that store is by design going to have to pay ultra-low wages.

You can't have it both ways.

Mike


Story:

___________________________

Jackpot Justice, the Wal-Mart Case
Wednesday, June 30, 2004
By Wendy McElroy


Wal-Mart is facing the largest class action lawsuit ever been brought against a private company. As many as 1.6 million women may join the suit and the possible payout could exceed $1 billion dollars. What are class action lawsuits, and why have they become so prominent in the news?

Class action lawsuits are an aspect of tort law, which addresses harm or loss that is caused either deliberately or through carelessness by the actions of another. A class action suit is brought by one or more plaintiffs on behalf of a larger group that has a common interest, a common harm. For example, if a product is defective and injures a consumer, that consumer can bring suit against the producer on behalf of all consumers similarly injured. After attorneys’ fees, any settlement or court award is divided among those participating in the suit.

In the Wal-Mart case, six women filed the original action in June 2001, claiming that the giant retailer discriminated against women in salaries and promotions. Approximately 1.6 million women who have worked for Wal-Mart since 1998 are eligible to join the suit.

There are several reasons why class action lawsuits have proliferated over the last few decades. Changes in legal procedure have favored the growth.

A comprehensive study from the Rand Institute for Justice entitled “Class Action Dilemmas, Pursuing Public Goals for Private Gains” explains one such change. “[T]he current controversy over class action roared to life in 1966 when Rule 23, the procedural rule that provides for class actions in federal courts, was significantly revised.…Whereas previously, all individuals seeking money damages with a class action lawsuit needed to sign on affirmatively (‘opt in’), now those whom the plaintiffs claimed to represent would be deemed part of the lawsuit unless they explicitly withdrew (‘opted out’).”


In an instant, the scope of lawsuits and the financial liability of defendants “multiplied many times over.” (Rule 23 has been subsequently amended, largely to increase the role of judges in every aspect of class action suits.)

In short, class action suits became tremendously more profitable, especially for lawyers whose contingency fees sometimes exceeded the money paid out to successful plaintiffs. Contingency fees are commonly viewed as a necessary device by which poor plaintiffs can access the court system. In 1971, the Florida Supreme Court stated, "It is irrefutable that the poor and the least fortunate in our society enjoy access to our courts, in part, because of the existence of the contingency fee."

But the excesses of contingency fees have become infamous, leading critics to label class action suits as “jackpot justice” for lawyers. One critic is Supreme Court Justice Sandra Day O'Connor who has spoken out against “out-of-control class action lawsuits and outrageous contingency fees, which have turned some lawyers into ‘overnight millionaires.’"

A recent class action suit against a Hooters restaurant in Augusta, Ga., is just one example among many. Over 1,300 plaintiffs sued Hooters for sending out six unsolicited fax advertisements. Although the faxes had been actually sent by a third party with whom Hooters had contracted, the court awarded the plaintiffs $12 million. Each plaintiff was to receive $6,000, with lawyers claiming $4 million.

The Hooters in question subsequently filed for bankruptcy protection, thus validating a common objection to class action suits: they bankrupt businesses, sometimes frivolously.

But much more than monetary profit is involved in the growth of class action suits. The lawsuits have become a vehicle for social reform. Those who advocate class action suits often present them as part of a larger crusade for grassroots justice in the face of corrupt corporations and the wealthy (e.g. physicians). The movie "Erin Brockovich" exemplifies this representation.

The recent decision that a class action suit can proceed against Wal-Mart seems to be cut from this cloth. In his 84-page ruling, Judge Martin Jenkins of the notoriously liberal U.S. District Court in San Francisco called the case "historic in nature, dwarfing other employment discrimination cases that came before." He compared the case to Brown v. Board of Education, the 1954 case that ended racial discrimination in schools.

Martin wrote, “This anniversary [of Brown] serves as a reminder of the importance of the courts in addressing the denial of equal treatment under the law whenever and by whomever it occurs." Those words are more appropriate to a social reformer rather than to a judge who has neutrally weighed the merits of a case.

The court as social reformer is often given support by media eager to maximize publicity. For example, an editorial in the Chicago Sun-Times was titled “Class action could finally put women on fast track.”

The merits of the Wal-Mart case are blurred by association with a broader political cause. The case is as much or more a piece of social reform than it is restitution for injured individuals. This is one of the main criticisms aimed at class action lawsuits and reform-minded judges. Namely, that unelected courts — including lawyers and juries — are going far beyond their jurisdiction of providing remedies to specific individuals. They are usurping the function of lawmakers.

Phyllis Schafly’s latest book, "The Supremacists: The Tyranny of Judges — and How to Stop It" addresses this issue. A blurb on the book cover reads, “The gravest threat to American democracy is the supreme power of judges over political, social, and economic policy.”

No one knows how to definitively resolve the abuses and dangers of class action suits without denying the underdog access to the courts. A good first step, however, would be to require participants to “opt in,” to limit contingency fees for lawyers, and reduce the jurisdiction of judges.
____________________

------Wendy McElroy is the editor of ifeminists.com and a research fellow for The Independent Institute in Oakland, Calif. She is the author and editor of many books and articles, including the new book, "Liberty for Women: Freedom and Feminism in the 21st Century" (Ivan R. Dee/Independent Institute, 2002). She lives with her husband in Canada.

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  #2  
Old 06-30-2004, 01:03 PM
G-Benz's Avatar
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When times are tough, people look for ways to "get paid"! Big business is an easy target.

I think the original lawsuit has merit, but not as a class-action. Unless each of the 1.6 million female employees and former employees of Walmart could build a similar case based on their own records, it shouldn't have stood on its own as a class action suit.

I was involved in one where one of the contractors working for the firm file a class-action lawsuit against the firm, claiming that they "cooked the books" with the payroll and shorted us overtime pay that was rightfully ours. He won, and the rest of us got our backpay (albeit $22/month over a three year period) . We all had timesheets and paychecks on file, so it would have been easy for each one of us to produce documentation proving his case.

But like the class-action suits involving medical complications due to some new drug, I believe only those that have experienced complications should be part of the suit, not those who purchased and used the product without incident.
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  #3  
Old 06-30-2004, 01:35 PM
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Lets see, Hooters violated the Telephone Consumer Protection Act by sending 6 unsolicited faxes to about 1300 people.

Each violation (fax sent) of the TCPA is a 500 fine. Thats $3000 per person. Wal Mart took it to jury and the jury found that they violated the law willfully and knowingly and damages were trebled to $9000 per person, as is provided for by statute.

That works out to about 12 million of which the Law Firm got a third. The fee was approved by the court. The Hooters filed BK so probably no one will get paid.

What's the problem? Hooters knowingly, willfully and repeatedly violating the law? Hooters going BK to avoid paying a judgment? Or a lawyer getting paid for taking a case on a contingency basis, going to trial and not only winning but winning big and winning all his appeals?

Wal Mart makes people work off the clock and goes so far as to lock them in the store and refuses to let them leave until task are done. THey have been sued succesfully by it's pharmasist for screwing with overtime pay. They get busted regurally for using undocumented illegals.

I don't care what their pay scale is. But there are laws, and Wal Mart violates them. Do the crime pay the fine. Right?
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  #4  
Old 06-30-2004, 02:11 PM
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koop,

I think Mike's point was the cost of the fine will be passed on to the consumers, implying we lose. I agree that is the likely outcome, and, when WalMart is no longer significantly cheaper than other stores, their cancerous growth, driving the smaller, local businesses out, will diminish. I think that is good for service and the local economy. Make everyone play by the rules, and let everyone make a fair living. While it may cost us all new toaster oven every so often, so what? We probably did not need another piece of lower priced junk anyway. Jim
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  #5  
Old 06-30-2004, 02:32 PM
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Wal Mart had 2.2 Billion in earnings LAST QUARTER. I doubt we are going to see a big jump in wal mart prices based on a lawsuit.

But even if we do, so what? Prices could be even lower if they just imported 10 year old bangladesh orphans to work for 25 cents an hour. or if they didn't have to pay taxes.

I hope your right Jim. If they keep breaking the law, and they keep getting hit with huge verdicts at some point they will pass on the cost to consumers, lose their pricing advantage and will then be on an equal footing and compete fairly with buisness' that don't break the law.
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  #6  
Old 06-30-2004, 06:56 PM
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Quote:
Originally posted by narwhal
Finally, lest anyone be confused, class actions are the absolute hardest damn things in the legal world to certify. They don't hand out class action certification like it was candy.
So why (according to the article) "class action lawsuits have proliferated over the last few decades"?

I'm not questioning your legal expertise, but obviously, this type of legal wrangling has become popular...
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  #7  
Old 06-30-2004, 07:38 PM
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Quote:
Originally posted by koop
Wal Mart had 2.2 Billion in earnings LAST QUARTER. I doubt we are going to see a big jump in wal mart prices based on a lawsuit.

But even if we do, so what? Prices could be even lower if they just imported 10 year old bangladesh orphans to work for 25 cents an hour. or if they didn't have to pay taxes.

I hope your right Jim. If they keep breaking the law, and they keep getting hit with huge verdicts at some point they will pass on the cost to consumers, lose their pricing advantage and will then be on an equal footing and compete fairly with buisness' that don't break the law.
My kid's friends who work at Wal-mart says they are hiring so many illegals they have to hold employee meetings in Spanish now. Considering the fact they got bad publicity for this a few months ago, it just shows me the gall of these guys by continuing to do it. They have in effect, become a country not a company, and are acting like some new nationality. I hope they get their asses sued off til they bleed.
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Old 06-30-2004, 10:53 PM
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Quote:
Originally posted by KirkVining
My kid's friends who work at Wal-mart says they are hiring so many illegals they have to hold employee meetings in Spanish now. Considering the fact they got bad publicity for this a few months ago, it just shows me the gall of these guys by continuing to do it. They have in effect, become a country not a company, and are acting like some new nationality. I hope they get their asses sued off til they bleed.
Perhaps they are just preparing for the impending "guest worker" status of these people, and they know something that we don't!

That's it! That's why there's so much talk about legitimizing illegal immigrants! It's going to happen, and Wal Mart is to blame! There's more American jobs going to "foreigners"! It's a conspiracy between Wal Mart and George W.!! It's so obvious! They both have Ws in their names after all!......



Ah, there's my tinfoil hat....thought I'd lost it....whew!....

Mike
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  #9  
Old 06-30-2004, 11:03 PM
mikemover's Avatar
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Quote:
Originally posted by narwhal
The author is a Canadian feminist who misquotes several legal principles throughout here article. She did not back up her statement about the proliferation of class action lawsuits. There are more people on the planet since 1966, so yeah there are more lawsuits period, but she didn't show quote any source to prove, maybe, more per-capita class actions.
I haven't done any research on this, so I can't argue one way or the other....but I have my suspicions.

Regardless, how can it possibly be legally proven that ALL of the 1.6 million women in this class-action suit were illegally discriminated against by Wal Mart or an employee of Wal Mart? This seems like an overwhelming logistical and legal impossibility to me.

This whole "opt-out" system for class-action just SCREAMS and BEGS to be abused.

Seems to me that discrimination in employment is an offense against an individual, and any case relating to it should be handled as such--on an INDIVIDUAL basis.

If Wal Mart loses this case and has to pay a settlement, there's going to be a LOT of people getting a piece of pie that they were not entitled to, a probably a few people getting a lot LESS than they should have.


Mike
__________________
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1985 300TD
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  #10  
Old 07-01-2004, 10:44 AM
mikemover's Avatar
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Quote:
Originally posted by Botnst
So...Wallmart takes advantange of dumb people and wetbacks to make billions for their corporate fatcats.

OR

Wallmart offers people on the bottom a chance to improve their lives through their own hard work.

B
Selective vision. People see what they want to see, don't they?

Mike
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  #11  
Old 07-02-2004, 02:05 AM
Orkrist
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There's a lot more to class actions than meets the eye, press or image. I hope I never get involved in one as a young attorney for example; its an art unto itself, and some of these guys are killing machines, on both sides.

However, the opt out system does not necessarily invite abuse. Many plaintiffs not opting out of the class would never pursue litigation on their own, the stake is to small to justify the time and expense of pursuing a well heeled and litigation saavy defendant. Many opting out may do so because they may have special damages not accounted for in the class.

Granted, however, some plaintiffs get more than they should and others less. Its an acceptible rate of error considering the judicial savings from consolidating cases, as the law sees it anyway.
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  #12  
Old 07-02-2004, 04:45 AM
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Well, having lived for 21 years within a 30min drive of Wally World HQ and having recently survived the Wal-Martian invasion of my local University campus for their annual Shareholder's Convention, with grandparents that knew Sam Walton personally, and having worked at one of the local Superstores, I have a somewhat unique perspective.


And that perspective is that Wal-Mart has gone down the $h|tter since he died. I think we can all agree on that point.

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