Daily Journal Web Exclusive, 08/09/05

Judge Demands Wal-Mart Lawyer Apologize to Trial Court for Insulting Brief

By Peter Blumberg
Daily Journal Staff Writer

SAN FRANCISCO - Wal-Mart Inc. took a courtroom beating Monday when it asked the 9th U.S. Circuit of Court of Appeals to throw out a gender discrimination class action brought by 1.5 million women employees nationwide.
Not only did the world's largest retailer appear one vote short, but the senior judge on Monday's panel called on Wal-Mart's lawyer to apologize for submitting an "arrogant" brief that rhetorically socked a San Francisco trial judge for allowing the unprecedented case to go forward.

"Do you regard this as an effective way to present advocacy?" Circuit Judge Harry Pregerson Jr. asked Theodore J. Boutrous, a nationally recognized appellate specialist at Gibson, Dunn & Crutcher in Los Angeles. "You slam the district judge?"

"No disrespect meant, Your Honor," Boutrous said repeatedly, his voice more humble with each intonation, as Pregerson ripped into his brief, which accused U.S. District Judge Martin Jenkins of "altering the substantive law" and "trampling on Wal-Mart's due process rights," among other claims.

"I was a district judge for 12 years, and if I read all that, I wouldn't like it," Pregerson said. "I think you ought to apologize to the district judge."

That brief exchange captured the contentious spirit of Monday's lively hourlong argument, in which Wal-Mart requested dismissal of the civil rights case on the grounds that it's too large and unwieldy.

In the end, it was quite clear that Wal-Mart will get support from the most conservative member of the panel, Andrew Kleinfeld of Alaska, but won't be getting votes from Pregerson of Woodland Hills or Michael Daly Hawkins of Phoenix.

The suit, filed in 2001 by Impact Fund, based in Berkeley, says that Wal-Mart systematically discriminates by gender, paying women less than men and giving them fewer promotions.

The suit seeks back pay, punitive damages and numerous changes in Wal-Mart's business practices.
The closely watched appeal has drawn heavy amicus briefing on both sides and could set an important precedent defining how large civil rights class actions can be.

Wal-Mart is arguing that Jenkins shouldn't have certified the class because the wage and personnel statistics that the plaintiffs have gathered were from an aggregate study across the company rather than a store-by-store comparison.

Kleinfeld sharply questioned the methodologies of the competing statistical approaches while indicating that he's troubled by Jenkins' decision in June 2004 to let the dispute proceed to a jury trial.

"You haven't shown that there is some national adverse impact for one sex over the other, have you?" he asked plaintiffs' attorney Brad Seligman.

Kleinfeld also questioned the plaintiffs' contention that Wal-Mart condones discriminatory stereotypes by giving individual managers at its 3,400 stores nationwide broad autonomy over hiring, pay and promotion.
"How do you know which of your employees to promote if you're not subjective?" he said. "I would think you would want a manager who gets along more than a manager with a master's degree."

Kleinfeld seemed sympathetic to Wal-Mart's conclusion, based on its own study, that there is no statistically significant difference in pay for men and women at 90 percent of the company's stores.

Seligman defended the size of the suit, saying that the women plaintiffs, from cashiers to managers, are properly lumped together because they are more alike than different in the discrimination they faced.

And he attacked Wal-Mart's data, asserting that the company crunched its numbers so as to mask the appearance of any pay disparities.

Boutrous countered that, by consolidating vastly different complaints from women in different positions, and not separating out the many women employees who have suffered no discrimination, the class certification deprives the company of the right to defend itself.

But Hawkins pointed out that undisputed data shows compensation for female workers at Wal-Mart lags when compared to the company's competitors.

And he ridiculed Wal-Mart for proposing that each plaintiff bring her own separate suit.
"Your answer is 4,500 individual suits," Hawkins said.

He pointed out that class actions offer one advantage for defendants: They need not worry about being sued again if they win.

Pregerson emphasized that the appellate panel should not second-guess Jenkins' decision unless he abused his discretion.

He described the lower court's 84-page decision as "very thorough, painstaking in its detail."
Pregerson also pooh-poohed Wal-Mart's worries that a discrimination case with 1.6 million class members will prove logistically unmanageable.

He said it's just a matter of working with the judge to solve problems when they come up.
"A lot of it depends on how smart the lawyers are, right?" he sad.

Whatever the outcome of Dukes v. Wal-Mart Stores Inc., the case is almost certain to be appealed to the full 9th Circuit or the U.S. Supreme Court.

The justices did not indicate when they will rule.