Advancing a Free Society

Wal-Mart’s Class Action Conundrum

Tuesday, April 5, 2011

Two of the most controversial features of modern law had their origins in the turbulent days of the 1960s. The Civil Rights Act of 1964 imposed on an employer a general obligation not to discriminate on grounds of sex in making employment decisions. Two years later, a major reform in the Federal Rules of Civil Procedure vastly expanded the potential scope of class actions under Rule 23 by introducing a procedural mechanism that allowed representative plaintiffs to bring class action lawsuits on behalf of other individuals without their cooperation or consent.

At the time of these reforms, the proponents of both legal initiatives offered extensive assurances that the expansion of liability would be carefully curbed to avoid imposing excessive burdens on defendants. It is fair to say that the drafters of those new laws and rules did try to make good on that promise.

Yet the argument of such reformers that any new rule is both mild and moderate should always be greeted with a large grain of salt. The long-term impact of any statute or rule does not depend exclusively, even largely, on either its text or its legislative history. It depends far more on two less obvious factors. The first is the way in which administrators and judges construe it going forward—which is always more broadly than either the words or the context suggest. The second is the synergistic interaction between different legal regimes, which magnify the impact of both legal regimes.

Continue reading Richard Epstein at our sister site Defining Ideas