When a class action goes to trial, it is a notable event, especially when there is over $70 million at stake.  The plaintiffs in Pippen v. Iowa (Iowa Dist. Ct. No. CL10738, filed Jul. 1, 2007) allege that the State of Iowa’s executive branch has systematically discriminated against black employees in hiring and promotion, resulting in an as much as $71 million in lost back pay and underpayment of current employees.  This figure does not include emotional damages, which could bring the total potential judgment to well over $100 million if the approximately 6,000-member class of plaintiffs receives a favorable judgment at trial.

The plaintiffs contend that Iowa neglected to follow its own training, testing, and documentation procedures, resulting in hiring and promotion decisions that are systematically biased against black candidates.  The state refutes these charges with an argument that the plaintiffs’ “unified theory of causation” cannot establish the necessary link between racial bias and statistically significant differences in the hiring and promotion of black and non-black employees, arguing that “African Americans’ employment successes vary widely by department, EEO category, job class and step within the hiring practices.”  Additionally, the state has posited that the proper damage award would be compensatory job interviews, not monetary relief.

Filed in 2007 and certified in September of 2010, Pippen v. Iowa appears to be the first certified Title VII discrimination case to go to trial following the U.S. Supreme Court’s Dukes v. Wal-Mart ruling, in which the Supreme Court reversed the certification of a class of approximately 1.5 million female Wal-Mart employees who had alleged discrimination in violation of Title VII.  A finding of liability in Pippen would likely result in an appeal by the defendant, which would inevitably address whether the significant difference in class size—Dukes’ 1.5 million versus the 6,000-member class in Pippen—provides a basis on which to distinguish Dukes.

Recent graduates of two law schools—Thomas M. Cooley Law School and New York Law School (NYLS)—are collectively seeking $450 million in class actions that allege the schools misrepresented employment and salary statistics in order to attract students.  The Cooley case was filed in the Western District of Michigan and the NYLS case was filed in the Supreme Court of New York County.  In an interesting twist, the New York firm representing the plaintiffs, Kurzon Strauss, is itself being sued by Cooley for defamation, with the school alleging that, in the course of finding named plaintiffs for the misrepresentation class action, Kurzon Strauss damaged the school’s reputation. 

Cooley consistently has among the highest admission rates of the country’s 200 ABA-accredited law schools, and in the twelfth edition of the law school ranking book, Judging the Law Schools, Cooley ranks second, to Harvard, and comfortably ahead of Yale (#10), Stanford (#30), and fellow defendant NYLS (#62).  Some have questioned the objectivity of these rankings, which are authored by a founder of Cooley Law School along with its current President and Dean. 

Both schools (along with Thomas Jefferson law school, defendant in a class action filed earlier this year) are alleged to have inflated their post-graduation employment statistics by hiring their own graduates, excluding from the statistics graduates who did not respond to employment surveys, and classifying graduates with part-time or contract positions as being “fully employed.”

In defending against the misrepresentation claims, the law schools are expected to rely on the American Bar Association’s liberal definition of “employed,” which makes no distinction between law-related jobs and all others, including the barista and telemarketing positions that recent law school graduates appear to land with some frequency.

The widely-covered $2 billion settlement in In re Wachovia Corp. “Pick-A-Payment” Mortgage Marketing and Sales Practices Litigation, No. M:09-MD-02015-JF, has recently been finalized following the resolution of three appeals; the Effective Date of Settlement is September 7, 2011.  Of note is the relatively modest $25 million in fees sought by and awarded to class counsel, to be divided among the seven firms appointed as such.  The reality of the fee award stands in marked contrast to public misperceptions concerning attorney fees with regard to class actions, exemplified by this comment, posted by “The Attorney” at www.topclassactions.com:

Let me explain how it really works. They plan to settle for 50 million and the lawyers are wanting 25 million. The lawyers will then sue the plaintiff for the 25 million. (They will not get it from the settlement nor from the people who are receiving the settlement.) There are 26 people [referring to the named plaintiffs] who will receive 125,000 each. This money is taken out of the settlement.  Leaving 46,750,000. . . . [T]here are 517,000 people who take part of this Class action lawsuit. So when you divide the money by 517,000 . . . each person will get 90.425 (90.43 if you round up).

http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/964-wachovia-qpick-a-paymentq-mortgage-loan-class-action-settlement-#comment-587.  

Apart from getting the settlement amount wrong (by $1.95 billion) this seemingly informed commentator massively overestimates a 50% fee request, and imagines a process whereby class counsel sues for fees.  In fact, the fees awarded in this case are just 1.25% of the $2 billion total settlement value.  Further, the attorney fees are not part of the $2 billion settlement fund, which is not denominated as a “common fund.”  Rather, the fees are to be paid separately, and thereby do not diminish the money going to class members.  Moreover, the fee award is to be divided among the seven firms appointed as class counsel, just as the $125,000 enhancement payment is to be divided among the 26 named plaintiffs.

In the latest action that will define the reach of the Supreme Court’s April ruling in AT&T Mobillity v. Concepcion, 131 S.Ct. 1740 (2011), the National Labor Relations Board (NLRB) will determine whether class action waivers in arbitration agreements violate the guarantee under the National Labor Relations Act (NLRA) that all non-government workers—union and non-union alike—must be permitted to engage in “concerted activities for the purpose of collective bargaining or other mutual aid and protection.”  29 U.S.C. § 157 (2011).  The case, D.R. Horton, Inc. (NLRB Case No. 12-CA-25764), has been fully briefed, and the NLRB may issue its ruling at any time.  Irrespective of the outcome, the losing party is expected to file an appeal, most likely in the Ninth Circuit.

At stake is whether Concepcion, which concerned a consumer contract, is properly applied to employment contracts.  If so, employers could insulate themselves from virtually all class actions seeking the enforcement of workplace laws by inserting arbitration clauses and class action waivers among the stacks of documents new employees sign.  Such a result could lead to the elimination of class actions in the employment context, since few workplace laws carry significant enough damages and penalties to justify individual lawsuits.  This could, in turn, result in the non-enforcement of a broad swath of employment laws.  By contrast, if the NLRB rules that Concepcion is inapplicable to employment contracts, workers’ long-standing ability to seek redress for violations of labor and employment laws, such as unpaid overtime or minimum wages, will remain intact.

Like Concepcion, the D.R. Horton case has its roots in California, as employees of homebuilder D.R. Horton, Inc. seek unpaid overtime by way of class-wide arbitration.  When the company invoked the class action waiver contained in the employees’ arbitration agreements, the employees responded by filing an NLRB complaint, alleging a violation of the NLRA’s “concerted activities” guarantee.  By making the NLRA guarantee the key issue of this case, the D.R. Horton plaintiffs will force the NLRB (and eventually, the Ninth Circuit) to address the tension between the federal government’s purportedly strong preference for arbitration, embodied in the Federal Arbitration Act, and the NLRA’s express protection of collective action by workers.  D.R. Horton is expected to be the second significant decision defining the application of Concepcion to workplace-protection statutes; this past July, in Brown v. Ralph’s Grocery Co., the California Court of Appeal held that Concepcion does not apply to the California Labor Code’s Private Attorneys General Act (PAGA).