How Do You Try a Class Action with 1.5 Million Plaintiffs?

The issue in Dukes v. Wal-Mart, 2007 U.S. App. LEXIS 28558 (9th Cir. Dec. 11, 2007), was the propriety of class certification. The defense challenged, among other things, the manageability of the case. One very legitimate question was exactly how you try a case with a plaintiff class numbering 1.5 million. The Ninth Circuit looked with favor at the thoughtful approach of Special Master Sol Schreiber in Hilao v. Estate of Ferdinand Marcos, 103 F.3d 767 (9th Cir. 1996), quoting the decision as follows:

The district court [Hon. Manuel Real ]... appointed Sol Schreiber as a special master (and a court-appointed expert under Rule 706 of the Federal Rules of Evidence). Schreiber supervised the taking of depositions ... of the 137 randomly selected claimants....

Schreiber then reviewed the claim[s] ... [and] recommended that 6 claims of the 137 in the sample be found not valid....

Schreiber then recommended the amount of damages to be awarded to the 131 [remaining] claimants....

Based on his recommendation that 6 of the 137 claims in the random sample (4.37%) be rejected as invalid, he recommended the application of a five-per-cent invalidity rate to the remaining claims.... He recommended that the award to the class be determined by multiplying the number of valid remaining claims ... by the average award recommended for the ... claims.... By adding the recommended awards..., Schreiber arrived at a recommendation for a total compensatory damage award....

A jury trial on compensatory damages was [then] held.... [An expert] testified that the selection of the random sample met the standards of inferential statistics, that the successful efforts to locate and obtain testimony from the claimants in the random sample "were of the highest standards" in his profession, that the procedures followed conformed to the standards of inferential statistics, and that the injuries of the random-sample claimants were representative of the class as a whole. Testimony from the 137 random-sample claimants and their witnesses was introduced. Schreiber testified as to his recommendations, and his report was supplied to the jury. The jury was instructed that it could accept, modify or reject Schreiber's recommendations and that it could independently, on the basis of the evidence of the random-sample claimants, reach its own judgment as to the actual damages of those claimants and of the aggregate damages suffered by the class as a whole.

The jury deliberated for five days before reaching a verdict. Contrary to the master's recommendations, the jury found against only two of the 137 claimants in the random sample. As to the sample claims, the jury generally adopted the master's recommendations, although it did not follow his recommendations in 46 instances. As to the claims of the remaining class members, the jury adopted the awards recommended by the master. The district court subsequently entered judgment for 135 of the 137 claimants in the sample in the amounts awarded by the jury, and for the remaining plaintiffs . . . in the amounts awarded by the jury, to be divided pro rata.

The Wal-Mart Court approved in concept trial by sample: “Because we see no reason why a similar procedure to that used in Hilao could not be employed in this case, we conclude that there exists at least one method of managing this large class action that, albeit somewhat imperfect, nonetheless protects the due process rights of all involved parties. Accordingly, we find no manageability-based reason to find this otherwise-certifiable class unsuited to class certification.”

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