The Supreme Court could change the face of class-action law

WAL-MART attracts superlatives. It is the biggest private employer in the world’s biggest economy, with 4,300 stores and 1.4m employees in America pulling in sales of $258 billion in the 2009-10 financial year. It may soon acquire a new distinction: being sued by the biggest-ever group of people. This spring the Supreme Court will consider whether 500,000-1.5m women who have worked at Wal-Mart since 1998 can be certified as a class in a sex-discrimination lawsuit. It is one of several cases which American businesses are watching with a mixture of fear and hope.

The courts are increasingly crowded. Littler Mendelson, a firm that often represents employers, reckons job-based class-action filings have grown from 2,999 in 2008 to 4,140 in 2010. The annual number of settlements has jumped from 91 to 205 since 2006. Last year a jury ordered Novartis, a drugs-maker, to pay $250m to a class of 5,600 female employees. The penalty was reduced to $175m on settlement—still a hefty sum. Gerald Maatman of Seyfarth Shaw, another legal firm, says such awards set new benchmarks and encourage copycat filings. “We keep thinking the wave has crested, but it has grown,” he says. …