Wal-Mart Wins Dismissal of Texas Women’s Class Action

Wal-Mart Stores Inc. (WMT), the world’s largest retailer, doesn’t have to face class-action gender- discrimination claims in a federal court lawsuit in Texas, a judge ruled.

Wal-Mart was accused in the lawsuit of discriminating against women in pay and promotions in the company’s Texas region, which included some stores in neighboring states. The suit sought to represent all women hourly and salaried workers, below store managers, employed by Wal-Mart and Sam’s Club in the region.

The lawsuit was filed last year after the U.S. Supreme Court rejected a nationwide class action claiming gender discrimination. U.S District Judge Reed O’Connor dismissed the Texas class complaint yesterday, finding that the lawsuit was filed too late.

The plaintiffs’ class claims “are barred by the statute of limitations, and should be dismissed,” O’Connor said in a 19- page decision. He also dismissed the suit by lead plaintiff, Stephanie Odle. O’Connor allowed other individual claims to go forward.

The case is one of four regional lawsuits filed against Wal-Mart, the world’s largest retailer, since the U.S. Supreme Court decision in June 2011. A similar suit is pending in California, and complaints were filed this month in Florida and Tennessee.

‘Can’t Piggyback’

“We are pleased that the district court has dismissed the class action claims, recognizing the individuals must pursue their own claims,” Theodore Boutrous Jr., a lawyer for Wal- Mart, said yesterday in an interview.

“You can’t piggyback one class action on top of another,” Boutrous said. “This class action was based on the same theories that were rejected by the Supreme Court.”

The plaintiffs will be appealing, Joseph Sellers, their attorney, said yesterday in a phone interview.

“We’re going to continue with the other cases and hope we can get this one overturned,” he said.

The plaintiffs said in court papers opposing dismissal that the nationwide class action covered 41 company regions. They said the Texas lawsuit limited itself to three Wal-Mart regions and two Sam’s Club regions.

“Within this area plaintiffs challenge the decisions of a discrete group of managers who made the pay and promotion decisions,” lawyers for the women wrote. Those managers “have long known about gender disparities” yet “have failed to take remedial action.”

Final Ruling

While the nationwide class action was pending, the statute of limitations on claims was set aside, or tolled, until a final court decision. Rules in the U.S. Court of Appeals in New Orleans restrict “the tolling to subsequent individual lawsuits and not further class actions,” O’Connor said. This allows the individuals to pursue claims, while barring a class action, he said.

The court based its decision on an outdated ruling from the federal appeals court in New Orleans, Sellers said.

“The court felt bound by a decision by the Fifth Circuit that’s 25-years old,” he said. “It’s no longer valid.” Subsequent decisions have supplanted that ruling, he said. The plaintiffs will be appealing O’Connor’s decision to the 5th Circuit.

Odle, who was one of the original plaintiffs in the national class action, was blocked by yesterday’s ruling from pursuing her suit because of a prior court decision.

O’Connor found that she had been dismissed from the nationwide case prior to the Supreme Court’s 2011 decision.

The federal appeals court in San Francisco in 2010 found that class members who didn’t work for Wal-Mart when the complaint was filed, “lacked standing to pursue injunctive or declaratory relief,” O’Connor said.

Odle Too Late

“The class of former employees neither moved to stay the mandate, nor appealed this issue to the Supreme Court,” O’Connor said. “Once the mandate issued, it constituted a final adverse determination as to Odle’s claims,” he said. Odle failed to file a separate lawsuit in time, O’Connor said.

“Our view is that she wasn’t dismissed,” Sellers, the plaintiffs’ lawyer, said yesterday. The appeals court “remanded her claim” to the trial court in San Francisco to “consider class certification under a different standard,” he said.

Wal-Mart lost a bid to dismiss a similar gender class action in California last month. U.S. District Judge Charles Breyer in San Francisco said a reduced class limited to California workers “could be certified.”

The women could pursue their claims as a group if they made a “showing consistent with the Supreme Court’s decision” that a nationwide class action isn’t appropriate, Breyer said.

The Texas case is Odle v. Wal-Mart Stores Inc., 3:11- cv-02954, U.S. District Court, Northern District of Texas (Dallas).

The California case is Dukes v. Wal-Mart Stores Inc., 01- cv-02252, U.S. District Court, Northern District of California (San Francisco). The Supreme Court case is Wal-Mart v. Dukes, 10-00277, U.S. Supreme Court (Washington).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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