Merrill Lynch v. McReynolds, et al.

Case Updates

NCLC urged the U.S. Supreme Court to reject an effort by the plaintiffs to evade federal class certification requirements, and the Supreme Court’s recent decision in Wal-Mart Stores, Inc. v. Dukes, by proposing certification of a single issue for class treatment, rather than seeking class treatment of all issues in the case.

In this case, a putative class of financial advisors alleged that two corporate policies resulted in unlawful disparities in their pay, in violation of Title VII. A district court rejected certification, and on appeal, the U.S. Court of Appeals for the Seventh Circuit acknowledged that the substance of this case is much the same as Dukes. Nonetheless, the court thought it could reach a different result by ordering the district court to certify a single “issue” for class treatment: plaintiffs’ theory that the defendant’s employment policies have a disparate impact on African-American financial advisers.

NCLC’s amicus brief argued that the Seventh Circuit’s endorsement of “issues classes” is inconsistent with federal class certification requirements, violates the Seventh Amendment, and functions as an open invitation for plaintiffs’ attorneys across the country to bring class actions that otherwise could not be certified. If allowed to stand, the Seventh Circuit’s backdoor approach to circumventing Rule 23 thus has the potential to dramatically and unfairly increase the exposure all companies to “bet-the-business” class actions.