"Class action" lawsuits have been tools for trial attorneys to extract enormous legal fees by suing and settling a case on behalf of thousands or millions of people who never hired the attorneys or approved the lawsuit. This is an exception to the general rule that lawsuits should typically be brought only by specific persons alleging specific injuries.

The lucrative power of a class action can be illustrated as follows. When one person is overcharged $10 by a large company, then the most he could recover in a lawsuit is $10. But if an attorney can sue in a class action on behalf of a million people who were overcharged $10 apiece, then he might recover $10 million in damages and take a large fraction of that as his legal fee. Often class actions are brought by liberal attorneys who plow some of their windfall back into campaigns for liberal politicians, such as Obama for president.

On June 20, 2011, the U.S. Supreme Court rejected the mother of all class actions, a gender discrimination lawsuit consisting of a class of 1.5 million women who now or formerly worked for Wal-Mart, the giant retailer. Allegations of gender discrimination by only one employee would not involve enough money to make it a profitable case. But in "one of the most expansive class actions ever," a lawsuit alleged gender discrimination on behalf of all present and former female employees of Wal-Mart. Wal-Mart Stores v. Dukes, 180 L. Ed. 2d 374 (2011). This lawsuit sought back pay, which could have totaled billions of dollars for such a large class.

By a 9-0 margin, the Court struck down such a massive and diverse class, and by a 5-4 margin the Court restricted the use of class actions in federal court. The conservative Justices took the opportunity presented by this over-the-top class action to clarify and curtail when class-action lawsuits will be allowed.

The Court held that a class action for gender discrimination will be permitted only when there is a common answer for each employee "to the crucial question why I was disfavored." Put another way, "There must be a single cause of the discrimination which can be litigated in one case. . . . Their claims must depend upon a common contention. . . ."

Wal-Mart's decentralized structure helped save it from this billion-dollar lawsuit. The company allows local managerial discretion in promotions, which the plaintiffs claimed promotes discriminatory practices. But the Court saw the reverse: Wal-Mart's actual practice is precisely "the opposite of a uniform employment practice that would provide the commonality needed for a class action."

The strength of this Wal-Mart decision could shut down other employment-based class action lawsuits against big companies. Individuals can still sue for particularized damages, but much of the racket of massive class actions for alleged employment discrimination may now be mercifully eliminated.