Ninth Circuit Affirmed WalMart Female Employee Class Certification

Ninth Circuit Certifies Class of 1.5 Million Female Employees to Pursue Title VII Discrimination Lawsuit Against Wal-Mart – Wal-Mart Responds with Cert. Petition.

Wal-Mart, reportedly the world’s largest, private employer, has a written policy barring discrimination based upon gender, but that did not prevent six putative class action plaintiffs from suing the world’s largest retailer. Plaintiffs alleged that Wal-Mart engaged in a company-wide policy discriminating against women by paying women less or promoting them less often than men. The alleged corporate policy was not created in the usual manner by dictating pay or hiring decisions from above. Instead, store managers were allegedly given “excessive discretion” to hire, fire or promote employees based upon subjective criteria with limited guidance or oversight. This culture, according to plaintiffs’ experts, created a social framework that sustained bias and gender stereotypes. Based upon declarations, statistical and other expert evidence, the District Court for the Northern District of California, located in San Francisco, certified a class under Rule 23(b)(2) consisting of women who worked at any of 3,400 Wal-Mart domestic retail stores at any time since December 1998. The class action complaint sought injunctive relief, back pay and punitive damages. On April 26, 2010, the Ninth Circuit Court of Appeals affirmed the class certification in a 6-5 opinion entitled Dukes v. Wal-Mart Stores, Inc., 603 F. 3d 571 (9th Cir. 2010).

With a name like Dukes, you expect something larger than life. You will not be disappointed. The class size in Dukes is breathtaking with an estimated 1.5 million present and former employees in the class. If you are not impressed by numbers alone, consider the observation in Wal-Mart’s subsequent Petition for a Writ of Certiorari: the Dukes class is greater in size than all the active duty personnel in the U.S. Army, Navy, Air Force, Marines and Coast Guard combined! That a single employer has this many present and former female employees is, by itself, difficult to grasp. That all of them would be joined into a single class action is beyond comprehension.

Acknowledging that individual class members worked at different Wal-Mart stores for different managers, received different levels of pay or were promoted (or denied promotion) at different rates, the Court of Appeals was not persuaded that these differences militated against class certification. Nor was the majority troubled that the proposed class included female managers who were allegedly responsible for the discriminatory decisions. As the dissent bluntly observed, the majority opinion created the disturbing situation where the “victims and their alleged victimizers” would sit at the same counsel table as members of the same class. 

The Dukes court theorizes that the several circuit court opinions announcing class certification standards are, in reality, just different words to express the same result. But having said so, the Dukes court goes on to disprove its own hypothesis. Theory and reality diverge on the important question of what it means to “find” that Rule 23 requirements are actually met. To appreciate the difference, the Third Circuit opinion in Hydrogen Peroxide Antitrust Litigation offers a good comparison. The Third Circuit held that it is not enough to merely support each Rule 23 element with some evidence. For instance, the fact that plaintiffs offer admissible expert opinion addressing a Rule 23 requirement is not enough. The judge must weigh that expert opinion against other conflicting evidence on the same point. Then, after considering all the evidence, the district judge must conclude that the Rule 23 criteria was established by a preponderance of the evidence. Under this approach, the district judge weighs conflicting expert opinions, resolves the dispute and chooses between them. In contrast, the Dukes court said that it was enough that [plaintiffs’ expert] presented scientifically reliable evidence tending to show a common question of fact. The Dukes opinion implies that the only finding necessary is whether the plaintiffs have presented admissible evidence tending to show the Rule 23 criteria without regard to whether that evidence constitutes a preponderance of the evidence, e.g., whether it is more or less persuasive than conflicting evidence on the same point. Under Dukes, a “finding” is something less than weighing all the evidence both pro and con and concluding that the totality of evidence demonstrates the Rule 23 criteria to have been met. 

The Dukes court also set a new standard for Rule 23(b)(2) class certifications- to decide if monetary relief predominates over injunctive relief, the district court should consider the “objective effect of the relief sought on the litigation.” Literally speaking, Rule 23(b)(2) authorizes class actions seeking declaratory and injunctive relief, but it says nothing about monetary damages. Actions seeking monetary damages are typically brought as Rule 23(b)(3) class actions, but the Dukes Plaintiffs did not allege (b)(3) certification; presumably because they could not show class questions would predominate given that monetary damage claims (and defenses) would vary from person to person. One of the principal questions raised in Wal-Mart’s certiorari petition is whether Rule 23(b)(2) is amenable to class actions seeking monetary damages. Another component of the Rule 23(b)(2) dispute is that a significant number of putative class members are former Wal-Mart employees. As former employees, they could not benefit from an award of injunctive relief and therefore lacked standing to seek the remedy authorized in Rule 23(b)(2). Though the Dukes majority conceded former employees were ineligible for the proposed class, the opinion purported to solve that conundrum by remanding to the district court to consider certification of a separate class under Rule 23(b)(3).

To no one’s surprise, given the 3-way circuit split on the Rule 23(b)(2) standard, on August 25, 2010, Wal-Mart filed a petition for writ of certiorari with the Supreme Court of the United States. (Case no. 10-277). A response to the petition for writ of certiorari is due on October 25, 2010.
 

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Posted in Articles, Employee/Labor Claims, Rule 23 Compliance Issues
One comment on “Ninth Circuit Affirmed WalMart Female Employee Class Certification
  1. Chris says:

    The Seattle University Law Review published an excellent discussion of this case and of class action certification in its last issue. You can download the article at http://lawpublications.seattleu.edu/sulr/vol34/iss2/7/.

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