The U.S. Supreme Court ruling in Wal-Mart Stores, Inc. v. Dukes revoked class certification from what would have been one of the largest gender bias cases and most expansive class actions of its kind. More than 1.5 million female Wal-Mart workers claimed sex discrimination under Title VII of the Civil Rights Act of 1964, alleging that supervisors at the nation’s largest retailer frequently denied promotional and pay increases to women employees based on a corporate culture that enabled stereotyping of female workers. The high court majority determined that the Ninth Circuit U.S. Court of Appeals improperly affirmed a district court’s certification of the class, finding that the commonality requirements of Federal Rule of Civil Procedure 23(a)(2) were lacking and that the class improperly sought individualized monetary damages under Rule 23(b)(2) in addition to injunctive and declaratory relief.
Background And Timeline
On June 8, 2001, Betty Dukes and six other women filed suit against Wal-Mart in the U.S. District Court for the Northern District of California, seeking to represent a class of more than 1.5 million female employees at 3,400 Wal-Mart stores across the United States; they claimed that the retailer made discriminatory decisions based on gender in determining female employees' pay and eligibility for promotions and sought billions of dollars in damages. (See 1-8 Mealey's Litig. Rep. Class Actions 13 (2001).)
On June 22, 2004, U.S. Judge Martin Jenkins of the Northern District of California certified a class of all current and former employees of Wal-Mart who worked at its U.S. stores at any time since Dec. 26, 1998. (See 1-1 Mealey's Litig. Rep. Employ. L. 2 (2004).)
On Dec. 11, 2007, a Ninth Circuit U.S. Court of Appeals panel limited the class to exclude workers who were not employed by Wal-Mart when the plaintiffs filed their first amended complaint on June 19, 2001. (See 4-6 Mealey's Litig. Rep. Employ. L. 4 (2008).)
On April 26, 2010, in a 6-5 vote, the Ninth Circuit U.S. Court of Appeals allowed the gender bias suit to proceed as a class action. (See 6-10 Mealey's Litig. Rep. Employ. L. 1 (2010).)
On Aug. 25, 2010, Wal-Mart petitioned the U.S. Supreme Court to review the class certification decision. (See 7-2 Mealey's Litig. Rep. Employ. L. 1 (2010).)
On Dec. 6, 2010, the justices granted certiorari and agreed to hear Wal-Mart’s appeal. (See 10-20 Mealey's Litig. Rep. Class Actions 1 (2010).)
Oral arguments were held March 29, 2011. (See 7-9 Mealey's Litig. Rep. Employ. L. 1 (2011).)
On June 20, 2011, the U.S. Supreme Court reversed certification, finding that it was not consistent with Federal Rule of Civil Procedure 23(a). (See 7-12 Mealey's Litig. Rep. Employ. L. 1 (2011).)
The Supreme Court Ruling
The Supreme Court focused on the commonality requirement of Federal Rule of Civil Procedure 23(a)(2), holding that the plaintiffs failed to satisfy that requirement for certifying class claims. In deciding to decertify the class, Justice Antonin Scalia wrote:
"Rule 23(a)(2) requires a party seeking class certification to prove that the class has common 'questions of law or fact.' Their claims must depend upon a common contention of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. Here, proof of commonality necessarily overlaps with respondents' merits contention that Wal-Mart engages in a pattern or practice of discrimination. The crux of a Title VII [of the Civil Rights Act of 1964] inquiry is 'the reason for a particular employment decision, Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867,876, and respondents wish to sue for millions of employment decisions at once. Without some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members' claims will produce a common answer to the crucial discrimination question."
In addition to strictly interpreting the commonality requirement, the justices determined that claims for back pay were improper within the context of Federal Rule of Civil Procedure 23(b)(2), noting that the rule does not authorize certification when each member of the class would be entitled to an individualized monetary award.
In the wake of the Supreme Court decision, the plaintiffs have been trying to resurrect the case on a reduced scale. Multiple similar complaints have been filed encompassing smaller classes of Wal-Mart employees, including an amended complaint seeking to represent only female Wal Mart employees in California. (See 11-17 Mealey's Litig. Rep. Class Actions 20 (2011).) The complaint, filed Oct. 27, 2011, estimates injunctive relief and monetary relief classes of approximately 45,000 members each.
The impact of class certification standards set out in Wal-Mart v. Dukes is already being seen nationwide. In Margarita Rosales, et al. v. El Rancho Farms, a California district court applied the commonality test when denying class certification, holding that "contradictory evidence and dissimilarities defeat a finding that there is a commonality of claims in the remaining classes, because the court cannot find there would be common answers that are capable of classwide resolution.” Similarly, another California district court declined to certify a proposed class of phone company workers in Aburto v. Verizon California, Inc., finding that the common questions of the case could not be resolved based on the same facts. A New Jersey district court, applying the same standard in another gender discrimination case, Carol Bell v. Lockheed Martin, Corp., determined that claims by current and former female company workers did not meet the class certification standards set out in Wal-Mart v. Dukes. Minority firefighters in Washington, D.C., were also denied class certification of their discipline and promotional discrimination suit when the same test was applied to determine that the plaintiffs were unable to sufficiently prove commonality in Gerald Burton v. District of Columbia.
In several recent decisions, including Olmedo Espinoza and Tomas Lopez v. 953 Associates LLC, and Katharine Bush, et al. v. Ruth's Chris Steak House, courts applied the Wal-Mart v. Dukes commonality standard when deciding that classes of restaurant workers should be certified.