Oral Argument in Wal-Mart v. Dukes: Class Certification Appears Unlikely as Justice Kennedy Raises Internal Inconsistencies in Plaintiffs’ Argument

Oral Argument in Wal-Mart v. Dukes: Class Certification Appears Unlikely as Justice Kennedy Raises Internal Inconsistencies in Plaintiffs’ Argument

by Arthur Silbergeld and Jessica Boar of Bingham McCutchen LLP

Counsel for Plaintiffs' time before the Supreme Court during oral argument on Tuesday morning probably felt more like years than an hour.  The Court pounded Plaintiffs' counsel with questions regarding the suitability of the litigation as a class and how, assuming a class was certified, back pay would be calculated for each class member.  Plaintiffs have maintained that Wal-Mart's policy gave local managers excessive discretion in pay and promotion decisions leading to widespread gender discrimination.  Some of the justices had difficulty with the notion that subjective decision making is actually a policy appropriate for class treatment.  Even those justices who seemed more accepting that a policy of decentralized decision making coupled with excessive subjectivity could be appropriate for a class action appeared troubled about how to calculate monetary damages for affected employees (lexis.com subscribers may access Supreme Court briefs for this case).

Justice Kennedy stressed that Plaintiffs' complaint is inconsistent, i.e., "faces in two directions."  He explained that first Plaintiffs say "this is a culture where Arkansas knows, the headquarters knows, everything that's going on" and then Plaintiffs "in the next breath . . . say, well, now these supervisors have too much discretion."  Scalia agreed,  saying he was getting "whipsawed" and asked Plaintiffs to decide" whether the individual supervisors are left on their own or whether there is a strong corporate culture that tells them what to do."  Plaintiffs argued that the managers are given discretion, but are told by the Company how to exercise the discretion.  Plaintiffs acknowledged that Wal-Mart has a policy against sex discrimination, but maintained that the written policy was not communicated to the managers.  As an example, in response to the question, "Why are women so underrepresented, or so few women in management?" at the Sam Walton Institute, where every manager is trained, the answer is that men seek advancement and are aggressive in doing so.  Scalia was quick, however, to respond that this explanation is just an assessment of why the percentage is different and that this does not tell managers not to promote women.  Scalia pointed out that statistically women at Wal-Mart did not fare any worse than women in the general population.  He challenged Plaintiffs as to whether they have sufficiently shown that Wal-Mart's policy is a "fraud" and "that's what's really going on is that there is a central policy that promotes discrimination against women."

Through their questioning, it appeared that the more liberal justices were inclined to find the Rule 23(a) standards satisfied on their face, but had questions regarding the appropriateness of the class proceeding under Rule 23(b)(2).  Justice Ginsburg emphasized that the advisory committee's notes explain that if dollars, i.e., damages, predominate, then Rule 23(b)(2) is not appropriate given that one half of the class (i.e., the former employees) is not interested in injunctive relief, but each potential class member is interested in damages.  Justice Breyer's questioning insinuated that the Court may be considering certifying a class for injunctive relief only pursuant to Rule 23(b)(2).  Justice Ginsburg was also concerned about how back pay would be calculated for each class member, assuming a class was certified.   Plaintiffs explained that back pay could be calculated by using a formula relying on Wal-Mart's internal database which contains information regarding performance, seniority and other job-related factors.  Plaintiffs explained that a formula would permit "precise comparisons in a way that individual hearings relying on hazy memories, post hoc rationalizations, does not."  Justice Kagan asked for an explanation of when a formula approach is preferable to individual hearings.  Plaintiffs said that the approach should be left to the district court, but that they do not maintain that a formula-like approach must always be used.  Justice Ginsburg challenged Plaintiffs, stating that she understood that because of the numbers there couldn't possibly be individualized back pay hearings.  Plaintiffs responded that individualized hearings would be "difficult" and Justice Ginsburg cut off Plaintiffs' counsel, stating that she thought the district court said, "impossible."  Justice Sotomayor asked Plaintiffs when Wal-Mart was going to have an opportunity to defend against the findings from the statistical model that would purportedly identify those women who should have received pay raises.  She questioned whether individualized hearings would result if Wal-Mart was given such a chance.  Justice Scalia opined that it is more reliable to have a hearing with evidence on the particular promotion or dismissal.  Plaintiffs argued that, because the allegedly discriminating pay decisions were standardless and recordless, a statistical analysis is sufficient and more appropriate than having managers come forward to "speculate about what they did 10 years earlier with no records to cross-examine them on."  Scalia questioned whether such an approach is "really due process" and sarcastically commented that perhaps the statistical model approach should be used in jury trials for "really old cases."

A decision is expected by June 2011.

Comments

Anonymous
Anonymous
  • 04-18-2011

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/.