Wal-Mart v. Dukes: The Supreme Court Slams the Door on Nationwide Class Action

Wal-Mart v. Dukes: The Supreme Court Slams the Door on Nationwide Class Action

By Arthur Silbergeld and Jessica Boar

Article: On June 20, 2011, the Supreme Court reversed the Ninth Circuit's decision in Dukes v. Wal-Mart, a death knell for one of the most expansive class actions in history. It would have included approximately 1.5 million current and former female Wal-Mart employees who claimed gender discrimination under Title VII of the Civil Rights Act of 1964.

In December 2010, the Court granted Wal-Mart's petition for certiorari. It agreed to hear Question I presented by the petition: "Whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2) and if so, under what circumstances," and fashioned its own second question for the parties to brief: "Whether the class certification ordered under Rule 23(b)(2) was consistent with Rule 23(a)."

Background: Federal Rule of Civil Procedure 23(b)(2) permits a class to be certified where "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." While the statutory language does not address the possibility of monetary relief, the Advisory Committee's notes on Rule 23(b)(2) state that Rule 23(b)(2) "does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages."

The meaning of this standard is critical, because certifying a class pursuant to Rule 23(b)(2) is less expensive, time-consuming and simpler than tackling the Rule 23(b)(3) requirements.

Unlike Rule 23(b)(3), Rule 23(b)(2) does not require notice to members of the class to give them the opportunity to "opt out" and be excluded from the class (although the district court in Dukes allowed such an option for class members seeking punitive damages). This raises due process concerns, as all individuals in the class are automatically bound by a court's decision and do not have the opportunity to individually pursue their own claims. Moreover, plaintiffs do not have to demonstrate that questions of law or fact predominate and that a class action is the superior means of resolving their dispute. Rather, they simply have to satisfy the factors of Rule 23(a)(1): that (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

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Arthur F. Silbergeld is an employment litigation partner in the Santa Monica and Los Angeles offices of Bingham McCutchen LLP. Mr. Silbergeld counsels employers in all aspects of employment law, and defends clients in wage and hour class action and individual wrongful termination, discrimination, disability, and harassment litigation. A Fellow of The College of Labor & Employment Lawyers, he has extensive bench and jury trial experience in federal and California courts. He can be reached at arthur.silbergeld@bingham.com or (310) 255-9077.

Jessica S. Boar is an employment litigation counsel in the Santa Monica and Los Angeles offices of Bingham McCutchen LLP. Ms. Boar counsels and represents employers in all aspects of employment law, including discrimination and harassment, wage and hour issues, and restrictive covenants and trade secrets. She may be contacted at jessica.boar@bingham.com or (310) 255-9067.