Wal-Mart Stores, Inc. v. Dukes: Whither Class Actions?

Wal-Mart Stores, Inc. v. Dukes: Whither Class Actions?

In Wal-Mart Stores, Inc. v. Dukes, the Supreme Court ruled that a class in a massive gender discrimination case had been improperly certified under Federal Rule of Civil Procedure 23(b)(2), both because common questions were lacking under Rule 23(a)(2), and because the class had sought individualized monetary relief in addition to injunctive and declaratory relief.

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During the last few years, the Supreme Court has been extraordinarily active on the procedure front, with most of the Court's opinions creating procedural obstacles to plaintiffs, especially in the class action context. Wal-Mart Stores, Inc. v. Dukes, S. Ct. 2541, 180 L. Ed. 2d 374, 2011 U.S. LEXIS 4567 (June 20, 2011), continues this trend. There, the Supreme Court ruled that a class in a massive gender discrimination case had been improperly certified under Federal Rule of Civil Procedure 23(b)(2), both because common questions were lacking under Rule 23(a)(2), and because the class had sought individualized monetary relief in addition to injunctive and declaratory relief. The Court reversed a 6-5 en banc Ninth Circuit opinion that had affirmed the district court's certification of a nationwide class of a million and a half women. See Georgene Vairo on Dukes v. Wal-Mart Stores, Inc. [accessible by lexis.com subscribers], 2010 Emerging Issues 5306. The en banc Dukes opinion generated a vigorous debate about the appropriate scope of class actions in general and employment discrimination class actions in particular. Thus, it came as no surprise that the Supreme Court granted certiorari. That the Court reversed the class action determination came as no surprise either, but the sweeping nature of the opinion already has generated significant debate about the extent to which the Court has erected virtually insurmountable barriers to class certification. Moreover, while the Court split 5-4 on the commonality issue, it was surprisingly unanimous on the back pay issue.

Facts and Procedural Background. Both the district court and the Ninth Circuit had approved certification of a class action employment discrimination suit under Rule 23(b)(2). The plaintiff class comprised about 1.5 million women, current and former employees of the defendant, Wal-Mart. They alleged that local supervisors exercised their discretion over pay and promotion matters so as to illegally discriminate against female employees. The essential theory of their case was that Wal-Mart's strong and uniform "corporate culture" facilitated the stereotyping of women which, in turn, infected the discretionary decision-making of each of the defendant's managers, thereby making every woman at the company the victim of one common discriminatory practice. The class sought, in addition to injunctive and declaratory relief, an award of back pay.

Requirements for Certification. Under Rule 23(a), a class may be certified only if the party seeking certification shows that (1) the class is so numerous that joinder of all members would be 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. Additionally, the class must satisfy at least one of the three subsections of Rule 23(b). Here, the plaintiff class relied on Rule 23(b)(2), which applies when "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."

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