California Labor & Employment Law Blog

The Ninth Circuit Court of Appeals recently handed down its much-anticipated opinion in Dukes v. Wal-Mart. In a 2-1 decision, the majority of the panel approved the lower court’s decision to certify a sex discrimination class action by 1.5 million women against Wal-Mart.

The certified class included all current and former female employees who worked for Wal-Mart during the relevant statute of limitations. Neither the lower court nor the Ninth Circuit made any attempt to address whether these discrimination claims might have merit. Rather, the only issue at stake was purely procedural -- i.e., whether the case could be tried as a single class action despite the different facts involved in proving whether each particular woman was truly a victim of discrimination.
Under Rule 23 of the Federal Rules of Civil Procedure, class certification depends mainly on whether the “common issues” shared by the plaintiffs outweigh the differences in their respective cases. But the majority opinion in Dukes appears to significantly lower the standard of “commonality” necessary to obtain class certification for large and diverse groups of plaintiffs.

For example, to the extent that Wal-Mart promulgated centralized personnel policies and procedures, the majority found that these supported a finding of “commonality.” Yet, to the extent Wal-Mart lacked such centrally imposed policies, the majority held that that, too, was evidence of “commonality” -- because it demonstrated a “common” policy of permitting subjective decisions by local managers. Predictably, Wal-Mart had no way of escaping this logical Catch-22.
In his dissenting opinion, Judge Kleinfeld issued a sharp criticism of the majority’s decision. As Judge Kleinfeld wrote:

This class certification violates the requirements of Rule 23. It threatens the rights of women injured by sex discrimination. And it threatens Wal-Mart's rights. The district court's formula approach to dividing up punitive damages and back pay means that women injured by sex discrimination will have to share any recovery with women who were not. Women who were fired or not promoted for good reasons will take money from Wal-Mart they do not deserve, and get reinstated or promoted as well. This is “rough justice” indeed. “Rough,” anyway. Since when were the district courts converted into administrative agencies and empowered to ignore individual justice?

The Ninth Circuit may decide to grant en banc review. Moreover, the United States Supreme Court will no doubt have an opportunity to weigh in by granting certiori at the conclusion of the Circuit Court proceedings. Given the size and scope of the issues involved and Wal-Mart’s demonstrated preference for fighting rather than settling high-profile litigation, this will probably not be the last word on the Dukes case.