Supreme Court Reverses Class Certification in Dukes v. Wal-Mart
Today the United States Supreme Court handed down its decision in Dukes v. Wal-Mart, holding that discrimination claims on behalf of some 1.5 million female Wal-Mart employees could not properly be pursued as a class action. The case challenges Wal-Mart's promotion and pay practices. Pay and promotion decisions are generally committed to the discretion of local managers, whom the plaintiffs claim exercise that discretion in a manner that favors male employees. The U.S. District Court of the Northern District of California certified the case as a class action, and the Ninth Circuit substantially affirmed. Today the Supreme Court reversed the Ninth Circuit's ruling and found that class treatment was not appropriate. Justice Scalia delivered the opinion of the Court.
In holding that class treatment was not appropriate, the Court began with the requirement set forth in Federal Rule of Civil Procedure 23 (a)(2) that in order for a class to be maintained, there must be questions of fact or law that are common to the class. The Court explained that"commonality” requires the plaintiff to demonstrate that class members have suffered the same injury, and that this injury depends upon a “common contention—for example, the assertion of discriminatory bias on the part of the same supervisor.“The Court further explained: “That common contention, moreover, must be of such a nature that it is capable of class wide 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.” According to the Court, what matters to class certification is not the mere existence of common questions, but rather “the capability of a class wide proceeding to generate common answers apt to drive the resolution of the litigation.“Dissimilarities among proposed class members may preclude such common answers.
Addressing the specifics of the class before it, the Court noted that the plaintiffs seek to sue"about literally millions of employment decisions at once.” “Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer to the crucial question why was I disfavored?” The Court explained that in discrimination cases, this generally requires a showing of a discriminatory policy or practice of discrimination, e.g. use of a biased testing procedure. The Court held that there was no such evidence of a company wide policy or practice of discrimination on the part of Wal-Mart. Instead, the evidence showed that Wal-Mart allowed local managers to exercise subjective discretion over pay and promotions, which is the exact opposite of a uniform policy or practice. The Court reasoned that one manager's discretion may not be exercised using the same criteria or reasoning as any other manager, and the reasoning behind the decision-making is the crux of proving discrimination. As such,a class proceeding would not generate “common answers"applicable to the whole class.
The Court separately addressed the plaintiffs' contention that a class could be certified under Rule 23(b)(2) because the plaintiffs sought injunctive and declaratory relief against Wal-Mart and their claims for back pay were, according to plaintiffs, “incidental” to their request for injunctive relief.A unanimous Court rejected this argument, holding that claims for individual monetary relief such as those before the Court, could not be certified under the injunctive relief provisions of 23(b)(2).
Today's Dukes v. Wal-Mart decision is a positive development for employers fighting employment claims sought to be pursued as class actions.