Alert
Alert
06.03.10
On April 26, 2010, a closely divided Ninth Circuit issued its long-awaited en banc decision in Dukes v. Wal-Mart Stores, Inc., an action on behalf of a nationwide class of female Wal-Mart employees alleging gender discrimination in violation of Title VII of the Civil Rights Act of 1965. The court’s decision affirming class certification has received widespread attention due partly to the size of the class—up to 1.5 million members—and the commensurately high potential damages. In the long run, however, by aligning the Ninth Circuit with a recent trend in the federal courts toward stricter scrutiny of class certification motions, Dukes should benefit defendants in many cases, especially cases outside the employment class action arena.
On the one hand, Dukes holds that district courts must consider and resolve factual disputes relating to whether the requirements for class certification under Federal Rule of Civil Procedure 23 have been met, even if those factual disputes also relate to (or “overlap” with) the merits of the case. While asserting that this had always been the rule under its own and Supreme Court precedent, the Ninth Circuit acknowledged that many district courts had misunderstood or failed to apply it. On the other hand, in affirming in large part the certification of a massive class, the Ninth Circuit said it would defer to class certification decisions of district courts that applied the governing standards properly. Five dissenting judges concluded that class certification was improper in Dukes because the plaintiffs had failed to present any significant proof that Wal-Mart had adopted a policy of discrimination applicable to all female employees nationwide, and because class certification would deny Wal-Mart its right to raise individual defenses to claims for back pay and punitive damages.
Background
The suit was filed in 2001 by six former and current Wal-Mart employees, alleging that the company systematically denied women workers equal pay and opportunities for promotion. The proposed class included all female Wal-Mart employees in some 3,400 stores. Only regional and national managers were excluded.
In June 2004, the district court granted class certification. After a three-member panel of the Ninth Circuit affirmed the district court’s ruling, the court granted Wal-Mart’s request for a rehearing before an 11-member en banc panel.
In a 6-5 decision, the en banc court affirmed the district court’s certification of a class of current Wal-Mart employees with respect to their claims for injunctive relief, declaratory relief, and back pay. The en banc court sent the case back to the district court for further findings with respect to these class members’ claims for punitive damages and claims of former Wal-Mart employees for back pay and punitive damages.
Download: Major Ninth Circuit Decision Sets Out Standards for Class Certification