June 21st, 2011 | Lisa Milam-Perez
On Monday, June 20, the U.S. Supreme Court issued its eagerly anticipated opinion in Wal-Mart v Dukes, holding that the Ninth Circuit erred in certifying a massive class action sex discrimination suit against Wal-Mart. Will Anthony, chair of Jackson Lewis’ Class Action and Complex Litigation Practice Group and member of the CCH Employment Law Daily Advisory Board, offered a practitioner’s analysis of the landmark ruling from a management perspective:
“Today the Supreme Court signaled the end to the proliferation of discrimination class actions that followed the Ninth Circuit’s ruling in Dukes v Wal-Mart. The clarity the Court provided to Rule 23 in the context of employment claims is good news for employers. The Court noted that class actions are the exception to the rule of individual litigation and that Rule 23 requirements effectively limit class claims to those fairly encompassed by the named plaintiff’s claims. Within that framework, the Court found the plaintiffs failed to meet the commonality requirements of Rule 23(a)(2) because the plaintiffs failed to demonstrate that class members ‘suffered the same injury’ under Title VII. The Court held that Rule 23 is not a mere pleading standard; rather, it imposes on the party seeking class certification an affirmative obligation to demonstrate beyond the pleadings, and even touching the merits of the claim, that common violations of the statute tie the class together. While the dissent argued that the Court’s analysis was more applicable to the ‘predominance’ requirement of Rule 23(b)(3), the majority considers the issue to be a threshold one.
“While the plaintiffs attempted to tie the class together by showing a policy of allowing local managers to make employment decisions, the Court found that ‘[O]n its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action.’ In rejecting the ‘social framework’ theory advance by plaintiffs’ expert, the Court noted that the theory does nothing to advance plaintiffs’ case, as their expert could not calculate whether 0.5 or 95 percent of employment decisions at Wal-Mart might be determined by stereotyped thinking. The Court also rejected plaintiffs’ anecdotal evidence as being far short of reliable since it was from so few members of the putative class.
“Finally, the Court rejected plaintiffs’ statistical analysis, as it focused on national and regional statistics and not on local statistics. More importantly, the Court said that even the local statistics would not be enough, as plaintiffs first must identify a specific employment practice that is challenged and apply the statistics to that practice. In short, the Court rejected plaintiffs’ arguments that a combination of statistics, anecdotal evidence, and a social framework argument are sufficient to glue together a national class.
“The Court also unanimously held that Rule 23(b)(2) does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant or when each class member would be entitled to an individualized award of money damages. Instead, the Court held that when seeking individual money claims, they must do so under Rule 23(b)(3).
“While the Court makes clear that certifying discrimination class actions is still possible, it is extremely limited. Significantly, the ruling makes clear that the current wave of discrimination class actions that rely largely on vague allegations, anecdotal evidence by individuals working in disparate locations, for disparate decision-makers, in disparate periods of time, and with disparate legal claims cannot be tied together with broad-brushed claims of statistical analysis and social framework theories. In other words, the bar was set back to where the Rule envisioned it when it created this exception to individual litigation.”