Much has been written about the 6:5 en banc decision of the Ninth Circuit in Dukes v Wal-Mart Stores.pdf, 605 F.3d 571 (9th Cir. 2010), in which a deeply divided court affirmed the certification of the largest employment class action in history. Among many other things, the court appeared to give little weight to serious manageability issues, inexplicably relaxed the Daubert standards for expert witnesses in the certification context, and permitted the plaintiffs to rely upon paradoxical theories that combined nondiscriminatory centralized policies with a statistically insignificant sampling of isolated individual reports.
On August 25, 2010 Wal-Mart petitioned the United States Supreme Court for certiorari. While the petition.pdf cites many of the problems with the decision of the Ninth Circuit majority, its request focuses on two issues.
First, it asks the Court to accept cert. to resolve a three-way split among the Circuits regarding the appropriate interplay between Rules 23(b)(2) and 23(b)(3). Plaintiffs frequently seek to combine the two to obtain a more easily manageable class as in the case of 23(b)(2) and yet still recover punitive damages and other highly individual monetary relief as would be the case under 23(b)(3), even though the requirements of neither Rule is met. The Ninth Circuit in Dukes suggested that such an approach might be available, while most courts, most notably the Fifth and Eleventh Circuits have rejected it as being inconsistent with the Rules themselves. The Second Circuit, curiously, has adopted an approach that looks at the plaintiffs’ subjective intent in bringing the suit. This issue alone is cert-worthy.
Wal-Mart’s second issue will have broader application, however, and is the reason why the case should be accepted for review. Wal-Mart’s obvious defense to the claims is to demonstrate that its decisions in each of the challenged instances were motivated by legitimate, non-discriminatory reasons. Put another way, its case is that if the finder of fact looks at the circumstances surrounding each individual decision, it will be apparent that reasons other than gender motivated the decision. The lower courts, however, have barred Wal-Mart from asserting that defense because it would simply take up too much time and would not be “feasible” in the class action context. The net result of the District Court and Ninth Circuit’s decision will be that the plaintiffs will be able to use their strongest evidence (some broad-brush statistics), while Wal-Mart cannot use the overwhelming bulk of its case.
Wal-Mart’s petition rightly refers to this as “stripping” its defense. If it is not “feasible” for a class action to accomodate the defense (or, for that matter, the plaintiffs’ own claims), then the case should never be certified. No party should be forced to sacrifice its evidence to accomodate the convenience of a class.
Underlying this dispute, as well as the similar controversy over whether employment arbitration agreements MUST provide for class action treatment, is a fundamental disagreement over whether a class action is somehow a substantive right. Some courts, most notably the Ninth Circuit, seem to believe it is, while most others appear to recognize that a class is simply one of many procedural vehicles, and should only be applied where provided for and where it will not interfere with the parties’ presentation of their claims and defenses.
The bottom line: The Dukes decision crossed several lines by certifying the class at the expense of the employer’s defenses. The Supreme Court should accept certiorari and reverse.