Wal-Mart Stores, Inc. v. Dukes

Brief Fact Summary.

A small group of women sued Defendant, alleging discrimination on the basis of gender. The action was sought to be changed to a class action, with the certified class represented by the original small group of women who sued the company. This class was the largest ever class.

Synopsis of Rule of Law.

Class certification under FRCP 23(a) is improper if there is no common injury that may be resolved across the entire class.

Facts.

Dukes and several other Plaintiffs filed a class action against Defendant, alleging that the company’s policies resulted in nationwide discrimination against women in their employment (e.g., lower pay for women than men in the same type of job, and longer delays before women were promoted as compared to men employees). The class certification was done by the U.S. District Court for the Northern District of California which was satisfied that Plaintiffs fulfilled the statutory requirements of FRCP 23(a)(2) and 23(b)(2). The class had more than 1.5 million women, all of whom were female employees who were hired by Wal-Mart after December 26, 1998. Defendant argued that the court should require individual lawsuits from the employees as the size of the class made it impossible to manage and increased the costs disproportionately. The U. S. Court of Appeals, Ninth Circuit, upheld the class certification three times.

Issue.

Is class certification under FRCP 23(a) improper if there is no common injury that may be resolved across the entire class?

Held.

The court reversed the class certification, holding that the certification was not consistent with FRCP 23(a), which required the party seeking class certification to prove that the class has common questions of law or fact. Moreover, Plaintiff’s claims for backpay were improperly certified under FRCP 23(b)(2), because claims for monetary relief cannot be certified under that provision when the monetary relief is not incidental (i.e., directly resulted from) to the requested injunctive or declaratory relief.

Dissent.

Justice Ginsburg, Breyer, Sotomayor, Kagan

They concurred in part and dissented in part. They agreed that the class should not have been certified under FRCP 23(b)(2) since Plaintiffs sought non-incidental monetary relief in addition to injunctive or declaratory relief. However, they argued that the majority opinion confused the rules. FRCP 23(b)(3) might be applicable if Plaintiffs could show that: 1) the common issues of the class predominate over the individual issues such as questions regarding the individual’s monetary relief, and 2) the best adjudication mode in this case is a class action. This would need further consideration and decision by the Court and should not have been decided by the Supreme Court at that time. When the majority opinion of the Court refused to recognize the class certification citing the “commonality” issue under FRCP 23(a)(2), it confused FRCP 23(a)(2) with the determination categories of FRCP 23(b)(3) by bringing in the concept of dissimilarities in the class, which was properly cited under the latter rule.

Discussion.

Class certification under FRCP 23(a) is improper if there is no common injury that may be resolved across the entire class. Under FRCP 23(a)(2), plaintiffs are required to show that “there are questions of law or fact common to the class.” Commonality requires the plaintiffs to demonstrate that all class members have suffered the same injury. It is not sufficient simply to allege that the class has suffered a violation under the same statute. Instead, the claims must depend upon a common contention that may be resolved across the entire class. In General Telephone Co. v. Falcon, the Supreme Court held that probing beyond the pleadings is sometimes necessary before resolving the question of class certification and that certification is proper only if the court’s “rigorous analysis” reveals that FRCP 23(a)‘s prerequisites have been met. With respect to certification under FRCP 23(b)(2), claims for monetary relief may not be certified under this provision if the monetary relief is not incidental to injunctive or declaratory relief. FRCP 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. The provision does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. FRCP 23(b)(2) also does not authorize class certification if each class member would be entitled to an individualized award of monetary damages. The individualized claims belong instead in FRCP 23(b)(3), with the procedural protections of predominance, superiority, mandatory notice, and the right to opt out.

Here, Plaintiffs alleged that the discrimination handed down by Wal-Mart was suffered by all female employees. Proof of commonality overlapped with Plaintiffs’ contention that Wal-Mart engaged in widespread sex discrimination. While Plaintiffs were suing for millions of employment decisions at once, there was no significant proof that Wal-Mart operated under a policy of discrimination. On the contrary, Wal-Mart had an express policy in place that prohibited workplace discrimination. Therefore, the lower court improperly certified the class under FRCP 23(a). Additionally, the lower court improperly certified plaintiffs’ back-pay claims under FRCP 23(b)(2). Plaintiffs’ claim that their back-pay claims did not “predominate” over their claims for injunctive and declaratory relief is rejected because such an interpretation cannot be justified by the rule’s language. Accordingly, the judgment of the court of appeals is reversed.