The Sprawling Class Action After Dukes v. Wal-mart: Unsettled Questions
| Publication year | 2011 |
| Pages | 49 |
2011, May, Pg. 49. The Sprawling Class Action After Dukes v. Wal-Mart: Unsettled Questions
May 2011
Vol. 40, No. 5 [Page49]
Labor and Employment Law articles are sponsoredby the CBA Labor and Employment Law Section to present current issues and topics of interest to attorneys, judges, and legal and judicial administrators on all aspects of labor and employment law in Colorado.
Coordinating Editor
John M. Husband, Denver, of Holland and Hart LLP-(303) 295-8228, jhusband@hollandhart.com
About the Authors
John M. Husband is the Chair of Holland and Hart, LLP's Management Committee. He is a Fellow of the College of Labor and Employment Lawyers, and has a nationally recognized practice and extensive experience in nationwide class and collective actions. Bradford J. Williams is an associate in Holland and Hart, LLP's Denver office. He is a member of the firm's Labor and Employment Practice Group, and has extensive experience counseling employers and assisting in labor and employment litigation.
This article surveys unsettled questions under the federal class action device on the cusp of one of the most highly anticipated employment law and class action decisions in decades. It suggests how the U.S. Supreme Court may use Dukes v. Wal-Mart as a vehicle to clarify Rule 23(a) and (b) prerequisites and to address various outstanding evidentiary issues affecting the certification of sprawling class actions.
In the most anticipated employment case to be reviewed in the past decade, the U.S. Supreme Court soon will determine class action issues that will set the course for the future of high-profile, high-stakes cases broughtby thousands (if not millions) of employees against U.S. companies. As employment law practitioners and class action litigators anxiously await this decision, speculation abounds regarding the unsettled questions the Supreme Court may resolve with respect to the Federal Rule of Civil Procedure (Rule) 23 class action device.
This article surveys various unsettled legal questions regarding Rule 23 class certification, and suggests how such questions may intersect with the Ninth Circuit's en banc decision currently under review. Following the Supreme Court's decision in Dukes-widely anticipated to be handed downby late June 2011-the authors of this article will publish a follow-up article in The Colorado Lawyer analyzing the Dukes decision and describing its anticipated effects on employers and class action litigators.
Overview
On December 6, 2010, the U.S. Supreme Court granted a petition for certiorari in Dukes v. Wal-Mart, a case portending the largest-ever employee class to be certified against a private employer.(fn1) Originally filed in 2001, Dukes is a sprawling sex discrimination lawsuit broughtby current and former Wal-Mart employees, alleging that the company pays women less than men in comparable positions and engages in discriminatory training, assignment, and promotion practices.(fn2) As most recently endorsedby the Ninth Circuit,the Dukes classcomprises between 500,000 and 2 million current and former Wal-Mart employees, and could expose the company to billions of dollars in potential damages.(fn3)
Dukes both reflects and magnifies a growing trend toward high-profile, high-stakes employment class actions brought against large U.S. companies. Indeed, just one week before the Supreme Court granted certiorari in the case, a federal district court in New York approved a $175 million settlement in a sex discrimination class action filed against Novartis Pharmaceuticals.(fn4) This settlement followed an earlier jury verdict awarding a quarter billion dollars in punitive damages.(fn5)
In fact, the list of private employers recently settling employment class actions in the tens-or even hundreds-of millions of dollars reads like a who's who of Fortune 500 companies: Coca-Cola ($192.5 million);(fn6) Texaco ($176 million);(fn7) Microsoft ($96.9 million);(fn8) Smith Barney ($98 million);(fn9) Abercrombie and Fitch ($50 million);(fn10) Home Depot ($65 million);(fn11) Staples ($38 million);(fn12) Morgan Stanley ($46 million);(fn13) Sprint/Nextel ($57 million);(fn14) IBM ($65 million);(fn15) UPS ($87 million);(fn16) and Albertsons ($53.5 million).(fn17) Whether such enormous employment class actions actually satisfy Rule 23's strict procedural requirements is the central question at the heart of the Dukes v. Wal-Mart litigation.
Rule 23 Class Actions
Rule 23 outlines various requirements that must be satisfied before a court may certify a plaintiff class.(fn18) Plaintiffs pursuing certification must satisfy each requirement in Rule 23(a), and must show that their case falls within one of three categories provided in Rule 23(b).(fn19)
Rule 23(a) Prerequisites
Rule 23(a) provides that one or more members of a class may sue as representatives of the class if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.(fn20) These four requirements are commonly referred to as numerosity, commonality, typicality, and adequate representation.
Pre-Dukes Application of Rule 23(a)
Before Dukes, the Supreme Court and many federal circuit courts stressed the importance of strict compliance with Rule 23(a) prerequisites, even in large-scale employment class actions. For instance, in General Telephone Company of the Southwest v. Falcon, the Court held that a class action alleging employment discrimination, "like any other class action, may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied."(fn21) The Court further emphasized that simply alleging a discriminatory employment practice will not satisfy Rule 23(a) requirements.(fn22) Instead, as the Court noted, "[i]f one allegation of specific discriminatory treatment were sufficient to support an across-the-board attack, every Title VII case would be a potential companywide class action."(fn2)3
Numerous circuit courts have echoed this belief, finding large-scale employment class actions too unwieldy to satisfy the Rule 23(a) prerequisites of commonality and typicality. For instance, in Reeb v. Ohio Department of Rehabilitation and Correction, the Sixth Circuit reversed the district court's certification of a class of more than 100 female corrections officers raising allegations of disparate treatment.(fn24) Quoting Falcon, the court stated that plaintiffs raising Title VII sex discrimination claims must present "significant proof" that their employer operated under a general policy of gender discrimination that manifested itself in the same general way as to the types of discrimination alleged.(fn25) As such, the court noted that a "general policy of discrimination is not sufficient to allow a court to find commonality or typicality."(fn26)
Similarly, in Cooper v. Southern Company, the Eleventh Circuit affirmed a district court's denial of certification to a class of 2,400 power company employees from four states alleging racial discrimination.(fn27) In affirming this denial, the court focused on typicality and commonality, noting that:
the compensation and promotion decisions affecting each of the named plaintiffs were madeby individual managers in disparate locations, based on the individual plaintiffs' characteristics, including their educational backgrounds, experiences, work achievements, and performance in interviews, among other factors.(fn28)
The court also noted that in cases involving "employees working in widely diverse job types, spread throughout different...
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