Class Action Certification

Respondent Betty Duke and other female employees sued Wal-Mart, alleging sexual discrimination pursuant to Title VII of the Civil Rights Act of 1964.  The respondents claimed that Wal-Mart’s policy of allowing regional and district managers to use their discretion in making pay and promotion decisions has led to an unlawful disparate impact on female employees.  The claim also alleged that, because Wal-Mart was aware of the disparate impact, its failure to restrain the abuse amounts to disparate treatment.  Representing 1.5 million members of the certified class, the named respondents sought injunctive and declaratory relief, punitive damages, and backpay. 

The respondents moved the U.S. District Court for the Northern District of California to certify a plaintiff class consisting of all women employed at any Wal-Mart retail store since December 1998 who have been or may be subjected to Wal-Mart’s challenged pay and promotion policy.  Seeking to satisfy the standards of class certification set forth in Federal Rule of Civil Procedure 23, the respondents provided statistical evidence, anecdotal reports, and the testimony of a sociologist as evidence that there were questions of law or fact common to all the women.  The District Court granted the motion and certified the proposed class.  The Ninth Circuit Court of Appeals substantially affirmed. 

In Wal-Mart Stores v. Dukes (10-277), the Court reversed, holding that the class certification was inconsistent with Federal Rule of Civil Procedure 23(a), and that the respondents could not claim backpay under Rule 23(b)(2).  Justice Scalia – joined by Chief Justice Roberts and Justices Kennedy, Thomas, and Alito – concluded that the class members had failed to present sufficient evidence to demonstrate the commonality required by Rule 23(a)(2).  Decisively rejecting the “social framework” analysis offered by the sociological expert – which sought to demonstrate a “strong corporate culture” causing gender bias to affect all managers at Wal-Mart – the Court held that evidence demonstrating a common mode of exercising discretion (a “specific employment practice”) throughout the entire company was necessary to establish the requisite commonality for class certification.  The statistical evidence offered failed to meet this standard, according to the Court, because it only showed regional and national-level disparities, not the requisite “store-by-store disparity.”  Even if such store-by-store disparity had been shown, the Court held, evidence of a “specific employment practice” tying all the claims together would also have been necessary.  The anecdotal evidence offered was rejected because it showed only small numbers of incidents relative to the size of Wal-Mart, and was geographically non-representative. 

Justice Ginsburg, joined by Justices Breyer, Sotomayor and Kagan, concurred in part and dissented in part.  Agreeing with the majority that the class should not have been certified under Rule 23(b)(2), Justice Ginsburg nevertheless concluded that Rule 23(a)(2)’s commonality threshold had been met by Wal-Mart’s uniform policy of delegating discretion.  She argued that the majority had inappropriately second-guessed factual determinations made by the lower courts, and had improperly imported standards from Rule 23(b)(3) – requiring some “decisive similarity” across the proposed class – into the 23(a)(2) determination.