August 9, 2013

Court denies Dukes plaintiffs class certification, again

By Anastasia P. Boden Attorney

Last week, district court judge Charles Breyer may have written the last chapter of Wal-Mart v. Dukes, when he denied the plaintiffs’ renewed attempt to bring a massive class-action lawsuit against Wal-Mart for sex discrimination.  Remarking on the path of the infamous lawsuit, the brother of Supreme Court Justice Stephen Breyer wrote, “This case has traveled a long road.”  Readers will recall PLF submitted amicus briefs throughout the preceding levels of litigation, including when the case was at the Supreme Court.

This time around, Judge Breyer found that the plaintiffs’ newclass of 150,000 women—1/10th of the original class’ size—merely repackaged the old claims on a smaller scale, and as a result, suffered the original class’ same deficiencies.  Even when used on a smaller scale, the plaintiffs’ sophisticated statistical claims were “underwhelming,” and could not demonstrate a consistent pattern of promotional disparities.  Nor could the plaintiffs prove a “culture of bias” giving rise to the purported disparities.  In other words, the plaintiffs could not prove that Wal-Mart as an institution discriminated against women.  Instead, if Wal-Mart employees did suffer discrimination, it was due to the decisions of individual managers, not from Wal-Mart as a whole, and that meant that the plaintiffs would have to prove their own individual cases instead of bundling them together as a class action lawsuit.

Other recent cases show that courts have been taking Federal Rule of Civil Procedure 23, which governs class actions, seriously.  In Davis v. Cintaswhich relied heavily on Dukes—the would-be class consisted of all women who had unsuccessfully applied for jobs as sales representatives at Cintas.  In 2003, the company implemented a set of objective hiring criteria which increased female employment.  Nevertheless, Davis contended that the managers’ subjective decisions led to fewer women being hired than men in sales rep positions.  The Sixth Circuit Court of Appeals found that Davis had not shown a “uniform, companywide practice of exercising discretion in a way that favored men over women.”  Indeed, the company had shown sincere attempts to hire more women.  Further, the Court found that the plaintiffs’ proposed method of calculating damages—which would have required Cintas to randomly hire from the class in proportion to the company’s “proven shortfalls” and distribute backpay pro rata among the class—would undermine Cintas’ right to defend itself against discrimination claims.  Whereas Dukes had concerned Wal-Mart’s wage and promotion practices, Davis expands Dukes’ reach by applying its reasoning to hiring practices.

In another recent decision, also based on Dukes, the Tenth Circuit held that Rule 23 requires not only that plaintiffs establish a common question of fact, but that plaintiffs establish a common question of fact that can be disposed of on a classwide basis.  In Wallace B. Roderick Revocable Living Trust v. XTO Energy, the would-be class was a group of people who owned royalty rights on oil wells in Kansas.  The class sued XTO, an oil company, for underpaying royalties.  The court found that, while XTO’s payment methodology was at issue—meaning there was a common question of fact—the plaintiffs had not shown that each contract contained the same terms.  Therefore, whether the XTO’s payment methodology violated the terms of one plaintiff’s contract did not necessarily bear on whether it violated another plaintiff’s contract.  The Court dismissed the suit for failure satisfy Rule 23.

These cases show that courts are taking Dukes’ and Rule 23’s requirements seriously. That’s a victory for consumers and job-seekers, who ultimately pay the price for wasteful litigation, or coerced settlements.

 

 

 

 

 

 

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