Wal-Mart Stores, Inc. v. Dukes, et al.
564 U.S. ___ (2011)

Annotate this Case
Justia Opinion Summary

Respondents, current or former employees of petitioner Wal-Mart, sought judgment against the company for injunctive and declaratory relief, punitive damages, and backpay, on behalf of themselves and a nationwide class of some 1.5 million female employees because of Wal-Mart's alleged discrimination against women in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1 et seq. At issue was whether the certification of the plaintiff class was consistent with Federal Rules of Civil Procedure 23(a) and (b)(2). The Court held that certification of the plaintiff class was not consistent with Rule 23(a) where proof of commonality necessarily overlapped with respondents' merits contention that Wal-mart engaged in a pattern or practice of discrimination and without some glue holding together the alleged reasons for the employment decisions, it would be impossible to say that examination of all the class members' claims would produce a common answer to the crucial discrimination question. The Court concluded that in a company Wal-Mart's size and geographical scope, it was unlikely that all managers would exercise their discretion in a common way without some common direction and respondents' attempt to show such direction by means of statistical and anecdotal evidence fell well short. The Court also held that respondents' backpay claims were improperly certified under Rule 23(b)(2) where claims for monetary relief could not be certified under the rule. Accordingly, the judgment of the Court of Appeals was reversed.


SYLLABUS
OCTOBER TERM, 2010
WAL-MART STORES, INC. V. DUKES


SUPREME COURT OF THE UNITED STATES

WAL-MART STORES, INC. v. DUKES et al.

certiorari to the united states court of appeals for the ninth circuit

No. 10–277. Argued March 29, 2011—Decided June 20, 2011

Respondents, current or former employees of petitioner Wal-Mart, sought judgment against the company for injunctive and declaratory relief, punitive damages, and backpay, on behalf of themselves and a nationwide class of some 1.5 million female employees, because of Wal-Mart’s alleged discrimination against women in violation of Title VII of the Civil Rights Act of 1964. They claim that local managers exercise their discretion over pay and promotions disproportionately in favor of men, which has an unlawful disparate impact on female employees; and that Wal-Mart’s refusal to cabin its managers’ authority amounts to disparate treatment. The District Court certified the class, finding that respondents satisfied Federal Rule of Civil Procedure 23(a), and Rule 23(b)(2)’s requirement of showing that “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” The Ninth Circuit substantially affirmed, concluding, inter alia, that respondents met Rule 23(a)(2)’s commonality requirement and that their backpay claims could be certified as part of a (b)(2) class because those claims did not predominate over the declaratory and injunctive relief requests. It also ruled that the class action could be manageably tried without depriving Wal-Mart of its right to present its statutory defenses if the District Court selected a random set of claims for valuation and then extrapolated the validity and value of the untested claims from the sample set.

Held:

   1. The certification of the plaintiff class was not consistent with Rule 23(a). Pp. 8–20.

      (a) Rule 23(a)(2) requires a party seeking class certification to prove that the class has common “questions of law or fact.” Their claims must depend upon a common contention of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. Here, proof of commonality necessarily overlaps with respondents’ merits contention that Wal-Mart engages in a pattern or practice of discrimination. The crux of a Title VII inquiry is “the reason for a particular employment decision,” Cooper v. Federal Reserve Bank of Richmond, 467 U. S. 867, 876, and respondents wish to sue for millions of employment decisions at once. Without some glue holding together the alleged reasons for those decisions, it will be impossible to say that examination of all the class members’ claims will produce a common answer to the crucial discrimination question. Pp. 8–12.

      (b) General Telephone Co. of Southwest v. Falcon, 457 U. S. 147, describes the proper approach to commonality. On the facts of this case, the conceptual gap between an individual’s discrimination claim and “the existence of a class of persons who have suffered the same injury,” id., at 157–158, must be bridged by “[s]ignificant proof that an employer operated under a general policy of discrimination,” id., at 159, n. 15. Such proof is absent here. Wal-Mart’s announced policy forbids sex discrimination, and the company has penalties for denials of equal opportunity. Respondents’ only evidence of a general discrimination policy was a sociologist’s analysis asserting that Wal-Mart’s corporate culture made it vulnerable to gender bias. But because he could not estimate what percent of Wal-Mart employment decisions might be determined by stereotypical thinking, his testimony was worlds away from “significant proof” that Wal-Mart “operated under a general policy of discrimination.” Pp. 12–14.

      (c) The only corporate policy that the plaintiffs’ evidence convincingly establishes is Wal-Mart’s “policy” of giving local supervisors discretion over employment matters. While such a policy could be the basis of a Title VII disparate-impact claim, recognizing that a claim “can” exist does not mean that every employee in a company with that policy has a common claim. In a company of Wal-Mart’s size and geographical scope, it is unlikely that all managers would exercise their discretion in a common way without some common direction. Respondents’ attempt to show such direction by means of statistical and anecdotal evidence falls well short. Pp. 14–20.

   2. Respondents’ backpay claims were improperly certified under Rule 23(b)(2). Pp. 20–27.

      (a) Claims for monetary relief may not be certified under Rule 23(b)(2), at least where the monetary relief is not incidental to the requested injunctive or declaratory relief. It is unnecessary to decide whether monetary claims can ever be certified under the Rule because, at a minimum, claims for individualized relief, like backpay, are excluded. Rule 23(b)(2) applies only when a single, indivisible remedy would provide relief to each class member. The Rule’s history and structure indicate that individualized monetary claims belong instead in Rule 23(b)(3), with its procedural protections of predominance, superiority, mandatory notice, and the right to opt out. Pp. 20–23.

      (b) Respondents nonetheless argue that their backpay claims were appropriately certified under Rule 23(b)(2) because those claims do not “predominate” over their injunctive and declaratory relief requests. That interpretation has no basis in the Rule’s text and does obvious violence to the Rule’s structural features. The mere “predominance” of a proper (b)(2) injunctive claim does nothing to justify eliminating Rule 23(b)(3)’s procedural protections, and creates incentives for class representatives to place at risk potentially valid monetary relief claims. Moreover, a district court would have to reevaluate the roster of class members continuously to excise those who leave their employment and become ineligible for classwide injunctive or declaratory relief. By contrast, in a properly certified (b)(3) class action for backpay, it would be irrelevant whether the plaintiffs are still employed at Wal-Mart. It follows that backpay claims should not be certified under Rule 23(b)(2). Pp. 23–26.

      (c) It is unnecessary to decide whether there are any forms of “incidental” monetary relief that are consistent with the above interpretation of Rule 23(b)(2) and the Due Process Clause because respondents’ backpay claims are not incidental to their requested injunction. Wal-Mart is entitled to individualized determinations of each employee’s eligibility for backpay. Once a plaintiff establishes a pattern or practice of discrimination, a district court must usually conduct “additional proceedings … to determine the scope of individual relief.” Teamsters v. United States, 431 U. S. 324, 361. The company can then raise individual affirmative defenses and demonstrate that its action was lawful. Id., at 362. The Ninth Circuit erred in trying to replace such proceedings with Trial by Formula. Because Rule 23 cannot be interpreted to “abridge, enlarge or modify any substantive right,” 28 U. S. C. §2072(b), a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims. Pp. 26–27.

603 F. 3d 571, reversed.

   Scalia, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Thomas, and Alito, JJ., joined, and in which Ginsburg, Breyer, Sotomayor, and Kagan, JJ., joined as to Parts I and III. Ginsburg, J., filed an opinion concurring in part and dissenting in part, in which Breyer, Sotomayor, and Kagan, JJ., joined.

Primary Holding
The commonality threshold for class certification requires that all class members in an employment discrimination action were subject to the same policy, not just that they were employed by the same employer. If the pursuit of damages in a class action is not merely incidental to the injunctive or declaratory relief sought, moreover, those claims for damages should not be certified.
Facts
Six women, including Betty Dukes, brought a class action against Wal-Mart, their employer. They claimed that it offered lower pay for women than for men in comparable positions on a nationwide level, as well as longer waits than men for management promotions. Ruling that the proposed class satisfied the requirements of Federal Rule of Civil Procedure 23, a California federal court certified a class that was believed to contain 1.5 million women employed by Wal-Mart after December 26, 1998 at facilities around the nation. This was the largest class action lawsuit in U.S.history.

Wal-Mart argued in response that class actions are inherently unmanageable and excessively costly when they are so large. It suggested that the class members should be required to file their claims on an individual basis, but the Ninth Circuit was not persuaded.

Opinions

Majority

  • Antonin Scalia (Author)
  • John G. Roberts, Jr.
  • Anthony M. Kennedy
  • Clarence Thomas
  • Samuel A. Alito, Jr.

The named plaintiffs who represent a class must have the same interests and suffer from the same injuries as the class members. This is because a class action is a relatively narrow exception to the general rule that litigation should unfold only between named parties. The named plaintiff must be an appropriate representative of the class, as determined by the requirements of numerosity, commonality, typicality, and adequacy in Rule 23(a). Title VII claims are based on the reason for a certain employment decision, but this class action is based on millions of employment decisions. To show commonality, the plaintiffs would need to prove that the defendant had engaged in a pattern or practice of discrimination. Since each decision was taken separately, it would be difficult for the court to reach a single common conclusion on the overall discrimination issue.

The plaintiffs had introduced expert testimony from the fields of social science and statistics, seeking to show that the defendant promoted gender bias through its work culture. This does not demonstrate that there was a general policy of discrimination, and the mere existence of a gender disparity does not by itself satisfy the commonality requirement. The plaintiffs must be able to show that there are disparities between men and women on the level of individual stores. Affidavits by just 120 people, which is less than one-hundredth of one percent of the class, do not amount to significant proof that the defendant engaged in a generally discriminatory policy. The proposed class consists of individuals who hold many different positions throughout the employment hierarchy for varying lengths of time in thousands of stores around the country. They worked for many different supervisors and were subject to varying regional policies.

Moreover, the plaintiffs were unable to meet the requirements of Rule 23(b). They argued that the proposed class satisfied Rule 23(b)(2), but this is not a situation in which a single injunction or declaratory judgment would provide an appropriate remedy to each member of the class. Here, by contrast, each person would be entitled to receive a separate declaratory judgment or injunction against the defendant, as well as an individual award of monetary damages. The Ninth Circuit erred in using a predominance test that evaluates whether claims for injunctive relief predominate over claims for monetary damages. The more appropriate test is the incidental damages test, which limits class certification of claims seeking monetary damages to situations in which the damages flow directly from liability to the class as a whole rather than requiring additional hearings. However, it is unnecessary to conclusively prohibit any claims for monetary damages from being certified under Rule 23(b)(2).

Concurrence/Dissent In Part

  • Ruth Bader Ginsburg (Author)
  • Stephen G. Breyer
  • Sonia Sotomayor
  • Elena Kagan

Rule 23(b)(2) was not an appropriate basis on which to certify the class, since the damages sought by the plaintiffs cannot be considered to be incidental to the injunctive or declaratory relief that they also seek. It may have been appropriate, on the other hand, to certify the class under Rule 23(b)(3). This would require the plaintiffs to prove that common questions related to the class predominate over the questions that affect individuals and that a class action would be superior to other methods of adjudication. The Court should have remanded the case for consideration on whether the class meets those requirements.

The majority improperly conflated the requirements of Rule 23(a) and Rule 23(b). It evaluated the concerns covered by Rule 23(b)(3) when addressing whether the plaintiffs satisfied the commonality requirements in Rule 23(a)(2). The analysis of dissimilarities between the representatives and the class should not be addressed until the Court reached Rule 23(b).

Case Commentary

Plaintiffs seeking to challenge a general policy or practice in an employment discrimination class action may need to show more than the baseline requirements of common questions of law and fact provided by the Federal Rules of Civil Procedure. Some likelihood of having common answers to the questions when they are resolved may be required to certify a large class, placing a heavy burden on trial courts of a fact-intensive inquiry in each case.

Disclaimer: Justia Annotations is a forum for attorneys to summarize, comment on, and analyze case law published on our site. Justia makes no guarantees or warranties that the annotations are accurate or reflect the current state of law, and no annotation is intended to be, nor should it be construed as, legal advice. Contacting Justia or any attorney through this site, via web form, email, or otherwise, does not create an attorney-client relationship.

Disclaimer: Official Supreme Court case law is only found in the print version of the United States Reports. Justia case law is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.