[author: R. Scott Adams]
At the Federal Bar Association’s Fall 2012 Banquet and CLE, Robin Shea of Constangy, Brooks & Smith in Winston-Salem will present to attendees on developments in class action litigation in the wake of Wal-Mart Stores, Inc. v. Dukes. In addition to its high profile due to Wal-Mart’s status as one of the largest private employers in the nation and the putative class size of 1.5 million people, Dukes garnered national attention because the Supreme Court of the United States clarified certain issues that are important for class action practitioners. This summary is adapted from Robin Shea’s manuscript and provides a preview of the valuable content that her presentation will provide.
In the context of a sex discrimination case, the majority in Dukes explained that not every aggregation of individual claims can proceed as a class action: rather, would-be class representatives must identify a question of law or fact that is common to all members of the putative class, and the resolution of this issue must dispose of the case. The Supreme Court also clarified the certification of individualized monetary claims, requiring such claims to proceed under Rule 23(b)(3).
The Dukes Court explained that Plaintiffs must still satisfy the Rule 23(a) requirements, i.e., numerosity, commonality, typicality, and adequacy of representation. Importantly, the Supreme Court conveyed that commonality required “glue” to bind together the claims in a manner capable of class-wide resolution. This concept altered prior decisions that held a disparate impact theory could “conceivably” be used to establish class claims if there was significant proof an employer “operated under a general policy of discrimination” and the discrimination manifested itself in hiring and promotion practices in the same general fashion. The Supreme Court in Dukes found that this theory could not determinate with any specificity how often discrimination played a part in employment decisions. Also, the Supreme Court stated that plaintiffs needed to identify a “specific employment practice” as the “glue” to hold their 1.5 million claims together.
With respect to monetary claims, the Supreme Court held that applying Rule 23(b)(2) to individualized claims was unfair to plaintiffs and defendants. The Court held that monetary claims could be certified under Rule 23(b)(2), which provides for a “mandatory class,” only when they were “incidental” to injunctive and declaratory relief granted to the entire class. This same reasoning informed the Supreme Court’s rejection of calculating damages based on a random sampling of plaintiffs and their recoveries.
Since Dukes, several federal courts throughout the country have applied the newly clarified standards applicable to commonality. For example, in Stockwell v. City and County of San Francisco, 2011 WL 4803505 (N.D. Calif. 2011), the district court found that plaintiffs did not make the necessary showing of commonality and stated that “statistical evidence of disproportionate impact, standing alone, is insufficient to establish that plaintiffs’ age discrimination claims can be proved on a classwide basis.” On the other hand, the same court held in Delagarza v. Tesoro Refining & Marketing Co., 2011 WL 4017967 (N.D. Calif. 2011) that where plaintiff alleged a common set of practices that applied to all members of the class throughout the facility with only exceptional variations. The court looked for the “glue” and distinguished cases based on the lack of a binding thread for plaintiffs’ cases.
As an alternative for avoiding the effect of Dukes, plaintiffs and courts may be able to rely on “issue certification” under Rule 23(c)(4), which allows an action to be brought or maintained as a class action with respect to particular issues.” Several decisions have highlighted that Dukes did not preclude issue certification and that courts may certify a single cause of action as an alternative to denying certification. See e.g., Kalow & Springut v. Commence Corp., 2011 WL 3625853 (D. N.J. 2011).
Dukes also explained that Rule 23 does not set forth a mere pleading standard, thus bringing into play consideration of the merits of class action claims. The Supreme Court hinted that expert testimony in support of a motion for class certification (and in opposition) could be subjected to analysis applying the principles in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993). Two class cases to be heard in the next term will touch on these issues, but in the meantime, plaintiffs and defendants should assert and defend against any applicable Daubert issues and preserve them for appeal.
Finally, Shea’s presentation will explore the application of Dukes to collective actions under the Fair Labor Standards Act (“FLSA”), which are different than Rule 23 class actions in important ways. Several cases since Dukes have examined whether collective actions should be subjected to the more rigorous analysis of Dukes. These cases have generally rejected such a position, but at least one court explained that Dukes could become relevant at the close of class-related discovery, at which point the court could conduct a specific analysis of each claim to ensure each plaintiff is an appropriate party. Spellman v. Am. Eagle Express, 2011 WL 4014351 (E.D. Pa. 2011).
This presentation is not to be missed, as it will provide greater substance and detail on these cases, trends in class action litigation, and practice points for those who prosecute and defend these cases regularly.