Wal-Mart Stores, Inc. v. Dukes: Supreme Court Reshapes Class Action Certification

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In vacating this morning what some regarded as history’s largest business class action, the Supreme Court’s landmark opinion in Wal-Mart Stores, Inc. v. Dukes considerably tightens the criteria for class certification in all would-be class actions while confining Fed. R. Civ. P. 23(b)(2) class certification to cases in which essentially only declaratory or injunctive relief is sought, without monetary relief. The certification of Rule 23(b)(2) classes in federal cases involving claims for backpay or money damages thus appears to be impermissible; those cases now will have to meet the stricter criteria of Rule 23(b)(3). The (b)(2) section of the Court’s opinion, significantly, was unanimous. The Court’s new and more exacting interpretation of the Rule’s general commonality requirement was endorsed by five justices.

Background

The district court had certified under Rule 23(b)(2) a nationwide class of more than one million current and former Wal-Mart employees who claimed sex discrimination in Wal-Mart’s alleged “policy” of allowing local managers discretion in employment decisions. The Court of Appeals for the Ninth Circuit affirmed, finding, among other things, that the plaintiffs’ claims for backpay were suitable for (b)(2) certification because the claims for monetary relief did not “predominate” over the requests for declaratory and injunctive relief. The Ninth Circuit described “predominance” in this context as “superior[ity in] strength, influence, or authority,” aggravating an existing split among the Courts of Appeals.

Last December, the Supreme Court granted Wal-Mart’s petition for certiorari on the question of “[w]hether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2)—which by its terms is limited to injunctive or corresponding declaratory relief—and if so, under what circumstances.” The Court also directed the parties to brief and argue the question of “[w]hether the class certification ordered under Rule 23(b)(2) was consistent with Rule 23(a).”

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