WALMART - CLASS ACTION FAILS

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WALMART - CLASS ACTION FAILS

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OCTOBER TERM, 2010
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
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 declaratoryrelief, punitive damages, and backpay, on behalf of themselves and anationwide class of some 1.5 million female employees, because ofWal-Mart’s alleged discrimination against women in violation of TitleVII of the Civil Rights Act of 1964. They claim that local managersexercise their discretion over pay and promotions disproportionatelyin favor of men, which has an unlawful disparate impact on femaleemployees; and that Wal-Mart’s refusal to cabin its managers’ au-thority amounts to disparate treatment. The District Court certified the class, finding that respondents satisfied Federal Rule of CivilProcedure 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 corre-sponding 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 declaratoryand 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 randomset of claims for valuation and then extrapolated the validity andvalue of the untested claims from the sample set.
Held:
1. The certification of the plaintiff class was not consistent withRule 23(a). Pp. 8–20.
(a) Rule 23(a)(2) requires a party seeking class certification to
2 WAL-MART STORES, INC. v. DUKES
Syllabus
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 determina
tion 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 com
monality 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 em
ployment decision,” Cooper v. Federal Reserve Bank of Richmond, 467
U. S. 867, 876, and respondents wish to sue for millions of employ
ment decisions at once. Without some glue holding together the al
leged reasons for those decisions, it will be impossible to say that ex
amination 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 pol
icy forbids sex discrimination, and the company has penalties for de
nials 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 be
cause he could not estimate what percent of Wal-Mart employment
decisions might be determined by stereotypical thinking, his testi
mony was worlds away from “significant proof” that Wal-Mart “oper
ated under a general policy of discrimination.” Pp. 12–14.
(c) The only corporate policy that the plaintiffs’ evidence convinc
ingly 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 di
rection. 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
Cite as: 564 U. S. ____ (2011) 3
Syllabus
whether monetary claims can ever be certified under the Rule be-cause, at a minimum, claims for individualized relief, like backpay, are excluded. Rule 23(b)(2) applies only when a single, indivisibleremedy would provide relief to each class member. The Rule’s his-tory and structure indicate that individualized monetary claims be-long instead in Rule 23(b)(3), with its procedural protections of pre-dominance, 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 claimsdo not “predominate” over their injunctive and declaratory relief re-quests. That interpretation has no basis in the Rule’s text and does obvious violence to the Rule’s structural features. The mere “pre-dominance” of a proper (b)(2) injunctive claim does nothing to justifyeliminating Rule 23(b)(3)’s procedural protections, and creates incen-tives for class representatives to place at risk potentially valid mone-tary relief claims. Moreover, a district court would have to reevalu-ate the roster of class members continuously to excise those who leave their employment and become ineligible for classwide injunc-tive or declaratory relief. By contrast, in a properly certified (b)(3)class action for backpay, it would be irrelevant whether the plaintiffsare still employed at Wal-Mart. It follows that backpay claimsshould not be certified under Rule 23(b)(2). Pp. 23–26.
(c)
It is unnecessary to decide whether there are any forms of “in-cidental” monetary relief that are consistent with the above interpre-tation of Rule 23(b)(2) and the Due Process Clause because respon-dents’ 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 apattern or practice of discrimination, a district court must usuallyconduct “additional proceedings . . . to determine the scope of indi-vidual relief.” Teamsters v. United States, 431 U. S. 324, 361. The company can then raise individual affirmative defenses and demon-strate 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 sub-stantive right,” 28 U. S. C. §2072(b), a class cannot be certified on thepremise that Wal-Mart will not be entitled to litigate its statutory de-fenses 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 GINS-BURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined as to Parts I and III.
4
WAL-MART STORES, INC. v. DUKES Syllabus GINSBURG, J., filed an opinion concurring in part and dissenting in part,in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined.