On June 20, 2011, the U.S. Supreme Court issued its highly awaited decision in Wal-Mart Stores, Inc. v. Dukes et al., in which the named plaintiffs sought to represent a nationwide class of around 1.5 million female employees claiming sex discrimination in violation of Title VII of the Civil Rights Act of 1964, as amended. The Supreme Court reversed the lower court's decision to certify the class.
To obtain class certification, a party must first demonstrate that all four requirements of Rule 23(a) of the Federal Rules of Civil Procedure are met: (1) numerosity; (2) commonality; (3) typicality; and (4) adequate representation. Second, the party must also demonstrate that one of the three requirements of Rule 23(b) are met. For example, Rule 23(b)(2) requires 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." After the district court granted class certification and the appellate court affirmed, Wal-Mart appealed to the Supreme Court.
The primary issue was whether the commonality requirement was met. The Court stated that commonality requires the plaintiffs to demonstrate that the class members have suffered the same injury. The plaintiffs desired to sue about literally millions of employment decisions at once, but without "some glue" holding the alleged reasons for all those decisions together, the Court found that it would be impossible to say that there would be a common answer to the crucial question of, "Why was I disfavored?"
The Court noted that a plaintiff may demonstrate commonality by showing significant proof that an employer operated under a general policy of discrimination. However, the Court found that absent in this case. Among other things, Wal-Mart's announced policy forbade sex discrimination, and the district court recognized Wal-Mart imposed penalties for denials of equal employment opportunity.
The other issue in the case was whether class certification was appropriate for the plaintiffs' backpay claims. The Court held claims for individualized relief cannot be certified under Rule 23(b)(2). Here, the backpay claims were for individualized relief because each class member would be entitled to an individualized award of damages. The Court noted, however, that class certification of individualized monetary claims may be appropriate under Rule 23(b)(3) instead of Rule 23(b)(2).
The Dukes decision is a significant victory for employers because it will make it harder for plaintiffs to obtain class certification. Wal-Mart Stores, Inc. v. Dukes et. al, No. 10-277 (June 20, 2011)