The Ninth Circuit recently affirmed a 2004 district court's decision to certify a nationwide class of women in a gender discrimination class action against Wal-Mart, the country's largest retailer. The widely publicized 6-to-5 decision in Dukes v. Wal-Mart Stores will permit as many as 1.5 million female employees of Wal-Mart to seek back pay, declaratory relief, and injunctive relief. The lawsuit was filed in the Northern District of California in 2001 by six female Wal-Mart employees seeking class certification on behalf of all women who had worked at Wal-Mart since December 26, 1998. They alleged that the retailer's nationwide policies violated Title VII by paying female workers less than their male counterparts for the same jobs and by giving fewer and slower promotions to women than to men. The class sought injunctive and declaratory relief, back pay, and punitive damages.

In 2005, after the district court determined that class certification was appropriate under Federal Rule of Civil Procedure 23 because the plaintiffs were united by an array of company-wide discriminatory practices, Wal-Mart sought an interlocutory appeal of the class certification decision. Wal-Mart argued that that the class did not satisfy Rule 23(a)'s commonality and typicality requirements, and that the large size of the class and potential claims in the billions of dollars undermined plaintiffs' claim that injunctive and declaratory relief predominated over monetary relief, as is required to qualify under Rule 23(b)(2). Wal-Mart argued that its stores operate independently of one another and should therefore be sued individually, while the plaintiffs' lawyers countered that individual lawsuits would be impractical and would create inconsistent results.

The issue was first heard by a three-judge panel of the Ninth Circuit and then by an eleven-member en banc panel. The en banc decision did not address the merits of the underlying discrimination claims against Wal-Mart, but rather it focused exclusively on the class certification procedural questions. The majority held that the district court properly conducted a "rigorous analysis" of the Rule 23 requirements and acted within its discretion in finding that the Rule 23 elements had been satisfied. The court remanded two issues to the district court for further consideration: 1) whether the plaintiff's claims for punitive damages could be certified under Rule 23(b)(2) or (b)(3); and 2) whether class certification was proper with respect to employees who were no longer working at Wal-Mart by the time the suit was filed in 2001.

The sharply-worded dissent emphasized the unprecedented size of the class and contended that any discriminatory employment actions were the result of discretionary decisions by individual Wal-Mart managers rather than a centralized corporate policy: "Without evidence of a company-wide discriminatory policy implemented by managers through their discretionary decisions, or other evidence of a discriminatory company-wide practice, there is nothing to bind these purported 1.5 million claims together in a single action."

One important outcome of this decision is the Court's holding that a district court must apply a "rigorous analysis" when determining whether to certify a class under Rule 23. The Court explained that this analysis will often require the District Court to look beyond the pleadings—even to issues that may overlap with the merits of the underlying claims, such as statistical evidence of discrimination. Although in this particular case the class certification decision was upheld under the "rigorous analysis" test, it remains to be seen whether this test will favor parties opposing or advocating for class certification. It is also too soon to predict the effects of the Court's four-factor test for determining when monetary relief predominates over injunctive relief such that the class may not be certified under Rule 23(b)(2), though the Ninth Circuit's split with other Circuits on this issue is likely to subject this sharply-divided opinion to U.S. Supreme Court review.