As discussed here, in the wake of the U.S. Supreme Court’s decertification of a nationwide class in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), former class members have filed a number of follow-on class actions against Wal-Mart. We have also blogged  here and here that district courts have dismissed class claims in a couple of those suits as untimely. In the past week, yet another court has dismissed a Wal-Mart follow-on class action, but this one reached the same result using a different analysis.  

This case, entitled Ladik, et al. v. Wal-Mart Stores, Inc., No. 13-CV-123, (W.D. Wis. Feb. 20, 2013), was filed by present and former female Wal-Mart retail store employees who were former members of the Dukes class. Their pay and promotion gender discrimination claims are substantially similar to those being litigated in Dukes, but these plaintiffs narrowed their class claims to “Region 14”— a region that includes stores in Wisconsin, Illinois, Indiana, and Michigan.

Shortly after the case was filed, Wal-Mart brought a motion to dismiss the class allegations. Wal-Mart based its motion on two independent arguments. First, Wal-Mart contended that, during the pendency of the Dukes action, the statute of limitations for the plaintiffs’ class claims was not tolled under American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974). As a result, the claims were untimely. In American Pipe, the U.S. Supreme Court held “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” Id. at 554. The Supreme Court later clarified that this tolling rule applied to any class member who later filed an individual action, not just those who intervened in the same action. See Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983). The Supreme Court did not address whether the tolling rule would apply to class members who later filed class claims in a federal court. Wal-Mart argued that such subsequently filed claims are not entitled to tolling.

Rejecting Wal-Mart’s argument, the Court in Ladik stated that “once a plaintiff has filed a complaint that is timely under American Pipe, the tolling issue is resolved, regardless whether the plaintiff wishes to proceed individually or as a class.” Slip Op.. at 11. Reasoning that the tolling rule was designed to avoid the needless filing of repetitive claims, the Court found that limiting tolling to subsequently filed individual actions would simply encourage the filing of multiple collective actions. In an apparent effort to address arguments related to abuse of process, the Court noted that the “merits” of repetitive class claims “can be addressed through application of principles of stare decisis and issue preclusion.” Id. at 12. As Wal-Mart had not argued preclusion, the Court did not address it. 

The Court then addressed Wal-Mart’s second argument: that the class claims should be dismissed because plaintiffs failed to identify a common question of law or fact in their complaint. Attempting to distinguish their class claims from the ones in Dukes, plaintiffs pointed to the geographical limitations on their proposed class. The Court did not find this difference meaningful, stating that such limitations “simply have created a smaller version of the same problem.” Id.  at 16. Finding that plaintiffs “must show a policy or practice at the regional level that applies to the entire class,” the Court observed that “plaintiffs point to nothing in their complaint that is different from the allegations in Dukes.” Id. More specifically, the Court stated that the plaintiffs “do not even attempt to distinguish the common questions they identify from those found lacking in Dukes” and that “most of their alleged common questions still related to ‘nationwide policies,’ not any policies of Region 14.” Id. at 18-19. Given such substantial similarities, the Court found that plaintiffs could not distinguish their proposed class from the one the Supreme Court rejected, and dismissed the class claims. Id. at 22.  

Implications For Employers

The Ladik decision illustrates that courts are utilizing different approaches in addressing the “re-booted” cases filed in the wake of Wal-Mart Stores, Inc. v. Dukes, but this decision is particularly noteworthy for its distinct tolling analysis. The defense has continued a streak of successes with respect to the follow-on class claims by former class members, but some decisions leave room for plaintiffs in other stacked class actions to play ball.