Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011). The decision in this closely-watched employment discrimination putative class action, near the end of the current term of the Supreme Court of the United States, was not a surprise. The current Supreme Court is, in general, hostile to class actions. Moreover, the portion of the ruling on which all nine Justices agreed– that cases seeking “individualized award[s] of monetary damages” cannot be the subject of a Rule 23(b)(2) class, which is designed for injunctive relief– is also not entirely surprising, since there was always some incongruity in allowing damage claims, especially large ones (as here, in a case that involved over one million Wal-Mart women employees) to proceed under (b)(2).
But other aspects of the decision, in which the Court split 5-4 along familiar ideological ines, are more troubling. The four Justices who concurred in part and dissented in part, Justices Ginsburg, Breyer, Sotomayor and Kagan, would have remanded the matter for a determination as to whether plaintiffs satisfied the requirements for a Rule 23(b)(3) damages class, which plaintiffs had sought as an alternative. The five-member majority would not permit that. Instead, they rewrote Rule 23 and seized on other ways to block consideration of a Rule 23(b)(3) class.
First, the majority, which spoke through Justice Scalia, held that plaintiffs had not satisfied the commonality requirement of Rule 23(a)(2), which speaks of “questions of law or fact that are common to the class.” Until this decision, it had been widely believed that the commonality prong was “easily satisfied,” as Moore’s Federal Practice states. Indeed, the majority opinion states that it remains the case that “[e]ven a single [common] question will do.” But the majority raised the bar for common questions so as to conclude that the Wal-Mart plaintiffs raised not even one common question of law or fact, and did so by ignoring the plain language and meaning of Rule 23(a)(2).
Justice Scalia stated that Rule 23(a)(2) was “easy to misread, since ‘[a]ny competently crafted class complaint literally raises common questions.’ For example: Do all of us plaintiffs indeed work for Wal-Mart?” (citation omitted). The majority went on to say that, instead of “common questions,” as Rule 23(a)(2) states, the Rule requires “the capacity of a classwide proceeding to generate common answers to drive the resolution of the litigation” (emphasis in original). Justice Scalia then concluded that because it was “impossible” for plaintiffs to answer on a common basis the one question that the majority found appropriate: “why was I disfavored?” (emphasis in original), due to the alleged (by Wal-Mart) absence of company-wide discriminatory practices, the commonality prong of Rule 23(a)(2) could not be satisfied.
For Justice Scalia, the high priest of textualism, to rewrite Rule 23 in this fashion, is breathtaking. The Wal-Mart women did not, of course, pose as a common question whether they all worked for Wal-Mart. Thus, the Court had no need to redraft Rule 23(a)(2) to avoid such common questions. To the extent that there was any valid concern about how to define “common questions of law or fact,” Justice Ginsburg’s dissent offered a sound interpretation that did not involve rewriting Rule 23: “the word ‘questions’ means disputed issues, not any utterance crafted in the grammatical form of a question.”
Even accepting the majority’s debatable conclusion that there was insufficient “glue” connecting the facts of the various plaintiffs’ circumstances, there was plainly at least one common question of law, which would have satisfied commonality. But conceding that might have allowed a Rule 23(b)(3) damages class to be certified, as the dissent suggested should at least have been considered. Since commonality is a requirement for damage classes as well as injunctive classes, the majority could kill both the injunctive and the damage class birds with a single, commonality stone.
In most cases, plaintiffs will still be able to articulate at least one common question of law or fact even under the reconstituted version of Rule 23(a)(2) that results from this case. But the Court has opened the door to mischief with this ruling about commonality.
The real winner on the commonality issue is a posthumous victor. Professor Richard Nagareda, now deceased, wrote a law review article that Justice Scalia quoted repeatedly as the basis for his commonality discussion. Every scholar dreams of what Professor Nagareda achieved here.
Second, the Court may have taken the first step down the slippery slope of an unconstitutional opt-in regime in class actions with its ruling about plaintiffs’ anecdotal evidence, which plaintiffs offered in addition to statistical evidence that the majority also rebuffed. Justice Scalia complained that plaintiffs filed “only” 120 affidavits from Wal-Mart women, “about 1 for every 12,500 class members– relating to only some 235 out of Wal-Mart’s 3,500 stores.” More than half of the anecdotes came from six states, half of all states had only one or two anecdotes, and 14 states had no anecdotes at all. As a matter of law, Justice Scalia concluded, even if all the anecdotes were true, they were not enough to show “a general policy of discrimination.”
Under Phillips Petroleum Co. v. Shutts, 472 U.S. 797 (1985), absent class members (that is, persons who are not named plaintiffs), are free to “sit back and allow the litigation to run its course” without participating actively in it. Their decision not to be active in the case is without prejudice to their rights, whatever they turn out to be. Shutts, written by Justice Rehnquist, expressly rejected the idea that the Due Process Clause of the Fourteenth Amendment required opt-in classes, and stated that an opt-in regime “would probably impede the prosecution” of most class actions.
The majority’s decision here, however, forces absent class members to leave the sidelines and file affidavits about their “anecdotal” experience, thereby potentially subjecting themselves to deposition and otherwise taking away the rights recognized in Shutts. If class members do not “opt in” by submitting their anecdotal evidence, plaintiffs will be unable to prove “a general policy of discrimination.” It is to be hoped that this is a mere aberration, an instance of a big, politically-charged case making bad law.
Third, and related to the second point, is the implicit conclusion of the majority that some cases are too big for class treatment. That has never been the rule. But the effect of the Court’s ruling about anecdotal evidence, as well as the fact that, from the very first sentence of the majority opinion (“We are presented with one of the most expansive class actions ever.”), the size of this case pervaded the ruling, seems to allow the argument that some defendants are too big, and their alleged wrongdoing too far-reaching, to allow a class action. That result is exactly backwards. One function of a class action is to allow individuals to go up against large, well-funded defendants. The larger the defendant, the more the class action device is needed, not the less.
Fourth, and related to the “too big to be sued” problem, is the “if we have no policy, we can’t be sued” problem. The majority concluded that because Wal-Mart had “a policy against having uniform employment practices” (emphasis in original), that is, because the company left employment decisions to each manager, this was “just the opposite of a uniform employment practice that would provide the commonality needed for a class action.” But Justice Ginsburg’s dissent persuasively showed that “examination of particular policies and practices alleged to affect, adversely and globally, women employed at Wal-Mart’s stores,” was sufficient to show commonality. Justice Ginsburg surveyed some of that evidence, while the majority failed to discuss it, instead relying almost solely on Wal-Mart’s purported general policy that “forbids sex discrimination.” The question whether that general policy was overcome by other policies alleged to affect women “globally” was itself a common question that sufficed to show commonality. But the majority shut its eyes to that.
The plaintiffs in this matter have vowed that they will continue this case, as one or more smaller class actions. This decision does not prevent that. The implications of the Court’s ruling for other cases, however, are cause for concern.