Dukes Not So Hazardous After All

June 24, 2011

As an update to our blog posting on April 6, the United States Supreme Court has ruled that a district court improperly certified a nationwide class of female employees of Wal-Mart who were claiming sex discrimination in the company’s pay and promotion practices. In Dukes v. Wal-Mart, the Court unanimously ruled that the lower courts improperly certified the lawsuit under Rule 23(b), which relates only to class action claims for injunctive or declaratory relief, but was split along ideological lines (5-4) regarding the issue of whether the matter was improperly certified as a class action under Rule 23(a), which sets forth the four threshold class action requirements for certifying a class action of numerosity, commonality, typicality and adequacy of representation.

Writing for the majority, Justice Antonin Scalia explained that of Rule 23(a)’s four threshold requirements, the “crux” of the Dukescase turned on commonality — namely, whether there were “questions of law or fact common to the class.” In addressing this question, the Supreme Court adopted wholesale the approach that it previously had taken in General Telephone Co. of Southwest v. Falcon, 457 U.S. 147 (1982), an approach which the Ninth Circuit, in its en banc opinion, had partially rejected as dicta. The Supreme Court’s majority held that in order to certify a class, plaintiffs must “affirmatively demonstrate” and “be prepared to prove” with “significant proof” at the class certification stage that class members have “suffered the same injury,” in that they have a common contention of fact or law, the determination of which “is central to the validity of each one of the [class members’] claims in one stroke.”

At stake in this case was the possibility of the largest employment class action in history, with literally billions of dollars on the line. With this ruling, however, employers across the country can breathe a collective sigh of relief. While this case will certainly make it more difficult for employees to certify class actions for discrimination claims in the future, the Supreme Court’s ruling does little to dissuade creative plaintiff’s lawyers from trying to certify class claims based upon the disparate impact that certain company policies may have.