Wal-Mart Stores, Inc. v. Dukes et al and the Implication for Sex-Based Class Actions
564 U.S. ____(2011)

By Melissa Alfano

On June 20, 2011, the Supreme Court handed down its ruling in Wal-Mart Stores, Inc. v. Dukes.  Click here to read the opinion.  The respondents, representing the 1.6 million women who are currently, or have previously worked for Wal-Mart since December 26, 1998, asserted that Wal-Mart paid them less than their male counterparts and repeatedly denied them promotions. Dukes , No. 10-277, slip op. at 2 (June 20, 2011).

While the case was an employment discrimination case, the Supreme Court ruling has a profound effect on all class action lawsuits.  There were two primary reasons why the Court denied the plaintiffs class action certification; the requested relief of back pay was inappropriate and the plaintiffs failed to show that a common question of law and fact predominated. Dukes, slip op. at 2, 4.

On the issue of relief, the Court unanimously agreed that claims for back pay were not an appropriate relief for a class wide determination.  The Court declared the Federal Rule of Civil Procedure 23(b)(2) does not provide for claims of money payment, unless the payment of money is incidental to injunctive or declaratory relief.  For this class action suit, all the justices agreed that the plaintiffs should have sought relief under a different section of Rule 23. Dukes, slip op. at 20.

The Court split along ideological lines on the issue of commonality.  The majority, Justices Scalia (who wrote the opinion), Alito, Kennedy, Thomas, and Chief Justice Roberts, said that because of the great variation in geography, experience of the plaintiffs, and the fact that managers have wide discretion in employment decisions, there was no way that this class could proceed under Rule 23.  The only thing that the majority found to be common amongst the plaintiffs were that they were female.  That was not sufficient to establish a class in this instance, since they provided “no convincing proof of a company-wide discriminatory pay and promotion policy.”  Instead, the class action plaintiffs would be better off pursing their claims individually. Dukes, slip op at 13.

The dissent, Justices Ginsberg (who wrote the dissenting opinion), Breyer, Kegan, and Sotomayor, disagreed on the issue of commonality.  The dissent argued that the unfettered discretion of the hiring managers was the proof of common harm.  If the plaintiffs were able to pursue the claim individually, it would not stop the unfettered discretion that resulted in the fact that women are 70% of the hourly wage employees in the company, but are only 33% of the management employees. Dukes, slip op. at 4 (Ginsburg, J. dissenting).

Dukes certainly does not ring the death knell for sex discrimination class actions.  Part of the reason that the claim failed was because the existence of an anti-discrimination policy within the company and the lack of strong statistical evidence of managers exercising discression in a common way.  It is possible that a different suit for sex discrimination could fare better with stronger statistical evidence.  However, it is unclear how much evidence is needed to convince the Court.  Furthermore, by relying on the anti-discrimination policy, the majority put a strong barrier in front of future potential plaintiffs, since it is possible a company can inoculate itself from the possibly discriminatory acts of its managers by having a policy in place.

This case does, however, ring the death knell for the claims of these particular plaintiffs.  A large benefit of a class action suit is to pool resources.  By having to pursue the claims individually, a lot of these claims will likely not go forward.  Furthermore, by seeking individual claims, the plaintiffs will not be able to address the actions by Wal-Mart that gave rise to the class action suit in the first place.