Class Actions at the Crossroads: An Answer to Wal-Mart v. Dukes
Harvard Law & Policy Review, Vol. 5, June 2011
38 Pages Posted: 27 Mar 2011 Last revised: 4 Apr 2011
Date Written: 2011
The Supreme Court has recently decided to hear argument in the largest private-employer civil rights case in American history, Dukes v. Wal-Mart Stores, Inc. This historic case involves up to 1.5 million women suing Wal-Mart, one of the largest companies in the world, for alleged gender discrimination in pay and promotions, in violation of Title VII of the Civil Rights Act of 1964. Like many employees who challenge companywide employment discrimination, the plaintiffs in Dukes brought their case as a class action pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure and sought injunctive and declaratory relief, and monetary relief in the form of back pay and punitive damages. After several appeals, class certification was largely upheld by the Ninth Circuit in a sharply divided en banc opinion. The Ninth Circuit affirmed the district court’s Rule 23(b)(2) certification of a class of current employees with respect to their claims for injunctive and declaratory relief and back pay.
This ruling set the stage for review by the nation’s highest court because of the ruling’s potential impact on class actions all over the country, involving areas as varied as employment discrimination, securities, antitrust, and products liability. The potential impact of the case stems not so much from the size of the Dukes class as from how the case will influence the very survival of certain types of class actions. At issue is whether it will become more difficult for plaintiffs who seek monetary relief for systemic misconduct to meet the class action criteria. This is important because for many employees and others, a class action is their only meaningful access to the courts. Moreover, class actions are important to the civil justice system because of the substantial time and cost savings they provide the courts and parties. The Dukes case has the potential to redefine the terms on which this critical procedural device is available.
While the case involves numerous complex procedural and substantive issues, this article examines the discrete yet critical question presented in the Dukes litigation of whether any monetary relief is permitted in a (b)(2) class, and if so, under what circumstances. The answer to this question will have significant implications for the future of class action law.
As an initial matter, there are two primary modes of statutory construction - textualism and intentionalism - the Supreme Court may use in interpreting Rule 23(b)(2)’s silence on the issue of whether monetary relief is permitted. Under either mode of construction, the Supreme Court should consult the Advisory Committee’s notes, to clarify an ambiguous text or to avoid an absurd result involving an unambiguous text. The Advisory Committee notes make clear that the Rule’s drafters did not intend to ban all forms of monetary relief, but only a small subset - exclusive or predominant monetary damages. Thus, the answer to the threshold question of whether any monetary relief is allowed by the Rule’s text is yes.
Wal-Mart’s contention that there are no circumstances under which monetary relief is justified under (b)(2) contradicts well-established law and conflates the separate approaches courts have used for permitting back pay, on the one hand, and monetary damages, on the other. Because of its equitable nature and susceptibility to common proof, back pay has long been permitted in Rule 23(b)(2) class actions. As a partner to injunctive and declaratory relief, back pay has played a central role in eradicating discriminatory practices and making victims whole under Title VII’s broad remedial scheme. Without exception, all of the courts of appeals to have ruled on the issue have recognized the compatibility of back pay and Rule 23(b)(2) in the Title VII context.
In contrast, courts have permitted (b)(2) certification of claims for monetary damages (compensatory and punitive) so long as they are not the exclusive or predominant form of relief sought. Because damages may not lend themselves to common proof, predominance ensures that the class remains sufficiently cohesive to provide due process, while sufficiently flexible to provide the efficiency of aggregate litigation. Predominance has been the linchpin to certification of claims involving monetary damages under Rule 23(b)(2). Thus, what is at issue is how courts should determine when damages predominate over injunctive or declaratory relief, not whether they should be permitted at all.
Although there is no disagreement over the propriety of using a predominance test, the courts of appeals disagree over how predominance should be defined. There are three major predominance approaches: the Fifth Circuit’s incidental test established in Allison v. Citgo Petroleum Corp., the Second Circuit’s ad hoc balancing test established in Robinson v. Metro-North Railroad Co., and the Ninth Circuit’s objective effects test established in Dukes v. Wal-Mart.
The predominance tests set forth in the Allison, Robinson, and Dukes trio may aid the Supreme Court in its determination of what circumstances justify inclusion of monetary damages in a Rule 23(b)(2) class action. Comparing each of the predominance tests using principles such as judicial discretion, judicial economy, due process and civil rights enforcement, reveal that although Dukes is youngest of the trio, it may turn out to be the wisest. Dukes takes the best from its sister circuits by including non-incidental damages - contrary to Allison - while retreating from a plaintiff-centered and subjective analysis - contrary to Robinson and Molski v. Gleich. The Ninth Circuit resurrects the broad judicial discretion required for a rigorous class certification analysis, and yet introduces practical factors that address manageability and due process concerns, thereby advancing judicial economy. Finally, the Dukes test offers promise, as contemplated by the Advisory Committee and Title VII’s drafters, that Rule 23(b)(2) will continue to aid those fighting to rid society of systemic discrimination and repair those ravaged by its consequences.
Keywords: Wal-Mart, class certification, rule 23(b)(2), rule 23, Dukes,Title VII, employment discrimination, class action, back pay, Advisory Committee, Allison, Robinson, Molski, textualism, intentionalism, gender discrimination
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