603 F.3d 571 (9th Cir. 2010) (en banc), petition for cert. filed, www.scotusblog.com (Aug. 25, 2010) (No. 10-277). Conference has not yet been scheduled.
Can claims for monetary relief be certified under federal rule of civil procedure 23(b)(2) — which by its terms is limited to injunctive or corresponding declaratory relief — and, if so, under what circumstances?
Does the certification order conform to the requirements of Title VII, the due process clause, the Seventh Amendment, the Rules Enabling Act and the Federal Rule of Civil Procedure 23?
In a sharply divided 94-page ruling, the en banc Ninth Circuit upheld, 6-5, the order of the U.S. District Court for the Northern District of California certifying a class under Rule 23(b)(2) of the Federal Rules of Civil Procedure in the largest-ever employment discrimination class action. The Title VII sex discrimination lawsuit, which was filed almost 10 years ago, alleges that Wal-Mart, the world's largest private employer with more than 3,400 U.S. stores, pays women less than men in comparable positions and promotes women much less frequently than men. According to the lawsuit, the discrimination is effective in keeping women from top roles. The suit alleges that women comprise more than 70 percent of Wal-Mart's sales work force, but account for fewer than 10 percent of store manager positions and fewer than one-third of store management overall, and that there is only one woman among Wal-Mart's 20 top executives. The class is estimated to include more than 1.5 million current and former Wal-Mart female employees.
Writing for the majority, Judge Hawkins found that "the district court acted within its broad discretion in concluding that it would be better to handle some parts of this case as a class action instead of clogging the federal courts with innumerable individual suits litigating the same issues repeatedly." 603 F.3d at 628. The majority found that the District Court had fulfilled its obligation under judicial precedent to conduct a "rigorous analysis" to ensure that the requirements of Rule 23 have been satisfied before certifying a class. Thus, "[t]he district court did not abuse its discretion in finding the requirements of Rule 23 satisfied … with respect to claims for injunctive and declaratory relief and back pay." Id.
In her concurring opinion, Judge Graber complimented both the majority and the dissent for their "scholarly and complete explanations of their positions," but also pointed out:
"In the simplicity of the majority's unremarkable holding: Current female employees may maintain a Rule 23(b)(2) class action against their employer, seeking injunctive and declaratory relief and back pay on behalf of all the current female employees, when they challenge as discriminatory the effects of their employer's company-wide policies.
"If the employer had 500 female employees, I doubt that any of my colleagues would question the certification of such a class. Certification does not become an abuse of discretion merely because the class has 500,000 members." — 603 F.3d at 628-29 [emphasis supplied]
Judge Ikuta's dissenting opinion began by stating that "[n]o court has ever certified a class action like this one, until now." Id. He pointed out that while the six named plaintiffs alleged that they were discriminated against by several individual store managers, "they fail to present '[s]ignificant proof' of a discriminatory policy or practice of Wal-Mart that would make it possible to conclude that 1.5 million members of the proposed class suffered similar discrimination. Without evidence of a company-wide discriminatory policy implemented by managers through their discretionary decisions, or other evidence of a discriminatory company-wide practice, there is nothing to bind these purported 1.5 million claims together in a single action." 603 F.3d at 628-29.
In a separate dissenting opinion, Chief Judge Kozinski stated that the members of the class certified by the District Court "have little in common but their sex and this lawsuit." 603 F.3d at 652.
In its petition, Wal-Mart states that the en banc Ninth Circuit decision "adopts standards that violate the rights of both defendants and absent class members and contradicts decisions" of the Supreme Court. Cert. Petition at 1. Moreover, the "Ninth Circuit created an acknowledged three-way circuit split on the standard for determining when claims for monetary relief can be certified as a class action under Federal Rule of Civil Procedure 23(b)(2), which on its face applies only to claims for injunctive or corresponding declaratory relief." Id. at 2.
Since this case is the largest employment discrimination class action ever filed, it is impossible to overstate the importance of the Supreme Court's upcoming decision whether to hear the case. If the court agrees to hear it, the resulting decision is certain to be applied to every subsequently filed class action in any context, because the court will not be construing employment law, but rather will be establishing the minimum standards for class certification under rule 23.