Size Doesn’t Matter: Commonality and the Shrinking Class in Dukes v. Wal-Mart

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On August 2, 2013, Judge Charles Breyer issued an order denying class certification to the plaintiffs in Dukes v. Wal-Mart Stores, Inc., Case No. CV 01-02252 CRB (N.D. Cal. August 2, 2013) (Doc. # 991), which two years ago had its original, nationwide class certification victory reversed by the U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011). Judge Breyer rejected, on the basis of a lack of commonality among the class members’ claims, the plaintiffs’ attempt to obtain certification of a narrower employment discrimination class of female Wal-Mart employees.

The new proposed class was limited to “about one hundred and fifty thousand women” employed in what the plaintiffs labeled as Wal-Mart’s “California Regions,” an area that includes about 250 stores. Ultimately, despite the submission of new evidence and the substantial downsizing of the proposed class, the trial court concluded that the plaintiffs were seeking to proceed on what amounted to a “scaled-down version of the same case with new labels on old arguments.”

Judge Breyer first rejected the plaintiffs’ attempt to proceed on a disparate treatment theory of employment discrimination, finding both that: (1) the plaintiffs’ new promotion statistics “are underwhelming” in large part due to the substantial paucity of statistically significant disparities within regions and districts, and a complete absence of such evidence at the individual store level and (2) even though “a pattern of statistically insignificant results can still be evidence of a common question,” the evidence of pay disparity could not “bridge[ ] the ‘worlds away’ gap the Supreme Court described between plaintiffs’ previous showing and Rule 23’s requirements.”

Noting that the court had “little difficulty concluding that the statistics still do not reflect ‘significant proof’ of a ‘general policy of discrimination’. . . ,” Judge Breyer ultimately found that “Plaintiffs numbers are not much stronger than they were when they failed to carry the day at the Supreme Court.”

In addition to rejecting the statistical evidence of disparate treatment, the court also found that plaintiffs’ non-statistical support, which included evidence of “regular communications among management and shared training, which [allegedly] contributed to a ‘strong culture’ and shared stereotypes about women,” was not sufficient to constitute proof of a general policy.

Not only was some of the evidence itself “cryptic and ambiguous,” but the fact that more than 450 decision-makers were involved in the challenged decisions precluded a finding, via anecdotal evidence, that a general policy of discrimination precipitated each of the class members’ alleged injuries. And additional anecdotal evidence from class members themselves amounted only to a 1:1745 ratio of evidence to class membership, even within the smaller, regional class. As a result, the court declined to certify the newly defined disparate treatment class.

Finally, turning to the disparate impact theory of the plaintiffs’ claims, the court concluded that the redefined class still suffered from the same problems as the original nationwide class, namely that a policy of delegated discretion in decision-making is, by definition, the absence of a uniform employment policy, and specifically found that the ostensibly offending policies and practices that were identified by the plaintiffs either were not: (1) applicable across the whole class with respect to the employment decisions in question or (2) specific and constraining enough to constitute a governing policy that led to a disparate impact on the female employees in operation.

Judge Breyer concluded his opinion, summarizing the plaintiffs’ failure, stating: “Rather than identify an employment practice and define a class around it, Plaintiffs continue to challenge the discretionary decisions of hundreds of decision makers, while arbitrarily confining their proposed class to corporate regions that include stores in California, among other states.” The problem is that “there is no particular logic to the precise scope of the class Plaintiffs now propose,” since “nothing in Plaintiffs’ evidence shows that [the regions they selected] are actually different from any other Wal-Mart regions along any relevant dimension.” The lesson is: when it comes to assessing whether a class satisfies the commonality requirement of Rule 23, it’s not the size that matters.