In the case of U.S. v. City of New York, United States District Judge Nicholas Garaufis, in the Eastern District of New York, rejected defendant New York City’s attempt to de-certify a class of black firefighters in their suit alleging race discrimination in hiring procedures. The City unsuccessfully relied on the Supreme Court’s recent ruling in Wal Mart v. Dukes, in which the Court more strictly limited the parameters for certifying class actions.
The Supreme Court held in Wal-Mart that there must be a “common question” of law or fact that “must be of such a nature that it is capable of class-wide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” In U.S. v. City of New York, the court found there to be four common questions, which are “whether Defendants” uses of [the written examinations] had a disparate impact upon black applicants for the position of entry-level firefighter; whether Defendants’ uses of those examinations were job related to the position in question and consistent with business necessity; whether alternative practices that satisfy the asserted business necessity without disparate effect are available; and whether Defendants engaged in a pattern or practice amounting to intentional discrimination.” Importantly, this court also cites to a 2nd Circuit case from 2006, finding that “for purposes of Rule 23(a)(2) [class certification] even a single common question will do.”
Why were the plaintiffs in this case permitted to maintain their class status, while the plaintiffs in Wal-Mart lost theirs? It boils down to the breadth of the scope of the class. In Wal-Mart, the class was essentially every woman, regardless of position or geographic location, employed by a company that has many different classes of employee, ranging from greeters paid on an hourly basis to salaried managers. The Wal-Mart court essentially found that there was not a common issue of law or fact between a store greeter working in a rural Arkansas location and an assistant store manager working in a Californian urban location, especially given the lack of evidence in that case.
Judge Garaufis in this particular case was confronted with no such issue. The class was limited to only black firefighters and firefighter applicants who sat for one of two specific written exams, and who were harmed by the City’s use of a pass/fail screening device with specific cutoff scores or a method of rank-order processing. Compared with the very broad class in Wal-Mart, which included all women who were harmed by a vague and lightly-evidenced “culture” of sexist discrimination, the class considered in this case is very narrowly tailored and easily meets the statutory requirements.
This case is likely the first of many that will demonstrate that Wal-Mart applies most forcefully to cases that push the boundary in terms of how broad a class should be. For the majority of class actions that specify classes based on specific and tailored criteria, Wal-Mart should not pose a major threat to plaintiffs going forward.
Dukes, et al. v. Wal-Mart Stores, Inc.
The Supreme Court recently rejected the certification of a class of plaintiffs, consisting of all of Wal-Mart’s current and former female employees, in a Title VII gender discrimination suit against the retail giant. The plaintiffs in this case allege that Wal-Mart, the largest employer in America with over one million employees, discriminates generally against women in pay, job promotions, and in administering disciplinary actions.
Commonality Requirement
In this decision, the Supreme Court set forth and clarifies the appropriate standard for seeking class certification under Federal Rule of Civil Procedure 23, and specifically, the “commonality” requirement. In order to certify a class, the plaintiffs must prove that there are questions of law or fact common to the class. In the Court’s words, there must be a “common contention” that “must be of such a nature that it is capable of classwide resolution- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”
The plaintiffs can satisfy this burden through one of two main ways, the Court held. First, the plaintiffs can assert that the employer used a “biased testing procedure” to evaluate its employees or applicants; or second, that the “employer operated under… a general policy of discrimination.” In proving a general policy of discrimination, plaintiffs may use anecdotal evidence from enough members of the potential class or expert evidence. The Court cited a case that it decided in 1982 as the basis for these two methods.
In this case, however, the plaintiffs fell short. They argued that rather than there being a policy of blatant discrimination, there was a policy of providing wide latitude to store, district, and regional managers, and this policy led to rampant gender discrimination. The Court concluded that this policy of manager autonomy is insufficient to prove commonality, since there is so much potential variation in the behaviors of each manager. The Court did note, however, that such a policy of autonomy is better-suited to showing disparate impact in proving an individual discrimination claim under Title VII, just not for class certification.
Additionally, the plaintiffs in this case only offered accounts of discrimination from forty potential members of the class, where the total number of potential individuals in the class was 500,000. That would have amounted to each account of discrimination representing 12,500 other potential members of the class, where the Court noted that in previous cases, a one-to-eight ratio was found to be permissible. Moreover, the expert in this case failed to make any compelling causal link to the “culture” at Wal-Mart that allegedly led to discriminatory conduct, and could not, with any specificity, demonstrate the impact of that discriminatory “culture” on management decisions.
With regard to commonality, this decision will likely not have a great impact on victims of gender discrimination in the workplace, or even to class actions alleging the same. The Supreme Court looked at the facts of this case and applied it against a standard that it first articulated in 1982 and determined, unfortunately, that they were not sufficient to sustain a class action in this particular case.
Backpay
The Court also tackles the issue of whether or not cases in which the plaintiffs seek backpay qualify for class certification under Rule 23(b)(2). The Court, unfortunately, has held that they do not, writing that this rule cannot be used to certify claims for monetary relief where the monetary relief is not incidental to the injunctive or declaratory relief. Individualized relief, including backpay, the Court goes on to write, does not satisfy Rule 23(b)(2).
The Court cites possible issues that could arise with plaintiffs attempting to minimize the importance of monetary damages in order to become eligible for class certification under Rule 23(b)(2), and reasons that some plaintiffs may unwittingly forfeit their right to compensatory damages when the class is certified in this manner. Importantly, the Court looks to the language of Title VII and finds that if Wal-Mart proves that if it took an adverse employment action against an employee for reasons other than discrimination, the court cannot order it to pay backpay. The Court then looks to the Rules Enabling Act, which states that courts should not interpret Rule 23 in any way that would “abridge, enlarge or modify any substantive right,” and concludes that certifying the class under Rule 23(b)(2) would take away Wal-Mart’s right to litigate its statutory defenses to each individual claim. Essentially, defendants such as Wal-Mart get to raise their affirmative defenses for each employee individually, without any courts’ reliance on “Trial by Formula.”
Ultimately, this Supreme Court ruling leaves plaintiffs with the option to certify their class under Rule 23(b)(3), which only imposes a handful more burdens, many of which are easily overcome, and allows plaintiffs to opt-out of the class to pursue their claims individually. On many levels, this finding further hinders the rights of workers and their ability to to effectuate necessary change in the unlawful corporate culture impacting many minorities and women in the workplace on a daily basis.