Dukes v. Wal-Mart Stores, Inc.

603 F.3d 571

Betty DUKES; Patricia Surgeson; Edith Arana; Karen Williamson; Deborah Gunter; Christine Kwapnoski; Cleo Page, on behalf of themselves and all others similarly situated, Plaintiffs-Appellees/Cross-Appellants, v. WAL-MART STORES, INC., Defendant-Appellant/Cross-Appellee.

Nos. 04-16688, 04-16720.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 24, 2009.

Filed April 26, 2010.

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Theodore J. Boutrous, Jr., Gibson, Dunn & Crutcher, Los Angeles, CA, for the defendant/appellant/cross-appellee.

Brad Seligman, The Impact Fund, Berkeley, CA, for the plaintiffs/appellees/cross-appellants.

Joel E. Krischer, Latham & Watkins, LLP, Los Angeles, CA, on behalf of amicus curiae Employers Group.

Rae T. Vann, Norris, Tysse, Lampley & Lakis, LLP, Washington, DC, on behalf of amicus curiae Equal Employment Advisory Council.

John H. Beisner, O'Melveny & Myers, LLP, Washington, DC, on behalf of amicus curiae Chamber of Commerce of the United States.

Daniel J. Popeo, Washington Legal Foundation, Washington, DC, on behalf of amicus curiae Washington Legal Foundation.

Laura C. Fentonmiller, Constantine Cannon LLP, Washington, DC, on behalf of amicus curiae The Retail Industry Leaders Association.

Pamela Coukos, Mehri & Skalet, Washington, DC, on behalf of amici curiae The National Employment Lawyers Association, The National Partnership for Women & Families, and The National Women's Law Center.

Daniel B. Kohrman, AARP Foundation Litigation, Washington, DC, on behalf of amicus curiae AARP.

Bill Lann Lee, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, CA, on behalf of amici curiae Consumers Union, National Consumer Law Center, Center for Constitutional Rights, and Communities for a Better Environment.

Audrey J. Wiggins, Lawyers' Committee for Civil Rights Under Law, Washington, DC, on behalf of amici curiae Lawyers' Committee for Civil Rights Under Law, Asian American Justice Center, Asian Pacific American Legal Center of Southern California, Legal Aid Society-Employment Law Center, Mexican American Legal Defense & Educational Fund, NAACP Legal Defense & Educational Fund, Inc., National Association for the Advancement of Colored People, Public Advocates, Inc. & Women Employed.

David R. Bruce, Santa Rose, CA, on behalf of amicus curiae California Employment Law Council.

James M. Beck, Dechert LLP, Philadelphia, PA, on behalf of amicus curiae Product Liability Advisory Council, Inc.

Mark Etheredge Burton, Hersh & Hersh, San Francisco, CA, on behalf of amicus curiae U.S. Women's Chamber of Commerce.

Joe R. Whatley, Whatley, Drake & Kallas, New York, NY, on behalf of amicus curiae Public Justice, P.C.

Barbara L. Sloan, Equal Employment Opportunity Commission, Office of the General Counsel, Washington, DC, on behalf of amicus curiae Equal Employment Opportunity Commission.

Before: ALEX KOZINSKI, Chief Judge, STEPHEN REINHARDT, PAMELA ANN RYMER, HAWKINS, BARRY G. SILVERMAN, SUSAN P. GRABER, RAYMOND C. FISHER, RICHARD A. PAEZ, MARSHA S. BERZON, CARLOS T. BEA and SANDRA S. IKUTA, Circuit Judges.

Opinion by Judge HAWKINS; Concurrence by Judge GRABER; Dissent by Judge IKUTA; Dissent by Chief Judge KOZINSKI.

MICHAEL DALY HAWKINS, Circuit Judge:

Plaintiffs allege that Wal-Mart, Inc., discriminates against women in violation of Title VII of the Civil Rights Act of 1964. After detailed briefing and hearing, the district court certified a class encompassing all women employed by Wal-Mart at any time after December 26, 1998, and encompassing all Plaintiffs' claims for injunctive relief, declaratory relief, and back pay, while creating a separate opt-out class encompassing the same employees for punitive damages. We affirm¹ the district court's certification of a Federal Rule of Civil Procedure 23(b)(2) class of current employees with respect to their claims for injunctive relief, declaratory relief, and back pay. With respect to the claims for punitive damages, we remand so that the district court may consider whether to certify the class under Rule 23(b)(2) or (b)(3). We also remand with respect to the claims of putative class members who no longer worked for Wal-Mart when the complaint was filed so that the district court may consider whether to certify an additional class or classes under Rule 23(b)(3).

BACKGROUND

Plaintiffs' Third Amended Complaint,² brought on behalf of certain named plaintiffs and those similarly situated, asserts claims against Wal-Mart for sex discrimination under Title VII of the 1964 Civil Rights Act. Plaintiffs allege that women employed in Wal-Mart stores: (1) are paid less than men in comparable positions, despite having higher performance ratings and greater seniority; and (2) receive fewer—and wait longer for—promotions to in-store management positions than men. Plaintiffs contend that Wal-Mart's strong, centralized structure fosters or facilitates gender stereotyping and discrimination, that the policies and practices underlying this discriminatory treatment are consistent throughout Wal-Mart stores, and that this discrimination is common to all women who work or have worked in Wal-Mart stores.

Plaintiffs sought to certify a nationwide class of women who have been subjected to these allegedly discriminatory pay and promotion policies. The proposed class consists of women employed in a range of Wal-Mart positions, from part-time entry-level hourly employees to salaried managers. The class seeks injunctive and declaratory relief, back pay, and punitive damages, but not traditional "compensatory" damages. Plaintiffs proposed that the district court certify the following class pursuant to Rule 23:

All women employed at any Wal-Mart domestic retail store at any time since December 26, 1998 who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices.

Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 141-42(N.D.Cal.2004).

After the parties had conducted extensive discovery and filed copious briefs, the district court heard oral argument. At the hearing, Wal-Mart emphasized the "historic" nature of Plaintiffs' motion, including the size of the putative class, involving women employees at Wal-Mart's 3,400 stores in 41 regions. The court acknowledged Wal-Mart's concerns but noted that, while the class size was large, the issues were not unusual.³

DISTRICT COURT PROCEEDINGS

The district court issued an eighty-four-page order granting in part and denying in part Plaintiffs' motion for class certification. See id. at 187-88. With respect to Plaintiffs' claims for equal pay, the district court granted Plaintiffs' certification motion as to issues of alleged discrimination and all forms of requested relief. With respect to Plaintiffs' promotion claim, the court's holding was mixed. The court certified the proposed class with respect to issues of alleged discrimination (including liability for punitive damages, as well as injunctive and declaratory relief); however, the court rejected the pro posed class with respect to the request for back pay, determining that data relating to the challenged promotions were not available for all class members. The court also exercised its discretion to provide for notice and an opportunity for employees to opt-out of the punitive damages portion of the class.

THE APPEAL

Pursuant to Rule 23(f), Wal-Mart appealed, contending that the district court erred by: (1) concluding that the class met Rule 23(a)'s commonality and typicality requirements; (2) eliminating Wal-Mart's ability to respond to individual Plaintiff's claims; and (3) failing to recognize that Plaintiffs' claims for monetary relief predominated over their claims for injunctive or declaratory relief. Plaintiffs cross-appealed from the district court's limitation of back pay relief for many of Plaintiffs' promotion claims.

DISCUSSION

I. STANDARD AND SCOPE OF REVIEW

A district court's decision regarding class certification is not only reviewed for abuse of discretion, Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir.2003), but also subject to "very limited" review, to be reversed "only upon a strong showing that the district court's decision was a clear abuse of discretion," Armstrong v. Davis, 275 F.3d 849, 867(9th Cir.2001) (internal quotation marks omitted). See also Millowitz v. Citigroup Global Mkts., Inc. (In re Salomon Analyst Metromedia Litig.), 544 F.3d 474, 480 (2d Cir.2008) ("When reviewing a grant of class certification, we accord the district court noticeably more deference than when we review a denial of class certification."); Gonzales v. Free Speech Coal., 408 F.3d 613, 618 (9th Cir. 2005) ("Abuse of discretion is a highly deferential standard, under which the appellate court cannot substitute its view of what constitutes substantial justification for that of the district court; rather, the review is limited to assuring that the district court's determination has a basis in reason." (internal quotation marks omitted)); Blyden v. Mancusi, 186 F.3d 252, 269 (2d Cir.1999) ("A district court's decision to certify a class is reviewed for abuse of discretion, and `a reviewing court must exercise even greater deference when the district court has certified a class than when it has declined to do so.'" (quoting Marisol A. v. Giuliani, 126 F.3d 372, 375 (2d Cir.1997) (per curiam))); Doninger v. Pac. Nw. Bell, Inc., 564 F.2d 1304, 1309(9th Cir.1977) (stating that "the judgment of the trial court should be given the greatest respect and the broadest discretion" (internal quotation marks omitted)).

A court abuses its discretion if its decision is premised on legal error. Hawkins v. Comparet-Cassani, 251 F.3d 1230, 1237 (9th Cir.2001). Moreover, the district court's factual findings as to the applicability of Rule 23 criteria are entitled to the traditional deference given such determinations....