Wednesday, June 22, 2011

Some Observations on the Wal-Mart Case

By Mike Dorf

Monday’s Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes is notable for multiple reasons. Here I’ll briefly address three.

1) Over the last quarter of a century, the scholarly interests of the legal academy have been drifting ever further from the concerns of courts. “Doctrinal scholarship,” in which legal scholars ask how various legal questions ought to be resolved by courts, has increasingly fallen out of fashion. Much of this drift is a healthy reflection of legal scholars bringing to bear a more diverse set of tools from related disciplines, such as history, philosophy, economics, statistics, psychology, and other fields. The work of the modern legal academy thus often reflects the professional norms of these other fields in which the scholars were trained--typically more descriptive and less prescriptive. On the whole, this means that whereas a generation or two ago a typical legal scholar imagined himself (and very rarely herself) as a kind of “shadow judge,” our perspective these days is much more external to the work of the courts. Nonetheless, despite all of this drift, legal scholars want to have influence. The Holy Grail is to write an article that becomes the basis for a new statute or a legal doctrine. Judged by that measure, the Wal-Mart decision crowns Richard Nagareda as an extraordinarily influential scholar. Both the majority and the four-Justice partial dissent repeatedly cite Nagareda on the key questions of the meaning of Federal Rule of Civil Procedure 23--almost in the way that an early-19th-century court would have cited Blackstone. This is bittersweet because Richard--whom I had the pleasure to meet only once--passed away well before his time less than a year ago.

2) Turning to the merits of the case, I want to register a tiny bit of faint praise for the majority opinion--intended to damn it, but not entirely. As yesterday’s highly critical NY Times Op-Ed pointed out, "the majority requires that potential members of a class show that they are likely to prevail at trial when they seek initial certification. In this change, the court has made fact-finding a major part of certification, increasing the cost and the stakes of starting a class action."

I agree, and in that important respect, the ruling is reminiscent of the Roberts Court’s most damaging adventure in civil procedure--the pair of rulings in Bell Atlantic v. Twombly and Ashcroft v. Iqbal (collectively called “Twiqbal” by civil procedure geeks like myself) that together imposed a “plausibility” requirement for a lawsuit to survive a motion to dismiss. Twiqbal took a procedural rule that had long been understood to impose a very low bar to getting a case off the ground, and interpreted it to require more than a mere peek at the merits. Wal-Mart does for--or perhaps we might better say Wal-Mart does to--Rule 23, what Twiqbal did for/to Rule 8.

Yet the move in Wal-Mart is at least internally coherent in a way that the Twiqbal rule is not. Both rules require evaluation of the facts, but at least in the class action setting, a court will hear evidence before making the class certification decision. By contrast, under Twiqbal, a court is authorized to dismiss an implausible complaint without hearing any evidence whatsoever.  I don’t intend this observation as a defense of the majority position in Wal-Mart, just as an observation that it’s not as crazy as Twiqbal.  (I told you this would be faint praise.)

3) I don’t read anything in Wal-Mart as foreclosing smaller class actions attacking particular firm practices alleged to be sex discriminatory. If I were a plaintiffs’ lawyer, I might start by attacking Wal-Mart’s requirement that any Wal-Mart employee who wishes to be considered for a management position--including being manager of a single store--go through the company's management training program. To qualify for that program, an employee must have “an above-average performance rating, at least one year’s tenure in the applicant’s current position, and a willingness to relocate.” The plaintiffs cited the requirement that store managers be willing to relocate as evidence of the company's sexist culture. As the partial dissent characterized the argument, "there is a risk that managers" considering whom to promote into positions that feed into store manager positions "will act on the familiar assumption that women, because of their services to husband and children, are less mobile than men."

Perhaps, but I wonder whether a narrower suit, brought either as a class action or on an individual basis, might attack the willingness-to-relocate requirement directly. I haven't done the research, but I would not be surprised to learn that the "familiar assumption" that women are less mobile than men is, on average, true. If so, the requirement that applicants for promotion to store manager positions be willing to relocate would have a disparate impact based on sex, and could be challenged on that basis. Under Title VII, once plaintiffs have shown such a disparate impact, the burden would shift to Wal-Mart to offer evidence that the willingness to relocate is "job-related for the position in question and consistent with business necessity." I suppose it's possible that Wal-Mart could satisfy that burden by arguing that it wants all of its store managers available to move up the corporate ladder, but at least on the face of it, I have a hard time seeing why the willingness to relocate is important for the job of managing a store in which one already works, i.e., for a position that does not require relocation. Whether such a lawsuit would succeed or even be brought remains to be seen.


Neil H. Buchanan said...

Nice analysis, Mike. I suppose it's simply passe to note at this point just how activist the Roberts Court has become. That this (and Twiqbal) are statutory decisions does not make them any less aggressive. Talk about uprooting established law!

From what I've read, I couldn't quite figure out why this decision is being read to mean that cases must henceforth be brought individually. (The Times editorial, for example, described the new world as one in which millions of people, each with $1100 in damages, would be effectively barred from relief.) Your analysis suggests one way to re-aggregate the cases. I'm wondering why the standard reading of the majority's position (including, if I read it correctly, the dissent's characterization thereof) is that class actions are simply dead for this type of case. Even though Wal-Mart accelerates the merits analysis, isn't there a way to sort the original plaintiffs into categories with more similar claims that could pass the first-look analysis that is now required? Or is the new standard simply rigged to say, "Every case of discrimination is so different that there can be no classes anymore, due to our expanded (mis-)reading of the commonality requirement"?

Michael C. Dorf said...

In the past, in a case of this sort, the remedy for intra-class differences would have been sub-classes within a single large class action. The Wal-Mart majority says that these intra-class differences mean that there isn't even commonality in the first place. But I don't see why that means that what would have previously been sub-classes of a single class can't now be separate classes. So I think the commentary is somewhat exaggerated. We will continue to see class actions, just smaller ones.

Hashim said...


You, and especially Neil, suggest that Wal-Mart's fact-finding requirement at the certification stage is an invention novel to this decision (as "plausibility" certainly was in Twombly/Iqbal). But what's your basis for that suggestion? The majority opinion has several cites supporting the practice. See slip op. at 10-11 & n.6. And notably, the dissent does not seem to question this fact-finding requirement: RBG simply argued that the pltfs had adduced sufficient facts. So I don't quite understand the basis of your critique.


Michael C. Dorf said...

Hash: My claim is not that the Wal-Mart Court invented the requirement of fact-finding at the class cert stage. I was agreeing with the NY Times editorial's statement that the decision "has made fact-finding a major part of certification." I read that to be saying that the Court in Wal-Mart engages in what looks like fact-finding more appropriate to the merits than to class cert. Now Justice Scalia says, correctly, that there has always been some overlap between the class cert inquiry and the merits (just as there is overlap between other procedural questions and the merits). The change from the prior cases is one of degree, tone, and emphasis, rather than kind: There is now, in my view, substantially more overlap with the merits. The majority's slicing and dicing of the plaintiffs' expert testimony is the chief example. Rather than just say that all of the cases have in common the question of whether Wal-Mart has a sexist culture, the Court asks whether there is enough evidence of such a sexist culture and enough evidence that such a culture has affected the diverse plaintiffs, to justify class treatment.

As noted in the post, though, my main point in number 2 was that at least the procedures for class cert are reasonably well suited for this sort of enterprise, by contrast with the procedures on a motion to dismiss under Twiqbal.

Hashim said...

Mike: Thanks for the clarification, but I'm still skeptical. Even assuming dubitante that the pltfs' statistical and anecdotal evidence was sufficient to establish a so-called "common question" as to a nationwide "sexist culture" at Wal-Mart, resolution of that "question" would not come within a million miles of proving the pltfs' case. The mere existence of a nationwide "sexist culture" would not show that there was systemic *intentional discrimination* at the individual store-level, which is the "common question" necessary to prove a pattern-or-practice claim. And it would not show that each individual store employed the *same* adverse employment practice with a disparate effect, which is the "common question" necessary to prove a disparate impact claim. I'm unaware of any SCt case that has ever let pltfs proceed based on a so-called "common question" that only trivially advanced (if at all) the ultimate resolution of their merits claims, and the dissent certainly doesn't cite any. In short, rather than "slicing and dicing" the pltfs' facts, I think the majority simply observed that those facts, even taken at face value, had little or nothing to do with what eventually needed to be proven to prevail on a nationwide level. Notably, in this regard, much of the dissent seems to be premised, not on a different view of the facts, but on a much more forgiving standard for what it takes to prevail on the merits for nationwide "pattern or practice" and "disparate impact" claims.

Michael C. Dorf said...

Hash: Prior to Monday's decision, it was not generally thought that the "common question" requirement of FRCP 23(a)(2) needed to be a common question that establishes (or comes close to establishing) the plaintiffs' case. It was widely regarded as a very minimal gatekeeper. For a flavor of how minimal, I recommend that you read Section 1763 of Wright & Miller. That is why the beefing up of FRCP 23(a)(2) has been compared with the beefing up of FRCP 8. The only further clarification I would issue is that I only meant to be agreeing with the second half of the statement in the NY Times editorial--that factfinding is now a major part of class cert (at least when contested). I didn't mean to endorse the first proposition--that plaintiffs must show they are likely to prevail to win class cert. I think that will sometimes be the effect of the ruling, but it's not the majority's rule itself.

In any event, I hope your narrower reading proves correct, just as I expect that on my third point, my reading--which is narrower than that of many of the initial commentators--proves correct.

michael a. livingston said...

But if a willingness to move is inherently discriminatory, isn't everyone from Walmart to the average law school faculty (the whole "matching outside offers" game) subject to attack?

Anonymous said...

If we are to consider "bringing to bear a more diverse set of tools from related disciplines, such as history, philosophy, economics, statistics, psychology, and other fields" (supra) has anyone considered the potential impact of discouraging frivolous litigation in the future?

It's no secret that a big reason for the backlog in many courts is the burden of needless (and often silly) la2 suits. Has anyone considered this possibility?

An "Activist" Court deals with the legal, but also current political climate, which is definitely anti-needless lawsuits.

George M Weinert V

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