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Wal-Mart class affirmed by Ninth Circuit, 2-1

In Dukes v. Wal-Mart, a decision that should be long studied for its intellectual dishonesty, a divided court upheld the class certification of a million-plus-member class with disparate individualized claims and absolutely no way to try the case (which seeks punitive damages, no less) with adequate fairness and due process for unnamed class members or the defendant. Objections were brushed aside: after all, if the class is truly problematic, the district judge who made the dishonest certification can choose to decertify the class. (Never mind that this is precisely backwards: the Committee Notes to Rule 23 say "A court that is not satisfied that the requirements of Rule 23 have been met should refuse certification until they have been met.") Statistical evidence that the Supreme Court has said was insufficient was held sufficient; class members that the Supreme Court have said have no standing were given standing; a punitive-damages procedure the Supreme Court has said violates due process was considered sufficient; all in order to shoehorn the class into a "typicality" requirement that could not be met otherwise, demonstrating the danger of class actions where the procedural tail wags the substantive dog. The Court also found, at the request of the plaintiffs' lawyers, that declaratory and injunctive relief "predominate" under Rule 23(b)(2), a matter of procedural convenience rather than intellectual honesty about the law when the compensatory and punitive damages sought rise into the hundreds of billions.

As Judge Kleinfeld's dissent points out, "The Civil Rights Act expressly prohibits orders requiring the reinstatement, promotion, or payment of back pay to anyone injured 'for any reason other than discrimination.'" No matter to the two-judge majority: the substantive law bends to the procedural necessity of extorting billions from Wal-Mart, though here they are at least not dishonest, just lawless, frankly admitting that they prefer "rough justice" to what the law requires.

Judge Kleinfeld's short dissent obliterates the reasoning of the majority opinion, which is why, perhaps, the Judge Pregerson majority opinion makes no effort to address it:

Whether these seven named plaintiffs �will fairly and adequately
protect the interests of the class,� gets no serious
attention, no doubt because everyone assumes that the lawyers
will manage the case without much interference from
their supposed clients. But if the named plaintiffs were really
zealously represented, as they are entitled to be, their interests
would diverge and require separate counsel. Women who still
work at Wal-Mart have an interest in the terms of an injunction.
But an injunction or declaratory judgment cannot benefit
women who have quit or been fired and do not want to return.
Those who are managers have interests different from those
who have not been promoted. Those who face defenses, such
as whether they were fired for stealing time, may have a
greater interest in a compromise settlement than those whose
records are unblemished. ...

The district court calls this class certification �historic,� a
euphemism for �unprecedented.� In the law, the absence of
precedent is no recommendation. This class certification violates
the requirements of Rule 23. It threatens the rights of
women injured by sex discrimination. And it threatens Wal-
Mart�s rights. The district court�s formula approach to dividing
up punitive damages and back pay means that women
injured by sex discrimination will have to share any recovery
with women who were not. Women who were fired or not
promoted for good reasons will take money from Wal-Mart
they do not deserve, and get reinstated or promoted as well.
This is �rough justice� indeed. �Rough,� anyway. Since when
were the district courts converted into administrative agencies
and empowered to ignore individual justice?

Wal-Mart has said that it will seek en banc review, and, if necessary, certiorari from the U.S. Supreme Court. One hopes this lawless decision is overturned.

Bruce Nye has good observations on the decision and on its disregard for FRE 702 and Daubert. Earlier coverage on Point of Law: Jun. 29, 2004 (Walter Olson); Jul. 2, 2004 (Jim Copland); Jan. 7 (former EEOC GC Eric Dreiband in the WSJ); Aug. 16, 2004 (dueling statistics and the problem of "Simpson's Paradox").

Judge Pregerson's previous claim to fame was issuing an opinion seeking to enjoin a lawful California recall election over its use of punchcard ballots that was eventually reversed by an en banc Ninth Circuit panel 11-0.

Press coverage: WSJ; CNN; SF Chron; LA Times; WaPo; The Recorder; AP; Bloomberg.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.