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9th Circuit Upholds Certification of Wal-Mart Class Action

Published by on May 6, 2010

In a recent 6-5 decision, the en banc U.S. Court of Appeals for the Ninth Circuit upheld a district court’s certification of a class action against Wal-Mart that could potentially include 1.5 million class members.  The plaintiffs, a group of six female employees, alleged that they were discriminated against with respect to pay and promotions due […]

In a recent 6-5 decision, the en banc U.S. Court of Appeals for the Ninth Circuit upheld a district court’s certification of a class action against Wal-Mart that could potentially include 1.5 million class members.  The plaintiffs, a group of six female employees, alleged that they were discriminated against with respect to pay and promotions due to their gender, and sought class certification on their claims.  The district court ruled in favor of class certification, and Wal-Mart appealed the ruling to the Ninth Circuit.  More after the break.

In its opinion, the Ninth Circuit began by clarifying the Supreme Court’s standard for class certification.  The court stated that in determining whether to certify a class, a district court must conduct a “rigorous analysis” to make sure that all of the requirements for class certification are met, which in some instances may require an inquiry into the factual issues, and sometimes the merits, of a case.  The court found that the district court had applied this standard in determining class certification.  Specifically, with regards to the issue of commonality, the court found that the plaintiffs had provided sufficient evidence of common questions of law or fact to satisfy the requirements of Rule 23(a), and that the district court had properly satisfied itself that this requirement had been met.  On the typicality issue, the court rejected Wal-Mart’s argument that the class representatives were not typical of potential class members who held management positions, stating that “because all female employees faced the same alleged discrimination, the lack of a class representative for each management category does not undermine Plaintiffs’ certification goal.”

The court also found that the district court properly certified the class under Rule 23(b)(2), which applies to cases where claims for injunctive or declaratory relief predominate.  The court rejected Wal-Mart’s argument that the claim for back pay prevented certification under this rule.  The court remanded the issue of whether certification under Rule 23(b)(2) is appropriate for punitive damages claims.  The court also found that certification under Rule 23(b)(2) would not be proper with respect to those individuals who were no longer employed by Wal-Mart as of the date of the complaint because they lacked standing to seek injunctive or declaratory relief.  But, the court stated that such individuals may still be eligible for back pay and punitive damages as part of a separate class certified under Rule 23(b)(3).  Although acknowledging Wal-Mart’s concerns that the potential size of the class could raise due process and manageability issues, the court emphasized that the district court had discretion to modify or decertify the class should it become unmanageable. 

Wal-Mart, who is the world’s largest private employer, has stated that it may appeal the Ninth Circuit’s ruling to the Supreme Court.  The company issued a statement saying that, “We do not believe the claims alleged by the six individuals who brought this suit are representative of the experiences of our female associates.”  In the event the case does proceed to trial, the suit could be the largest employment discrimination case to date. 

Additional stories on the case here and here.

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