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Tuesday, August 24, 2010

Dukes v Wal-Mart Stores: En Banc Ninth Circuit Lowers the Bar for Class Certification and Creates Circuit Splits in Approving Largest Class Action Ever Certified

Posted by D. Daniel Sokol

Donald Falk, Archis Parasharami, & Marcia Goodman (Mayer Brown) explore Dukes v Wal-Mart Stores: En Banc Ninth Circuit Lowers the Bar for Class Certification and Creates Circuit Splits in Approving Largest Class Action Ever Certified.

ABSTRACT: The U.S. Court of Appeals for the Ninth Circuit has issued a significant decision affirming the certification of the largest class action since the adoption of Federal Rule of Civil Procedure 23. In Dukes v. Wal-Mart Stores, Inc., a divided en banc court ruled, 6 to 5, that the district court did not abuse its discretion in certifying a class of as many as 1.5 million female employees who worked in Wal-Mart's 3,400 stores at any time after December 1998 for gender discrimination claims based on pay. The effect of the Ninth Circuit's decision will reach far beyond the employment context and is likely to ease the path to certify class actions under antitrust and California unfair competition theories as well.

The Ninth Circuit's decision creates or deepens conflicts with other circuits on at least three key class certification issues:

1. Whether the district court must resolve Daubert objections to the admissibility of experts used in support of class certification before ruling on the class certification motion;

2. Whether the use of "sample cases" is consistent with the defendant's right to present affirmative defenses against each class member's claims at trial; and

3. Under what circumstances claims for injunctive relief predominate over claims for monetary relief so as to permit class certification under Rule 23(b)(2), which excuses plaintiffs from satisfying the "predominance" and "superiority" requirements imposed by Rule 23(b)(3) on class actions for damages.

Dukes is likely to affect certification of antitrust class actions (and thus, the incentives to settle cases of questionable merit). As one court has put it, because of the enormous stakes involved in class actions, the "basic truth about class action litigation" is that "the fight over class certification is often the whole ball game." Because Dukes lowers the bar to class certification in the Ninth Circuit, businesses that may be targeted by antitrust class actions should be prepared to face more litigation there, and should be sure to preserve important issues for potential Supreme Court review.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/08/dukes-v-walmart-stores-en-banc-ninth-circuit-lowers-the-bar-for-class-certification-and-creates-circ.html

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