Tuesday, March 29, 2011
The Supreme Court heard arguments today in Wal-Mart v. Dukes, the gender discrimination class action that has been pending for ten years. Based on the transcript, it's hard to predict what the Court will decide. The Justices seemed to split their questions between the procedural questions about the class action rules, questions about the practicalities of trying the case, and questions that go to the merits of the discrimination claim. I'm still processing what I've read, but here are my preliminary impressions.
Counsel for Wal-Mart argued that the only policy the company had was to not discriminate, that any policy which allowed for excess subjectivity by managers couldn't be a "practice," presumably for pattern and practice or disparate impact liability, and that to the extent that there might have been a policy towards that discretion, the policy affected individuals in different ways, so there was no commonality. He also argued that the claims for backpay were really monetary rather than equitable, and were the primary remedy sought, so certifying the class under the section of Rule 23 that allows for an easier process for claims for injunctive relief was improper.
Counsel for the class argued that parts of the policies on pay and promotion gave too much discretion to managers, but there was a strong corporate culture that filled in the exercise of that discretion in a way to prime stereotyping. Thus, the women in the class were all subject to the same policy, which made their claims sufficiently common. He also argued that what was really at stake was the claim for injunctive relief, including back pay, and that Wal-Mart's HR database was thorough enough that a formula could be devised to determine who in the class was entitled to back pay and the amount of that backpay so that individual hearings would not be necessary.
Many of the questions of counsel for Wal-Mart focused on when company headquarters should be on sufficient notice that it should have known that its policies were allowing discrimination to occur. More focused on the possibility of separating out the monetary claims into a separate class and what the effect would be on women who did not want to be part of the class.
Many of the questions for the plaintiff-class's counsel focused on the tension within the plaintiffs' theory of discrimination and commonality. How could a policy of too much managerial discretion affect all of the members of the class in a common way. And more fundamentally, how did the allegation of the strong corporate culture then mesh with the delegation of too much discretion. More questions were skeptical of the use of statistics in general, particularly in the remedial phase. Similarly, many questions focused on how Wal-Mart would be able to raise the pattern and practice defense that it didn't discriminate against a particular woman without individual hearings.
I'm terrible at predictions, and this one seems particularly challenging. It seems safe to say that Justices Ginsburg, Breyer, Sotomayor, and Kagan would hold that some formation of a class could move forward. It's equally safe to say that Justice Scalia, and probably Justice Alito would say the class could not. I couldn't tell conclusively how Justice Roberts or Justice Kennedy might be leaning. Justice Roberts was concerned about fairness to the women not before the court, but he also seemed to suggest that companies should be on notice at some point of a pattern of discriminatory actions by lower level managers such that inaction becomes a policy. He may have been skeptical, though, that the point had been reached here. Justice Kennedy, too, was thinking along those lines, and referenced Monell, a case about when action or inaction by a municipality becomes a policy the municipality is liable for. But both he and Justice Roberts said they had a hard time pinpointing what the plaintiffs were alleging the policy was.
I'll predict a win for Wal-Mart because of those concerns, but I could easily be wrong.