Header graphic for print
Class Action Countermeasures Discussions of the Strategic Considerations Involved In Class Action Defense

Judge Posner Provides Preview of Wal-Mart v. Dukes Ruling?

Posted in Certification

 Last week, while the legal world was abuzz over the Supreme Court argument on Wal-Mart v. Dukes, Judge Posner was quietly putting the finishing touches on Randall v. Rolls Royce, which provides his own take on some of the same issues.

As in Dukes, the plaintiffs sought to represent a class of women who alleged gender discrimination under Title VII. As in Dukes, they alleged that, because they were women, they had received less money for comparable work, and were passed over for promotions within the company. As in Dukes, they sought certification under Rule 23(b)(2), while seeking monetary relief in the form of "back pay." However, unlike the Dukes plaintiffs, the Randall plaintiffs only sought to represent 500 women, so this was hardly "too big to certify." 

The lower court denied certification, holding that the plaintiffs had not demonstrated commonality, typicality, or adequacy (there were conflicts within the class), and that certification of a class seeking monetary relief was not appropriate under Rule 23(b)(2). So the plaintiffs appealed under Rule 23(f).

Judge Posner began his opinion by noting one of the strategic quirks about this Rule 23(f) appeal. Rolls Royce had solid defenses to most of plaintiffs’ claims; so it would behoove it not to oppose certification, because in the very likely event a certified class lost, it would never face another gender discrimination claim from the class members for any conduct through 2011. Judge Posner also spent a paragraph on the plaintiffs’ conflict of interest (one also present in the Dukes class): since some class members were in management they’d be defendants in other class members’ claims.

Having dealt with those issues, Judge Posner turned to Rule 23(b)(2). As he noted:

Class action lawyers like to sue under that provision because it is less demanding, in a variety of ways, than Rule 23(b)(3) suits, which usually are the only available alternative.

So, like in Dukes, the question became whether the plaintiffs could seek certification under Rule 23(b)(2) when they were also seeking back pay. According to Judge Posner, they could not.

To read “injunctive” in the rule to mean “equitable” is to become mired in sticky questions of differentiating between “legal” and “equitable” actions—and such questions abound. See, e.g., Medtronic, Inc. v. Intermedics, Inc. We can avoid the mire by recognizing that Rule 23(b)(2) class actions are limited to cases in which “final injunctive relief or corresponding declaratory relief” is appropriate, rather than extending to all cases in which any kind of equitable relief is sought.

As this case illustrates: calculating the amount of back pay to which the members of the class would be entitled if the plaintiffs prevailed would require 500 separate hearings. The monetary tail would be wagging the injunction dog.

The proper approach in this case would thus have been for the plaintiffs to seek class certification under Rule 23(b)(3)—which requires full notice so that class members can opt out if they want to bring an independent suit for damages or other monetary relief—but to ask for injunctive as well as monetary relief.

The plaintiffs also argued, in the alternative, that they should be allowed to substitute new class representatives (using intervention under Fed. R. Civ. P. 24) should the court find the originals inadequate. But Judge Posner held that, in this case, that would not be an option.

It would go too far to suggest that unless substitution for the original named plaintiffs is sought as soon as a substantial challenge to certification is made, the district judge is justified in denying it. Such a rule might involve constant interruptions of the proceeding—procedural hiccups—as nervous class action counsel tried to add new class representatives every time the defendants raised an objection to certification. But it was obvious from the outset that these named plaintiffs faced a serious chal- lenge to their status as class representatives. And with the entire class in one location (a single plant in Indiana), class counsel had ample opportunity to sift through potential named plaintiffs before deciding on Randall and Pepmeier. Intervention shouldn’t be allowed just to give class action lawyers multiple bites at the certification apple, when they have chosen, as should have been obvious from the start, patently inappropriate candidates to be the class representatives.

With the exception of the substitution question, this case provides a possible road map for the Supreme Court’s decision in Wal-Mart v. Dukes. Wal-Mart raised the same adequacy issues in its brief, and the same Rule 23(b)(2) arguments. Size of the class aside, the facts of the case are remarkably similar to the Dukes class. Whether the Supreme Court will follow that road map, of course, remains to be seen.