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July 18, 2012 Articles

Rule 23(b)(2) Certification after Wal-Mart v. Dukes

Some day it may become impossible to certify claims for monetary relief under Rule 23(b)(2), but, for now, it is possible in a narrow range of circumstances.

By Adam C. Dembrow

In the year since the Supreme Court’s decision concerning certification of class actions under Federal Rule of Civil Procedure 23 in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), fierce debate has ensued as to the degree to which the decision has heightened the requirements for demonstrating commonality under Rule 23(a)(2). Often overlooked, however, is the portion of the decision holding that the class claims for monetary relief at issue in Dukes—claims for back pay under Title VII of the Civil Rights Act of 1964—could not be certified under Rule 23(b)(2). An examination of analysis in Dukes of Rule 23(b)(2), as well as of post-Dukes civil rights class actions considering certification under Rule 23(b)(2), suggests that, at most, Dukes has narrowly refined the law on whether class claims seeking monetary relief may be certified pursuant to this rule.

For a civil action commenced by a single named plaintiff, or a small group of named plaintiffs, to be litigated on behalf of a class of plaintiffs, all the requirements of Rule 23 must be satisfied. In particular, the four requirements of Rule 23(a)—numerosity, commonality, typicality, and adequate representation—must be satisfied. Even if all four of Rule 23(a)’s requirements are satisfied, an action may be maintained as a class action only if it is one of the types of class actions specified in Rules 23(b)(1), (2), or (3). Rule 23(b)(2) describes a class action in which “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Rule 23(b)(2) is the rule typically, although not exclusively, used in class actions seeking to vindicate the civil rights of a group of similarly situated plaintiffs. See, e.g., Fed. R. Civ. P. 23 advisory committee’s note (1966) (“Illustrative [of Rule 23(b)(2) class actions] are various actions in the civil-rights field where a party is charged with discriminating unlawfully against a class, usually one whose members are incapable of specific enumeration.”) (citing cases).

The Dukes Court’s Analysis of Rule 23(b)(2) Certification
In Dukes, the Supreme Court considered whether a class of some 1.5 million women, current and former employees of Wal-Mart, claiming gender discrimination under Title VII, could be certified under Rule 23. Ultimately, a 5-to-4 majority of the Court concluded that the class lacked sufficient commonality to be certified under Rule 23(a)(2). In addition, the Court unanimously concluded that the requirements for certification under Rule 23(b)(2) had not been satisfied. Consequently, the Court reversed the Ninth Circuit’s affirmance of class certification.

The Dukes plaintiffs’ principal justification for certification under Rule 23(b)(2) was that their claims for monetary relief (back pay) did not predominate over their claims for injunctive and declaratory relief. Prior to Dukes, this was an acceptable basis for Rule 23(b)(2) certification of class claims for monetary relief. The Dukes Court took issue with this formulation, however, which it saw as disregarding potential violations of plaintiffs’ and defendant’s due process rights. Specifically, with regard to the plaintiffs’ due process rights, Dukes held that to certify even incidental monetary claims under Rule 23(b)(2), instead of Rule 23(b)(3), might not only strip from class plaintiffs the notice and opt-out rights found in Rule 23(b)(3) but also preclude individual plaintiffs with claims for compensatory damages from advancing such claims, because no class claims were made in Dukes for compensatory damages. However, the Supreme Court stopped short of expressly ruling that the absence of notice and the ability to opt out in class actions where monetary relief does not predominate violates due process.

With regard to the defendant’s due process rights, the Supreme Court stated that “Wal-Mart is entitled to individualized determinations of each employee’s eligibility for backpay[,]” for which “Title VII includes a detailed remedial scheme.” 131 S. Ct. at 2560. After laying out this scheme, the Court rejected the Ninth Circuit’s alternative plan for a “Trial by Formula” (liability and remedial (back pay) determinations would be made for a sample set of class plaintiffs, with the results being applied to the entire remaining class), holding that “a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims.” Id. at 2561.

Ultimately, the Supreme Court determined that the class claims for monetary relief required individualized determinations and therefore were not incidental to claims for declaratory or injunctive relief. Therefore, these claims were inappropriate for Rule 23(b)(2) certification. Having previously expressed doubt that claims for monetary relief could be certified under Rule 23(b)(2), the Supreme Court now held “that they may not, at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief.” 131 S. Ct. at 2557. However, not only was this holding applicable only to class claims for monetary relief (as opposed to those seeking declaratory or injunctive relief or both), but the Court expressed a reservation about its holding, leaving open the possibility (however slim) that where claims for monetary relief are merely incidental to claims for either injunctive or declaratory relief, such claims may be certifiable under Rule 23(b)(2). The Supreme Court expressly did not reach the question of whether Rule 23(b)(2) applies solely to claims for injunctive or declaratory relief, as opposed to claims for monetary relief. See 131 S. Ct. at 2557 (“We need not reach that broader question in this case, because we think that, at a minimum, claims for individualized relief (like the backpay at issue here) do not satisfy the Rule.”). Similarly, the Supreme Court held that “[w]e need not decide in this case whether there are any forms of ‘incidental’ monetary relief that are consistent with the interpretation of Rule 23(b)(2) we have announced and that comply with the Due Process Clause.” 131 S. Ct. at 2560. Thus, the Dukes decision’s addition to Rule 23(b) jurisprudence is simply a strong preference that “individualized monetary claims belong in Rule 23(b)(3).” 131 S. Ct. at 2558.

An examination of civil rights class-action cases considering Rule 23(b)(2) certification after Dukes, including cases in which such certification was granted before Dukes and then revisited after Dukes, suggests that although there is a reluctance to certify incidental claims for monetary relief under (b)(2), Dukes did not really change the legal landscape when considering the certification of Rule 23(b)(2) classes seeking declaratory or injunctive relief or both. Courts have been separately analyzing claims for monetary relief and claims for declaratory and injunctive relief, with the latter claims largely analyzed based on pre-Dukes precedents.

Cases Asserting Claims for Monetary Relief
Subsequent cases in which a class asserted claims for monetary relief, including Title VII class actions such as the one in Dukes, have construed the Rule 23(b)(2) holding in Dukes as changing the rule’s certification standards with respect to class to claims for monetary, as opposed to injunctive, relief. For example, in United States v. City of New York, 276 F.R.D. 22 (E.D.N.Y. 2011), a long-running lawsuit concerning whether the New York City Fire Department’s use of written examinations to screen applicants for entry-level firefighter positions discriminated against black applicants in violation of Title VII, the district court specifically considered the impact of Dukes on certification. Although both parties agreed that Dukes precluded Rule 23(b)(2) certification of class claims for compensatory damages and back pay, the defendant argued that the class claims for liability, previously certified by the court under Rule 23(b)(2), should be decertified as well. The district court disagreed and held that Dukes did not affect Second Circuit precedent governing the application of Rule 23(b)(2) to employment-discrimination class actions (Robinson v. Metro-North Commuter Railroad Co., 267 F.3d 147 (2d Cir. 2001)), insofar as that precedent required “Rule 23(b)(2) certification of the liability phase of pattern-or-practice disparate treatment cases[.]” Id. at 33. The City of New York court further noted that Robinson required a broad reading of Rule 23(c)(4), which provides that “an action may be brought or maintained as a class action with respect to particular issues,” such that the rule “may be used to certify those portions of a claim that satisfy (b)(2) even if the claim as a whole does not. Id. (citing Robinson, 27 F.3d at 167–68). The court then applied this precedent and denied the defendants’ motion to decertify the liability-phase class, ruling that “even where class plaintiffs file a complaint seeking non-incidental individual monetary relief, the classwide liability questions raised by their disparate impact and pattern-or-practice disparate treatment claims are properly certified under Rule 23(b)(2) and (c)(4).” Id. at 35.

Other district courts in the Second Circuit have similarly responded to Dukes by separately analyzing class claims for monetary relief and those for declaratory and injunctive relief, and by continuing to certify the latter claims under Rule 23(b)(2). For example, in Easterling v. Connecticut Department of Correction, 278 F.R.D. 41 (D. Conn. 2011), a class action had been certified under Rule 23(b)(2) prior to Dukes on behalf of a class of female applicants to the Connecticut Department of Correction. The class claimed that a physical fitness test that applicants were required to pass as part of the selection process for becoming a corrections officer had a disparate impact on female applicants in violation of Title VII. The certified class sought both injunctive and monetary relief. Following the Dukes decision, the defendant moved to decertify the class. The court acknowledged that it had certified a class based on then-prevailing Second Circuit law allowing the use of Rule 23(b)(2) to certify a class seeking both injunctive and monetary relief, so long as the injunctive relief predominated over the monetary relief. See 278 F.R.D. at 45 (citing Robinson, 267 F.3d at 169–70). However, the court declined to decertify the entire class; instead, it invoked Rule 23(c)(4), as the City of New York court did. The court then distinguished Dukes from Robinson and, taking up a suggestion from the plaintiff, simply modified its existing 23(b)(2) certification order “to include only the issues of the defendant’s liability and the plaintiff’s claims for class-wide declaratory and injunctive relief, because, unlike claims for monetary damages or individualized injunctions, resolution of these issues ‘must perforce affect the entire class at once.’” Id. at 47 (quoting Dukes, 131 S. Ct. at 2557). See also Chen-Oster v. Goldman, Sachs & Co., No. 10 Civ. 6950, 2012 WL 205875, at*7–8 (S.D.N.Y. Jan. 19, 2012) (rejecting defendants’ argument that, under Dukes, class claims for monetary relief under Title VII precluded certification of any class claims under Rule 23(b)(2), bifurcating case into liability and remedial phases, and finding that a Rule 23(b)(2) class could be certified for a determination as to defendant’s liability for employment discrimination); Stinson v. City of New York, No. 10 Civ. 4228, 2012 WL 1450553, at *20 (S.D.N.Y. Apr. 23, 2012) (certifying class claims for injunctive and declaratory relief under Rule 23(b)(2) and class claims for monetary relief under Rule 23(b)(3), stating that “[r]ecent precedent from this Court establishes that when a district court engages in the analysis required under Rule 23(b)(2) and Rule 23(b)(3), a class can be certified seeking both declaratory and injunctive relief as well as money damages”).

District courts in other circuits have reached similar holdings in other types of civil rights class actions. In D.L. v. District of Columbia, 277 F.R.D. 38 (D.D.C. 2011), the court considered whether Dukes required modification of the class certification order it had issued prior to the Dukes decision. The court had certified under Rule 23(b)(2) a class of children who sued the District of Columbia Public Schools, alleging violations of the Individuals with Disabilities and Education Act (IDEA). Ultimately, the court left untouched its Rule 23(b)(2) certification of the plaintiffs’ claims for declaratory and injunctive relief. At the plaintiffs’ request, the court separately recertified their claims for reimbursement and compensatory education under Rule 23(b)(3), holding that recertification of the damages claims was appropriate given both the Dukes decision and pre-Dukes D.C. Circuit Court precedent giving district courts discretion to “adopt a ‘hybrid’ approach [to class certification by] certifying a (b)(2) class as to claims for declaratory and injunctive relief, and a (b)(3) class as to the claims for monetary relief[.]” 277 F.R.D. at 47 (quoting Eubanks v. Billington, 110 F.3d 87, 96 (D.C. Cir. 1997)) (internal quotation marks omitted). But see Jamie S. v. Milwaukee Pub. Schs., 668 F.3d 481 (7th Cir. 2012) (holding class asserting violation of the IDEA was improperly certified under Rule 23(b)(2) where court-ordered remedy for class claims did not provide final injunctive relief to the class because the remedial scheme required notice to potential class members, followed by a process to determine whether such potential class members were actual class members, followed by separate liability and remedy determinations for each child determined to be a proper class member).

Similarly, in Morrow v. Washington, 277 F.R.D. 172 (E.D. Tex. 2011), named plaintiffs asserted claims on behalf of a putative class of racial and ethnic minorities who alleged that they were improperly targeted by police under a drug interdiction program in violation of their Fourth and Fourteenth Amendment rights. Class claims were asserted seeking declaratory, injunctive, and monetary relief. The court stayed its ruling on class certification pending the decision in Dukes. After that decision, in its determination of the propriety of Rule 23(b)(2) certification, the Morrow court separately analyzed certification of the claims for declaratory and injunctive relief, and the claims for monetary relief. Dukes did not drive the court’s analysis of the former claims, aside from the court stating that the case before it was a civil rights case “against parties charged with unlawful, class-based discrimination[,] a prime example of what (b)(2) is meant to capture.” 277 F.R.D. at 196 (citing Dukes, 131 S. Ct. at 2557) (internal quotation and quotation marks omitted). The Morrow court went on to certify the class claims for declaratory and injunctive relief, even while finding that “the specific declaratory and injunctive relief proposed by Plaintiffs is inappropriate.” Id. at 198. This did not affect the court’s determination concerning certification because “[t]his is not to say that any declaratory or injunctive relief is inappropriate on a classwide basis.” Id. (emphasis in original). By contrast, the court’s analysis of the class claims for monetary relief was based almost entirely on Dukes and its holding that “‘individualized monetary claims belong in Rule 23(b)(3).’” Id. at 202 (quoting Dukes, 131 S. Ct. at 2558). The Morrow court declined to certify class claims for monetary relief under any rule. Because such relief would require individualized determinations, the court left it to individual plaintiffs to pursue their own damages.

Similarly, in Donovan v. St. Joseph County Sheriff, No. 3:11-CV-133, 2012 WL 1601314 (N.D. Ind. May 3, 2012), the named plaintiff brought suit on behalf of himself and a putative class alleging Fourth Amendment violations arising from the defendant sheriff’s policies relating to the time within which certain detainees in the sheriff’s custody were given initial hearings or arraignments. Class claims were asserted for both monetary (compensatory damages) and declaratory relief. Although the court acknowledged that Seventh Circuit precedent “has recognized the validity of a hybrid certification of a Rule 23(b)(2) class for the declaratory relief and a Rule 23(b)(3) class for damages[,]” the court found that, in the case before it, Rule 23(b)(2) certification was not appropriate because it determined that the desired monetary relief was not incidental. 2012 WL 1601314, at *7, n.1. The court did, however, certify the class under Rule 23(b)(3).

Finally, in Logory v. County of Susquehanna, 277 F.R.D. 135 (M.D. Pa. 2011), a detainee in the county jail brought a class action on behalf of himself and a putative class challenging the constitutionality of the jail’s delousing policy. The plaintiff sought, and the district court granted, certification pursuant to Rule 23(b)(3). However, as the plaintiff had requested Rule 23(b)(2) certification in the alternative, the court considered certification under that rule and, relying on Dukes, determined it was inappropriate because the class claims for monetary relief were for compensatory damages (those requiring individualized determinations) and thus could not be incidental to declaratory or injunctive relief. The court did note that, post-Dukes, “Rule 23(b)(2) may allow monetary claims on an indivisible basis[.]” Id. at 147.

Cases Not Involving Monetary Relief
Even some courts considering post-Dukes certification of Rule 23(b)(2) classes not seeking monetary relief have construed the Rule 23(b)(2) holding in Dukes as limited to affecting certification of classes seeking such relief. For example, in a class action seeking to vindicate the constitutional rights of children in foster care, Connor B. ex rel. Vigurs v. Patrick, 278 F.R.D. 30 (D. Mass. 2011), the district court had, prior to Dukes, certified a class of all children who were or who would be in the foster care custody of Massachusetts. After Dukes was decided, the defendant moved to decertify this class, arguing that Dukes changed the standards for certification under both Rules 23(a)(2) and (b)(2). In particular, with respect to Rule 23(b)(2), the defendants, relying on the statement in Dukes that “[t]he key to the (b)(2) class is ‘the indivisible nature of the injunctive or declaratory remedy warranted[,]’” argued that the certified class of foster children could not pass muster under Dukes because “each class member has different needs for . . . services, placements, and visitation.” 278 F.R.D. at 34 (citing Dukes, 131 S. Ct. at 2557). The Connor B. court disagreed and denied the motion, holding that this formulation of Rule 23(b)(2) was not new and that “[a]ny new rules of law that Wal-Mart may have created for 23(b)(2) class actions were limited to its specific holding regarding the propriety of claims for monetary relief.” Id. (citing Dukes, 131 S. Ct. at 2557). Where plaintiffs’ claims were limited solely to injunctive relief, Dukes did not disturb existing law. But see M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 846 (5th Cir. 2012) (vacating certification seeking declaratory and injunctive relief while noting that claims were potentially certifiable under Rule 23(b)(2)).

Similarly, in Gray v. Golden Gate National Recreational Area, No. C-08-00722, 2011 WL 7710257 (N.D. Cal. Aug. 30, 2011), plaintiffs sought certification (post-Dukes) of a class alleging violations of the Rehabilitation Act of 1973. Specifically, the putative class contended that Golden Gate National Recreational Area, a national park, discriminated against people with mobility or vision disabilities by failing to provide them with adequate accommodations. The putative class sought only injunctive relief under Rule 23(b)(2). The defendants claimed that the class could not be certified under either Rules 23(a) or (b)(2) because, with respect to the latter rule, “class wide injunctive relief is unavailable and no injunction complying with both Federal Rules of Civil Procedure 23 and 65 could be fashioned.” 2011 WL 7710257, at *1. In particular, the defendants, relying on Dukes, claimed that they were entitled to present individualized defenses with regard to each challenged barrier in the park and its effect on various types of disabled individuals. The defendants further claimed that no injunctive relief could be fashioned that would provide relief to the entire class. The court disagreed and held that Dukes was distinguishable because the plaintiffs in this case were seeking only injunctive, and not any type of monetary, relief; the statutory defenses to each Title VII back pay claim in Dukes could not be equated to the defendants’ potential defenses in this case; and even though the plaintiffs had yet to spell out the precise injunction they were seeking as a remedy, the court believed such an injunction could be formulated. 2011 WL 7710257, at *22–23. Accordingly, the court certified the class under Rule 23(b)(2).

Post-Dukes Rule 23 jurisprudence continues to evolve. It is conceivable that, in the future, the Supreme Court may effectively foreclose the possibility of certifying any claims for monetary relief whatsoever under Rule 23(b)(2). However, for the time being, certification under the rule remains possible, at least in a narrow range of circumstances. For civil rights class actions asserting claims solely for declaratory or injunctive relief or both, pre-Dukes precedents still appear to govern certification under Rule 23(b)(2). For class actions asserting claims for both monetary and declaratory or injunctive relief, courts appear to be analyzing the former claims under Rule 23(b)(3), while analyzing the latter claims separately under Rule 23(b)(2).

Plaintiffs still wishing to certify claims for monetary relief under Rule 23(b)(2) should, at a minimum, determine what standard exists in their circuit for determining when monetary relief is deemed incidental to declaratory and injunctive relief in order to steer clear of the due process concerns expressed in Dukes. See, e.g., In re Conseco Life Ins. Co. Life Trend Ins. Mktg. & Sales Practice Litig., No. C 10-02124, 2011 WL 6372412 (N.D. Cal. Dec. 20, 2011) (certifying claims for monetary damages under Rule 23(b)(2) after determining damage claims were incidental to claims for injunctive relief).

Keywords: litigation, class actions, class certification, civil rights, monetary relief, injunctive relief, declaratory relief

Adam C. Dembrow – July 18, 2012

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