February 01, 2011 Articles

Lower Class-Certification Standards as Discrimination Suit Advances

More than 1.5 million current or former female Wal-Mart employees are all potential class members in a lawsuit alleging gender discrimination.

By Elizabeth E. McGinn, Benjamin P. Saul, and Sarah Betts Esterhay – February 1, 2011

What do 1.5 million current or former female employees of the world’s largest retailer have in common? Courtesy of the Ninth Circuit, they are all potential class members in a lawsuit against Wal-Mart, alleging gender discrimination. In Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010), an en banc court upheld the certification of the largest ever civil-rights lawsuit with a nationwide class of women who worked at Wal-Mart stores at any point since 1998.

In this case, the Ninth Circuit lowered the standard for class certification under Rule 23 of the Federal Rules of Civil Procedure. The court announced a more lenient standard of proof at the certification stage and eased restrictions on expert testimony and statistical evidence. In addition, the court allowed the lawsuit to proceed under the less restrictive standard in Rule 23(b) for cases seeking equitable relief, as opposed to the more stringent standard for cases where monetary relief predominates. Furthermore, the court held that a defendant’s right to assert defenses against the individual claims can be satisfied by conducting a series of sample mini-trials and then using a formula to calculate damages.

This decision is significant not only for the parties in this case, but also for employers and class-action litigants generally. Courts, moreover, have already applied the decision outside the employment-discrimination context, including in fair-lending class-action cases.

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