Dukes v. Wal-Mart Stores, Inc.Dukes v. Wal-Mart Stores, Inc.
- Reporters:
- , ,
- Before:
- Michael Daly Hawkins, Susan P. Graber, Sandra S. Ikuta, Alex Kozinski, Stephen Reinhardt, Pamela Ann Rymer, Barry G. Silverman, Raymond C. Fisher, Richard A. Paez, Marsha S. Berzon, Carlos T. Bea
Opinion by Judge Hawkins;
Concurrence by Judge Graber;
Dissent by Judge Ikuta;
Dissent by Chief Judge Kozinski
Theodore J. Boutrous, Jr., Gibson, Dunn & Crutcher, Los Angeles, California, for the defendant/appellant/cross-appellee.
Brad Seligman, The Impact Fund, Berkeley, California, for the plaintiffs/appellees/cross-appellants.
Rae T. Vann, Norris, Tysse, Lampley & Lakis, LLP, Washington, D.C., on behalf of amicus curiae Equal Employment Advisory Council.
John H. Beisner, O’Melveny & Myers, LLP, Washington, D.C., on behalf of amicus curiae Chamber of Commerce of the United States.
Daniel J. Popeo, Washington Legal Foundation, Washington, D.C., on behalf of amicus curiae Washington Legal Foundation.
Laura C. Fentonmiller, Constantine Cannon LLP, Washington, D.C., on behalf of amicus curiae The Retail Industry Leaders Association.
Pamela Coukos, Mehri & Skalet, Washington, D.C., on behalf of amici curiae The National Employment Lawyers Association, The National Partnership for Women & Families, and The National Women’s Law Center.
Daniel B. Kohrman, AARP Foundation Litigation, Washington, D.C., on behalf of amicus curiae AARP.
Bill Lann Lee, Lewis, Feinberg, Lee, Renaker & Jackson, P.C., Oakland, California, on behalf of amici curiae Consumers Union, National Consumer Law Center, Center for Constitutional Rights, and Communities for a Better Environment.
Audrey J. Wiggins, Lawyers’ Committee for Civil Rights Under Law, Washington, D.C., on behalf of amici curiae Lawyers’ Committee for Civil Rights Under Law, Asian American Justice Center, Asian Pacific American Legal Center of Southern California, Legal Aid Society-Employment Law Center, Mexican American Legal Defense & Educational
David R. Bruce, Santa Rose, California, on behalf of amicus curiae California Employment Law Council.
James M. Beck, Dechert LLP, Philadelphia, Pennsylvania, on behalf of amicus curiae Product Liability Advisory Council, Inc.
Mark Etheredge Burton, Hersh & Hersh, San Francisco, California, on behalf of amicus curiae U.S. Women’s Chamber of Commerce.
Joe R. Whatley, Whatley, Drake & Kallas, New York, New York, on behalf of amicus curiae Public Justice, P.C.
Barbara L. Sloan, Equal Employment Opportunity Commission, Office of the General Counsel, Washington, D.C., on behalf of amicus curiae Equal Employment Opportunity Commission.
OPINION
HAWKINS, Circuit Judge:
Plaintiffs allege that Wal-Mart, Inc., discriminates against women in violation of Title VII of the Civil Rights Act of 1964. After detailed briefing and hearing, the district court certified a class encompassing all women employed by Wal-Mart at any time after December 26, 1998, and encompassing all Plaintiffs’ claims for injunctive relief, declaratory relief, and back pay, while creating a separate opt-out class encompassing the same employees for punitive damages. We affirm1
BACKGROUND
Plaintiffs’ Third Amended Complaint,2 brought on behalf of certain named plaintiffs and those similarly situated, asserts claims against Wal-Mart for sex discrimination under Title VII of the 1964 Civil Rights Act. Plaintiffs allege that women employed in Wal-Mart stores: (1) are paid less than men in comparable positions, despite having higher performance ratings and greater seniority; and (2) receive fewer—and wait longer for—promotions to in-store management positions than men. Plaintiffs contend that Wal-Mart’s strong, centralized structure fosters or facilitates gender stereotyping and discrimination, that the policies and practices underlying this discriminatory treatment are consistent throughout Wal-Mart stores, and that this discrimination is common to all women who work or have worked in Wal-Mart stores.
Plaintiffs sought to certify a nationwide class of women who have been subjected to these allegedly discriminatory pay and promotion policies. The proposed class consists of women employed in a range of Wal-Mart positions, from part-time entry-level hourly employees to salaried managers. The class seeks injunctive and declaratory relief, back pay, and punitive damages, but not traditional “compensatory”
All women employed at any Wal-Mart domestic retail store at any time since December 26, 1998 who have been or may be subjected to Wal-Mart’s challenged pay and management track promotions policies and practices.
Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 141-42 (N.D. Cal. 2004).
After the parties had conducted extensive discovery and filed copious briefs, the district court heard oral argument. At the hearing, Wal-Mart emphasized the “historic” nature of Plaintiffs’ motion, including the size of the putative class, involving women employees at Wal-Mart’s 3,400 stores in 41 regions. The court acknowledged Wal-Mart’s concerns but noted that, while the class size was large, the issues were not unusual.3
The district court issued an eighty-four-page order granting in part and denying in part Plaintiffs’ motion for class certification. See id. at 187-88. With respect to Plaintiffs’ claims for equal pay, the district court granted Plaintiffs’ certification motion as to issues of alleged discrimination and all forms of requested relief. With respect to Plaintiffs’ promotion claim, the court’s holding was mixed. The court certified the proposed class with respect to issues of alleged discrimination (including liability for punitive damages, as well as injunctive and declaratory relief); however, the court rejected the proposed class with respect to the request for back pay, determining that data relating to the challenged promotions were not available for all class members. The court also exercised its discretion to provide for notice and an opportunity for employees to opt-out of the punitive damages portion of the class.
THE APPEAL
Pursuant to
DISCUSSION
I. STANDARD AND SCOPE OF REVIEW
A district court’s decision regarding class certification is not only reviewed for abuse of discretion, Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003), but also subject to
A court abuses its discretion if its decision is premised on legal error. Hawkins v. Comparet-Cassani, 251 F.3d 1230, 1237 (9th Cir. 2001). Moreover, the district court’s factual findings as to the applicability of Rule 23 criteria are entitled to the traditional deference given such determinations. See Local Joint Executive Bd. of Culinary/Bartender Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1161 (9th Cir. 2001).
Rule 23 “provides district courts with broad discretion to determine whether a class should be certified, and to revisit that certification throughout the legal proceedings before the
Our review is limited to whether the district court correctly selected and applied Rule 23 criteria. Bogus v. Am. Speech & Hearing Ass’n, 582 F.2d 277, 289 (3d Cir. 1978); see also Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 295 (1st Cir. 2000) (“An abuse occurs when a court, in making a discretionary ruling, relies upon an improper factor, omits consideration of a factor entitled to substantial weight, or mulls the correct mix of factors but makes a clear error of judgment in assaying them.“). Thus, if Plaintiffs demonstrate that they meet Rule 23’s requirements, they should be allowed to pursue their action as a class.
II. STANDARDS FOR CLASS CERTIFICATION UNDER RULE 23
[1] A district court may certify a class only if:
(1) the class is so numerous that joinder of all members is impracticable;
[2] The district court must also find that at least one of the following three conditions is satisfied: (1) the prosecution of separate actions would create a risk of: (a) inconsistent or varying аdjudications, or (b) individual adjudications dispositive of the interests of other members not a party to those adjudications; (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class; or (3) questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for the fair and efficient adjudication of the controversy. See
The party seeking certification bears the burden of showing that each of the four requirements of Rule 23(a) and at least one requirement of Rule 23(b) have been met. Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180, 1186 (9th Cir.), amended by 273 F.3d 1266 (9th Cir. 2001).
[3] The parties vigorously contest the standards governing the district court in finding the Rule 23 requirements satisfied. For a number of reasons, we must clarify this standard. First, the parties’ briefs demonstrate the degree of debate over the standard in this circuit. Second, a number of recent cases in other circuits have endeavored to clarify the standard, and we find it prudent to follow suit given evidence of confusion. Third, it is only very recently that any case in this circuit has interpreted language under the standard that drifts away from our clear case law, and we write to clarify our precedent. Fourth, we are not aware of a circuit that has detailed the
A. Supreme Court Authority
The Supreme Court has provided clear, if sometimes misunderstood, guidance on the issue of what standards a district court applies when deciding whether to certify a class.
The leading case describing these standards is Falcon, where the plaintiff successfully certified a class of Mexican-Americans claiming racial discrimination. After a full trial on the merits, however, the district court’s findings distinguishing the named representative’s claims from those of the class called the propriety of continued class certification into question.5 On appeal, the Supreme Court held that because of the district court’s findings at trial, Falcon’s “complaint provided an insufficient basis for concluding that the adjudication of his claim of discrimination in promotion would require the decision of any common question concerning the failure of [General Telephone] to hire more Mexican-Americans.” Id. at 158.
[4] The Court described the implications of its holding, noting that “[s]ometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff’s claim,
Illustrating further, the Court approvingly cited Judge Godbold’s concurring opinion in the Fifth Circuit case that had announced the “across-the-board” rule the Court was reviewing in Falcon. Judge Godbold’s concurrence addressed the role of the district court in understanding the likely course of the litigation, and the Supreme Court praised his focus on “the need for more precise pleadings.” Id. at 160 (internal quotation marks omitted). The Court approved of his statement that ” ‘without reasonable specificity the court cannot define the class, cannot determine whether the representation is adequate, and the employer does not know how to defend.’ ” Id. at 161 (quoting Johnson v. Ga. Highway Express, Inc., 417 F.2d 1122, 1126 (5th Cir. 1969) (Godbold, J., specially concurring)).
[5] Falcon thus provides relatively straightforward guidance. When considering class certification under Rule 23, district courts are not only at liberty to, but must, perform a rigorous analysis to ensure that the prerequisites of Rule 23(a) have been satisfied. See id. at 160-61. It does not mean that a district court must conduct a full-blown trial on the merits prior to certification. A district court’s analysis will often, though not always, require looking behind the pleadings, even to issues overlapping with the merits of the underlying claims. See id. As we describe in more detail below, every circuit to have considered this issue, including our own previous deci-
We also agree with the Second Circuit’s recent decision in Miles v. Merrill Lynch & Co. (In re Initial Pub. Offerings Securities Litigation) (“IPO“), which explained that, to the extent lower courts have evidenced confusion regarding the Rule 23 standard after Falcon, this confusion has existed because those courts have misread a Supreme Court statement made eight years before the Court handed down Falcon. See 471 F.3d 24, 33-34 (2d Cir. 2006). Specifically, courts have misunderstood Eisen v. Carlisle & Jacquelin, in which the Supreme Court stated, “We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action.” 417 U.S. 156, 177 (1974). “This statement has led some courts to think that in determining whether any Rule 23 requirement is met, a judge may not consider any aspect of the merits . . . .” IPO, 471 F.3d at 33. It has “led other courts to think that a judge may not do so at least with respect to a prerequisite of Rule 23 that overlaps with an aspect of the merits of the case.” Id.
As the IPO court recognized, the distinguishing features of Falcon and Eisen are the purposes for which the certifying court is using the underlying facts — whether to address a merits issue unnecessarily or to determine whether, for example, the plaintiffs have demonstrated questions of law or fact common to their proposed class. See IPO, 471 F.3d at 32-35. An easy way to understand this distinction is to analogize to a familiar dispute over the admissibility of alleged hearsay evidence. Offered for the truth of the matter asserted, an out-of-court statement by someone not testifying is, of course, inadmissible hearsay. However, that same evidence used to impeach a witness may be properly admitted. So, too, with
B. Case Law in Other Circuits
Like our decision today, and in part because of courts’ misunderstanding of Eisen, many of our sister circuits have recently been called upon to clarify the standard that a district court applies when deciding whether to certify a class under Rule 23.
Though IPO is the most notable of these decisions, other courts often trace the explanatory effort back to the Seventh Circuit’s decision in Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir. 2001). In Szabo, the court rejected a nationwide products liability class because the class was generally unsuitable for class-wide resolution because of choice of law problems on the state breach-of-warranty and fraud claims. Id. at 674. The Seventh Circuit also found that the district court below had “certified the class without resolving factual and legal disputes that strongly influence the wisdom of class treatment” because the district court had stated that the plaintiffs’ “allegations in the complaint are accepted as true for purposes of the class motion.” Id. at 675. Analogizing to the preliminary jurisdictional inquiries that district courts routinely make under
Since IPO, a number of other circuits have detailed the issue. The First Circuit has reviewed these appellate cases, noting that “[o]ur sister circuits agree that when class criteria and merits overlap, the district court must conduct a searching inquiry regarding the Rule 23 criteria, but how they articulate the necessary degree of inquiry ranges along a spectrum which suggests substantial differences.” Brown v. Am. Honda (In re New Motor Vehicles Canadian Export Antitrust Litig.), 522 F.3d 6, 24 (1st Cir. 2008) (“New Motor Vehicles“).
Though, of course, different circuits have used different words in articulating the review necessary, we think New Motor Vehicles overstates the degree of difference among the
A closer discussion of the cases the First Circuit has cited demonstrates the truly narrow range in which this “spectrum” actually exists. Requiring the district court to “make specific findings that each Rule 23 criterion is met” represents, the First Circuit has claimed, “around the more rigorous end of [the] spectrum,” and has been embraced by the Second, Fourth, Fifth, Seventh—and we would add Ninth—Circuits. New Motor Vehicles, 522 F.3d at 24 (citing IPO, 471 F.3d at 33, 41; Unger v. Amedisys Inc., 401 F.3d 316, 321-22 (5th Cir. 2005) (requiring courts to find facts favoring class certification through the use of “rigorous, though preliminary, standards of proof“); Gariety v. Grant Thornton, LLP, 368 F.3d 356, 366 (4th Cir. 2004) (requiring that “the factors spelled out in Rule 23 . . . be addressed through findings“); Szabo, 249 F.3d at 675-76)); see Blackie, 524 F.2d at 897.
On the other end of this “spectrum,” according to the New Motor Vehicles court, are cases in “the Third and Eighth Circuits [which] sometimes require an inquiry into and preliminary resolution of disputes, but they do not require findings and do not hold that such inquiry will always be necessary.”
In our review of these cases, we find this “spectrum” of certification standards narrower and more internally consistent than does the First Circuit. To begin with, we respectfully disagree with New Motor Vehicles’s characterization of the Third Circuit’s approach. The case New Motor Vehicles cited, Newton, 259 F.3d at 174-77, only discussed a “presumption” of conformity with Rule 23 in the context of the fraud-on-the-market presumption in a securities class action.
The Third Circuit has since provided clarification. It has noted that Newton does not hold that a district court can presume Rule 23 requirements met from contested pleadings outside the fraud-on-the-market context. Vallies v. Sky Bank, No. 08-4160, 2009 WL 5154473, at *7 (3d Cir. Dec. 31, 2009). It has also demonstrated its conformity with the other circuits’ standard more broadly. In In re Constar International Inc. Securities Litigation, the court explained that “we require that each Rule 23 component be satisfied.” 585 F.3d 774, 780 (3d Cir. 2009) (emphasis added) (citing In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 310 (3d Cir. 2009) (“Hydrogen Peroxide“)). Recognizing the importance of the class certification decision, the court emphasized that “district courts, where appropriate, [are] to ‘delve beyond the pleadings to determine whether the requirements for class certification are satisfied.’ ” Id. (quoting Hydrogen Peroxide, 552 F.3d at 316; Newton, 259 F.3d at 167). It further elucidated, “[a]n overlap between a class certification requirement and the merits of a claim is no reason to decline to resolve relevant disputes when necessary to determine whether a class certification requirement is met.” Id. (internal quotation marks omitted). The Third Circuit thus requires a district court “determination” that the “requirements” of Rule 23 have been “satisfied.” Id. While we readily recognize the benefit of the additional cases
New Motor Vehicles is on firmer ground describing the Eighth Circuit’s decision in Blades, though we find the language in that case more nuanced than New Motor Vehicles describes, and we disagree that Blades “suggests substantial differences” from other circuits. New Motor Vehicles, 522 F.3d at 24. The Blades court cited Falcon in describing the standard as follows:
To determine whether common questions predominate, a court must conduct a limited preliminary inquiry, looking behind the pleadings. In conducting this preliminary inquiry, however, the court must look only so far as to determine whether, given the factual setting of the case, if the plaintiffs [sic] general allegations are true, common evidence could suffice to make out a prima facie showing for the class . . . .
The preliminary inquiry at the class certification stage may require the court to resolve disputes going to the factual setting of the case, and such disputes may overlap with the merits of the case. See Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676-77 (7th Cir. 2001). Nonetheless, such disputes may be resolved only insofar as resolution is necessary to determine the nature of the evidence that would be sufficient, if the plaintiff’s general allegations were true, to make out a prima facie case for the class.
Blades, 400 F.3d at 566-67 (some citations omitted) (emphasis added).
While this language is not as definitive as that used by the Second Circuit in IPO, for example, it sets up essentially the
We thus view whether an appellate court requires district courts to “resolve,” id.; “find,” Unger, 401 F.3d at 319-20; or “determine,” IPO, 471 F.3d at 40-41, that Rule 23 requirements have been met, as essentially, even if not precisely, the same standard.6 To characterize such usage as embodying “substantial differences” seems to create a distinction where none exists. See New Motor Vehicles, 522 F.3d at 24; see also Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. Rev. 97, 113-14 (2009) (Nagareda,
Having discussed our sister circuits’ treatment of this issue, we now turn to the standard in our circuit as established by our previous cases.
C. Ninth Circuit Precedent
[6] Since we first addressed the issue in the wake of the Eisen and Falcon decisions, our cases have made clear that a district court inquiry overlapping with the merits is permissible, and often required, under Rule 23. See Moore v. Hughes Helicopters, Inc., 708 F.2d 475, 480 (9th Cir. 1983) (“Although some inquiry into the substance of a case may be necessary to ascertain satisfaction of the commonality and typicality requirements of Rule 23(a), it is improper to advance a decision on the merits to the certification stage.” (citation omitted)). Later, we said that a district court is “at liberty to consider evidence which goes to the requirements of Rule 23 even though the evidence may also relate to the underlying merits of the case.” Hanon v. Dataproducts Corp., 976 F.2d 497, 509 (9th Cir. 1992) (internal quotation marks omitted); see also Staton v. Boeing Co., 327 F.3d 938, 954 (9th Cir. 2003) (“The court may not go so far, of course, as to judge the validity of [the merits] claims. . . . But the breadth and consistency of class counsel’s initial evidence places the district court’s finding of commonality well within
[7] We have adhered to the Supreme Court‘s guidance in holding that “[a] class may only be certified if we are ‘satisfied, after a rigorous analysis, that the prerequisites of
In addition, our cases have understood that Falcon, like
[8] Our most recent statement considering Falcon and Eisen comports with this understanding as well. Writing for the court in United Steel Workers v. ConocoPhillips Co., Judge Bybee explained that it is the plaintiff‘s theory that matters at the class certification stage, not whether the theory will ultimately succeed on the merits. See No. 09-56578, 2010 WL 22701, at *5 (9th Cir. Jan. 6, 2010). We thus found reversible error because the district court did not consider whether the plaintiff‘s legal theory “was one in which common issues of law and or fact did not predominate,” and instead found the class did not meet Rule 23‘s requirements because ” ‘there can be no assurances that [plaintiffs] w[ould] prevail on this theory.’ ” Id. (citing the district court) (first emphasis added). In short, we have consistently held that when considering how the facts and legal issues apply to a class under
For the most part, the dozens of district court cases in this circuit parsing Eisen, Falcon, and our precedent, have considered Eisen‘s language in context, concluding that they must make determinations that the requirements of Rule 23 have been met, and acknowledging that these determinations will sometimes require examining issues that overlap with the merits. See, e.g., Endres v. Wells Fargo Bank, No. C 06-7019, 2008 WL 344204, at *2 (N.D. Cal. Feb. 6, 2008) (“[T]he court is not pеrmitted to make a preliminary inquiry into the merits of the plaintiffs’ claims at that stage of the litigation. Nevertheless, the court must consider evidence relating to the merits if such evidence also goes to the requirements of Rule 23.” (internal quotation marks and citation omitted)); Westways World Travel, Inc. v. AMR Corp., 218 F.R.D. 223, 230 (C.D. Cal. 2003) (“Although the Supreme Court once stated that courts have no authority to conduct a preliminary inquiry
In the less typical instances in which district courts in this circuit have been led astray, a common reason seems to have been a misreading of our statement in footnote 17 of Blackie v. Barrack, in which we explained that district courts are “bound to take the substantive allegations of the complaint as true, thus necessarily making the class order speculative in the sense that the plaintiff may be altogether unable to prove his allegations.” 524 F.2d at 901 n.17; see also Edwards v. City of Long Beach, 467 F. Supp. 2d 986, 991 (C.D. Cal. 2006) (“The court is bound to take the substantive allegations in the complaint as true.“). But, that statement is taken out of con
Nor is the class issue separable from the merits in all cases (including this one). The common questions, typicality, conflicts and adequacy of representation,
Fed. R. Civ. P. 23(a) , and predominance tests,Fed. R. Civ. P. 23(b)(3) , are determinations . . . which may require review of the same facts and the same law presented by review of the merits.
[9] A better reading of Blackie, then, is to understand it as having the meaning that our cases, and the majority of district court opinions, have ascribed to it: Blackie is entirely consistent with the Supreme Court‘s guidance, explicitly requiring
[A] court can never be assured that a plaintiff will prevail on a given legal theory prior to a dispositive ruling on the merits, and a full inquiry into the merits of a putative class‘s legal claims is precisely what both the Supreme Court and we have cautioned is not appropriate for a
Rule 23 certification inquiry.
United Steel Workers, 2010 WL 22701, at *5.
In short, the explanation we provide today is not a new standard at all. Though a small number of district courts in this circuit have misunderstood Blackie and relied on Eisen in the way that the Second Circuit has cautioned against, and that we now reject, the precedent from this court is consistent. We are unable to find a single case in our court that incorrectly relied on the “no merits inquiry” language from Eisen in certifying a class without examining necessary issues because they overlapped with the merits. Cf. Caridad, 191 F.3d at 291-92 (applying the “no merits inquiry” language from Eisen out of context to prohibit the proper
D. Clarifying the Standard
1. The Proper Standard of Rule 23 Adjudication
This review of Supreme Court dictates, as well as our own and other circuits’ treatment of the issue, leads us to recognize a number of constant holdings across circuits that we must incorporate into our clarification of the proper standard governing a district court in considering a
To begin with, at the class certification stage, while Eisen prohibits a court from making determinations on the merits that do not overlap with the
In addition, in the cases such as IPO in which courts have recognized how Eisen is sometimes misunderstood, those circuits have uniformly reserved discretion with the district court to avoid a trial-level inquiry at the certification stage despite
When reading recent class certification cases, one also notices the prevalence of securities fraud cases, and particularly the fraud-on-the-market presumption, in the evolution of the Rule 23 standard. See, e.g., Oscar Private Equity Invs. v. Allegiance Telecom, Inc., 487 F.3d 261, 264 (5th Cir. 2007); IPO, 471 F.3d at 30-31; Bowe v. PolyMedica Corp. (In re PolyMedica Corp. Secs. Litig.), 432 F.3d 1, 6-7 (1st Cir. 2005); Unger, 401 F.3d at 323-24; Gariety, 368 F.3d at 364-66; West v. Prudential Sec., Inc., 282 F.3d 935, 937-38 (7th Cir. 2002).
It is an interesting feature of the case law‘s development that it has occurred largely in these fraud-on-the-market cases, in which a plaintiff typically must show the six “basic elements” of a securities fraud action,
Thus, in contrast to a securities class action based on a fraud-on-the-market theory, in a pattern and practice discrimination case, a plaintiff will typically not come to court in the first place without anecdotal evidence. For practical purposes, assuming a plaintiff possesses anecdotal evidence, the plaintiff‘s statistical evidence does not overlap with the merits, it largely is the merits. See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 986-87 (1988); Int‘l Bhd. of Teamsters v. United States, 431 U.S. 324, 337-39 (1977). This means that disputes over whose statistics are more persuasive are often not disputes about whether the plaintiffs raise common issues or questions, but are really arguments going to proof of the merits. See Nagareda, Class Actions, supra, at 619-20 (“Nowhere is this [disputed statistics] problem more acute than in employment discrimination class actions centered on statistical analysis of an aggregate nature.“). Of course, if one party argued that the other party‘s statistics were unreliable or based on an unaccepted method, this may be an issue the district court would have to resolve to determine whether the potentially problematic statistics were even capable of raising a common question.
In fact, after IPO, but before his recent elevation to the Second Circuit, Judge Gerard Lynch recognized this problem in a Title VII gender discrimination case in which the plaintiffs were seeking to certify on the same grounds as those here. Predictably faced with a dispute regarding whether the plain
The problem, the district court explained, was that “[i]n deciding that the class certification order complied with In re IPO, it is important to note that disparate impact cases present unique difficulties in analyzing the commonality requirement of
In resolving this problem and certifying the class, the district court noted, “[c]ontrary to defendants’ assertions, In re IPO does not stand for the proposition that the Court should, or is even authorized to, determine which of the parties’ expert reports is more persuasive. Defendants ignore the fact that In re IPO specifically rejected this interpretation of Rule 23.” Id. at 210. Instead, Judge Lynch explained, ”In re IPO reiterated that ‘experts’ disagreement on the merits—whether a discriminatory impact [can] be shown—[is] not a valid basis for denying class certification.’ ” Id. (alterations in original) (quoting IPO, 471 F.3d at 35). Thus, the court could only “examine the expert reports as far as they bear on the Rule 23 determination.” Id.
Judge Lynch similarly clarified, with regard to the disparate treatment issue in the case before him, that “plaintiffs and defendants disagree on whose statistical findings and observations are more credible, but this disagreement is relevаnt only
Thus, in addition to demonstrating
This insight derives from the Supreme Court‘s explanation of the predominance test under
While we find the case law across circuits more uniform than some courts have implied, see id. at 24, to the extent it is not, this result may be because of courts’ failure to recognize this key difference between a district court‘s job under
Though some courts have noted the difference between
[10] In short, these observations, which include the Supreme Court‘s direction, long-standing precedent in this court, and treatment from other circuits, lead us to the following explanation of the proper standards governing a district court‘s adjudication of a Rule 23 motion for class certification. First, when considering class certification under
2. The Dissent‘s “Significant Proof” Standard
In addition to setting out our own review, we feel compelled to discuss the dissent‘s consideration of this issue. The Supreme Court‘s decisions in Falcon and Eisen are the primary guides to our ruling in this case. The dissent, in suggesting that we are unfaithful to Falcon, seeks to create a new class action requirement based on a hypothetical in one sentence of Supreme Court dicta; conflates, or at least fails to dis
We read Falcon, as has nearly every Court of Appeals to consider the question, as creating the standard we describe above. But in discussing what it views as the analysis required by Falcon, the dissent quotes a portion of a sentence of Falcon dicta in footnote 15 as standing for the requirement that plaintiffs cannot prevail at the certification stage without showing “[s]ignificant proof that an employer operated under a general policy of discrimination.” Id. at 6244. However, the entire footnote sentence reads as follows: “Significant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes.” Falcon, 457 U.S. at 159 n.15 (emphasis added).15
Contrary to the dissent,16 Falcon does not say that Plaintiffs
The dissent also largely ignores Supreme Court guidance by failing to recognize that Falcon addressed the claim that the allegations of an employee subject to discrimination in
Again unlike in Falcon, and as discussed in detail below, the district court here did not presume or fail “to evaluate carefully the legitimacy [of Plaintiffs’ claims to be] proper class representative[s],” id. at 160, but rather found Rule 23 satisfied only after undertaking the “rigorous analysis” the Supreme Court requires, see Dukes, 222 F.R.D. at 143-69. The specific recognition of Falcon‘s “rigorous analysis” requirement guided the district court‘s analysis throughout its lengthy order, and the court made determinations that each of Rule 23‘s requirements were satisfied. Id. at 143-44, 166-68 (applying Falcon). The dissent‘s attenuated claim that the district court abused its discretion by failing to require a “specific presentation identifying the questions of law or fact that were common to the claims of respondent and of the members of the class he sought to represent,” see Falcon, 457 U.S. at 158, is vitiated by the twenty-four pages in which the district court exhaustively performed exactly that analysis, explicitly
considering questions of law and fact that were common to the members of the class and the named representatives,19 see Dukes, 222 F.R.D. at 145-69. In short, and as we will now explain, at the certification stage, it is difficult for us to envision a more rigorous analysis than the one the district court conducted.
III. CERTIFICATION OF THIS CLASS
Unsurprisingly, the class in this case is broad and diverse, encompassing both salaried and hourly employees in a range of positions, who are or were employed at one or more of Wal-Mart’s 3,400 stores across the country. The district court found that the large class is united by a complex array of company-wide practices, which Plaintiffs contend discriminate against women.
A. Rule 23(a)
At the outset of considering the district court’s certification order in light of the above-clarified standard, we note two facets of the district court’s review.
First, this case reached us after a significantly more searching review than cases in other circuit courts explaining the
In other words, previous circuit courts addressing similar issues have been faced with district courts making the same mistake that we described a small number of district courts in this circuit have made in citing Blackie out of context: refusing to consider any issue overlapping with the merits, and assuming the plaintiffs’ substantive allegations as true for the
Second, we also note that resolving this case requires a close reading of the district court’s lengthy opinion to determine the standard the district court applied in deciding to certify the class. Contrary to the claims of Wal-Mart and the dissent, such a reading of the district court’s individual determinations on
[11] In broadly discussing the standard of review, the district court stated the following:
A party seeking to certify a class must demonstrate that it has met all four requirements of
Federal Rule of Civil Procedure 23(a) , and at least one of the requirements ofRule 23(b) .Rule 23(a) requires that all of the following four factors be met . . . . In short, the class must satisfy the requirements of numerosity, commonality, typicality, and adequacy. . . .The party seeking certification must provide facts sufficient to satisfy Rule 23(a) and(b) requirements. In turn, the district court must conduct a rigorous analysis to determine that the prerequisites ofRule 23 have been met. Gen. Tel. Co. v. Falcon., 457 U.S. 147, 161 (1982). If a court is not fully satisfied, certification should be refused. . . . SeeFed. R. Civ. P. 23 advisory committee’s note to 2003 amends.. . . .
. . . “[A]lthough some inquiry into the substance of a case may be necessary to ascertain satisfaction of the commonality and typicality requirements of
Rule 23(a) , it is improper to advance a decision on the merits to the certification stage.” Moore v. Hughes Helicopters, Inc., 708 F.2d 475, 480 (9th Cir. 1983) (citation omitted); see also Nelson v. United States Steel Corp., 709 F.2d 675, 679-80 (11th Cir. 1983) (plaintiffs’ burden at class certification “entails more than the simple assertion of [commonality and typicality] but less than a prima facie showing of liability“) (citation omitted).
Dukes, 222 F.R.D. at 143-44 (some citations omitted) (last alteration in original) (emphasis added). Unlike some other district courts, which have assumed facts in a complaint, the district court here spent significant effort explaining a nuanced standard that clearly comprehended the need to look well beyond the pleadings in the case.
[12] Most importantly, as we will now explain, the district court’s standard led to a review that complies with Falcon and with our herein-described standards that a district court must follow when deciding whether to certify a class.
1. Numerosity
Rule 23(a)(2) has been construed permissively. All questions of fact and law need not be common to satisfy the rule. The existence of shared legal issues with divergent factual predicates is sufficient, as is a common core of salient facts coupled with disparate legal remedies within the class.
The commonality test is “qualitative rather than quantitative“—one significant issue common to the class may be sufficient to warrant certification, see, e.g., Savino v. Computer Credit, Inc., 173 F.R.D. 346, 352 (E.D.N.Y. 1997), aff’d, 164 F.3d 81 (2d Cir. 1998); see also Conte & Newberg, supra, § 3:10, at 272-74, a standard that dovetails with our discussion above, requiring plaintiffs to show common questions or issues.
The district court found that Plaintiffs had provided evidence sufficient to support their contention that significant factual and legal questions are common to all class members. After analyzing Plaintiffs’ evidence, the district court stated:
Plaintiffs have exceeded the permissive and minimal burden of establishing commonality by providing: (1) significant evidence of company-wide corporate practices and policies, which include (a) excessive subjectivity in personnel decisions, (b) gender stereotyping, and (c) maintenance of a strong corporate culture; (2) statistical evidence of gender disparities caused by discrimination; and (3) anecdotal evidence of gender bias. Together, this evidence
raises an inference that Wal-Mart engages in discriminatory practices in compensation and promotion that affect all plaintiffs in a common manner.
Dukes, 222 F.R.D. at 166. Discussing commonality, the district court alluded to the determinations
a. Evidence of a Common Policy of Discrimination
[13] Pursuant to Falcon, 457 U.S. at 161, Plaintiffs presented four categories of commonality evidence that the district court subjected to a “rigorous analysis“: (1) facts supporting the existence of company-wide policies and practices that, in part through their subjectivity, provide a potential conduit for discrimination; (2) expert opinions supporting the existence of company-wide policies and practices that likely include a culture of gender stereotyping; (3) expert sta
(1) Factual Evidence
As factual evidence, Plaintiffs presented evidence of the following: (1) uniform personnel and management structure across stores; (2) Wal-Mart headquarters’s extensive oversight of store operations, company-wide policies governing pay and promotion decisions, and a strong, centralized corporate culture; and (3) consistent gender-related disparities in every domestic region of the company. Such evidence supports Plaintiffs’ contention that Wal-Mart operates a highly сentralized company that promotes policies common to all stores and maintains a single system of oversight. Wal-Mart does not challenge this evidence.
(2) Expert Opinion
Plaintiffs presented evidence from Dr. William Bielby, a sociologist, to interpret and explain the facts that suggest that Wal-Mart has and promotes a strong corporate culture — a culture that may include gender stereotyping. Dr. Bielby based his opinion on, among other things, Wal-Mart managers’ deposition testimony; organizational charts; correspondence, memos, reports, and presentations relating to personnel policy and practice, diversity, and equal employment opportunity issues; documents describing the culture and history of the company; and a large body of social science research on the impact of organizational policy and practice on workplace bias.
The district court reviewed Plaintiffs’ and Wal-Mart’s competing claims as to Wal-Mart’s uniform culture and determined that “the evidence indicates that in-store pay and promotion decisions are largely subjective and made within a substantial range of discretion by store or district level managers, and that this is a common feature which provides a wide enough conduit for gender bias to potentially seep into the system.” Id. at 152. Having evaluated this evidence in detail, the court determined “that given the evidence regarding strong uniform culture and policies, the degree and impact of this practice is a significant question of fact common to the class as a whole.” Id. at 153. Such a reasoned determination is what our standard for
Wal-Mart made an identical argument to the district court and the district court properly rejected it. A close reading of the district court’s order demonstrates its correct understanding of its role at the
This conclusion is furthered by the fact that Wal-Mart did not (and does not) challenge Dr. Bielby’s methodology or contend that his findings lack relevance because they “do[ ] not relate to any issue in the case,” Daubert, 509 U.S. at 591 (internal quotation marks omitted). Wal-Mart challenges only whether certain inferences can be persuasively drawn from his data. But because Daubert does not require a court to admit or exclude evidence based on its persuasiveness, but rather
[14] Accordingly, Wal-Mart’s contention that the district court was required to strike Dr. Bielby’s testimony under the Daubert test at the class certification stage, simply because the conclusion he reached seemed unpersuasive absent certain corroborating evidence, is misplaced.22 See Daubert, 509 U.S.
In accepting Dr. Bielby’s social framework analysis, the district court stated:
The Court is further guided by Daubert v. Merrell Dow Pharm., Inc. (Daubert II), 43 F.3d 1311, 1316 (9th Cir.1995), in which the Ninth Circuit stated that scientific knowledge “does not mean absolute certainty,” and that expert testimony should be admitted when “the proffered testimony is ‘based on scientifically valid principles.’” Id., quoting Daubert I, 509 U.S. 579, 113 S. Ct. 2786. The Ninth Circuit continued: “Our task, then, is to analyze not what the experts say, but what basis they have for saying it.” Daubert II, 43 F.3d at 1316. The Court is satisfied that Dr. Bi[e]lby’s opinion—while subject to critique—is based on
at 595 (“The focus, of course, must be solely on principles and methodology, not on the conclusions that they generate.“). While a jury may ultimately agree with Wal-Mart that, in the absence of a specific discriminatory policy promulgated by Wal-Mart, it is not more likely than not, based solely on Dr. Bielby’s analysis, that Wal-Mart engaged in actual gender discrimination, that question must be left to the merits stage of the litigation (and presumably will not have to be decided as there will be other evidence). At the class certification valid principles. Thus, it is sufficiently probative to assist the Court in evaluating the class certification requirements at issue in this case. Accordingly, Defendant’s motion to strike Dr. Bilby’s declaration is denied.
Dukes v. Wal-Mart, Inc., 222 F.R.D. 189, 192 (N.D. Cal. 2004) (”Dukes II“).
On this review, regardless of whether full Daubert review is required at the class certification stage, we cannot say that admitting Dr. Bielby’s social framework analysis was an abuse of discretion. The district court specifically considered Daubert’s applicability to Dr. Bielby and was within its discretion to limit its inquiry. As the district court observed, Dr. Bielby’s testimony could be admissible even without reaching “defini-tive[ ]” conclusions, because tentative rather than “conclusive determination[s]” are in “the nature of this particular field of science.” Dukes, 222 F.R.D. at 154.
Other cases support this conclusion. The Third Circuit, citing IPO, has noted that when the plaintiffs’ ability to prove their case “is genuinely disputed, the district court must resolve it after considering all relevant evidence. Here [in Hydrogen Peroxide], the District Court apparently believed it was barred from resolving” these expert disputes. Hydrogen Peroxide, 552 F.3d at 325. Unlike Hydrogen Peroxide and other cases Wal-Mart cites, in the present case the district court heard, rather than excluded, the bulk of the relevant evidence. As a general rule, “‘[d]istrict courts are not required to hold a Daubert hearing before ruling on the admissibility of scientific evidence,’” Millenkamp v. Davisco Foods Int’l, Inc., 562 F.3d 971, 979 (9th Cir. 2009) (quoting Jaros v. E.I. DuPont (In re Hanford Nuclear Reservation Litig.), 292 F.3d 1124, 1138 (9th Cir. 2002)). Plaintiffs clearly established foundation for Dr. Bielby’s testimony and statistics. It was not an abuse of discretion for the district court not to exclude them, under Daubert or otherwise.
(3) Statistical Evidence
It is well established that plaintiffs may demonstrate commonality by presenting statistical evidence, which survives a “rigorous analysis,” sufficient to fairly raise a common question concerning whether there is class-wide discrimination. See Falcon, 457 U.S. at 159 n.15, 161; Caridad, 191 F.3d at 292;24 see also Stastny v. S. Bell Tel. & Tel. Co., 628 F.2d 267, 278 (4th Cir. 1980)
[15] A careful reading of the district court’s treatment of the competing statistical evidence demonstrates that, in conducting its analysis, the district court followed the correct standard as explained in Falcon and our earlier cases, and clarified today.
Dr. Richard Drogin, Plaintiffs’ statistician, analyzed data at a regional level. He ran separate regression analyses for each of the forty-one regions25 containing Wal-Mart stores.26 He concluded that “there are statistically significant disparities
Wal-Mart challenges Dr. Drogin’s findings and faults his decision to conduct his research on the regional level, rather than analyze the data store-by-store.28 However, the proper test of whether workforce statistics should be viewed at the macro (regional) or micro (store or sub-store) level depends largely on the similarity of the employment practices and the interchange of employees at the various facilities. See Kirkland v. N.Y. State Dep’t of Corr. Servs., 520 F.2d 420, 425 (2d Cir. 1975) (recognizing that the focus of analysis depends on the nature of a defendant’s employment practices); 2 Barbara Lindemann & Paul Grossman, Employment Discrimination Law 1598, 1723 (3d ed. 1996).
Here, Dr. Drogin explained that a store-by-store analysis would not capture: (1) the effect of district, regional, and
In conducting its rigorous analysis of these claims, the district court first re-stated its standard of review. Its decision makes clear that the district court made determinations that Plaintiffs’ statistics raised common questions of fact or law only after it rigorously analyzed them, probing significantly behind the pleadings and resolving facts necessary to make determinations on
Discussing the proper standard for evaluating the statistics, the district court said it rejected a full-blown merits evaluation of the evidence but had to “view[ ] the statistical evidence and testimony through the proper lens of the standards applicable to a class certification motion.” Dukes, 222 F.R.D. at 155. Though noting it would not decide the actual merits of the claims, the court did “delve[ ] into the substance of the expert testimony . . . to the extent necessary to determine if it [wa]s sufficiently probative of an inference of discrimination to create a common question as to the existence of a pattern and practice of gender discrimination at Wal-Mart.” Id. This is the precise inquiry that cases such as IPO have required, and it clearly meets the standard we outline above, particularly given the depth of the district court’s review, the evidentiary posture of the case as a Title VII pattern and practice case, and the underlying procedural standard where the district court here was reviewing evidence under
In addition to formulating a review that complied with Falcon and our precedent, the district court, contrary to Wal-
The district court cited Caridad five times. Two instances of this reliance can be immediately set aside as unproblematic because they relied on Caridad’s holding that excessive subjectivity in corporate policies can contribute to a finding of commonality. Dukes, 222 F.R.D. at 149-50, 154. IPO neither addressed nor overruled this holding in Caridad, and it still remains “controlling authority” in the Second Circuit. Hnot, 241 F.R.D. at 210. A third citation to Caridad supported the district court’s statement that, “although some inquiry into the substance of a case may be necessary to ascertain satisfaction of the commonality and typicality requirements of
Turning to the factual assertions in Plaintiffs’ evidence, the court made a preliminary determination, based on the following “largely uncontested” statistics:
[W]omen working in Wal-Mart stores are paid less than men in every region, that pay disparities exist in most job categories, that the salary gap widens over time even for men and women hired into the
same jobs at the same time, that women take longer to enter into management positions, and that the higher onе looks in the organization the lower the percentage of women.
Dukes, 222 F.R.D. at 155. Importantly, and as instructed by Falcon, these factual determinations were arrived at after looking beyond the pleadings to Plaintiffs’ expert’s deposition. Id.
Correctly noting that descriptive statistics do not address causation, the district court then analyzed not the pleadings, but Plaintiffs’ and Wal-Mart’s statistics, finding, “In short, all of Dr. Drogin’s regressions show that gender is a statistically significant variable in accounting for the salary differentials between female class members and male employees at Wal-Mart stores.” Id. at 156.
The court specifically analyzed whether aggregation of statistics for regional units was proper or whether Wal-Mart was correct to insist upon a store-level evaluation. The district court first stated the relevant sub-standard: “The proper test of whether workforce statistics should be viewed at the macro (regional) or micro (store or sub-store) level depends largely on the similarity of the employment practices, and the interchange of employees, at the various facilities.” Id. at 157 (citation omitted). It continued, “Dr. Drogin contends that it is proper to conduct the analysis on a regional level because the subjective decision-making in compensation and promotions takes place within parameters and guidelines that are highly uniform . . . . Plaintiffs also have shown, as discussed above, that the primary salary decision-makers, Store Managers, experience frequent relocation among the various stores.” Id. at 157.
[17] On appeal, Wal-Mart contends that the district court erred by not finding Wal-Mart’s statistical evidence more persuasive than Plaintiffs’ evidence because, according to Wal-
Here, again, the district court followed the Supreme Court’s guidance to thoughtfully “probe behind the pleadings,” Falcon, 457 U.S. at 160, and did not abuse its discretion when it relied on Dr. Drogin’s use and interpretation of statistical data as a valid component of its determination that Plaintiffs raised common questions. It considered Wal-Mart’s challenges to Dr. Drogin’s statistics and made the specific determination that “the Court is not persuaded that Dr. Drogin’s aggregated statistical analysis should be rejected because he did not choose to utilize the Chow test,” as Wal-Mart had urged. Dukes, 222 F.R.D. at 158. In other words, for the purposes of class certification, the district court reasonably made the determination to credit Plaintiffs’ statistics.
Wal-Mart also claims the district court erred in determining that Wal-Mart provided little or no proper legal or factual challenge to Dr. Drogin’s analysis,32 and that, contrary to Wal-Mart’s contention, Dr. Haworth’s Store Manager survey evidence—which was stricken for failing to satisfy the stan-
In rejecting the inclusion of Wal-Mart’s Store Manager surveys as a challenge to Dr. Drogin’s statistics because they were not based on a scientifically valid reasoning or methodology, Dukes II, 222 F.R.D. at 197-98 (discussing
Thus, because Dr. Drogin adequately explained, and the district court rigorously analyzed, why his statistical method best reflected the alleged discrimination, the court did not abuse its discretion when it credited Dr. Drogin’s analysis of statistical evidence of common discrimination questions. Nor did the district court abuse its discretion when it concluded
Finally, and discussed further below, the district court‘s review of statistics showing discrimination regarding promotions was also not an abuse of discretion. Plaintiffs and Defendant disagree over whether Dr. Drogin‘s analysis of internal promotion data was proper. Specifically, both sides agreed that Wal-Mart‘s actual applicant flow data for promotions during the class period was limited and contained significant gaps. Dukes, 222 F.R.D. at 162. Dr. Drogin‘s statistics estimated the applicant flow by “tabulating ‘the incumbents in historical feeder jobs for each promotion.‘” Id. Wal-Mart argued that the data, “while limited, is nonetheless sufficient to justify an extrapolation for all job openings during the entire class period.” Id.
The district court, addressing this statistical dispute, found Plaintiffs’ statistics “sufficient to create an inference of discrimination.” Id. at 164. In doing so, the district court found Dr. Drogin‘s reasoning and methodology valid and applicable in the case. While the court noted in passing that Dr. Drogin‘s statistics were “reasonable,” the court also, and more appropriately, stated that “it is well recognized that where actual applicant flow data is inadequate or unavailable, other measures of applicant flow—including but not limited to “feeder pools“—are deemed acceptable so long as they are used in a reliable manner.” Id. at 162-63. In doing so the district court
Thus, properly considering Dr. Drogin‘s statistics, the court made a determination on the applicant pool data. It found that “Defendant‘s assertion that its approach is necessarily superior does not withstand scrutiny. Rather, Defendant‘s arguments, which go to the weight of the evidence [i.e., the persuasiveness on the merits], merely highlight the presence of a significant issue affecting all class members which supports, rather than defeats, granting class certification.” Id. at 164. This determination was thus made after a rigorous analysis of the parties’ statistical claims.
[18] In short, the district court stated the legal standard, analyzed Plaintiffs’ and Wal-Mart‘s competing claims to the propriety of aggregating statistics on a regional level and addressing Wal-Mart‘s missing applicant flow data, noted Plaintiffs have “shown” reasons to accept their statistics, dismissed Wal-Mart‘s statistical challenges, demonstrated these finding were supported by relevant Ninth Circuit precedent (and an identical dispute involving the same two experts), rejected Wal-Mart‘s reliance on a district court case purportedly explaining why the sub-store statistical analysis was proper, and, finally, determined that at the class certification stage all of this analysis was sufficient to support Dr. Drogin‘s analysis and raise questions of law or fact common to the class. This searching analysis was solid, well founded and in no way an abuse of discretion.
(4) Anecdotal Evidence
Circumstantial and anecdotal evidence of discrimination is commonly used in Title VII “pattern and practice” cases to bolster statistical proof by bringing “the cold numbers convincingly to life.” Teamsters, 431 U.S. at 339; see also Rudebusch v. Hughes, 313 F.3d 506, 517 (9th Cir. 2002). Wal-Mart contends that the district court erred by concluding that the anecdotal evidence, presented by Plaintiffs in the form of sworn declarations, supported a finding of commonality.34 Wal-Mart maintains that the declarations depict a handful of “widely divergent” events that cannot be deemed probative or representative of discrimination in pay or management-track promotions.
In their declarations, the potential class members testified to being paid less than similarly situated men, being denied or delayed in receiving promotions in a disproportionate manner when compared with similarly situated men, working in an atmosphere with a strong corporate culture of discrimination, and being subjected to various individual sexist acts. The district court credited this evidence.
[19] Wal-Mart argues that 120 declarations cannot sufficiently represent a class of this size. However, we find no authority requiring or even suggesting that a plaintiff class submit a specific number of declarations for such evidence to have any value. Moreover, the district court did not state that this anecdotal evidence provided sufficient proof to establish commonality by itself, but merely noted such evidence provides support for Plaintiffs’ contention that commonality is present. See Dukes, 222 F.R.D. at 166 (“This anecdotal evidence, in combination with the other evidence previously discussed, further supports an inference that [Wal-Mart‘s]
Finally, in arguing against certification based on affidavits, Plaintiffs’ personal allegations, statistics, and expert testimony, the dissent intersperses references of Falcon immediately with discussion of Cooper v. Federal Reserve Bank, 467 U.S. 867, 879 (1984), claiming “individual stories do not constitute significant proof that Wal-Mart has adopted a general policy of discrimination or that such a policy prevails” at Wal-Mart. Dissent at 6250. This criticism, and particularly its temporary suspension of consideration of the statistical evidence, is indicative of the dissent‘s repeated attempts to go beyond the Supreme Court‘s concern with the need for “more
Contrary to the dissent‘s proposed standard, Plaintiffs here need not “establish a prima facie case” on the merits. Dissent at 6263. Class certification in Cooper had already taken place and, in fact, the case had gone through a trial. 467 U.S. at 872. The decision for the Supreme Court was whether the class‘s loss at trial precluded a class member from maintaining his own, separate civil action subsequent to the loss. Id. at 869. This is an entirely different posture than the present case presents, and the standard for winning a claim under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), is, of course, different than that for certifying a class action. See Cooper, 467 U.S. at 875-76; Falcon, 457 U.S. at 160-61.
b. Subjective Decision Making
As discussed above, the district court found substantial evidence suggesting common pay and promotion policies among Wal-Mart‘s many stores. See Dukes, 222 F.R.D. at 148-51. The court also reasoned that Wal-Mart‘s decision to permit its managers to utilize subjectivity in interpreting those policies offers additional support for a commonality finding. See id. Relying on Sperling v. Hoffman-LaRoche, Inc., 924 F. Supp. 1346 (D.N.J. 1996), Wal-Mart challenges the latter conclusion, contending that managers’ discretionary authority does not support a finding of commonality because “[d]ecentralized, discretionary decisionmaking is not inherently discriminatory.”
It is well established that subjective decision making is a “ready mechanism[ ] for discrimination” and that courts should scrutinize it carefully. Sengupta v. Morrison-Knudsen Co., 804 F.2d 1072, 1075 (9th Cir. 1986) (internal quotation marks omitted). Wal-Mart is correct that discretionary decision making by itself is insufficient to meet Plaintiffs’ burden. The district court recognized this, noting that managerial discretion is but one of several factors that supported a finding of commonality. See Dukes, 222 F.R.D. at 149-50 (“And while the presence of excessive subjectivity, alone, does not necessarily create a common question of fact, where, as here, such subjectivity is part of a consistent corporate policy and supported by other evidence giving rise to an inference of discrimination, courts have not hesitated to find that commonality is satisfied.“).
Wal-Mart is incorrect, however, that decentralized, subjective decision making cannot contribute to a common question of fact regarding the existence of discrimination. See Falcon, 457 U.S. at 159 n.15. Indeed, courts from around the country have found “[a]llegations of similar discriminatory employment practices, such as the use of entirely subjective personnel processes that operate to discriminate, [sufficient to] satisfy the commonality and typicality requirements of Rule 23(a).” Shipes v. Trinity Indus., 987 F.2d 311, 316 (5th Cir. 1993); see also supra note 7 and cases cited therein.
[20] Plaintiffs produced substantial evidence of Wal-Mart‘s centralized firm-wide culture and policies, see Dukes, 222 F.R.D. at 151-54, thus providing a nexus between the subjective decision making and the considerable statistical evidence demonstrating a pattern of lower pay and fewer promotions for female employees. See id. at 154-65; see also Reid v. Lockheed Martin Aeronautics Co., 205 F.R.D. 655, 670-72 (N.D. Ga. 2001) (subjective decision making may give rise to an inference of discrimination where evidence shows a nexus between decision making and discrimination). Therefore, for the reasons stated above, there was no abuse of
c. Commonality Conclusion
[21] The district court‘s analysis of Rule 23(a)(2) complies with the standard the Supreme Court has set down and we have explained today for a district court adjudicating a motion for class certification. Plaintiffs’ factual evidence, expert opinions, statistical evidence, and anecdotal evidence provide sufficient support to raise the common question whether Wal-Mart‘s female employees nationwide were subjected to a single set of corporate policies (not merely a number of independent discriminatory acts) that may have worked to unlawfully discriminate against them in violation of Title VII. Evidence of Wal-Mart‘s subjective decision-making policies suggests a common legal or factual question regarding whether Wal-Mart‘s policies or practices are discriminatory. Many other courts have reached the same conclusion based on similar evidence. See, e.g., Staton, 327 F.3d at 955; Shipes, 987 F.2d at 316; Cox v. Am. Cast Iron Pipe Co., 784 F.2d 1546, 1557 (11th Cir. 1986); Segar v. Smith, 738 F.2d 1249, 1276 (D.C. Cir. 1984).
3. Typicality
As an initial matter, Plaintiffs contend that Wal-Mart has waived a challenge to the district court‘s typicality finding by failing to offer specific objections to the district court‘s typicality determination. However, because Wal-Mart refers, somewhat obliquely, to the typicality factor in its opening brief and because typicality and commonality are similar and tend to merge, see Falcon, 457 at 157 n.13,37 we conclude that
Thus, although Wal-Mart did not raise a specific challenge, it nevertheless raised a general objection to the district court‘s conclusion that Plaintiffs’ evidence satisfies the typicality requirement. As discussed below, to satisfy the typicality prerequisite, Plaintiffs must demonstrate that their claims and their class representatives are sufficiently typical of the class.
a. Plaintiffs’ Claims Are Sufficiently Typical
Thus, we must consider whether the injury allegedly suffered by the named plaintiffs and the rest of the class resulted from the same allegedly discriminatory practice. See Staton, 327 F.3d at 957. Even though individual employees in different stores with different managers may have received different levels of pay or may have been denied promotion or promoted at different rates, because the discrimination they claim to have suffered occurred through alleged common practices—e.g., excessively subjective decision making in a corporate culture of uniformity and gender stereotyping—the district court did not abuse its discretion by finding that their claims are sufficiently typical to satisfy
b. Plaintiffs’ Representatives Are Sufficiently Typical of the Class
Typicality requires that the named plaintiffs be members of the class they represent. See Falcon, 457 U.S. at 156. There is no dispute that the class representatives are “typical” of the hourly class members, because almost all of the class representatives hold hourly positions. Instead, Wal-Mart contends that the class representatives are not typical of all female in-store managers because only one of the class representatives holds a salaried management position, and she holds a somewhat low-level position.
However, because all female employees faced the same alleged discrimination, the lack of a class representative for each management category does not undermine Plaintiffs’ certification goal. See Hartman v. Duffey, 19 F.3d 1459, 1471 (D.C. Cir. 1994) (An employee can challenge discrimination in “different job categories where the primary practices used to discriminate in the different categories are themselves similar. While it may be prudent to have the class divided into sub-classes represented by a named plaintiff from each of the differing job categories, it would not be necessary to the validity of the class certification to do so.“); Paxton v. Union Nat‘l Bank, 688 F.2d 552, 562 (8th Cir. 1982) (“Typicality is not defeated because of the varied promotional opportunities at issue, or the differing qualifications of the plaintiffs and class members.“).
In addition, because the range of managers in the proposed class is limited to managers working in Wal-Mart‘s stores and excludes those at regional or national offices, it is not an excessively diverse class; a named plaintiff occupying a lower-level, salaried, in-store management position is sufficient to satisfy the “permissive” typicality requirement. Staton, 327 F.3d at 957 (recognizing that, ” ‘[under the rule‘s permissive standards,’ ]” plaintiffs are not required to offer a
[22] Because Plaintiffs’ claims and Plaintiffs’ representatives are sufficiently typical of the class, the district court acted within its discretion when it found that Plaintiffs satisfied the typicality prerequisite.
4. Adequate Representation
Before the district court, Wal-Mart argued that Plaintiffs cannot satisfy this factor because of a conflict of interest between female in-store managers who are both plaintiff class members and decision-making agents of Wal-Mart. Relying on Staton, the district court recognized that courts need not deny certification of an employment class simply because the class includes both supervisory and non-supervisory employees. See Dukes, 222 F.R.D. at 168; see also Staton, 327 F.3d at 958-59. This decision was not an abuse of discretion. Finally, because Wal-Mart does not challenge the district court‘s finding that Plaintiffs’ class representatives and counsel are adequate, we need not analyze this factor.
5. Commonality, Typicality, and Manageability of Promotion Claims
The district court certified Plaintiffs’ promotion claims for injunctive and declaratory relief and punitive damages, but concluded that “manageability concerns” required that “any
[23] Title VII pattern and practice class actions frequently include both salary and promotion claims. See, e.g., Bazemore v. Friday, 478 U.S. 385, 406 (1986) (per curiam); Cooper, 467 U.S. at 870. As discussed above, the district court found that Plaintiffs here have provided evidence sufficient to support their contention that company-wide corporate practices and policies—including excessive subjectivity in personnel decisions, gender stereotyping, and maintenance of a strong corporate culture—affected both compensation and promotion of all Plaintiffs in a common manner. Dukes, 222 F.R.D. at 166. Although there may be some variation among individual promotion decisions, variation does not prevent class certification of common issues of fact. See Hanlon, 150 F.3d at 1019 (“Rule 23(a)(2) has been construed permissively. All questions of fact and law need not be common to satisfy the rule.“). Given its findings regarding Wal-Mart‘s company-wide promotion policies and minimum guidelines, see Dukes, 222 F.R.D. at 148-49, the district court did not abuse its discretion by concluding that there was a sufficient common factual basis among putative class members’ promotion claims to satisfy
[24] We also affirm the district court‘s conclusion that a back pay remedy for promotion claims would be manageable only “with respect to those positions for which objective applicant data is available to document class member interest.” Dukes, 222 F.R.D. at 183. Wal-Mart‘s extensive database containing information on each employee individually with respect to job history, seniority, job review ratings, and
6. Rule 23(a) Conclusion
[25] Based on the evidence before the district court, which it rigorously analyzed pursuant to Falcon, 457 U.S. at 161, and the standard herein described, the district court did not abuse its discretion when it found that the
B. Rule 23(b)
As mentioned earlier, Plaintiffs moved to certify the class under
[26]
We first turn to the appropriate standard for determining when monetary relief “predominates” over declaratory and injunctive relief and therefore precludes certification of a
We see no need to employ either approach, which are both, essentially, glosses on the text of the Advisory Committee‘s Note‘s statement that
An analysis of a plaintiff‘s subjective intent in bringing a suit, as required by the standard set forth in Molski, is, at best,
The Molski approach is troubling for the additional reason that it requires courts to engage in a nebulous and imprecise inquiry into the plaintiffs’ intent in bringing a particular suit. Only in those cases in which a request for injunctive relief is obviously a ruse will this inquiry provide a clear answer. More often than not, we suspect that the answer will be equivocal and, therefore, essentially an entirely discretionary one.
Although the standard set forth in Allison is an objective one that does consider the practical effect of a request for monetary damages, it suffers from a different deficiency. By requiring monetary relief to be no more than “incidental” to injunctive or declaratory relief, the Allison approach is in direct conflict with the text of the Advisory Committee‘s Note, which forbids certification under
Allison‘s standard also “usurps the district courts’ authority granted by
[27] To the extent Molski required the district court to inquire only into the intent of the plaintiffs and focus primarily on determining whether reasonable plaintiffs would bring suit to obtain injunctive or declaratory relief even in the absence of a possible monetary recovery, see Molski, 318 F.3d at 950 & n.15, it is overruled. In light of the inadequacy of both the Allison and Molski approaches, we adopt instead the standard that
[28] Under this standard, as discussed more fully below, the district court‘s decision to include claims for back pay in a class certified under
1. Wal-Mart‘s Evidence Does Not Undermine Plaintiffs’ Claim That Injunctive and Declaratory Relief Predominate
Wal-Mart first asserts that the district court “failed to even evaluate”
2. The Large Size of the Class Does Not Undermine Plaintiffs’ Claim That Injunctive and Declaratory Relief Predominate
Wal-Mart contends that monetary claims necessarily predominate because this case involves claims that may amount to billions of dollars. However, such a large amount is principally a function of Wal-Mart‘s size, and the predominance test turns on the primary goal and nature of the litigation—not the theoretical or possible size of the total damages award. A comparison between the amount of monetary damages available for each plaintiff and the importance of injunctive and declaratory relief for each is far more relevant to establishing predominance than the total size of a potential monetary award for the class as a whole. As the district court stated, “focusing on the potential size of a punitive damage award would have the perverse effect of making it more difficult to certify a class the more egregious the defendant‘s conduct or the larger the defendant. Such a result hardly squares with the remedial purposes of Title VII.” Dukes, 222 F.R.D. at 171. Because Wal-Mart has not shown that the size of the monetary
3. Request for Back Pay Does Not Undermine Plaintiffs’ Claim That Injunctive and Declaratory Relief Predominate
Wal-Mart asserts that Plaintiffs’ request for back pay weighs against certification because it proves that claims for monetary relief predominate. The district court reasoned that back pay “is recoverable as an equitable, make-whole remedy in employment class actions notwithstanding its monetary nature.” Dukes, 222 F.R.D. at 170. Wal-Mart contends that the district court erred by failing to recognize that back pay, whether “equitable” or not, is still a form of monetary relief.
Wal-Mart‘s argument is without merit. Although the circuits have adopted different tests for determining when monetary relief predominates, every circuit to have addressed the issue has acknowledged that
Courts have provided two justifications for the conclusion that a request for back pay is consistent with certification under
We find this reasoning persuasive and therefore join the consensus view that a request for back pay in a Title VII case is fully consistent with the certification of a
4. Monetary Relief May Predominate With Respect to Plaintiffs’ Bifurcated Punitive Damages Claims
In determining whether “appropriate final relief relates exclusively or predominantly to money damages,”
To decide whether certification under
Here, the district court certified Plaintiffs’ punitive damages claims as a separate class, but did so under
Notwithstanding its decision to require notice and an opportunity for opt-out, the district court abused its discretion by certifying the punitive damages claims under
[29] On remand, the district court must determine whether certification under
First, the inclusion of a punitive damages request means that the key issue in this case, Wal-Mart‘s liability, will be decided by a jury, rather than a judge. This significant procedural change weighs in favor of finding that monetary relief would predominate if the punitive damages claims are certified, although it is not dispositive.46
Second, Plaintiffs’ request for punitive damages introduces a new and substantial factual issue. To recover punitive damages, Plaintiffs must show not only that Wal-Mart engaged in a pattern or practice of discrimination, but also that it did so “with malice or with reckless indifference to the federally protected rights of” Plaintiffs.
Third, the size of a potential punitive damages award, measured on an individual basis, could be quite significant. Title VII permits a punitive damage award of up to $300,000 per employee. See
Finally, we note that, unlike in other punitive and compensatory damages cases, this case does not require individualized punitive damages determinations. Plaintiffs’ theory of liability is a class-wide theory that is based on a company policy that allegedly affects all class members in a similar way. See Allison, 151 F.3d at 417 (leaving open the possibility that a punitive damage class could be certified under 23(b)(2) where the “plaintiffs challenge broad policies and practices” and “contend that each plaintiff was affected by th[o]se polices and practices in the same way“). While this factor counsels against a finding that punitive damages predominate, it also is not necessarily dispositive.
In sum, we hold that the district court abused its discretion when it certified a
[30] If the district court concludes that the punitive damage class in this action cannot be certified under
Under this hybrid approach, the highly cohesive
We do not express a view on whether the punitive damages claims in this case meet the
5. Class Certification May Not be Proper as to Class Members Who Were Not Wal-Mart Employees as of the Date Plaintiffs’ Complaint Was Filed
Wal-Mart‘s final contention is that, because a substantial number of the putative class members no longer work for Wal-Mart—and, thus, no longer have standing to seek injunctive or declaratory relief—such relief cannot possibly predominate over monetary relief for purposes of certifying this class under
[31] We agree with Wal-Mart to this extent: those putative class members who were no longer Wal-Mart employees at the time Plaintiffs’ complaint was filed do not have standing to pursue injunctive or declaratory relief. See Walsh v. Nev. Dep‘t of Human Res., 471 F.3d 1033, 1037 (9th Cir. 2006) (recognizing that former employees lack standing to seek injunctive relief because they “would not stand to benefit from an injunction requiring the anti-discriminatory policies [to cease] at [their] former place of work“); ACLU of Nev. v. Lomax, 471 F.3d 1010, 1015 (9th Cir. 2006) (“When evaluating whether [the standing] elements are present, we must look at the facts ‘as they exist at the time the complaint was filed.‘” (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 569 n.4 (1992))). Under these circumstances, it is difficult to say that monetary relief does not predominate with respect to claims by plaintiffs who lack standing to seek injunctive or declaratory relief.
[32] However, this does not mean that former employees are ineligible to receive any form of relief. Although women who were not employed by Wal-Mart as of June 8, 2001, the date on which the complaint was filed, do not have standing to seek injunctive or declaratory relief, they may be eligible
Putative class members who were still Wal-Mart employees as of June 8, 2001, do have standing to seek the injunctive and declaratory relief requested in the complaint.47 See Lomax, 471 F.3d at 1015. We are satisfied that class certification under
In summary, we affirm the district court‘s certification of a
IV. CLASS ACTION CAN PROCEED IN A WAY THAT IS BOTH MANAGEABLE AND IN ACCORDANCE WITH DUE PROCESS
[33] The district court was cognizant of the large size of the class when it concluded that the class size was not unmanageable. See Dukes, 222 F.R.D. at 173. Indeed, the district court acknowledged that, “[w]hile courts possess wide discretion to flexibly respond to manageability issues that may arise
To demonstrate the manageability of the class action, the district court outlined a trial plan based, in large part, on how other courts have handled similarly large and complex class action suits.49 Wal-Mart, supported by a number of business-related amici,50 contend that at least some aspects of this trial
[34] At this stage, we express no opinion regarding Wal-Mart‘s objections to the district court‘s tentative trial plan (or
For example, in Hilao v. Estate of Marcos, 103 F.3d 767, 782-87 (9th Cir. 1996), the district court employed the following procedure to determine the amount of compensatory damages due the plaintiffs in a large class action:54
In all, 10,059 claims were received. The district court ruled 518 of these claims to be facially invalid, leaving 9,541 claims. From these, a list of 137 claims was randomly selected by computer. This number of randomly selected claims was chosen on the basis of the testimony of James Dannemiller, an expert on statistics, who testified that the examination of a random sample of 137 claims would achieve “a 95 percent statistical probability that the same percentage determined to be valid among the examined claims would be applicable to the totality of claims filed.” . . . .
The district court then appointed Sol Schreiber as a special master (and a court-appointed expert under
Rule 706 of the Federal Rules of Evidence ). Schreiber supervised the taking of depositions . . . of the 137 randomly selected claimants . . . .
Based on his recommendation that 6 of the 137 claims in the random sample (4.37%) be rejected as invalid, he recommended the application of a five-per-cent invalidity rate to the remaining claims.
. . . .
He recommended that the award to the class be determined by multiplying the number of valid remaining claims . . . by the average award recommended for the . . . claims . . . .
. . . .
By adding the recommended awards . . . Schreiber arrived at a recommendation for a total compensatory damage award . . . .
. . . .
A jury trial on compensatory damages was [then] held . . . [Hilao‘s statistical expert] testified that the selection of the random sample met the standards of inferential statistics, that the successful efforts to locate and obtain testimony from the claimants in the random sample “were of the highest standards” in his profession, that the procedures followed conformed to the standards of inferential statistics, and that the injuries of the random-sample claimants were representative of the class as a whole. Testimony from the 137 random-sample claimants and their witnesses was introduced. Schreiber testified as
to his recommendations, and his report was supplied to the jury. The jury was instructed that it could accept, modify or reject Schreiber‘s recommendations and that it could independently, on the basis of the evidence of the random-sample claimants, reach its own judgment as to the actual damages of those claimants and of the aggregate damages suffered by the class as a whole. The jury deliberated for five days before reaching a verdict. Contrary to the master‘s recommendations, the jury found against only two of the 137 claimants in the random sample. As to the sample claims, the jury generally adopted the master‘s recommendations, although it did not follow his recommendations in 46 instances. As to the claims of the remaining class members, the jury adopted the awards recommended by the master. The district court subsequently entered judgment for 135 of the 137 claimants in the sample in the amounts awarded by the jury, and for the remaining plaintiffs . . . in the amounts awarded by the jury, to be divided pro rata.
Id. at 783-84 (subheadings and footnotes omitted).
On appeal, the Hilao court was presented with some of the same objections to its trial plan as Wal-Mart presents here.55 After a lengthy discussion, however, the Hilao court rejected these challenges and approved of the trial plan, addressing the due process issue as follows:
While the district court‘s methodology in determining valid claims is unorthodox, it can be justified
by the extraordinarily unusual nature of this case. ” ‘Due process,’ unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances.” Cafeteria and Restaurant Workers Union, Local 473 v. McElroy, 367 U.S. 886, 895 . . . (1961). . . . .
The interest of the [defendant] that is affected is at best an interest in not paying damages for any invalid claims. . . . The statistical method used by the district court obviously presents a somewhat grеater risk of error in comparison to an adversarial adjudication of each claim, since the former method requires a probabilistic prediction (albeit an extremely accurate one) of how many of the total claims are invalid. . . . Hilao‘s interest in the use of the statistical method, on the other hand, is enormous, since adversarial resolution of each class member‘s claim would pose insurmountable practical hurdles. The “ancillary” interest of the judiciary in the procedure is obviously also substantial, since 9,541 individual adversarial determinations of claim validity would clog the docket of the district court for years. Under the balancing test set forth in Mathews [v. Eldridge, 424 U.S. 319 (1976)] and [Connecticut v.] Doehr[, 501 U.S. 1 (1991)], the procedure used by the district court did not violate due process.
Hilao, 103 F.3d at 786-87 (footnote and citations omitted).
Because we see no reason why a similar procedure to that used in Hilao could not be employed in this case,56 we con-
CONCLUSION
For the reasons set forth above, we hold that the district court acted within its broad discretion in concluding that it would be better to handle some parts of this case as a class action instead of clogging the federal courts with innumerable individual suits litigating the same issues repeatedly. The district court did not abuse its discretion in finding the requirements of
We deny Plaintiffs’ cross-appeal, because the district court did not abuse its discretion when it found that back pay for promotions may be limited to those Plaintiffs for whom proof of qualification and interest exists. Finally, we must reiterate that our findings relate only to class action procedural questions; we neither analyze nor reach the merits of Plaintiffs’ allegations of gender discrimination.
AFFIRMED in part; REMANDED in part. Each party to bear its own costs on appeal.
GRABER, Circuit Judge, concurring:
The majority and the dissent have written scholarly and complete explanations of their positions. What the length of their opinions may mask is the simplicity of the majority‘s unremarkable holding:
Current female employees may maintain a
Rule 23(b)(2) class action against their employer, seeking injunctive and declaratory relief and back pay on behalf of all the current female employees, when they challenge as discriminatory the effects of their employer‘s company-wide policies.
If the employer had 500 female employees, I doubt that any of my colleagues would question the certification of such a
I therefore concur fully in the majority opinion.
IKUTA, Circuit Judge, with whom Chief Judge KOZINSKI and Judges RYMER, SILVERMAN, and BEA join, dissenting:
No court has ever certified a class like this one, until now. And with good reason. In this case, six women who have worked in thirteen of Wal-Mart‘s 3,400 stores seek to represent every woman who has worked in those stores over the course of the last decade—a class estimated in 2001 to include more than 1.5 million women. According to the plaintiffs’ theory, Wal-Mart has a corporate policy of discrimination which it implements through the discretionary decisions of store managers, resulting in class-wide injury in violation of Title VII of the Civil Rights Act of 1964.
But while the six plaintiffs allege they have suffered discrimination at the hands of a few individual store managers, they fail to present “[s]ignificant proof” of a discriminatory policy or practice of Wal-Mart that would make it possible to conclude that 1.5 million members of the proposed class suffered similar discrimination. See Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 159 n.15 (1982). Without evidence of a company-wide discriminatory policy implemented by managers through their discretionary decisions, or other evidence of a discriminatory company-wide practice, there is nothing to bind these purported 1.5 million claims together in a single action. See id. at 158-59.
Then there is the problem of individual hearings. Under Title VII, Wal-Mart has the right to raise affirmative defenses as to each class member‘s claim. This means the court must
In certifying the class despite these obstacles, the district court abused its discretion. In affirming most of the district court‘s determinations, the majority compounds the error, and creates a precedent for class action suits that departs from the language and intent of
I
A brief review of the facts highlights the obstacles to certifying this class. Wal-Mart is the largest private employer in the world, Dukes v. Wal-Mart Stores, Inc. (Dukes I), 222 F.R.D. 137, 141 (N.D. Cal. 2004), and the largest retail chain in the United States. At year-end 2001, when this suit was filed, Wal-Mart employed over 930,000 retail employees in hundreds of different jobs at roughly 3,400 stores nationwide.
Wal-Mart‘s corporate structure is complex. The company divides its retail operation into seven divisions, six for Wal-Mart and one for Sam‘s Club.1 Those divisions are split into 41 separate regions, each of which is overseen by a regional vice president. The regions are further divided into roughly 400 individual districts, which are headed by district managers. Each of Wal-Mart‘s regions consists of 80 to 85 stores, with Wal-Mart employing anywhere from 80 to 500 people per store.
Individual stores are run by store managers who are responsible for hiring and promoting the hourly employees in their respective stores. At each store, assistant managers report to
Wal-Mart gives its managers substantial discretion in both pay and promotion decisions. Store managers make pay decisions for hourly employees, subject only to a general pay structure. Id. at 146. Store managers “are allowed to depart from the minimum start rates, within a two dollar per hour range, without being constrained by objective criteria and with limited oversight.” Id. at 146-47. Wal-Mart also allows store managers to increase pay for exceptional performance. Id. at 147. District managers set the pay for salaried employees. They have “discretion to set pay rates with little guidance and limited oversight.” Id.
Managers likewise have substantial discretion in making promotion decisions. Wal-Mart has corporate guidelines regarding entrance requirements for its management trainee program, but individual store managers may apply their own subjective criteria in selecting employees who will be invited to enter the program. Id. at 148. Decisions regarding advancement into the highest store-level managerial positions (assistant manager, co-manager, and store manager) are “similarly based on subjective assessments beyond adherence to corporate minimum guidelines.” Id. Discretion is “further compounded by the fact that the company does not monitor the promotion decisions being made or otherwise systematically review the grounds on which candidates are selected for promotion.” Id. at 149.
This action was brought by six women on behalf of all women who were employed in any retail store position throughout Wal-Mart. Two of these six women still work at
Together, these six women assert that they are adequate class representatives of a class comprising “[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26, 1998 who have been or may be subjected to Wal-Mart‘s challenged pay and management track promotions policies and practices.” Id. at 141-42. The class includes every woman working in Wal-Mart‘s retail stores, which by definition encompasses salaried store managers who were responsible for the allegedly discriminatory hiring decisions,4 assistant managers and co-managers who were also responsi-
II
Before it can certify a class, a court must ensure that the proposed class meets the standards set forth in
We review the district court‘s class certification decisions for abuse of discretion. Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir. 2003). Abuse of discretion occurs when the district court commits a legal error, or when it “relies upon an improper factor, omits consideration of a factor entitled to substantial weight, or mulls the correct mix of factors but makes a clear error of judgment in assaying them.” Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 939 (9th Cir. 2009) (citation and internal quotation marks omitted).
A
In Falcon, the Supreme Court held that when a small number of plaintiffs allege company-wide discrimination and attempt to certify a company-wide class, the district court must undertake a “rigorous analysis” to determine whether the
This principle is simple common sense. A female employee in a store in California, for example, may have a valid claim that her supervisor discriminated against her when making decisions regarding promotion opportunities. But this individual claim would not by itself entitle the California employee to bring the alleged discrimination claims of female employees in a store in Wyoming. Absent evidence that the Wyoming employees had been subject to the same sort of discrimination and could bring the same sort of claims, such a proposed class would clearly fail the
The Supreme Court has identified two situations in which a plaintiff could potentially bridge this gap. The first is where a plaintiff alleges that an employer “used a biased testing procedure” to evaluate all members of the proposed class. Id. at 159 n.15. This makes sense because if the employer used a biased testing procedure throughout the company, then every employee subject to the test would have a similar claim.
The Court’s second example applies directly to this case: a plaintiff “conceivably” could bring a company-wide Title VII
Although Falcon did not spell out what constitutes “significant proof” of the existence of a general policy of discrimination, it did make one thing сlear: Evidence of discrete instances of discrimination are insufficient to sustain an inference of an employer’s general policy and do not rise to the level of “significant proof.” See 457 U.S. at 158 (holding that evidence that the plaintiff “was passed over for promotion when several less deserving whites were advanced” may support a claim of individual discrimination, but “would not necessarily justify” a company-wide claim of discrimination). This is the standard that must be applied to the claims here.
The majority offers several reasons for concluding it is not bound by Falcon’s “significant proof” requirement. First, the majority claims that this requirement has little weight because it was a “hypothetical in clear dicta.”8 Maj. Op. at 6178 n.15. This contention has no merit. We are bound by the Supreme Court’s instructions whether they are stated in the first sentence of an opinion or in the final footnote. Falcon’s analysis of
Second, the majority attempts to cabin Falcon to its facts, asserting that the “significant proof” requirement applies only when the plaintiff is an employee of the company and other members of the purported class are job applicants. In such a case, the majority asserts, the plaintiff and the purported members of the class have “distinct legal theories of recovery.” Maj. Op. at 6179. The majority’s efforts to distinguish Falcon on this ground are unpersuasive. Falcon’s determination that the district court erred in certifying a class of existing employees and job applicants was based on the general principle that a plaintiff’s claims must “fairly encompass” those of
Finally, the majority claims that Falcon’s “significant proof” requirement conflates the class certification and merits phases of the litigation. Maj. Op. at 6180 n.17. This is incorrect. Falcon does not require plaintiffs to prove the merits of their claim; here, for example, plaintiffs need not establish a prima facie case of discrimination that can survive the employer’s rebuttal evidence, nor need they prove their claims for individual relief. See Int’l Bhd. of Teamsters v. United States, 431 U.S. 324, 360 (1977). But Falcon does require the plaintiffs to put forth some significant proof, i.e., evidence beyond allegations, that a general policy of discrimination exists. Falcon, 457 U.S. at 159 n.15. More important, as Falcon states (and as the majority acknowledges), courts at the class certification stage must “probe behind the pleadings” to examine evidence which goes to the requirements of
We must consider plaintiffs’ motion for class certification under
1
On its face, 120 anecdotes, or one anecdote for every 12,500 class members, does not support plaintiffs’ claim that Wal-Mart had a company-wide policy of discrimination. The affidavits describe the affiants’ experiences in, at most, 235 of Wal-Mart’s 3,400 stores, meaning that the affidavits provide no information about working conditions in over 3,100 stores. A single affidavit from a single store in Michigan tells little about whether there is discrimination at each of the other 72 stores in Michigan, let alone the rest of the company. Cooper, 467 U.S. at 877-78; see Cooper v. S. Co., 390 F.3d 695, 714-15 (11th Cir. 2004) (holding that evidence of discrimination in one part of a company does not necessarily give rise to an inference of discrimination in a different part of the company), overruled on other grounds by Ash v. Tyson Foods, Inc., 546 U.S. 454, 457-58 (2006) (per curiam).
The Supreme Court has held that a court may find a company-wide policy of discrimination where plaintiffs have offered a substantial number of affidavits compared to the size of the class, along with sufficient statistical evidence.11 Teamsters, 431 U.S. at 339. In Teamsters, for example, 40 anecdotes of discrimination out of a class of some 334 employees (one out of every eight class members) were held probative of a pattern or practice of discrimination. See
On the other hand, the Supreme Court has concluded that a handful of discriminatory incidents is insufficient evidence of a company-wide policy of discrimination to justify certification of a company-wide class. Falcon, 457 U.S. at 159. A plaintiff’s individual experience of discriminatory treatment does not itself raise the inference that such treatment is typical of the employer’s practices. Id. at 158; see Cooper, 467 U.S. at 877-78 (“[A] class plaintiff’s attempt to prove the existence of a companywide policy, or even a consistent practice within a given department, may fail even though discrimination against one or two individuals has been proved.“).
Here, 120 affidavits compared to 1.5 million members of the class amount to nothing more than evidence of “isolated or sporadic” incidents of discrimination, Cooper, 468 U.S. at 876, which are insufficient to show a company-wide policy of discrimination. See Falcon, 457 U.S. at 159. The affiants claim discrimination in different forms, at the hands of different people, in different stores, in different parts of the country, at different times, and under a constellation of facts unique to each individual. Whether or not these 120 employees have actionable discrimination claims against the store and management where they worked, their individual stories do not constitute significant proof that Wal-Mart has adopted a general policy of discrimination or that such a policy prevails in the remaining 3,100 stores. In relying on such scanty anecdotal evidence to support class certification, the district court failed to “probe behind the pleadings” to determine whether the six plaintiffs actually did “possess the same interest and suffer the same injury” as the proposed class members. Id. at 160.
2
The plaintiffs’ statistical evidence is no better. Plaintiffs relied most heavily on the statistical study produced by Dr. Richard Drogin, a retired professor of statistics from California State University, Hayward. Drogin conducted a regional analysis comparing the percentage of women promoted into management positions at Wal-Mart with the percentage of women in the available pool of hourly workers, and concluded that women were underrepresented in management in almost every one of Wal-Mart’s 41 regions. Drogin also compared the earnings of women to the earnings of men at Wal-Mart and concluded that in each region, Wal-Mart pays women less than men in comparable hourly positions.
Wal-Mart objected to this evidence on the ground that data aggregated at the regional or national level did not demonstrate there was a generаl policy of discrimination throughout Wal-Mart’s 3,400 individual retail stores. The district court
The district court’s superficial examination of Drogin’s statistics constituted legal error. The plaintiffs’ class proposal hinged on its proof that Wal-Mart had a general policy of discrimination; absent convincing proof on that point, the plaintiffs could not bridge the gap between their discrimination claims and the purported claims of the class. Accordingly, the district court was obliged to scrutinize plaintiffs’ evidence and make a reasoned determination as to whether it constituted significant proof that Wal-Mart had a general policy of discrimination, and thus whether the requirements of
The district court expressly rejected this responsibility. Instead of rigorously analyzing whether the plaintiffs’ evidence was significant proof of a general policy of discrimination, the district court made it Wal-Mart’s burden to prove that Drogin’s statistics were no longer probative or were “fatally flawed.” See Dukes I, 222 F.R.D. at 161-62; see also id. at 159 (concluding that Wal-Mart failed to persuade the court “that Dr. Drogin’s regional analysis should be rejected . . . because it is lacking in probative value“); id. at 160 (concluding that “[Wal-Mart] has not discredited or nullified Dr. Drogin’s results” with respect to Wal-Mart’s objection that Drogin’s methodology failed to account for a variety of rele
Had the district court properly analyzed the evidence, it could not have concluded that Drogin’s statistics constituted significant proof of plaintiffs’ theory. Information about disparities at the regional and national level does not establish the existence of disparities at individual stores, let alone raise the inference that a company-wide policy of discrimination is implemented by discretionary decisions at the store and district level. As Wal-Mart’s statistical expert, Dr. Joan Haworth, explained, the statistical disparities at the regional level could be due to decisions made at only a small percentage of Wal-Mart stores.12 Indeed, Haworth concluded that, when data is considered at the store level, over 90 percent of Wal-Mart’s stores showed no statistical difference in the hourly pay rates between men and women associates with similar work-related characteristics. Although Drogin argued that it was proper to conduct an analysis on a regional level because “the subjec
The majority disposes of Wal-Mart’s objection that regional data is not indicative of a general discriminatory policy at individual stores by criticizing Wal-Mart’s statistics, which aggregated data at the sub-store rather than the store level, an approach the district court had previously allowed.
3
Finally, the district court committed legal error by failing to test the reliability of the expert opinion of William Bielby, Ph.D., as required by
Instead of evaluating the reliability of Bielby’s report in light of Wal-Mart’s arguments, the district court denied Wal-Mart’s motion on the ground that “courts should not even apply the full Daubert ‘gatekeeper’ standard” at the class certification stage. Dukes II, 222 F.R.D. at 191. Rather, the district court held that “[t]he appropriate question at this stage of the litigation is not whether Dr. Bielby can make a conclusive determination, but whether [his opinion] could add probative value to the inference of discrimination that plaintiffs allege.” Dukes I, 222 F.R.D. at 154. Concluding that the report was not “so flawed that it lacks sufficient probative value to be considered in assessing commonality,” the district court relied on Bielby’s report in making its determination that plaintiffs met the
In so ruling, the district court misunderstood Daubert and the level of inquiry required at the class certification stage. The purpose of conducting a Daubert inquiry is to ensure that proffered expert testimony is relevant and reliable. Kumho Tire Co. v. Carmichael, 526 U.S. 137, 152 (1999). “It is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field.” Id. To this end, a court must make “a preliminary assessment of whether the reasoning or methodology underlying the testimony is scientifically valid and of whether that reasoning or methodology properly can be applied to the facts in issue.” Daubert, 509 U.S. at 592-93. Courts are obliged to address allegations
These principles are equally applicable in the class certification context. The district court must “assess all of the relevant evidence admitted at the class certification stage and determine whether each
The majority focuses its discussion on what it characterizes as Wal-Mart’s objection to the persuasiveness of Bielby’s testimony. According to the majority, Wal-Mart “did not (and does not) challenge Dr. Bielby’s methodology.” Maj. Op. at 6190. In fact, Wal-Mart never challenged the persuasiveness of Bielby’s testimony, but rather challenged Bielby’s methodology, a challenge that is proper under Daubert. See Daubert, 509 U.S. at 592-93; see also Joiner, 522 U.S. at 144. By missing this point, the majority erroneously approves the district court’s reliance on an arguably unreliable expert opinion.
D
When plaintiffs’ evidence is subjected to the rigorous inquiry required by Falcon, it is inadequate to bridge the gap between the six plaintiffs’ claims of individual discrimination and a class-wide claim of company-wide discrimination. None of plaintiffs’ evidence is probative of company-wide
By taking the district court’s determination at face value, the majority erroneously accepts a chain of weak inferences as sufficient to carry plaintiffs’ burden of adducing significant proof that Wal-Mart “operated under a general policy of discrimination” that affected all members of the class. Falcon, 457 U.S. at 159 n.15. Any reasonable scrutiny of the evidence in this case compels the conclusion that although the six plaintiffs here may have individualized claims of discrimination, they cannot represent a class of 1.5 million past and present employees. The district court abused its discretion in holding that the plaintiffs met the commonality and typicality requirements of
Even assuming the district court was correct in concluding that the proposed class satisfied the
A
The parties’ substantive rights in this case are defined by Title VII. The majority acknowledges that the legal and factual frameworks of different causes of action can impact the outcome of a court’s
1
Under Title VII, the plaintiff has the ultimate burden of establishing that the employer is engaged in an unlawful employment practice described in
Title VII affords defendant-employers certain affirmative defenses. If the employer can prove that an adverse employment action against an individual employee was “for any reason other than discrimination on account of race, color, religion, sex, or national origin or in violation of section 2000e-3(a) of this title,” a сourt shall not order the “hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any back pay.”
These defenses are available to a defendant regardless of whether the plaintiffs allege discrimination against a single individual or against a class. See
The first phase of a Title VII pattern-or-practice lawsuit focuses on company-wide practices. The party bringing the
But if plaintiffs seek individual relief such as reinstatement or back pay, the district court must conduct additional proceedings in the second phase of the trial “to determine the scope of individual relief.” Id. In this second phase, “[t]he proof of the pattern or practice supports an inference that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy.” Id. at 362. Therefore, individual class members may establish a prima facie case merely by showing that an individual “unsuccessfully applied for a job and therefore was a potential victim of the proved discrimination.” Id. (footnote omitted). The burden then shifts to the employer to raise its affirmative defenses and to “demonstrate that the individual applicant was denied an employment opportunity for lawful reasons.” Id. Teamsters acknowledged that the district court‘s task of determining individual relief would “not be a simple one,” because “the court will have to make a substantial number of individual determinations in deciding which of the minority employees were actual victims of the company‘s discriminatory practices.”20 Id. at 371-72.
As explained by Justice O‘Connor in her concurrence in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), superceded in part by statute,
In sum, a determination that an employer has engaged in a pattern or practice of discrimination in violation of Title VII entitles the class to prospective relief and creates a presumption of liability for individual relief. The employer then has a statutory right, recognized by the Supreme Court, to prove that its actions against individual employees were not discriminatory. The Rules Enabling Act prohibits a district court from depriving an employer of this right simply to facilitate the certification of a class action.21 See
2
In this case, notwithstanding the requirements of Title VII, the district court rejected Wal-Mart‘s arguments that it was entitled to raise a defense with respect to each class member‘s claim for back pay and punitive damages. Dukes I, 222 F.R.D. at 173-74. The district court did not provide any reason for
It seems obvious that the district court‘s determination that it could not certify the class in compliance with Teamsters compels the conclusion that it could not certify the class at all. Nevertheless, the district court determined it could bypass Supreme Court precedent. Relying on cases the court characterized as allowing back pay awards to be calculated on a class-wide basis, see Dukes I, 222 F.R.D. at 176-78, 180, 184, the district court held that once plaintiffs proved that Wal-Mart engaged in a pattern or practice of discrimination, liability as to individual class members could be determined by means of a formula for employees denied promotions, id. at 176-78, or by analyzing Wal-Mart‘s personnel data to identify employees entitled to back pay, id. at 184-86. Further, the district court rejected Wal-Mart‘s argument that punitive damages could not be awarded on a class-wide basis, holding that it could “limit recovery of any punitive damages to those class members who actually recover an award of lost pay,” as determined by a formula. Id. at 172.
In adopting the approach described above, the district court deprived Wal-Mart of its statutory right to raise its defenses and violated the mandate of the Rules Enabling Act. If Wal-Mart can prove that it took an adverse employment action with respect to a particular plaintiff for non-discriminatory reasons, or that it “would have taken the same action in the absence of the impermissible motivating factor,”
The cases relied on by the district court, see Dukes I, 222 F.R.D. at 176-78, 180, 184, do not justify its refusal to pro-
B
The district court‘s crucial misunderstanding of Title VII and Teamsters led to a second mistake: it failed to undertake a proper analysis of whether the proposed class should be certified under
1
Courts considering whether to certify a class under
None of the cases cited by the Advisory Committee included claims for monetary relief or individual relief of any kind.
While
Because these more “adventuresome” class actions, Amchem, 521 U.S. at 614, raise due process concerns, the Advisory Committee imposed two safeguards on courts certifying such a class. First, a district court must “find[ ] that the questions of law or fact common to class members predominate over any questions affecting only individual members.”
This right to opt out of a class action, however, is exclusive to classes certified under
2
In certifying this class under
Second, the class‘s claims for monetary relief raise the very due process concerns considered by the Advisory Committee in drafting
Given the Supreme Court‘s direction to adhere to the historical models in considering which classes can be certified under
C
In holding that the district court did not err in certifying the class under
But in upholding the district court‘s certification with regard to back pay, the majority fails to apply these factors from its own test. Had it done so, it would have concluded that the district court erred in certifying the class under
The majority avoids these issues, however, and dismisses Wal-Mart‘s arguments as mere objections to the district court‘s “trial plan.” Maj. Op. at 6231. The majority “express[es] no opinion regarding Wal-Mart‘s objections to the district court‘s tentative trial plan” and concludes that there are many steps the district court could take “that would allow this class action to proceed in a manner that is both manageable and in accordance with due process,” Maj. Op. at 6232 (citing Hilao v. Estate of Marcos, 103 F.3d 767, 782-87 (9th Cir. 1996)).27
The majority‘s failure to address these objections runs contrary to the Supreme Court‘s mandate, Ortiz, 527 U.S. at 861, and the majority‘s own rule, Maj. Op. at 6217 (stating that courts must consider “whether [the proposed class action] requires individualized hearings” when it determines whether a class may be certified under
Presumably because the application of its own test would lead to the conclusion that the district court erred, the majority does not apply its test (or remand back to the district court to apply it, as it did with the punitive damages class). Instead, the majority determines that the back-pay remedy does not predominate over the claims for injunctive and declaratory relief for two reasons: (1) the calculation of back pay in Title VII cases “generally involves [relatively un]complicated factual determinations and few[ ] individualized issues,” and (2) back pay is a “‘make whole’ remedial scheme, a scheme to which the drafters of the Federal Rules of Civil Procedure clearly intended Rule 23(b)(2) to apply.” Maj. Op. at 6220-21 (alterations in original) (citations omitted). As noted above, neither of these rationales is correct. In this case, back pay cannot be calculated until after Wal-Mart has had an opportunity to raise its defenses, which will involve the litigation of a multitude of individual issues. Moreover, while the drafters of Rule 23 intended that classes involving demands for
As to claims for punitive damages, the majority remands the case to the district court to determine under its new test whether the case could be certified under
IV
The class action device is a procedural mechanism to aggregate individual claims for purposes of judicial efficiency. Falcon, 457 U.S. at 159. By allowing claims to go forward that ordinarily would not be litigated, the class action has proven to be an invaluable tool in litigating civil rights and other cases involving systemic discrimination. But, because Rule 23 creates a procedural device that constitutes “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only,” Califano, 442 U.S. at 700-01, courts must use it carefully, ensuring that the proposed class action complies with controlling law and does not jeopardize the parties’ substantive rights. See Gulf Oil Co. v. Bernard, 452 U.S. 89, 100 (1981) (holding that, in
The district court here failed in its duty to apply Rule 23 carefully and correctly. In its enthusiasm for allowing the class action to proceed, the district court sped forward, dodging substantive and procedural hurdles, and making an end run around Title VII, the Rules Enabling Act, and Supreme Court precedent. It conducted no rigorous analysis to determine “the existence of a class of persons who have suffered the same injury” as the class representatives. Falcon, 457 U.S. at 157. It certified the class even after determining that compliance with the Supreme Court‘s framework in Teamsters was infeasible. Finally, the district court failed to consider the text, structure, and historical framework of Rule 23(b) that should have guided its analysis. The resultant class certification runs directly contrary to controlling precedent.
Despite these flaws, the majority affirms those legal errors with even less analysis and inquiry than the district court. Never before has such a low bar been set for certifying such a gargantuan class. The majority‘s ruling provides scant limits to the types of classes that can be certified. Put simply, the door is now open to Title VII lawsuits targeting national and international companies, regardless of size and diversity, based on nothing more than general and conclusory allegations, a handful of anecdotes, and statistical disparities that bear little relation to the alleged discriminatory decisions. The district court abused its discretion in certifying this class. The majority errs in concluding otherwise. While class actions have a vital role to play in the battle against discrimination, the majority‘s decision to allow this case to go forward epitomizes the Supreme Court‘s warning that “the rulemakers’ prescriptions for class actions may be endangered by those who
KOZINSKI, Chief Judge, dissenting:
Maybe there‘d be no difference between 500 employees and 500,000 employees if they all had similar jobs, worked at the same half-billion square foot store and were supervised by the same managers. But the half-million members of the majority‘s approved class held a multitude of jobs, at different levels of Wal-Mart‘s hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed depending on each class member‘s job, location and period of employment. Some thrived while others did poorly. They have little in common but their sex and this lawsuit.
I therefore join fully Judge Ikuta‘s dissent.
Notes
471 F.3d at 41. The number of Wal-Mart stores and managers set forth in this paragraph are based on information provided by plaintiffs’ expert, Dr. Marc Bendick, and are current as of 1999.[W]e reach the following conclusions: . . . (5) a district judge has ample discretion to circumscribe both the extent of discovery concerning Rule 23 requirements and the extent of a hearing to determine whether such requirements are met in order to assure that a class certification motion does not become a pretext for a partial trial of the merits.