Dukes V. Wal-Mart: Some Closed Doors And Open Issues - Part 2

1. The Ninth Circuit Reverses Course: Ellis v. Costco

   Among the post-Dukes decisions, the case that most clearly demonstrates Dukes' impact is the Ninth Circuit's decision in Ellis v. Costco.81 Decided by the same appellate court that affirmed the Dukes decision that was reversed by the Supreme Court, Ellis reflects the Ninth Circuit's understanding of how it must modify the standards governing class certification as a result of the Supreme Court's decision.

   Similar to Dukes, the Ellis plaintiffs sought to represent a class of present and former female employees who were allegedly discriminated against on the basis of gender by Costco's promotional practices. The class was certified under Rule 23(b)(2) by the district court. On appeal, post-Dukes, the Ninth Circuit reversed. Finding that, at best, the standard for certification applied by the district court was unclear, the Ninth Circuit stated it was "tak[ing] this opportunity to clarify the correct standard."82 Following the principles set forth in Dukes, the court first explained the often critical role the merits of the underlying claims play in determining whether a case is appropriate for class certification. Emphasizing that "the merits of the class members' substantive claims are often highly relevant when determining whether to certify a class," the court stated, "it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with the Rule 23(a) requirements."83

   Next, the court addressed the district court's failure to engage in a rigorous analysis of the evidence presented. Again applying Dukes, the Ninth Circuit stated that simply determining the admissibility of the evidence was insufficient. Instead, the Ninth Circuit ruled that district courts are:

   required to resolve any factual disputes necessary to determine whether there was a common pattern and practice that could affect the class as a whole. If there is no evidence that the entire class was subject to the same allegedly discriminatory practice, there is no question common to the class.84

   Thus, the court stated, if, as Costco's expert testified, any gender disparities that existed were confined to two of Costco's eight regions:

   [it] would not show that "discrimination manifested itself in ... promotion practices in the same general fashion," throughout Costco — which is necessary to show commonality in a nationwide class.

   If no such nationwide discrimination exists, Plaintiffs would face an exceedingly difficult challenge in proving that there are questions of fact and law common to the nationwide class.

   Regarding the typicality requirement, the Ninth Circuit ruled that the appropriate inquiry is whether the named plaintiffs will be subjected to individual defenses rather than those pertaining to the class.85

   Turning to Rule 23(b), the Ninth Circuit followed Dukes in rejecting the "predominance" test, assessing whether monetary issues predominate, for determining whether a class claim including monetary damages can be certified under Rule 23(b)(2). Instead, the appellate court concluded that the relevant inquiry is whether that provision provides sufficient procedural safeguards to protect the due process rights of absent class members as to the relief sought. The Ninth Circuit remanded the case to the district court to make that determination, and also instructed the lower court to consider whether claims for punitive damages could be certified under Rule 23(b)(2), and claims for monetary relief could be certified under Rule 23(b)(3).

2. Some District Courts Have Considered Dukes in FLSA Collective Actions

   Although courts in a number of cases have declined to apply Dukes in FLSA collective actions, at least two district courts have recognized the relevance of the reasoning in Dukes to such actions. Ruiz v. Serco, Inc.86 was a proposed FLSA collective action asserting misclassification claims on behalf of employees providing clerical and support services to military personnel returning from deployment and their families. The court denied conditional certification, finding there was insufficient evidence to establish that plaintiffs were similarly situated as to job duties and levels of discretion, or as to the policies used to determine their exemption classification. Significantly, the court applied...