As anticipated, the Supreme Court ruled unanimously in favor of Wal-Mart in an important workplace discrimination case. The Court divided 5-4 in adopting more stringent standards for future cases. From the outset, I viewed this as an extremely bad case that would likely make bad law for those fighting workplace discrimination. It now has.
In Wal-Mart v. Dukes , all of the justices agreed to reverse the United States Court of Appeals for the Ninth Circuit in the case which would have affected up to 1.6 million women and billions of dollars in damages.
That was the easy part. The justices, however, divided on the elements needed for future such cases. It divided along ideological lines with Justice Antonin Scalia holding that the court must require common elements to be the basis for such class actions. Scalia’s decision also struck hard on the standard, including the rejection of the type of statistical analysis used in this case:
Even if they are taken at face value, these studies are insufficient to establish that respondents’ theory can be proved on a classwide basis. In Falcon, we held that one named plaintiff’s experience of discrimination was insufficient to infer that “discriminatory treatment is typical of [the employer’s employment] practices.” 457 U. S., at 158. A similar failure of inference arises here.
Scalia’s opinion also rejected the ability to seek backpay in the case. He concluded:
The Court of Appeals believed that it was possible to replace such proceedings with Trial by Formula. A sample set of the class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined in depositions supervised by a master. The percentage of claims determined to be valid would then be applied to the entire remaining class, and the number of (presumptively) valid claims thus derived would be multiplied by the average backpay award in the sample set to arrive at the entire class recovery—without further individualized proceedings. 603 F. 3d, at 625–627. We disapprove that novel project. Because the Rules Enabling Act forbids interpreting Rule 23 to “abridge, enlarge or modify any substantive right,” 28 U. S. C. §2072(b); see Ortiz, 527 U. S., at 845, a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims. And because the necessity of that litigation will prevent back- pay from being “incidental” to the classwide injunction, respondents’ class could not be certified even assuming, arguendo, that “incidental” monetary relief can be awarded to a 23(b)(2) class.
This is also a big victory of Chief Justice Alex Kozinski, whose views are expressly embraced by the majority on the Court.
Writing for the dissenting justices, Justice Ruth Bader Ginsburg insisted that, despite the flaws in the case, there were sufficient facts alleged to maintain a class action based on “Wal-Mart’s [policy of] delegation of discretion over pay and promotions.” She wrote:
The District Court’s identification of a common question, whether Wal-Mart’s pay and promotions policies gave rise to unlawful discrimination, was hardly infirm. The prac- tice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce dispa- rate effects. Managers, like all humankind, may be prey to biases of which they are unaware.6 The risk of dis- crimination is heightened when those managers are pre- dominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.
The standards clarified by the majority would make it extremely difficult to bring such a massive discrimination case in the future, particularly where businesses delegate these decisions to local stores. While the dissenting justices saw evidence of a “culture” of discrimination, that will not do in the future. Indeed, many businesses reading this opinion are likely to reaffirm the delegation of such questions to local store managers to further insulate the company from nationwide class actions. It does not mean that it will bar class actions. It only means that it will practically confine such cases in the future.