In recent companion pieces marking the 10-year anniversary of Wal-Mart Stores v. Dukes,[1] counsel for Wal-Mart celebrated the judicial assault on class actions and urged that it continue,[2] while counsel for the plaintiffs rightly observed that discrimination class actions are not dead yet.[3]
As class action practitioners who have represented employees, consumers, tenants, and others, we take this opportunity to respond to the defense-side piece and address key points.
Most saliently, the defense perspective reflects a fundamental philosophical difference regarding class actions. Contrary to defendants’ suggestions, the class action device is not generally antithetical to due process; nor is the steady erosion of class actions beneficial to “the parties, absent class members, and the civil justice system as a whole.” Rather, class actions foster the judicial economy and are often the only feasible means to tackle mass-scale, systemic wrongdoing. Without a class action, countess victims may be left without a meaningful remedy and a corporate or institutional defendant may get a free pass for unlawful conduct—including violations of seminal civil rights, employment, housing, and consumer protection laws.
Accordingly, we would venture, defendants’ espoused concern for the rights of absent class members is wholly disingenuous. A self-appointed role in safeguarding class members’ interests is akin to the fox guarding the chicken coop. By seeking to severely curtail the availability of class actions, defendants are bidding not for due process, but no process. Most individuals harmed by corporate or institutional misfeasance would be unable to bring a claim at all. In defeating certification, Wal-Mart counsel did employees—their adversaries in an adversarial system—no favors, but deprived them of high-quality representation.
This is “protecting” employees and consumers from the so-called horrors of a class action by offering them nothing in return and no reasonable way to vindicate their rights in many cases. Essentially, defense counsel professes to take away individuals’ best instrument to achieve redress for their own good, leaving them only scraps. Defense counsel is doing so in service of a different, diametrically-opposed master.[4]
In reality, corporations’ “due process” objections are inflated. Companies may typically defend themselves against allegations of a common course of conduct by mounting a common defense. Courts have the authority (and responsibility) to shape class action proceedings to simultaneously ensure that they serve their critical purpose and that all parties’ rights are amply protected. They have many tools and methods at their disposal in this endeavor.
Take, for example, the established Teamsters procedure in employment discrimination cases. The proceedings are bifurcated into a class liability and injunctive phase (Phase I) and individual remedial phase (Phase II). In Phase I, the court determines whether, as a matter of corporate policy and practice, the company has a standard operating procedure of discriminating against members of the class. If so, the court enters appropriate injunctive relief tailored to the violations. Further, each employee garners a rebuttable presumption that he or she is an individual victim of discrimination. At Phase II, the defendant has an opportunity to rebut this presumption for each class employee and show that he or she has not actually experienced unlawful discrimination.[5] Other methods of adjudication may be appropriate in different types of cases.
In this light, methods such as certification under Rule 23(b)(2) and/or (c)(4) are warranted even where plaintiffs also seek monetary relief and even assuming that common issues do not predominate over individual ones under Rule 23(b)(3). While Dukes generally precludes certification of individualized remedies as part of a (b)(2) mandatory class, it is perfectly proper to separately certify the declaratory and injunctive aspects of an action. Likewise, (c)(4) partial certification of common issues is called for when it will materially advance the action. This is a valuable tool that is growing in importance. As the Second Circuit has emphasized: “District courts should take full advantage of this provision to certify separate issues in order to reduce the range of disputed issues in complex litigation and achieve judicial efficiencies.”[6]
For such reasons, panic that certified classes may include uninjured members who are not entitled to relief is overblown. Such remedial matters should not be relevant to (c)(4) certification of class-wide liability issues nor to the propriety of class-wide injunctive relief to a (b)(2) class. Where liability for a policy or practice is established, all members of such a class will benefit from forward-looking changes to the policy or practice. And, with regard to monetary and other individualized relief ((b)(3)-type relief after Dukes), the Teamsters procedure, claims processes, and other methods may be utilized to cull out “uninjured” class members.[7] It is black letter law in most circuits that the mere presence of such individuals does not defeat even (b)(3) certification.[8] Notably, the Supreme Court in TransUnion v. Ramirez expressly declined to address the “distinct question whether every class member must demonstrate standing before a court certifies a class.”[9]
Indeed, even after Comcast Corp. v. Behrend,[10] courts have universally rejected the proposition that a class-wide method of calculating damages is required and have adhered to established law that the need for individual damages determinations will generally not defeat (b)(3) predominance, much less preclude certification altogether.[11] Where liability questions are common and revolve around the legality uniform policies or conduct, whether individuals have suffered compensable harm and to what extent—questions of loss and damages—should be treated as a remedial/damages issue.
Ultimately, practitioners and courts should approach class certification from a sensible and pragmatic perspective. Instead of categorically condemning class actions as the enemy and finding ways not to certify them, they should proceed from a recognition of Rule 23’s liberal remedial and law enforcement purposes and certify what they can.[12] Many courts continue to do so.
Fortunately, numerous states decline to apply recent Rule 23 precedent, including the “rigorous analysis” announced in Falcon[13] and clarified in Dukes.[14] Such states adhere to the original purposes animating Rule 23 and their own state law derivatives.[15] Despite the constraints posed by the Class Action Fairness Act (CAFA), 28 U.S.C. § 1332(d), the battlefield for many actions brought by employees, consumers, and other individuals may shift to state court.
In sum, Dukes and its progeny do not represent a “promise” of a better day but a giveaway to corporate interests. While the demise of the class action has been greatly exaggerated,[16] it is wrong to treat class actions as harmful to the administration of justice or to pretend that recent inroads into their use are somehow beneficial to employees, consumers, and other individuals harmed by powerful institutions and interests. Class actions occupy a critical role in vindicating the rights of vulnerable individuals and groups and will continue to do so for the foreseeable future.
Footnotes
[1] 564 U.S. 338 (2011)[2] https://www.law360.com/employment-authority/articles/1397554/10-years-of-dukes-a-resounding-class-certification-legacy[3] https://www.law360.com/employment-authority/articles/1394757/10-years-of-dukes-workplace-bias-class-claims-are-still-alive.[4] Under Rules 23(a)(4) and 23(g), a court appoints class representatives and class counsel to “fairly and adequately” represent and protect the interests of the class. It does not entrust the role to the class opponent.[5] One primary way that the Dukes case went wrong, with such a large and diverse class, was abandoning this method in favor of a novel procedure under which, in the absence of a common policy, liability and damages for 1.5 million individuals would be determined by the results of 137 test cases. Defense counsel overstates what is meant by Dukes’ proscription of “trial by formula.” See, e.g., Tyson Foods Inc. v. Bouaphakeo, 577 U.S. 442, 458-59 (2016); Braun v. Wal-Mart Stores, Inc., 630 Pa. 292 (2014); Andrew Melzer, “The ‘Tough Noogies’ Doctrine: Rights But No Remedies,” Law360 (Oct. 5, 2016), https://www.law360.com/articles/847396/the-tough-noogies-doctrine-rights-but-no-remedies[6] Robinson v. Metro N. Commuter R.R. Co., 267 F.3d 147, 167-68 (2d Cir. 2001) (cleaned up; citations omitted).[7] Cf., e.g., Butler v. Sears, Roebuck & Co., 727 F.3d 796, 800 (7th Cir. 2013) (“a class action limited to determining liability on a class-wide basis, with separate hearings to determine—if liability is established—the damages of individual class members, or homogeneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed.”).[8] See, e.g., Ruiz Torres v. Mercer Canyons, Inc., 835 F.3d 1125, 1136-39 (9th Cir. 2016); In re Nexium Antitrust Litig., 777 F.3d 9 (1st Cir. 2015); Messner v. Northshore Univ. Healthsystem, 699 F.3d 802, 822-26 (7th Cir. 2012).[9] TransUnion LLC v. Ramirez, 141 S.Ct. 2190 n.4 (2021); see also Tyson, 577 U.S. at 460-62 (premature to determine whether the proposed method of allocation or another methodology will be successful in identifying uninjured class members).[10] 569 U.S. 27 (2013)[11] See, e.g., Brown v. Electrolux Home Prods., Inc., 817 F.3d 1225, 1238-39 (11th Cir. 2016); Roach v. TL Cannon Corp., 778 F.3d 401 (2d Cir. 2015); 2 Newberg on Class Actions § 4.54 (updated June 2021) (“courts in every circuit have uniformly held that the 23(b)(3) predominance requirement is satisfied despite the need to make individualized damage determinations… Indeed, a class may also be certified solely on the basis of common liability, with individualized damages determinations left to subsequent proceedings… [T]he black letter rule is that individual damage calculations generally do not defeat a finding that common issues predominate,” with isolated exceptions); see also Tyson, 577 U.S. at 453.[12] C.f., e.g., Cooper v. Pac. Life Ins. Co., 458 F. Supp. 2d 1368, 1376 (S.D. Ga. 2006) (“the Court has a powerful arsenal from which to draw in making otherwise intractable class actions manageable for trial, including trial of the action as to particular issues only, the use of subclasses, sampling, and the use of bifurcation techniques to ‘wield’ Rule 23 like a ‘scalpel,’ instead of a ‘meat axe.’”) (citations omitted); Thompson v. Bruister & Assocs., Inc., 967 F. Supp.2d 1204, 1222 (M.D. Tenn. 2013) (in FLSA collective action, emphasizing the court’s discretion over trial management and observing: “While ‘sifting through the subclaims… is an unenviable task,’ it is better that 1,700 plus trials and, in any event, plaintiffs like defendants ‘are… entitled to their day in court.’”) (citing Alvarez v. City of Chicago, 605 F.3d 445, 449-50 (7th Cir. 2010)).[13] Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982).[14] 564 U.S. at 350-51[15] See, e.g., Stecko v. RLI Ins. Co., 995 N.Y.S.2d 13 (N.Y. App. Div. 2014) (certifying a class action on behalf of workers deprived of wages: “the motion court was not required to apply the ‘rigorous analysis’ standard utilized by the federal courts in addressing class certification motions under Federal Rule 23… given this Court’s recognition that CPLR § 901(a) ‘should be broadly construed’”); see also Braun v. Wal-Mart Stores, Inc., 24 A.3d 875 (Pa. Super. Ct. 2011), aff’d, 630 Pa. 292 (2014) (upholding $187,000,000 verdict in wage-and-hour action and affirming class certification in favor of the employees; relying explicitly on “the strong and oft-repeated policy of Pennsylvania that, in applying the rules for class certification, decisions should be made liberally and in favor of maintaining a class action.”).[16] Indeed, we contend, the Supreme Court’s recent arbitration jurisprudence has done far greater damage than Dukes and other Rule 23 cases. In a completely unprincipled manner, the Court has concluded that the Federal Arbitration Act (FAA) entitles companies to extract otherwise invalid class and collective action waivers from employees, consumers, and other victims of unlawful institutional practices.