Court Opinion

ID: 9560641
Source: CourtListenerOpinion
Date Created: 2023-08-21 17:52:55.704644+00
Date Added: 2024-06-11T09:13:03.904573
License: Public Domain

KLEINFELD, Circuit Judge,
dissenting:
I respectfully dissent. The majority’s new opinion does not solve the problems of its previous opinion. Class action certification still violates Rule 23, likely deprives many women who have been discriminated against of the money they are entitled to, and deprives Wal-Mart of its constitutional rights to jury trial and due process of law.
Class actions may not be brought in federal court unless they satisfy, among other things, the criteria of Federal Rule of Civil Procedure 23(a):
(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.1
*1194These criteria are called, for short: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation.2 In the somewhat analogous ease of General Telephone Co. of the Southwest v. Falcon,3 the Supreme Court held that class certification had been inappropriate, where a Mexican-American who was not promoted had been allowed to sue on behalf of all Mexican-American applicants for employment. The Court held that the Rule 23 requirements apply fully to Title VII class actions, and rejected the “ ‘tacit assumption’ underlying the [rejected] across-the-board rule that ‘all will be well for surely the plaintiff will win and manna will fall on all members of the class.’ ”4
In this case, the only one of the four Rule 23 requirements that is satisfied is “numerosity.” In seeking to represent as large a class as imaginable, plaintiffs have destroyed their commonality, typicality, and adequacy of representation, as in many other attempted class certifications that have over-reached.5
This class lacks “commonality” because the questions “common to the class”6 are insubstantial. The only common question plaintiffs identify with any precision is whether Wal-Mart’s promotion criteria are “excessively subjective.” This is not a commonality with any clear relationship to sex discrimination in pay, promotions or terminations. Plaintiffs’ sociologist claims merely that a subjective system is “vulnerable” to sex discrimination. But the Supreme Court recognized in Watson v. Fort Worth Bank & Trust that, although disparate impact analysis may be usable in subjective criteria cases, “leaving promotion decisions to the unchecked discretion of lower level supervisors should itself raise no inference of discriminatory conduct”7 because “[i]t is self-evident that many jobs ... require personal qualities that have never been considered amenable to standardized testing.”8 “Vulnerability” to sex discrimination is not sex discrimination.
Plaintiffs’ only evidence of sex discrimination is that around % of Wal-Mart employees are female, but only about ]é of its managers are female. But as the Supreme Court recognized in Watson, “[i]t is entirely unrealistic to assume that unlawful discrimination is the sole cause of people failing to gravitate to jobs and employers in accord with the laws of chance.”9 Not everybody wants to be a Wal-Mart manager. Those women who want to be managers may find better opportunities elsewhere. Plaintiffs’ statistics do not purport to compare women who want to be managers at Wal-Mart with men who want to be managers at Wal-Mart, just *1195female and male employees, whether they want management jobs or not.
This class lacks “typicality” because “the claims or defenses of the representative parties” are not “typical of the claims or defenses of the class.”10 Plaintiffs must show “the existence of a class of persons who have suffered the same injury” as themselves.11 There are seven named plaintiffs.12 Here they are, with the gist of the claims they make in the complaint:
Betty Dukes African American female promoted to manager, then demoted in retaliation for discrimination complaints. Did not apply for several slots filled by African American females, African American males, Hispanic female, Filipino male, and Caucasian male because she was discouraged by discrimination against women.
Patricia Surgeson Sexually harassed, replaced by a male who got a better title and more money, denied management opportunities, quit.
Cleo Page Quickly promoted to manager, but denied a department manager position after being told it’s “a man’s world.” A “Caucasian female” got the department manager position. Page later got a different department manager position. But a “Caucasian male,” a “Latina,” and a “Caucasian female” got other management positions she sought and she got paid less than a “Caucasian male” with less seniority.
Chris Kwapnoski Sought management positions given to less qualified men. Manager made sexist remarks.
Deborah Gunter Sought management positions given to less experienced males. Males she trained were promoted instead of her. Never got a management position. Fired after complaining about discrimination and a reduction in her hours.
Karen Williamson Sought management position but was never promoted, even though “qualified.” Males got promotions that were not ed.
Edith Arana African American woman. Sought management position but never promoted. Store manager told her he “did not want women.” Fired after “falsely accused of ‘stealing time’ ” in retaliation for her discrimination complaints.
“Typicality” exists only if these seven women’s claims are “typical of the claims or defenses of the class.”13 They are not even typical with respect to each other, let alone with respect to the class of “[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.” Some of the seven named plaintiffs and members of the putative class work for Wal-Mart, some have quit, some have been fired. Some claim sex discrimination, some claim mixed motive race and sex discrimination, some appear *1196to claim only race discrimination. Some claim retaliation, and some appear to claim unfairness but not discrimination. Some of the seven plead a prima facie case, some do not.
Nor are the defenses to the claims likely to be common even as to these seven, let alone all female employees. Some are likely to be vulnerable to defenses such as misconduct, some are not. For example, Wal-Mart’s defense to Arana’s claim might be that she really did steal time, or that Wal-Mart fired her because the manager concluded in good faith after reasonable investigation that she stole time. For Dukes, the obvious potential defense is that they did promote her to manager and hoped for the best, but she did not do well. For Kwapnoski, the defense may be no defense at all, just a money settlement and promotion. We cannot know how the individual cases may proceed, but we can easily tell from the complaint that they will be different from each other as to both the claims and the defenses. Whatever the “vulnerability” to sex discrimination of the “corporate culture” of this national corporation with no centralized system for promotion, the various Plaintiffs’ claims and Wal-Mart’s defenses against them do not resemble one another.14
The fourth requirement under Rule 23 is that the seven named plaintiffs “will fairly and adequately protect the interests of the class.”15 The majority opinion and the district court give this little attention, no doubt because everyone knows that the lawyers, being without real clients who can instruct them if a class is certified, will run the case as they choose. Based on their own descriptions of the wrongs done to them in the complaint, the interests of the seven named plaintiffs diverge from each other, as will the interests of other members of the class. Women who still work at Wal-Mart and who want promotions have an interest in the terms of an injunction. But an injunction and declaratory judgment cannot benefit women who have quit or been fired and do not want to return. For them, compensatory and punitive damages are what matter. Those who are managers, and many Wal-Marts have female store managers, have interests in preserving their own managerial flexibility under whatever injunction may issue, while those who are not and do not want to be managers may not share this concern. Those who face strong defenses, such as if they did indeed steal time or money, have a considerable interest in a fast, mass settlement, while those who have impressive performance records have an interest in pushing their individual cases to trial.
The class certification we are reviewing is pursuant to Federal Rule of Civil Procedure 23(b)(2). That is error because 23(b)(2) certification is only available when injunctive and declaratory relief “predominate.” 16 Injunctive and declaratory relief cannot possibly “predominate” for the women who will benefit from neither, because they no longer work at Wal-Mart and have no desire to return. The majority now acknowledges that these class members lack standing to sue for declaratory and injunctive relief, yet leaves it to the district court to decide whether they can stay in the class. For the whole class, the complaint seeks punitive damages, and for a class this big, one would expect the claim to be in the billions of dollars, like a tobacco or oil spill case.
It is risible to say that injunctive and declaratory relief “predominate,” even for *1197those who do have standing to seek such relief. The majority says punitive damages do not predominate because it would “thwart congressional intent” if a defendant guilty of egregious sex discrimination were not punished. That may be so, but it has nothing to do with whether the claim for declaratory and injunctive relief predominates. For anyone but the richest people in the world, billions of dollars are going to predominate over words and solemn commands and promises about how to behave in the future. What Wal-Mart cashier or stocker would care much about how the district court told Wal-Mart to run its business after getting enough cash to quit?
Even worse than the Rule 23 violations, the district court’s management plan for this class action violates Wal-Mart’s constitutional rights to due process and jury trial. The district court order establishes a first phase of the case in which a jury will determine liability (including liability for punitive damages and an injunction) on a class-wide basis, without adjudicating the merits of any class member’s claim. Then in a second phase, a “special master” will determine Wal-Mart’s total front and back pay for the women discriminated against on the basis of some unspecified generally applicable formula.17
Both phases of this plan are constitutionally defective because they are inadequately individualized.18 There will never be an adjudication, let alone an adjudication by an Article III judge and a jury, to determine whether Wal-Mart owes any particular woman the money it will be required to pay, nor will any particular woman ever get a trial to establish how much she is owed. Wal-Mart will never get a chance, for example, to prove to a jury that Dukes was tried as a manager and did not perform well, or that Arana did indeed steal time or at least that after a good faith investigation Wal-Mart fired her for that nonpretextual reason. Under both the Seventh Amendment19 and the statute applicable to punitive damages in Title VII cases,20 Wal-Mart is entitled to trial by jury of these issues.
Nor is there a legitimate way for the jury or court to decide upon a punitive damages award, since the jury will never make a compensatory damages award. It is now firmly established that the Due Process Clause constrains punitive damages to a ratio of punitive damages to compensatory damages,21 and that the ratio can rarely exceed, a nine to one ratio.22 *1198Yet compensatory damages will never be determined here. After the punitive damages have already been awarded, a special master will decide upon whatever lost pay may be awarded, by formula rather than examination of individual cases. We have explained that “in a multi-plaintiff, multi-defendant action, an approach that compares each plaintiffs individual compensatory damages with the punitive damages awards against each defendant more accurately reflects the true relationship between the harm for which a particular defendant is responsible, and the punitive damages assessed against that defendant.”23 In this case, a ratio analysis will not be possible because punitive damages will be unanchored to compensatory damages.24
In its first opinion, the majority explicitly approved of the district court’s trial plan in the face of the Due Process deprivations. In this second opinion, the majority “express[es] no opinion regarding Wal-Mart’s objections to the district court’s” scheme and finds it sufficient to “note” that “there are a range of possibilities'— which may or may not include the district court’s proposed course of action — that would allow this class action to proceed in a manner that is both manageable and in accordance with due process.” Wal-Mart has appealed precisely the unconstitutionality in the district court’s order, so it is incumbent upon us to correct it.
The majority seeks cover under Hilao v. Estate of Ferdinand Marcos,25 where we allowed a class action against the dictator of the Philippines for victims of disappearances, torture, and summary executions. Assuming that that case was correctly decided,26 this one is distinguishable. The victims of sex discrimination by Wal-Mart can obtain individual counsel where they live and do not face the problems of proving injuries suffered in a foreign country. Hilao included a plan to have a “random sample of 137 claims” go to jury trial,27 while in this case no individual cases will go to trial. And in Hilao, a jury award of compensatory damages would be made28 and would provide the information necessary for the constitutionally required “ratio analysis.”29
*1199There are serious reasons for these rules' constraining class actions. Class actions need special justification because they are “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.”30 They are designed largely to solve an attorneys’ fees problem. “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.”31 That need does not pertain here. Much of the bar now earns a living by litigating sex discrimination claims. Many sex discrimination cases satisfy the three elements that make a contingent fee case worth accepting, good liability, high damages potential, and collectibility of a judgment, sweetened by the lagniappe of statutory attorneys fees awards.32 These features of individual sex discrimination cases “eliminate financial barriers that might make individual lawsuits unlikely or infeasible,”33 so women discriminated against by Wal-Mart do not need a class action. They can, with contingent fee agreements, afford to hire their own lawyers and control what the lawyers do for them.
Women employed by Wal-Mart who have suffered sex discrimination stand to lose a lot if this sex discrimination class action goes forward. All the members of the class will be bound by the judgment or settlement because, under Rule 23, the judgment “shall include” all class members, “whether or not favorable to the class.”34 What if the plaintiffs’ class loses? Worse, for many women in the class, what if the plaintiffs win? Women who have suffered great loss because of sex discrimination will have to share the punitive damages award with many women who did not. Women entitled to considerable compensatory damages in addition to lost pay will be deprived of them. Women who have left Wal-Mart will get injunctive and declaratory relief of no value to them, while new female Wal-Mart employees will benefit from the injustice done to other women. If the settlement is mostly words for the women and money for the lawyers, a realistic possibility, it will be a pyrrhic victory indeed.
A lawyer representing a class is in practical effect a lawyer without a client. Clients as principals compel their lawyers as agents to serve their interests. Without individual clients to control what they do, the lawyers have a powerful financial incentive to settle the case on terms favorable to themselves, but not necessarily favorable to their unknown clients with varying individual circumstances that are unknown to their purported lawyers.
The absence of any real clients to control them leaves the lawyers free to pursue their own earnestly held views about the public good generally. They will doubtless have their own views, which they will try to get into an injunction, such as about how Wal-Mart ought to manage its stores, how it should train and promote employees, and how and whether Wal-Mart ought to be unionized, even though these social *1200views may be of little interest to many of the women they purport to represent. Counsel will also have a practical interest in maximizing attorneys’ fees. Wal-Mart will have an interest in agreeing to enough lawyers’ fees so that the terms of an injunction to which plaintiffs’ counsel will agree will be less onerous. True, the parties must obtain judicial approval of a settlement, but that is not much of a substitute for client control. The judge has a very considerable incentive to clear the docket of a case so large and complex as to be almost untriable, and the judge also will know nothing of the individual circumstances and needs of the 1.5 million members of the class. Nor, in a proposed settlement urged upon the judge by both the plaintiffs’ and the defendant’s lawyers, will the judge have the benefit of adversarial presentations, except perhaps from those typically and disapprovingly called “gadfly” opponents of the settlement. A class action settlement is “a bargain proffered for its approval without benefit of adversarial investigation.”35
None of these burdens to justice need be borne in this case. No class action is necessary to obtain justice for women wronged by sex discrimination at Wal-Mart, because there is no attorneys’ fees barrier to their obtaining individual justice. Plenty of lawyers make good livings litigating sex discrimination cases for contingent fees.
The district court calls this class certification “historic,”36 a euphemism for “unprecedented.” In the law, the absence of precedent is no recommendation. This class certification violates the requirements of Rule 23. It sacrifices the rights of women injured by sex discrimination. And it violates Wal-Mart’s constitutional rights. The class action may be useful for punishing Wal-Mart and shifting much of its management to the lawyers and special master negotiating and supervising the injunction. But it is not useful for doing justice between Wal-Mart and women against whom it may have discriminated because of their sex. And that is what lawsuits are for.
The district court’s formula approach to dividing up punitive damages and back pay means that women injured by sex discrimination will have to share any recovery with women who were not. Women who were fired or not promoted for good reasons will take money from Wal-Mart they do not deserve, and get reinstated or promoted as well. Compensatory damages will be forfeited. This is “rough justice”37 indeed. “Rough,” anyway. Since when were the district courts converted into administrative agencies and empowered to ignore individual justice?

. Fed.R.Civ.P. 23(a).

. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); Staton v. Boeing Co., 327 F.3d 938, 953 (9th Cir.2003).

. 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982).

. Id. at 161, 102 S.Ct. 2364 (quoting Johnson v. Georgia Highway Express, Inc., 417 F.2d 1122, 1127 (5th Cir.1969) (Godbold, J., specially concurring)).

. Cooper v. S. Co., 390 F.3d 695, 715 (11th Cir.2004) ("Where, as here, class certification was sought by employees working in widely diverse job types, spread throughout different facilities and geographic locations, courts have frequently declined to certify classes.”) (citations omitted); see also Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565 (6th Cir.2004); Stastny v. So. Bell Tel. & Tel. Co., 628 F.2d 267 (4th Cir.1980).

. Fed.R.Civ.P. 23(a)(2).

. 487 U.S. 977, 990, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988).

. Id. at 999, 108 S.Ct. 2777.

. Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 992, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988).

. Fed.R.Civ.P. 23(a)(3); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).

. Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982).

. The plaintiffs' names add up to seven: Dukes, Surgeson, Arana, Williamson, Gunter, Kwapnoski, Cleo. The district court and the majority say there are six named plaintiffs. One not concerned with individual justice may not care about one woman more or less, but in our system we must and do.

. Fed.R.Civ.P. 23(a)(3); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).

. See Bacon v. Honda of Am. Mfg., Inc., 370 F.3d 565, 572-73 (6th Cir.2004).

. Fed.R.Civ.P. 23(a)(4).

. E.g., Molski v. Gleich, 318 F.3d 937, 949-50 (9th Cir.2003); Allison v. Citgo Petroleum Corp., 151 F.3d 402, 411 (5th Cir.1998).

. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 180 (D.Cal.2004).

. See Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 355, 118 S.Ct 1279, 140 L.Ed.2d 438 (1998) ("[W]e hold that the Seventh Amendment provides a right to a jury trial on all issues pertinent to an award of statutory damages ... including the amount itself.”); Cimino v. Raymark Industries, Inc., 151 F.3d 297, 311 (5th Cir.1998) (finding Seventh Amendment and due process violations where district court's trial plan for class action did not allow individual determinations of liability and damages).

. See Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 355, 118 S.Ct. 1279, 140 L.Ed.2d 438 (1998).

. 42 U.S.C. § 1981a(c)(1).

. See State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001); BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996); White v. Ford Motor Co., 500 F.3d 963 (9th Cir.2007); Bains LLC v. Arco Prods. Co., 405 F.3d 764 (9th Cir.2005); Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020 (9th Cir.2003).

. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) ("[F]ew awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, *1198will satisfy due process.”). See also Bains LLC v. Arco Prods. Co., 405 F.3d 764, 777 (9th Cir.2005) and Zhang v. Am. Gem Seafoods, Inc., 339 F.3d 1020, 1044 (9th Cir.2003) (holding 7 to 1 ratio constitutional in discrimination case).

. Planned Parenthood of the Columbia/Willamette, Inc. v. Am. Coalition of Life Activists, 422 F.3d 949, 961 (9th Cir.2005). Indeed, it is now clear that punitive damages cannot be awarded to one plaintiff in order to punish the defendant for harm caused to others. Philip Morris USA v. Williams, -U.S.-, 127 S.Ct. 1057, 1063, 166 L.Ed.2d 940 (2007).

. See White v. Ford Motor Co., 500 F.3d 963, 973-74 (9th Cir.2007) (due process does not require jury instruction regarding constitutional ceiling for punitive damages provided court will have information necessary to conduct ratio analysis on appeal).

. 103 F.3d 767, 782-87 (9th Cir.1996).

. Cf. Cimino v. Raymark Industries, Inc., 151 F.3d 297, 319 (5th Cir.1998) (suggesting that Hilao is incorrect and stating that "we find ourselves in agreement with the thrust of the dissenting opinion there”).

. Hilao v. Estate of Marcos, 103 F.3d 767, 782-84 (9th Cir.1996).

. The special master first examined the sample cases, and made recommendations as to claim validity and damages awards to the jury, which made the final determination as to both. Id. at 783-84. No such procedure is suggested here.

. See White v. Ford Motor Co., 500 F.3d 963, 973-74 (9th Cir2007).

. Califano v. Yamasaki, 442 U.S. 682, 700-701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979).

. Amchem Prods. v. Windsor, 521 U.S. 591, 617, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (1997)).

. 42 U.S.C. § 2000e-5(k).

. Allison v. Citgo Petroleum Corp., 151 F.3d 402, 420 (5th Cir.1998).

. Fed.R.Civ.P. 23(c)(3).

. Amchem Pros., Inc. v. Windsor, 521 U.S. 591, 621, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997).

. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 142 (D.Cal.2004).

.Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137, 177 (D.Cal.2004) (deciding "that this 'rough justice’ is better than the alternative of no remedy at all for any class member”).