anna segobia masters, esq., partner winston & … segobia masters, esq., partner winston &...
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Anna Segobia Masters, Esq., PartnerWinston & Strawn LLP
North America Asia Europe
Phyllis W. Cheng, Esq., DirectorDepartment of Fair Employment & Housing
North America . Asia . Europewww.winston.com
State of Californiawww.dfeh.ca.gov
www.thomsonreuters.com
June 29 2011June 29, 2011
© Copyright 2011. DFEH. All Rights Reserved. Winston & Strawn LLP © 2011. 2011 Thomson Reuters. All rights reserved.
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Phyllis W. Cheng, Esq., DirectorDepartment of Fair Employment & Housing
Anna Segobia Masters, Esq., PartnerWinston & Strawn [email protected] y g g
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Overview of Wal-Mart v. Dukes. Legal Standard for and Types of Class Actions in
Federal Court. Evidence Used to Establish Class (FRCP Rule 23(a) ) Evidence Used to Establish Class. (FRCP Rule 23(a).) Backpay Considerations. (FRCP Rule 23(b).) Issues Decided: Majority, Concurrence & Dissents. Considerations for Future Litigation. Anatomy of a successful California class action.
L T I li ti Long-Term Implications.
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In Wal-Mart v. Dukes, __ 564 U.S. __ (June 20, 2011 No 10 277) authored by Justice Scalia2011, No. 10-277), authored by Justice Scalia, the U.S. Supreme Court set aside the class certification of the nation’s largest class action
i bsuit, because:
1. Employees failed to show a particular pattern or1. Employees failed to show a particular pattern or practice of discrimination that meets the commonality requirement for class actions.
2. Employer was entitled to individual proceedings on each backpay claim.
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Largest private employer operating four types of retail stores with 3,400 locations and employing more than 1 million workers.
Pay and promotion at discretion of local managersmanagers.
Subjective decision-making by local Subjective decision making by local managers.
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Three current and former employees.
Represented 1.5 class members.
Claimed sex discrimination with regard to pay and promotions in violation of Title VIIand promotions in violation of Title VII.
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Did not allege express corporate policy against women.
All d l l ’ di i Alleged local managers’ discretion over pay and promotions favored men.
Relied on anecdotal information and experts’ statistical and sociological information tostatistical and sociological information to prove corporate culture of subjective decision making.
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Legal standard under FRCP Rule 23(a):
1. Numerosity;
2. Commonality;
3. Typicality; and
4. Adequacy.
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Legal standard under FRCP Rule 23(b):
1. (b)(1) – Incompatible Standards/Unitary D i iDecisions;
2 (b)(2) Injunctive Relief Class Actions; or2. (b)(2) – Injunctive Relief Class Actions; or
3 (b)(3) – Damages Class Actions3. (b)(3) – Damages Class Actions.
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Three forms of proof:
1. Statistical evidence about pay and promotion disparities between men and women at the company;
2. Anecdotal reports of discrimination from about p120 of Wal-Mart’s female employees; and
3 Testimony of a sociologist Dr William Bielby3. Testimony of a sociologist, Dr. William Bielby, who conducted a “social framework analysis” of Wal-Mart’s “culture” and personnel practices.
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Claims for monetary relief may not be certified under Rule23(b)(2) at least where the monetary relief is notRule23(b)(2), at least where the monetary relief is not incidental to the requested injunctive or declaratory relief.
Claims for individualized relief, like backpay, are excluded.
Rule 23(b)(2) applies only when a single, indivisible remedy would provide relief to each class member.
Wal-Mart is entitled to individualized determinations of each employee’s eligibility for backpay. p y g y p y
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Judge Kozinski: Class had little in common “b t th i d thi l it ”“but their sex and this lawsuit.”
Judge Ikuto: Information “about disparities at Judge Ikuto: Information about disparities at the regional and national level does not establish the existence of disparities at i di id l l l i hindividual stores, let alone raise the inference that a company-wide policy of discrimination is implemented bydiscrimination is implemented by discretionary decisions at the store and district level.”
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Concurrence and dissent by Justice Ginsburg:
Agreed with majority that the class should h b ifi d d F d l R l fnot have been certified under Federal Rule of
Civil Procedure 23(b)(2).
Disagreed that plaintiffs produced insufficient commonality to form class underinsufficient commonality to form class under Rule 23(a)(2)
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All 9 justices agreed suit improper for class ti i ki b k d R laction in seeking backpay under Rule
23(b)(2).
Majority of 5 justices held plaintiffs did not have enough commonality to form class due t l k f lit Mi it ld hto lack of commonality. Minority would have found sufficient commonality.
Did not decide whether company discriminated against female employees.
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Heightened focus on size and geographic scope of class.
Heightened focus on ratio of actual evidence presented at certification stage vs. scope of alleged wrongdoing.
Dukes had 1 declaration for every 12,500 class members and related to 235 of 3400 stores.
Teamsters had 1 declaration for every 8 class members.
Understand different requirements and purposes under FRCP 23(b)(2) or 23(b)(3).
If individual damages sought, cannot rely on 23(b)(2).
Court was hostile to concept of class members waiving individualized damages in order to bring 23(b)(2) claim.damages in order to bring 23(b)(2) claim.
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Heightened scrutiny of experts Heightened scrutiny of experts.
In discrimination cases, the merits will need to be d l d t t bli h “th l ” th t t hdeveloped to establish “the glue” that patches together the class issues. Smaller and regional class claims more likely to survive
Plaintiffs need to investigate sources of commonality early on: Plaintiffs need to investigate sources of commonality early on: Common Decision makers Common Policies Common Practices Other common factors resulting in disparate treatment or impact
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Be prepared with a trial plan that will demonstrate bili f h lmanageability of the class.
Focus on manageability and due process issues Focus on manageability and due process issues.
Evaluate whether incorrect results could occur with sample cases or litigating too large a class with so many inherent individual issues, particularly in (b)(2) cases.(b)(2) cases.
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Dept. Fair Employ. & Hous. v. Verizon Services Corp. (L.A. Super Ct Case No B444066) $6 011 190 on CFRA classSuper. Ct., Case No. B444066), $6,011,190 on CFRA class action settlement.
Case Grading Method.Thorough investigation by Special Investigations Unit of a Thorough investigation by Special Investigations Unit of a dozen complaints and nearly 100 potential claimants over two years.
Ensure case met elements of Cal Gov Code section 12961 Ensure case met elements of Cal. Gov. Code section 12961 for class/group action.
Ensure claimants met Cal. Code Civ. Proc. section 382 elements:elements: 1. Common or general interest;2. Of many persons; and3. Substantial benefits to litigants and courts.g
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Fewer class actions in federal court; more class actions in state court.
Fewer national class actions; more regional or local class actions.
Large employers more secure; mid sized employers more Large employers more secure; mid-sized employers more vulnerable.
Decentralized management structures and decisionmaking more f d li d l d i blpreferred; centralized management structures less desirable.
Coupled with AT&T Mobility LLC v. Concepcion, __ 563 U. S. __ (Nov. 9, 2010, No. 09–893), allowing class action waivers/bars in ( , , ), g /mandatory arbitration agreements, the future of class actions is an interesting question!
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Anna Segobia Masters, Esq., PartnerWi t & StWinston & [email protected]
Phyllis W. Cheng, Esq., DirectorDepartment of Fair Employment & Housingp p y [email protected]
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