Some Random Thoughts on Dukes
The Ninth Circuit's recent en banc decision affirming the largest Title VII class action in history has been the subject of a lot of commentary and debate recently. See Dukes v. Wal-Mart Stores, Inc., 2010 WL 1644259 (9th Cir. Apr. 26, 2010). Legal bookies give strong odds for the Supreme Court to grant certiorari in the case. I won't undertake to summarize the full opinion; my colleagues already have done that. One of the points of controversy, however, is just how much impact, if any, Dukes should have on consumer class actions and mass torts. Here are some random thoughts on that subject that I have jotted down on train rides and in other public places:
1. This is an employment discrimination opinion that ought to have little applicability to consumer class actions. My labor law colleagues tell me that statistical proof is common in their cases; in fact, it apparently helps define certain disparate impacts. That's awfully different from consumer fraud cases, where the elements of reliance and causation are defined individually and are subject to individual rebuttal evidence. The majority in Dukes even recognized that special rules apply in employment discrimination cases: "the typical situation presented in such a case implicates significant differences in the doctrine that require explanation to reach a resolution here and in future Title VII class action certification decisions." Id. at *4. See also id. at *16 ("the statistical disputes typical to Title VII cases often encompass the basic merits inquiry and need not be proved to raise common questions and demonstrate the appropriateness of class resolution.").
2. To the extent generalizations can be made from Dukes beyond the employment discrimination context, it is clear that the Ninth Circuit now has squarely joined the camp of Circuits requiring courts to conduct a "rigorous analysis" of whether the class action prerequisites are satisfied, and trial courts cannot now hide behind Eisen to avoid looking beyond the pleadings to determine how the case actually will be tried. Id. at *5 ("Courts have thus strayed from Falcon when they have myopically invoked Eisen to avoid considering facts properly relevant to the Rule 23 determination because the facts happen to be relevant to the later merits inquiry as well."), *9 ("The district court must analyze underlying facts and legal issues going to the certification questions regardless of any overlap with the merits."), *12 ("A district court must sometimes resolve factual issues related to the merits to properly satisfy itself that Rule 23's requirements are met . . .").
3. The majority's seeming rejection of the use of Daubert to challenge expert testimony at the class certification stage is clearly grounded in its belief that employment discrimination actions are different, and that the fact that there are competing statistical proofs does not mean that the case cannot be certified, but rather goes to the merits. See id. at *22-*24. This does not mean that the Ninth Circuit has rejected the use of Daubert on expert testimony as to whether something like the need for medical monitoring is capable of common proof.
4. It is still possible, under the test articulated by the Dukes court to determine whether monetary relief "predominates," to argue that where monetary relief is dressed up as "equitable" relief, the "key procedures that will be used," the "new and significant legal and factual issues," and the need for individualized hearings make the monetary relief superior in strength, influence and authority to the so-called "injunctive" relief. See id. at *35-*36. The majority's conclusion that the request for back pay did not predominate was driven by the statutory history of such relief and the fact that the drafters of Rule 23(b)(2) clearly envisioned statutory employment discrimination actions proceeding under that provision. The majority's analysis of the issues raised by punitive damages highlight the types of arguments that are still available in consumer class actions. Id. at *38-*39.
5. Perhaps the most troubling part of the opinion is the dicta describing how statistical proof and fluid recovery was used in a 1996 decision in a case brought by torture victims. Id. at *42-*43. It is plain, however, that such methodologies -- which ignore the individual nature of the liability determination and the defenses thereto -- have been widely rejected since 1996 in cases like McLaughlin v. American Tobacco Co., 522 F.3d 218 (2d Cir. 2008). Indeed, Judge Jack Weinstein, who has long been a proponent of the use of statistical proof to facilitate class actions, has described this as the "individualized proof rule" in denying the State of Mississippi the ability to premise its claim for relief on such statistical proof. See Hood v. Eli Lilly & Co., 2009 WL 4260857 (E.D.N.Y. Dec. 1, 2009).
It should surprise no one that I am much more persuaded by Chief Judge Kozinski's dissent in Dukes, and that I hold out hope of working on an amicus brief for the case in the Supreme Court. In the meantime, it seems clear to me that defendants in consumer class actions and mass tort cases can raise significant challenges to the use of Dukes in such litigation.
