A. The Ninth Circuit Reverses Course: Ellis v. Costco

Among the post-Dukes decisions, the case that most clearly demonstrates Dukes' impact is the Ninth Circuit's decision in Ellis v. Costco.81 Decided by the same appellate court that affirmed the Dukes decision that was reversed by the Supreme Court, Ellis reflects the Ninth Circuit's understanding of how it must modify the standards governing class certification as a result of the Supreme Court's decision.

Similar to Dukes, the Ellis plaintiffs sought to represent a class of present and former female employees who were allegedly discriminated against on the basis of gender by Costco's promotional practices. The class was certified under Rule 23(b)(2) by the district court. On appeal, post-Dukes, the Ninth Circuit reversed. Finding that, at best, the standard for certification applied by the district court was unclear, the Ninth Circuit stated it was "tak[ing] this opportunity to clarify the correct standard."82 Following the principles set forth in Dukes, the court first explained the often critical role the merits of the underlying claims play in determining whether a case is appropriate for class certification. Emphasizing that "the merits of the class members' substantive claims are often highly relevant when determining whether to certify a class," the court stated, "it is not correct to say a district court may consider the merits to the extent that they overlap with class certification issues; rather, a district court must consider the merits if they overlap with the Rule 23(a) requirements."83

Next, the court addressed the district court's failure to engage in a rigorous analysis of the evidence presented. Again applying Dukes, the Ninth Circuit stated that simply determining the admissibility of the evidence was insufficient. Instead, the Ninth Circuit ruled that district courts are:

required to resolve any factual disputes necessary to determine whether there was a common pattern and practice that could affect the class as a whole. If there is no evidence that the entire class was subject to the same allegedly discriminatory practice, there is no question common to the class.84

Thus, the court stated, if, as Costco's expert testified, any gender disparities that existed were confined to two of Costco's eight regions:

[it] would not show that "discrimination manifested itself in ... promotion practices in the same general fashion," throughout Costco — which is necessary to show commonality in a nationwide class.

If no such nationwide discrimination exists, Plaintiffs would face an exceedingly difficult challenge in proving that there are questions of fact and law common to the nationwide class.

Regarding the typicality requirement, the Ninth Circuit ruled that the appropriate inquiry is whether the named plaintiffs will be subjected to individual defenses rather than those pertaining to the class.85

Turning to Rule 23(b), the Ninth Circuit followed Dukes in rejecting the "predominance" test, assessing whether monetary issues predominate, for determining whether a class claim including monetary damages can be certified under Rule 23(b)(2). Instead, the appellate court concluded that the relevant inquiry is whether that provision provides sufficient procedural safeguards to protect the due process rights of absent class members as to the relief sought. The Ninth Circuit remanded the case to the district court to make that determination, and also instructed the lower court to consider whether claims for punitive damages could be certified under Rule 23(b)(2), and claims for monetary relief could be certified under Rule 23(b)(3).

B. Some District Courts Have Considered Dukes in FLSA Collective Actions

Although courts in a number of cases have declined to apply Dukes in FLSA collective actions, at least two district courts have recognized the relevance of the reasoning in Dukes to such actions. Ruiz v. Serco, Inc.86 was a proposed FLSA collective action asserting misclassification claims on behalf of employees providing clerical and support services to military personnel returning from deployment and their families. The court denied conditional certification, finding there was insufficient evidence to establish that plaintiffs were similarly situated as to job duties and levels of discretion, or as to the policies used to determine their exemption classification. Significantly, the court applied the Supreme Court's analysis in Dukes to determine "when certification of a collective action under the FLSA is appropriate."

Plaintiffs have not provided enough evidence to satisfy their burden at this stage. The Supreme Court's recent decision in Wal-Mart Stores, Inc. v. Dukes is instructive on this point.... It is not enough for plaintiffs to raise a common question as to whether they and other employees with some similar job duties were properly classified as exempt. Rather, the answer to that question must be susceptible to proof that can be extrapolated to the class plaintiffs seek to represent. In this case, it would be difficult to generate common answers in light of the individualized inquiries arising from the wide variations in duties, experience, responsibility, discretion and supervisors on the part of the potential class members.87

Similarly, in Macgregor v. Farmers Insurance Exchange88 the district court denied conditional certification to a potential class of property claims representatives in a case asserting the employer's pay policies and practices violated the FLSA. While noting that collective actions under the FLSA are "not subject to the provisions generally associated with class actions under FRCP 23," the court stated that the Supreme Court's reasoning in Dukes is "nonetheless illuminating."89 Quoting Dukes, the court concluded that the employer's policy of providing discretion to managers was the opposite of a uniform employment practice and did not raise an inference of illegal conduct. Noting that "numerous district courts have reached similar results without the benefit of this clearly reasoned Supreme Court decision," the court went on to state that when there is no uniform policy or practice, "individual factual inquiries are likely to predominate and judicial economy will be hindered rather than promoted by certification of a collective action."90

V. CONCLUSION

Dukes provides a new analytical framework for analyzing certification in class actions, making it significantly more difficult for plaintiffs to certify nationwide classes challenging discrimination practices, unless those practices are expressly stated and uniformly applied. The type of cases that may survive the standards set by the Supreme Court will likely be those that challenge the use of a standardized test or other uniformly applied screening device. Thus, it is likely that future class actions will be narrower in scope, both geographically and in terms of the practices challenged and the relief that is sought.

Dukes also raises the bar for expert testimony. Experts will have to tie their opinions more closely to the facts of the case and attempt to quantify the pervasiveness of the practices attacked by the plaintiffs. Perhaps an outgrowth of that process will be more searching and detailed discovery requests, which plaintiffs will be able to justify as necessary to provide their experts the required facts.

A most interesting question that may persist for the next few years is whether Dukes will be extended beyond discrimination cases to FLSA collective actions. To date, the courts are divided on that questions, but we anticipate that ultimately a consensus is likely, one way or the other, until the Supreme Court resolves that important issue.

Footnotes

1 131 S. Ct. 2541 (2011).

2 29 U.S.C. § 216(b).

3 Dukes v. Wal-Mart Stores, Inc., 509 F.3d 1168 (9th Cir. 2007).

4 Dukes, 131 S. Ct. at 2552 (emphasis in original).

5 457 U.S. 147 (1982).

6 Dukes, 131 S. Ct. at 2545 (quoting Falcon, 457 U.S. at 157-58) (emphasis added).

7 Id.

8 Id. at 2555.

9 Id. at 2556 (quoting Falcon, 457 U.S. at 159, n.15).

10 Id. at 2553.

11 Id.

12 E.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1440 (2010) (Noting that Rule 23 is "designed to further procedural fairness and efficiency"); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615 (1997) (The principle purpose of Rule 23 class actions is to promote "efficiency and economy of litigation... without sacrificing procedural fairness or bringing about other undesirable results."); Mevorah v. Wells Fargo Home Mortg. (In re Wells Fargo Home Mortg.), 571 F.3d 953, 958 (9th Cir. 2009) (citing and quoting Amchem for the same principles).

13 Dukes, 131 S. Ct. at 2557.

14 109 F.3d 1016, 1017 (5th Cir. 1997).

15 103 F.3d 767 (9th Cir. 1996).

16 Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 625-26 (9th Cir. 2010).

17 28 U.S.C. §1350.

18 Hilao, 103 F.3d at 782-84.

19 Dukes, 603 F.3d at 627.

20 Id. at 643, n.20.

21 Dukes, 131 S. Ct. at 2561

22 Dukes, 603 F.3d at 652.

23 This section of the Report draws heavily on King, Klein, and Mitchell, "The Effective Use and Presentation of Social Science Evidence," Employee Relations Law J. (forthcoming).

24 Expert Report of Anthony G. Greenwald, Pippen v. State of Iowa, Case No. CL 107038 (Dist. Ct., Polk County, Iowa 2007).

25 In addition to objections under Federal Rule of Evidence 702 or a state law equivalent, Dr. Greenwald's testimony also presents the question whether this testimony violates the ban on character evidence by asserting that all managers at Iowa agencies have the propensity to exhibit racial bias and engage in discrimination.

26 For example, the decision by the district court in Dukes to admit Dr. Bielby's opinions appears to have been positively influenced by the district's prior acceptance of testimony by Dr. Bielby. See Dukes, 222 F.R.D. at 192 ("Dr. Bielby's testimony on sex stereotyping also has been admitted in prior cases in this district." (citation omitted)).

27 Fed. R. Civ. P. 35(a)(1).

28 Id.

29 Koch v. Cox, 489 F.3d 384, 391 (D.C. Cir. 2007).

30 Schlagenhauf v. Holder, 379 U.S. 104, 119 (1964).

31 Fed. R. Civ. P. 35(a)(1) ("The court ... may order a party....") (emphasis added).

32 Schlagenhauf, 379 U.S. at 115 n.12 ("Although petitioner was an agent of [the defendant], he was himself a party to the action. He is to be distinguished from one who is not a party but is, for example, merely the agent of a party."); Kropp v. General Dynamics Corp., 202 F. Supp. 207, 208 (E.D. Mich. 1962) (holding that the court lacked jurisdiction to compel a truck driver, a nonparty and agent of corporate defendant, to submit to a physical examination under Rule 35(a)).

33 114 F.2d 479, 481 (D.C. Cir. 1940).

34 144 F. Supp. 880, 882 (W.D. Pa. 1956).

35 Palgut v. City of Colorado Springs, 2008 U.S. Dist. LEXIS 123115, at *12 (D. Colo. July 3, 2008).

36 Case No. 04-05764 (N.D. Ill. 2004).

37 Case No. 94-4335 (N.D. Cal. 1994).

38 Case No. 07-08383 (S.D.N.Y. 2007).

39 Case No. 04-09194 (S.D.N.Y. 2004 ).

40 Report of Gregory Mitchell, Ph.D., Bridgewater v. Northrop Grumman Ship Systems, Inc., Case No. 1:06-cv-769HSO (S.D. Miss. 2006).

41 Report of Dr. James Outtz, Gutierrez v. Johnson & Johnson, Case No. 01-cv-5302 (D.N.J. 2001). For the court's opinion denying class certification, in part on grounds that the companies were occupationally diverse and not following common practices, see Gutierrez v. Johnson & Johnson, 269 F.R.D. 430 (D.N.J. 2010).

42 No. CIV.A. 99-C-3356, 2002 WL 31061088, at **1–3 (N.D. Ill. Sept. 17, 2002).

43 Id. at **4-5.

44 Id. at *9 ("[T]he inclusion of a large number of class members in the survey appears to have strongly influenced the overall results, which further supports the defendant's position that the survey data do not reliably reflect the views or experiences of the overall population of relevant employees.").

45 See, e.g., Vita-Mix Corp. v. Basic Holding, Inc., 581 F.3d 1317, 1325 (Fed. Cir. 2009) (double-blind study of product users in patent infringement case); Marlo v. UPS, Inc., No. CV 03-04336 DDP (RZX), 2005 WL 6197774, at *10 (C.D. Cal. Mar. 1, 2005) (double-blind survey of employees regarding their duties in wage-and-hour case).

46 2007 U.S. Dist. LEXIS 61239 (N.D. Cal. Aug. 21, 2007), rev'd, 319 F. App'x 688 (9th Cir. 2009).

47 Id. at **24 -27. The plaintiff challenged the study on grounds that it did not examine the activities of the actual class members, but the court rejected this challenge: "FedEx argues, and Whiteway does not effectively rebut, that there is no operational/functional difference between the centers in California and the centers in other western states surveyed." Id. at *26.

48 See, e.g., id. at *9 ("[T]here remains no evidence[] that ... the job duties/responsibilities of any Center Manager ... are any different than another.").

49 29 U.S.C. § 216(b).

50 See Hoffmann-La Roche v. Sperling, 493 U.S. 165, 180-81 (1989) (Rehnquist and Scalia, JJ., dissenting) (the joinder process established by § 216(b) is comparable to the joinder process of Rule 20).

51 28 U.S.C. § 2072.

52 Id. at § 2072(b).

53 Callihan v. Schneider, 178 F.3d 800, 802 (6th Cir. 1999).

54 Fed. R. Civ. P. 1 (emphasis added).

55 Sperling, 493 U.S. at 172.

56 See Fink v. Oliver Iron Min. Co., 65 F. Supp. 316, 318 (D. Minn. 1941) ("It seems clear, therefore, that all Congress intended under Section 16 of the Fair Labor Standards Act was a permissive joinder").

57 152 F.2d 851 (3d Cir. 1945).

58 Id. at 852 (quoting 2 Moore's Federal Practice 2241 (2d ed. 1938)).

59 35 F. Supp. 2d 519, 520 (N.D. Ga. 1940).

60 Pentland, 152 F.2d at 854.

61 Id. at 854 n.11 (emphasis added).

62 194 F.2d 737 (7thCir. 1952).

63 Id. at 743.

64 Id.

65 7A Charles Alan Wright, Arthur Miller, & Mary Kay Kane, Federal Practice and Procedure, § 1752 (2d ed. 2005).

66 Newberg & Conte, Newberg on Class Actions, § 1.09 (3d ed. 1992).

67 29 U.S.C. §§ 256(a), 256(b), and 257.

68 E. K. Spahn, Resurrecting the Spurious Class: Opting-In to the Age Discrimination in Employment Act and the Equal Pay Act through the Fair Labor Standards Act, 71 GEO. L. J. 119, 129 (1982) ("Congress in 1947 ... codified in section 216(b) the spurious class action practice of the 1938 version of Rule 23.").

69 Lofther v. First Nat'l Bank of Chicago, 45 F. Supp. 986, 989 (N.D. Ill. 1941); see also J. A. Rahl, The Class Action Device and Employee Suits Under the Fair Labor Standards Act, 37 Ill. L. Rev. 119, 126 (1942) ("It has been said that the 'spurious' suit is really an 'invitation to intervene' extended to all persons similarly situated.").

70 Kainz, 194 F.2d at 743.

71 118 F.R.D. 392, 408 (D.N.J. 1988).

72 Fed. R. Civ. P. 20(a)(1)(B). As the Supreme Court emphasized, it is primarily those common questions that give rise to common answers that really matter. See note 4, supra.

73 Cf. Illinois v. Ampress Brick Co., 67 F.R.D. 457, 460 (N.D. Ill. 1975) ("This burden is not properly upon defendants or the courts. It is the responsibility of plaintiff ... in the first instance to determine that the parties it seeks to join as named plaintiffs have suffered appropriate injury.").

74 132 F.R.D. 263 (D. Colo. 1990).

75 Id. at 265-66 (emphasis omitted); accord St. Leger v. A.C. Nielsen Co., 123 F.R.D. 567 (N.D. Ill. 1988) (stating that certification was inappropriate because common questions did not predominate).

76 513 F.2d 286, 288 (5th Cir. 1975).

77 See also Hipp v. Liberty Nat'l Life Ins. Co., 252 F.3d 1208, 1216 (11th Cir. 2001) (noting the "fundamental" difference between Rule 23 class actions and § 216(b) class actions).

78 575 F.3d 567, 584-86 (6th Cir. 2009).

79 Fed. R. Civ. P. 1.

80 See e.g., Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1438 (2010) ("like the rest of the Federal Rules of Civil Procedure, Rule 23 automatically applies" in all civil actions and proceedings in the United States district courts (emphasis in original); Califano v. Yamasaki, 442 U.S. 682, 700 (1979) ("In the absence of a direct expression by congress of its intent to depart from the usual course of trying 'all suits of a civil nature' under the [Federal Rules]," class relief under Rule 23 is permitted).

81 657 F.3d 970 (9th Cir. 2011).

82 Id. at 981.

83 Id. at 981.

84 Ellis, 657 F.3d at 983 ("the district court was required to resolve any factual disputes necessary to determine whether there was a common pattern and practice that could affect the class as a whole. If there is no evidence that the entire class was subject to the same allegedly discriminatory practice, there is no question common to the class. In other words, the district court must determine whether there was 'significant proof that [the employer] operated under a general policy of discrimination.'") (citations omitted).

85 Id. at 984-85.

86 2011 U.S. Dist. LEXIS 91215 (W.D. Wis. Aug. 5, 2011).

87 Id. at *18.

88 2011 U.S. Dist. LEXIS 80361 (D.S.C. July 22, 2011).

89 Id. at *13.

90 Id. at **13-14.

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