by Art Gutman Ph.D., Professor, Florida Institute of Technology
As reported in an alert on March 30, 2011, two of our DCI colleagues (David Morgan & Eileen Curtayne) attended oral arguments held a day earlier Wal Mart v. Dukes. I will assume the reader has read their report, which lays out the major issues in the case. In the days since, various blog writers have handicapped the oral arguments, universally agreeing that the plaintiff's arguments for certifying a class of 500,000 women on grounds of sex discrimination in pay and promotion is weak and wanting. There are basically two issues in this case, one substantive and other technical. The substantive issue is whether Wal Mart established a culture of sex-biased subjective decision-making that was common to the entire class. The technical issue, as noted by Morgan and Curtayne, is whether the 9th Circuit ruling favoring certification is more consistent with Federal Rule 23(b)(3), commonly used for monetary awards, and Federal Rule 23(b)(2), commonly used for injunctive and declaratory relief.
Often, I find the “common wisdom” weak and wanting, but not in this case. The tea leaves clearly favor Wal Mart. Basically, the three female justices (Ginsburg, Sotomayor & Kagan) were friendly to the plaintiffs on most (but not all) issues, Breyer, at best, was neutral, and predictably, Roberts, Scalia, and Alito were unfriendly, if not hostile. As usual, Thomas was quiet, but he has a history of siding with Roberts and Scalia. That leaves the one justice who generally decides potentially close rulings --- Kennedy. Kennedy lobbed a couple of softball questions at Wal Mart’s attorney (Boutrous) and bombshell questions at the plaintiff’s attorney (Sellers).
Kennedy’s unfriendliness to the plaintiffs on the substantive issue can be summed up with his first question to Sellers. Accordingly:
It's not clear to me what is the unlawful policy that Wal-Mart has adopted under your theory of the case?
To which sellers responded:
Justice Kennedy, our theory is that Wal-Mart provided to its managers unchecked discretion in the way that this Court's Watson decision addressed that was used to pay women less than men who were doing the same work in the same -- the same facilities at the same time, even though -- though those women had more seniority and higher performance, and provided fewer opportunities for promotion than women because of sex.
To which Kennedy responded:
It's -- it's hard for me to see that the -- your complaint faces in two directions. Number one, you said this is a culture where Arkansas knows, the headquarters knows, everything that's going on. Then in the next breath, you say, well, now these supervisors have too much discretion. It seems to me there's an inconsistency there, and I'm just not sure what the unlawful policy is.
Scalia then interrupted echoing the same theme:
I'm getting whipsawed here. On the one hand, you say the problem is that they were utterly subjective, and on the other hand you say there is a -- a strong corporate culture that guides all of this. Well, which is it? It's either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do.
Justice Roberts added:
What if you had a situation where you had a company with a very clear policy in favor of equal treatment of men and women? You know, the answer to your -- the answer to your question was women don't have as many positions because managers discriminate against them in -- in hiring and in promotion, yet you still have the same subjective delegation system. Could you have a class of women who were harmed by this subjective policy, even though it was clear that the policy of the corporation favored equal employment opportunity?
Justice Roberts also asked:
How many examples of abuse of the subjective discrimination delegation need to be shown before you can say that flows from the policy rather than from bad actors? I assume with three -- however many thousands of stores, you're going to have some bad apples.
Justice Alito, took a broader perspective, adding:
So, you have the company that is absolutely typical of the entire American workforce, and let's say every single -- there weren't any variations. Every single company had exactly the same profile. Then you would say every single company is in violation of Title VII?
I think you get the picture ….. regardless of which federal rule applies, the plaintiffs are in deep water on their substantive claim. Kennedy, Scalia, Roberts and Alito lobbed bombs at the plaintiffs, and Thomas was probably thinking the same thing.
The technical issue will also likely resolve in favor of Wal Mart. The plaintiffs favor Rule 23(b)(2) so that they can make pure statistical arguments for damages, negating any basis for Wal Mart to challenge individual claims.
Wal Mart favors Rule 23(b)(3), which is more difficult to satisfy and permits Wal Mart to challenge individual claims. There was clearly more consensus among the justices, and it favored Rule 23(b)(3). Indeed, the chief critic of Rule 23(b)(2) was Sotomayor, who stated to Sellers:
I'm -- I'm a little confused, all right? Because you're saying an individualized hearing is impossible, but that's exactly what you're saying you're going to do, only through statistics.
Sotomayor than anticipated Seller’s response and added:
You're going to say through my statistical model, I will be able to identify those women in the class who are deserving of pay raises. What that doesn't answer is when in this process is the defendant going to be given an opportunity to defend against that finding?
Stay tuned. The Supreme Court will probably rule sometime in July.