Wal-Mart Presents to Full Panel in Dukes Case

The clashing sides in the long-running case of Dukes v. Wal-Mart Stores Inc. presented arguments to a full panel of the U.S. Ninth Circuit Court of Appeals March 24 on whether the case should proceed as a class action.

Reports from the hearing, which by all accounts drew a packed house, didn’t indicate either side emerged with an edge. The biggest news was the Equal Employment Opportunity Commission filing a brief in support of class action status for Dukes after previously staying neutral on the case.

The Web site law.com provided a run-down of the political leanings of the 11-judge panel, and it sounds like Wal-Mart couldn’t have asked for a better mix in the notoriously liberal Ninth Circuit.

The en banc hearing was awarded to Wal-Mart on Feb. 13 after it appealed the 2007 ruling by a Ninth Circuit three-judge panel that certified the Dukes case as a class action by a 2-1 vote.

If certified, the Dukes case is potentially the largest class action in American history, covering as many as 2 million current and former female Wal-Mart employees who worked for the company after 1998. Goldman Sachs has estimated Wal-Mart has a potential exposure of between $1.5 billion and $3.5 billion, with punitive damages potentially ranging from $13.5 billion to $31.5 billion.

Wal-Mart agreed to settle 63 unrelated wage discrimination lawsuits in December 2008 for between $350 million and $640 million.

Dukes alleged gender discrimination in the suit filed in 2001.

Only one of the two judges who ruled in favor of class action was seated on the randomly-selected panel, Judge Michael Hawkins.

Law.com tells us four of the judges were appointed by Republicans, seven by Democrats. Law.com described four of the Democratic appointees as moderates, and noted that at least one of those, Judge Susan Graber, seemed uncomfortable with an “all-or-nothing” proposition of class action status.

That would appear to favor Wal-Mart’s argument that the class of 2 million female employees lack commonality, one of the key principles in establishing class status. Wal-Mart has argued that female employees who were promoted and in supervisory roles don’t have commonality with Dukes’ claim that she was denied advancement because of gender.

Legal observers jumped on the bipartisan EEOC getting involved after sitting it out during the previous administration. The EEOC had three Republicans and two Democrats in 2006 when it declined to issue an opinion at the request of Dukes’ lawyers.

The panel is now split 2-2 with a vacancy. The EEOC argued in support of class action status that:

“If Wal-Mart’s arguments were accepted, it could effectively preclude a claim for punitive damages in most if not all Title VII pattern-or-practice cases including those brought by the Commission.”

The EEOC opinion is not a statement on the merits of the Dukes case, only whether it should proceed as a class action.

Duking It Out

June 2001
Betty Dukes files discrimination claim against Wal-Mart claiming she was denied training and promotion because of her gender. Five other women join the suit.

June 2004
U.S. District Court Judge Martin Jenkins certifies case as a class action covering more than 1.6 million female Wal-Mart employees who worked for the company after 1998.

Dec. 11, 2007
U.S. Ninth Circuit Court of Appeals upholds class action status for Dukes case by 2-1 vote.

Feb. 13, 2009
Wal-Mart wins appeal for en banc hearing before an 11-judge panel of the Ninth Circuit.

March 24, 2009
Wal-Mart argues against class action status before en banc panel, EEOC filed brief in support of class action status for Dukes.