Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 141 E. Wal-Mart Stores, Inc. v. Dukes—The Supreme Court Shifts the Landscape of Class Certification In 2011, the U.S. Supreme Court issued its decision in Wal-Mart Stores, Inc. v. Dukes.722 This opinion transformed the class certification analysis under Rule 23 and dramatically changed how workplace class actions are structured and defended. This decision has significantly assisted employers in defeating certification in wage and hour cases. In Dukes, the Supreme Court reversed the Ninth Circuit and held that class action certification should not have been granted as to the element of commonality because it requires plaintiffs to establish commonality among all putative class members as to the reason for a particular employment decision—the “glue” that holds the alleged unlawful conduct together. The Court ruled that the proof of commonality required by Rule 23(a) will frequently overlap with the merits of the case. This holding repudiates plaintiffs’ usual argument that it is inappropriate to consider the merits of claims at the certification stage of class litigation. In addition to commonality, the Court severely limited the use of Rule 23(b)(2), pertaining to class-wide injunctive and declaratory relief, in cases seeking back pay, ruling that such money damages may be awarded under this rule only when they are truly incidental to the requested equitable relief.723 Dukes thus contains two core holdings. First, the Court held unanimously that certification of a class of female Wal-Mart workers was inappropriate under Rule 23(b)(2), which permits certification where “the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole.” Second, the Court ruled, 5-4, that the plaintiffs failed to satisfy the “commonality” requirement of Rule 23(a)(2). Each of these holdings has reverberated in important ways in wage and hour litigation. 1. Class Members Must All Suffer A Common Injury Capable Of Class-Wide Resolution The Dukes decision reinforces that, because class actions are “an exception to the usual rule,” a class representative “must ‘possess the same interest and suffer the same injury’ as the class members.” One gauge for measuring whether that requirement has been met is the “commonality” test of Rule 23(a). According to Justice Scalia’s majority opinion, commonality requires class members to have suffered the same injury as each other, not just a violation of the same provision of law. Moreover, the common injury must be “capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.”724 722 564 U.S. 338 (2011). 723 See Sepulveda v. Wal-Mart Stores, Inc., 464 Fed. App’x 636 (9th Cir. 2011) (affirming that the non-incidental test should be applied when determining class certification under Rule 23 (b)(2)). 724 The distinction between a “common injury” and individualized damages can often be confusing in wage & hour class actions. Applying Dukes, the Ninth Circuit recently affirmed that differences in damage calculations between class members (e.g., where more rest breaks were provided to some employees than to others) does not necessarily defeat class certification if the plaintiffs can show their damages were “one type of injury” that resulted from the defendant’s common policy or practice. Vaquero v. Ashley Furniture Industries, Inc., 824 F.3d 1150, 1154-55 (9th Cir. 2016).
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