Dukes Watch: Lively Debate in Supreme Court Oral Argument

March 30, 2011

The much anticipated oral argument in Dukes v. Wal-Mart – the biggest gender discrimination case in history — was held today before the United States Supreme Court.  From the unofficial transcript (click here) it looks like Wal-Mart’s counsel, Theodore Boutrous, didn’t have time to uncap his pen before a robust series of incisive questions, initially led by Chief Justice Roberts, were thrown at him.

Mr. Boutrous began his presentation by arguing that the class certified, and as affirmed by the Ninth Circuit Court of Appeals, does not satisfy Rule 23(a) because decentralization in the massive company destroys cohesion.  But that position drew immediately fire by Chief Justice Roberts who asked whether it also could be the case that a decentralized structure could itself lead to a pattern of discrimination that the company would be aware of.  Wal-Mart’s counsel had no clear answer.  But Justice Kennedy followed up by asking whether a company’s deliberate indifference to discrimination would itself be a policy.

Justice Ginsburg continued with the point “Is there any responsibility if you — the numbers are what has been left out so far. The company gets reports month after month showing that women are disproportionately passed over for promotion, and there is a pay gap between men and women doing the same job. It happens not once, but twice. Isn’t there some responsibility on the company to say, is gender discrimination at work, and if it is, isn’t there an obligation to stop it?”  Mr. Boutrous conceded that a company would have an obligation to do just that, but went on to insist that the real issue was the District Court’s application of the incorrect standard at class certification.

Justice Alito went to the heart of the matter:  “What do you think is the difference between the standard that the district court was required to apply at the certification stage on the question whether there was a company-wide policy and the standard that would be applied on the merits?  After extensive dialogue Mr. Boutrous explained that, in his view, every class member would have to show individual causation of the same injury.  Justice Kagan promptly pointed out that “that’s never been the law.”  She added: “[a]ll that the plaintiffs have to demonstrate and, especially at this stage in the proceedings, is that there is a practice, a policy of subjectivity that on the whole results in discrimination against women, not that each one of these women in the class were themselves discriminated against.”  (Mr. Boutrous might have broken his pen in half at this point but that’s not in the transcript.)

But Joseph Sellers, counsel for the Class, quickly faced tough questions of his own.  Chief Justice Roberts asked (in a case involving thousands of stores) how many examples of “abuse of subjective discrimination delegation” need be shown to establish a pattern or practice.  Pointing out that there’s “no minimum number,” Mr. Sellers simply explained that there must be “disparities sufficiently substantial to create an inference of discrimination.”  Justice Kennedy then went to 30,000 feet:  “What is the unlawful policy that Wal-Mart has adopted under your theory of the case?”  He followed up by pointing to what he viewed as an inconsistency in the case theory, saying the complaint “faces in two directions.”

On the one hand, there’s the notion that the corporate head knows all, but on the other hand, the theory is there is too much discretion on the store manager level.  So, as Justice Scalia later asked, “Which is it?”  Mr. Sellers attempted to explain that while store managers have discretion, they abide by Wal-Mart institutional values, thus arguing there’s no inconsistency at all.  And what about Wal-Mart’s written policy against sex discrimination?  Justice Scalia asked about the import of that, to which Mr. Sellers argued that there was a written policy, but it was not “effectively communicated” to managers, and the evidence showed it.  Ultimately, Mr. Sellers argued these are issues for trial and not certification.

Justice Breyer turned the discussion back to the core question of class certification:  “Given the facts about what people say and how they behave, many of which central management knew, and given the results which central management knew or should have known, should central management under the law have withdrawn some of the subjective discretion in order to stop these results?”  Mr. Sellers: “That — that is a fair way to put it.”  Justice Breyer: “If that is a fair way to put it, is that a question that every one of the women in this class shares in common?”  Of course, Mr. Sellers answered yes.  Justice Scalia took the debate further, obviously concerned over proof by statistics that belie a written company policy, by asking whether it is possible that every industry in America could be guilty of sex discrimination if there is no equality of promotion for men and women.  Mr. Sellers could only say that he was not accusing the “entire society” of gender discrimination.  That’s a relief.

Moving to the issue of whether certification jeopardizes Wal-Mart’s due process rights, Justice Ginsburg noted that the District Court felt the class was so large that individual trials would be “impossible.”  The inquiry that naturally followed was whether Wal-Mart would have any opportunity to challenge underpayment to any given class members on an individual basis, but could only challenge the finding by attacking the statistical model (and not individual evidence).  Mr. Sellers gave a big maybe to this, which drew a “you’re not answering me” from Justice Sotomayor.  But when Mr. Sellers again tried to answer the question by returning to the propriety of use of statistical evidence to prove the claims, Justice Scalia did not hold back.  He first suggested that there could be no question that individual evidence would always be more reliable than statistical evidence, and said if that’s not the case “we have a pretty bad judicial system.”

The transcript is well worth the read, and there are certainly other observations to expand upon beyond this post.  No matter what side you are on in this debate, you cannot help but appreciate what is at stake here, including a potentially evolving class certification standard (the real impact of which would become its own source of litigation for years) to the questioned propriety of use of statistical evidence in employment class cases and possibly beyond.

Photo credit: D’Arcy Norman

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