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Wednesday, April 28, 2010

Dukes v. Wal-Mart: Discussion of Trial Issues and Conclusion

Class Action Can Proceed in a Way That Is Both Manageable and in Accordance with Due Process

The Court next turned its attention to the district court's decision that it could manage the class action trial. The Court did not rule on the district court's trial plan, but held that there are a number of proper ways to try large and complex class actions. The Court then explained the method used in Hilao v. Estate of Marcos, 103 F.3d 767, 782-87 (9th Cir. 1996), to determine the amount of compensatory damages due the plaintiffs in a large class action.

In short, the Court examined the claims filed and ruled out those that it found to be facially invalid. A court-appointed statistical expert advised on a statistically significant sample size. A randomly selected group of that size was deposed under the supervision of a court-appointed special master, who found that a certain number of claims were invalid, and determined the amounts owed to the remainder. The special master then extrapolated an invalidity rate and a total award to the class.

The Court then held a jury trial on damages. The parties presented the special master's findings to the jury, which was authorized to accept, reject, or modify those findings. The plaintiffs' statistical expert testified as to the significance of the sample. The deponents and their witnesses testified. The special master testified as to his findings.
The jury deliberated for five days before reaching a verdict. Contrary to the master’s recommendations, the jury found against only two of the 137 claimants in the random sample. As to the sample claims, the jury generally adopted the master’s recommendations, although it did not follow his recommendations in 46 instances. As to the claims of the remaining class members, the jury adopted the awards recommended by the master. The district court subsequently entered judgment for 135 of the 137 claimants in the sample in the amounts awarded by the jury, and for the remaining plaintiffs . . . in the amounts awarded by the jury, to be divided pro rata.
Slip op. at 92, citing Hilao at 783-84. The Court held that a similar procedure could be used to try the Dukes case and found "no manageability-based reason to find this otherwise-certifiable class unsuited to class certification." Slip op. at 94.

For the reasons set forth above, we hold that the district court acted within its broad discretion in concluding that it would be better to handle some parts of this case as a class action instead of clogging the federal courts with innumerable individual suits litigating the same issues repeatedly. The district court did not abuse its discretion in finding the requirements of Rule 23 satisfied with respect to those Plaintiffs who were still Wal-Mart employees on June 8, 2001, and with respect to claims for injunctive and declaratory relief and back pay. Given the tentative nature of the district court’s trial plan, we decline to address Wal-Mart’s due process and manageability challenges to that plan. We note, however, that the district court has the discretion to modify or decertify the class should it become unmanageable. Although the size of this class action is large, mere size does not render a case unmanageable.

We deny Plaintiffs’ cross-appeal, because the district court did not abuse its discretion when it found that back pay for promotions may be limited to those Plaintiffs for whom proof of qualification and interest exists. Finally, we must reiterate that our findings relate only to class action procedural questions; we neither analyze nor reach the merits of Plaintiffs’ allegations of gender discrimination.
Slip op. at 94-95.

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