As part of our analysis, we’ve been looking at how Missouri courts have been interpreting the United States Supreme Court’s decision in Wal Mart v. Dukes, 1341 S. Ct. 2541 (2011).  As you probably recall, Dukes has been lauded as a game-changer by some on the defense side, or dismissed by some as a recapitulation of prior law and the product of a really bad fact pattern by others.   Without getting into too much detail on a subject well-covered in several places, Justice Scalia wrote for the majority in reversing the certification of a massive class of some 1.5 million female current and former Wal Mart employees alleging Title VII discrimination under a disparate impact theory.  At the risk of oversimplifying, the Dukes majority denied certification under b(3) because in the absence of a companywide discriminatory pay and promotion policy, there was no common question, and denied injunctive certification under b(2) because individual monetary back pay claims belonged under b(3) rather than (b)(2).

We see three basic takeaways from Dukes:

  1.  In terms of satisfying Rule 23(a)’s commonality requirement, what matters is not generating common questions, but the capacity of class proceedings to generate common answers apt to drive the resolution of the litigation;
  2. Claims for individualized relief and monetary damages, even if framed in terms of equitable remedies like unjust enrichment and disgorgement, cannot be certified under 23(b)(2), largely due to lack of procedural protections under Rule 23(b)(2);
  3. Rejection of the 9th Circuit’s proposed “Trial by Formula” to determine back pay under section b(2)  by using samples before a special master which would then be extrapolated to the class – the majority determined that Wal-Mart was entitled to litigate its statutory defenses to individual claims – and anything else violates Rules Enabling Act.

Missouri Courts, both federal and state, are well-aware of Dukes, although it’s not clear any of these courts have yet to use Dukes as a game-changer.  We looked at how some state and federal Missouri courts have applied Dukes:

In Nobles v. State Farm, 2011 WL 3794021 (W.D. Mo), Judge Laughery certtified Missouri and Oklahoma wage and hour classes under Rule 23, and held commonality was satisfied under the Dukes standard where the misconduct was based on the same common policy.  Judge Laughery contrasted  the core allegations in that case – alleging that the timekeeping system as written violated Labor Department regulations and underpaid the classes – with the allegations of the Dukes case where there was no identified common mode of exercising discretion over the challenged employment decisions.

In contrast, in McLean v. Health Systems, Inc., 2012 WL 607217  (W.D.   Mo 2012), Judge Kays relied on Dukesto deny certification of a proposed wage and hour case.  Judge kays found that the prpose class failed to satisfy Rule 23(b)(3)’s predomiance requirement due to the absence of an overriding policy regarding the challenged actions – compensation for breaks — which were instead left to discretion of individual supervisors.  This seems like an easy call, and a fact pattern squarely in the crosshairs of Dukes.

In Smith v. Highways Commission, 372 S.W.3d 90 (Mo. Ct. App. 2012), Judge Bates denied certification of a proposed class of individuals who had suffered damages arising from wet pavement loss of control accidents.  Judge Bates relied on Dukes to find lack of commonality due to the presence of too many individual issues of causation that were unlikely to generate common answers that would drive the resolution of the proceedings.  Since this was a class action premised on causation for motor vehicle accidents, this doesn’t seem like a hard call either, and Dukes is really just one of many reasons why a class like this should be uncertifiable.

In Hagler v. True Mfg., 2012 WL 1025672 (E.D. Mo. 2012), Magistrate Judge Medler relied on Dukes in granting a motion to dismiss the class allegations of a proposed FMLA class that basically included any employee of the defendant who had his or her FMLA rights violated for any reason during the prior three years.   Again, this seems like an easy call and close to the fact pattern in Dukes.

In In re BPA Litigation, 276 F.R.D. 336 (W.D. Mo.  2011), Judge Smith utilized the commonality analysis set forth in Dukes to deny certification of a proposed class of consumers who had purchased baby products containing BPA.  Interestingly, Judge Smith didn’t seem to think there was anything terribly new about Dukes, noting that the Eighth Circuit has applied essentially the same commonality standard for years.  Regardless, Judge Smith relied on Dukes to find that many of the proposed common questions identified by the plaintiffs were clearly not so common, because they would need to be proven with different evidence for different class members, and would produce different results for different class members.

In Wilhoite v. Missouri Department of Social Services, 2011 WL 502850 (W.D. Mo. 2011), Judge Laughery used Dukes’ b(2) analysis to deny certification of a proposed a b(2) class of Missouri Medicaid recipients seeking compensatory damages and disgorgement of illegal liens imposed by the Missouri DSS.  In doing so, Judge Laughery analogized the claims to the back pay sought in Wal-Mart which the Dukes majority considered too individualized to certify under Rule b(2).

Another issue is whether, and to what extent, the Dukes commonality analysis applies at the conditional certification stage of proposed FLSA classes?  Judge Sachs says it doesn’t in Chapman v. Hy-Vee, 2012 WL 1067736 (W.D. Mo, March 29, 2012).  Judge Ross agrees with him in Arnold v. DirectTV, Inc., 2012 WL 4480723 (E.D. Mo., September 28, 2012), and posits that any differences in plaintiffs’ situations can be addressed later through narrowing the class definition, subclasses, or decertification.   But Judge Whipple disagreed in  Adams v. Hy-Vee, Inc.,  2012 U.S. Dist. Lexis 98590 (W.D. Mo., May 22, 2012), where he used Dukes to deny conditional collective action certification under the FLSA where, as in Dukes, there was no overriding policy dictating the challenged conduct, but rather discretion had been left to individual Store Directors.

There are other Missouri decisions addressing Dukes, but you get the idea.  To us, it appears that both state and federal courts in Missouri will utilize Dukes in a measured manner, using it to deny classes that are clearly too decentralized and sprawling to have been certified prior to Dukes, and using it as a counterpoint to certify more carefully cabined classes that would likely have been certified prior to Dukes.  In other words, we have yet to see Dukes applied in a really close call as a difference-maker.

National Developments: Judge Posner, Dukes, and Front-Loading Washers: 

In a November 13, 2012 Order, Judge Posner reversed the district court’s order denying certification of a class of purchasers of one group of front-loading Kenmore-brand Sears washers that allegedly contain defects causing mold to accumulate in the machines (“mold claims”), and affirmed a parallel district court order granting certification of a class of purchasers of another group of front-loading Kenmore-brand Sears washers that allegedly contain defects causing the machines to stop inopportunely (“control unit design claims”).  The district court had denied certification based on predominance, relying on the fact that the mold claims implicated a number of different design modifications, some of which may be defective and some of which may not.  Judge Posner dismissed the district court’s concern, pointing out that because there were only five basic design differences, all of which were alleged to have caused mold problems, the basic question of whether the machines were defective in producing mold was common to the entire class “although the answer may vary with the differences in design.”  While Judge Posner never discussed Dukes, his commonality analysis seems at odds with that expressed by the majority opinion in Dukes, which emphasized the importance not so much of identifying “common questions” but rather identifying “common answers apt to drive the resolution of the litigation.”   131 S.Ct. at 2251.   While five different designs is not the “kaleidoscope” of different factual variations identified in Dukes, Judge Posner’s view of commonality and predominance seems different from that expressed by the Dukes majority.  Once liability has been determined, Judge Posner suggested that the remaining issues be resolved through either individual damages trials or a schedule of damages capped at the cost of a replacement washer.  Judge Posner appears to suggest something akin to the “Trial By Formula” method decried by the majority opinion in Dukes, although he appears to be limiting the formulaic determination to damages as opposed to liability.  This of course begs the question of where the line between injury and damages lies, particularly in the context of an alleged defect that merely creates the propensity for future damages.  Interestingly, Judge Posner characterizes the alleged mold defect as an “expected harm” analogous to “symptomless high blood pressure” that creates harm in the form of “an abnormally high risk of stroke,” and leaves it to applicable state law to determine the extent to which recovery is possible under such a theory.  In any event, this is an interesting opinion from an eminent judge, but we don’t see it as being as inconsistent with Dukes as some have suggested.  Of note, the Sixth Circuit Court of Appeals had already certified a parallel class in In re Whirlpool Corp. Front-Loading Washer Prods. Liab. Litig., 673 F.3d 409 (6th Cir. 2012).