The Way Forward after Wal-Mart
Rutherglen, George, Notre Dame Law Review
The Supreme Court's decision denying certification of a class action in Wal-Mart Stores, Inc. v. Dukes (1) elicited a strong dissent from Justice Ginsburg, (2) and widespread criticism in liberal circles, (3) but in several important respects, the decision was unanimous. All the Justices agreed that a class action could not be certified under Federal Rule of Civil Procedure 23(b)(2), (4) the rule that governs class actions in which injunctive relief is "appropriate respecting the class as a whole." (5) Instead, the class could be certified (if at all) only under the more stringent provisions of Rule 23(b)(3), (6) typically reserved for damage class actions. (7) The holding that divided the Justices concerned the failure of the plaintiffs' case to meet the requirement of Rule 23(a)(2) that there were "questions of law or fact common to the class." (8) On this issue, the five Justices conventionally identified as conservative were in the majority and the liberals were in dissent. Yet even on this issue there were points of apparent agreement, and one of them was the need to inquire into the merits to determine whether the prerequisites for certification were satisfied. (9) On this point, the majority and the dissenters disagreed only over how strong the plaintiffs' evidence on the merits really was.
As that disagreement makes clear, a consideration of the merits deeply affects almost all certification decisions. If Wal-Mart had actually discriminated against women in pay and promotions, as Justice Ginsburg plainly suspected it had, (10) then the argument for certification would have been strengthened by the need to prevent future discrimination and to compensate victims of past discrimination. If, on the contrary, the evidence was too weak to support this conclusion, as Justice Scalia argued for the majority, (11) then certification should have been denied. What is true in the particular case also is true for entire categories of litigation: the more meritorious the underlying claim of class-wide liability, the stronger the arguments for certification. Part I of this article situates this commonly accepted observation in the perennial disputes over substance and procedure within the specific context of class actions, both for the Title VII claims at issue in Wal-Mart and for class actions generally.
The opinion in Wal-Mart expands upon this observation in a different direction, by disapproving a broad interpretation of the holding in Eisen v. Carlisle & Jacquelin (12) that an inquiry into the merits cannot be used to shift the cost of notice to the defendant immediately upon certification of a class action. Wal-Mart makes the merits a component of the certification process, first, by requiring the party seeking certification to "affirmatively demonstrate" that the requirements of Rule 23 have been met, and second, by recognizing that such proof usually involves an examination of the merits. (13) Prior cases and previous commentary have recognized these points, but these sources fail to articulate exactly what an inquiry into the merits entails, or how it relates to other procedural devices that involve an examination of the merits before trial, such as motions to dismiss for failure to state a claim and motions for summary judgment. (14) Part II of this article examines this issue and seeks to put certification decisions in their proper place within the structure of civil litigation, consisting of pleading, discovery, and summary judgment, followed by settlement or trial.
That inquiry, in turn, leads to the larger question of how to reform class action procedure. If "one size does not fit all," as John Coffee has previously pointed out, then it is the merits that determine which size fits in different class actions, both in quantitative terms--in determining the optimal number of class members--and in qualitative terms--in defining the scope and procedure for different class actions. (15) As Richard Marcus has recently emphasized, an examination of the merits is crucial to the gatekeeping function of federal courts in controlling aggregate litigation. …