California Labor and Employment Defense Blog

2(b) or Not 2(b)?: Dukes v. Wal-Mart Closes the Gap Between Class Certification under Rule 23(b)(2) and (b)(3)

As widely reported, the U.S. Supreme Court held in Dukes v. Wal-Mart that the Title VII gender discrimination claims of 1.5 million employees were far too diverse to be decided on a class-wide basis.  While the result is hardly surprising, the opinion is notable because it substantially revises the standards applicable to class certification under Rule 23(b)(2).

(b)(2) vs. (b)(3) 

To briefly summarize, Rule 23 is the statute governing class certification in federal court.  Subsection (b)(2) of the Rule provides an easier path to certification where a class is seeking mainly equitable or injunctive relief.  By contrast, claims for money damages must normally be certified under subsection (b)(3), which requires additional proof that common issues "predominate" over individual issues and that a class action is the "superior" method of deciding the claims.

As originally enacted, Title VII provided only for equitable remedies (back pay and front pay were available but were deemed to be equitable substitutes for reinstatement).  For many years Title VII claims were thus commonly certified under the relaxed standard of Rule 23(b)(2).  This became much less common however after Title VII was amended in 1991 to allow for emotional distress and punitive damage awards.        

Rule 23(b)(2) after Dukes.

The district court's certification order in Duke's v. Wal-Mart was thus a bit of an anomaly because it allowed certification under the easier 23(b)(2) standard even though the plaintiffs were claiming literally billions in damages. 

In rejecting the lower court's certification analysis the Supreme Court effectively closed what some might characterize as the "loophole" of using 23(b)(2) to certify Title VII damage claims.  The Court did this in two ways.  First, the Court held that (b)(2) certification should be unavailable in almost all claims that include monetary relief.  Second, even to the extent subsection (b)(2) is available the Court took away its main attraction by requiring plaintiffs to meet a standard of "commonality" that is effectively the same as the "predominance" test required by (b)(3).

The effects of Dukes should be felt primarily in Title VII cases.  California wage and hour class actions are virtually never certified solely under Rule(b)(2), so the impact on these cases should be minimal.        


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