Wait! Don't Tell Me! - Court Finds That An Employer Raised Appropriate Challenges To Class Claims At The Wrong Time
As quiz shows go, we believe that NPR has created the most honest one. The pauses designed to give the home player a chance to answer before the reveal are not engineered with lights and buttons and coy invitations from the host. Instead, the home audience is treated to hearing the players hilariously think aloud in answering questions that are practically beside the point. In keeping with the tenor, all the points are just made up as the game goes along, with blithe acknowledgements that the host just divvies them up as he likes because…well…he’s the host. Of course, the format works because there is nothing at stake in the game: no money, no prizes, just plain old entertainment. However, even in such a low-stakes format, the show still provides the actual answer to the question presented. They get that any refusal to do so would just be maddening.
To that end, employers might be surprised to read the recent decision from the U. S. District Court for the District of New Jersey in a case entitled Barghout v. Bayer Healthcare Pharmaceuticals, et al., Case No. 11-CV-1576, 2012 WL 1113973 (D.N.J. Mar. 30, 2012), in which Judge Cavanaugh took the opposite approach in responding to the far more serious question of whether class claims that on their face appear to be unviable should be permitted to continue on to the distinctly high stakes forum of class discovery.
Barghout involved Title VII and state law claims of gender discrimination brought by eight plaintiffs who are current and former employees of Bayer. Plaintiffs alleged hostile work environment claims based upon both sexual harassment and pregnancy discrimination, as well as disparate impact claims involving pay and promotion practices. Three plaintiffs additionally raised FMLA claims, and two of those plaintiffs also raised retaliation claims. Plaintiffs sought injunctive and declaratory relief, as well as compensatory and punitive damages, and back pay. They purported to bring their claims as a class action.
Following the filing of plaintiffs’ Second Amended Complaint, Bayer moved to dismiss and/or strike the class allegations. Bayer argued that plaintiffs complaint was deficient under Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011), for two reasons. First, the Second Amended Complaint “failed to explain the ‘supposed commonality’ of ‘highly individualized and fact specific claims.” Id. at *9. Second, Bayer argued that plaintiffs’ claims were facially deficient because their claims for individualized monetary relief could not be harmonized with Wal-Mart.
The Court's Ruling
The Court’s opinion is structured in a way that seems to highlight the point of Bayer’s motion. The Court used nearly two-thirds of its 22 page order outlines the individual factual allegations of each of the eight Plaintiffs. For example, the Court points out specific awards bestowed upon each of the plaintiffs, particular conversations each of the plaintiffs had with their supervisors, and discipline to which each of the plaintiffs was subjected. The Court also enumerates specific injuries some of the plaintiffs allegedly suffered, and it refers to statement made in their individual performance reviews. Notably absent from the discussion of the facts is any identification of any company-wide policy that potentially supports class certification. In other words, neither plaintiffs nor the Court identified “the specific employment practice that is challenged.” Wal-Mart, 131 S.Ct. at 2555. Not surprisingly, given the absence of an allegation identifying a single company-wide practice at issue, neither plaintiffs nor the Court identify how the Court could provide relief in the form of “a single injunction or declaratory judgment would provide relief to each member of the class.” Id. at 2557.
Perhaps the most surprising aspect of the opinion was the Court’s refusal to address the questions Bayer presented in its motion: Did the allegations of the Second Amended Complaint state any viable class claim for relief and, if so, what were those allegations? Indeed, to the extent that the Court expressed an opinion on the issue, it only indicates that Bayer’s substantive concerns were valid, stating “[i]ndeed Defendants ably present strong legal analysis regarding Plaintiffs’ potential deficiencies in so far as class certification is sought.” Id. at 18. Apparently, the plaintiffs did not provide a substantive response to those concerns, as the Court asserts only that plaintiffs demonstrate “at the very least, an understanding of what certification under 23(b)(2), 23(b)(3), or 23(c)(4) would require….” Id. at *11.
Implications Of The Ruling
Most would agree that the “very least” any plaintiff should do is articulate the legal standards that govern their claims, especially if they launch a high stakes class action. Hence, the mere recitation of legal standards is not sufficient to meet pleading requirements under Twombly and Iqbal. Employers have sometimes achieved success - especially after Wal-Mart - in attacking defective class certification theories and securing dismissal of those allegations under Rule 23(d)(1)(D). A prime example is Scott v. Family Dollar Stores, Inc., 2012 U.S. Dist. LEXIS 4669 (W.D.N.C. Jan. 13, 2012), the subject of one of our previous posts.
Rather than explain how plaintiffs' allegations overcame Bayer’s concerns - and virtually ignoring the standards articulated in Wal-Mart - the Court in Barghout made the conclusory statement that Bayer’s arguments “are not appropriate at this stage of the litigation.” Id. At this point in the order, one can almost see the Judge covering his ears and saying “WAIT! DON’T TELL ME!”
The ruling in Barghout also flies in the face of the Sixth Circuit's decision late last year in Pilgrim v. Universal Health Care, LLC, 660 F.3d 943 (6th Cir. 2011), where it held that when plaintiffs' class claims are defective on their face, discovery is not required, and Rule 23 class claims can be adjudicated on the pleadings.
Of course, as readers of this Blog know all too well, class action litigation is not a low-stakes game show. Enormous amounts of time and money are spent simply getting to the point where plaintiffs file a motion for class certification. Under these circumstances, it is not particularly satisfying if the best answer the adjudicator can offer is the coy response: “Stay Tuned.”