By Courtney Bohl and Laura J. Maechtlen

We previously blogged about Judge Charles R. Breyer’s September 21, 2012 Order denying Wal-Mart’s motion to dismiss the fourth amended complaint in the continuing saga of Dukes v. Wal-Mart Stores, Inc., No. 3:01-CV-02252 (N.D. Cal. Sept. 21, 2012). In the September 21 Order, Judge Breyer refused to dismiss Plaintiffs’ fourth amended complaint, which narrowed the scope of Plaintiffs’ class claims to current and former California female employees, yet attempted to establish commonality by alleging that the source of bias was a discrete group of California district and regional managers. In refusing to dismiss the fourth amended complaint, the Court held that the fourth amended complaint stated allegations that could — if supported by evidence at the class certification stage — satisfy Rule 23’s requirements. It also held that Plaintiffs claims were tolled, allowing otherwise time-barred claims to proceed.

After the denial of its motion to dismiss, Wal-Mart “doubled down” on its position that “Plaintiffs’ motion for class certification does not deserve to see the light of day,” and asked the Court to certify for interlocutory appeal the September 21 Order denying Wal-Mart’s motion to dismiss.  The Court denied Wal-Mart’s request. A district court may certify for immediate appeal orders where: (1) the order involves a controlling question of law; (2) as to which there is substantial ground for difference of opinion; and (3) an immediate appeal from the order may materially advance the ultimate termination of the litigation. Id. at 2. 

In Wal-Mart’s case, the Court agreed that the tolling issue and the commonality issue are controlling questions of law and also agreed that the tolling issue presented a novel and difficult legal question of first impression where substantial grounds for difference of opinion exist. Id. at 3-5. It otherwise disagreed with Wal-Mart. 

Wal-Mart argued that Judge Breyer’s reading of the U.S. Supreme Court ruling in Wal-Mart v. Dukes was wrong. Id. Judge Breyer reasoned in the September 21 Order that the Supreme Court’s decision rested on the inadequacy of Plaintiffs’ proof and not on a total rejection of Plaintiffs’ theories. Wal-Mart further argued that the Supreme Court’s decision actually barred class actions based on policies that grant supervisors discretion to make personnel decisions. Id. This interpretation, Wal-Mart noted, is supported by other case law authorities. Id.

The Court rejected Wal-Mart’s argument. The Court noted that its interpretation and Wal-Mart and other courts’ purportedly contrary interpretations are not, in fact, in conflict. Id. The Court clarified that the Supreme Court’s decision foreclosed claims that delegated discretion alone is sufficient to state a common question for purposes of Rule 23. Id. The Supreme Court’s decision did not completely preclude plaintiffs from alleging that a company policy involves some amount of delegated discretion in order to show a class-wide pattern or practice of discrimination or a common mode of exercising delegated discretion. Id.  

Wal-Mart also argued that Plaintiffs’ fourth amended complaint failed to remedy the commonality issues that the Supreme Court found in the class. Id.  at 7. The Court noted that “[t]he lack of evidence in the record on the commonality question has everything to do with the premature nature of Wal-Mart’s motion and nothing to do with the viability of Plaintiffs’ class claims.” Id. 

Finally, the Court found that an immediate appeal would not materially advance the ultimate termination of the litigation. The Court noted that “[a]t this point in the litigation, an interlocutory appeal could dispose of Plaintiffs’ class claims – but so could the class certification motion set to be submitted in January, which would have the added benefit of developing the record on the Rule 23 commonality issue.” Id. at 8. “Where the issue of relative efficiency is a toss-up, this Court sees no value in encouraging parties to litigate request for interlocutory appeal when the resolution of a motion the Court has already set for hearing in the near future may well, as practical matter, lead to the same result.” Id. at 9. 

Accordingly, Wal-Mart’s request for interlocutory appeal was denied and Plaintiffs’ claims survived to see the light of another day. Plaintiffs must file their motion on class certification no later than January 11, 2013. The Court will hear the motion at 10 a.m. on February 15, 2013. We will keep our readers updated with further developments, so stay tuned!