Federal Court Denies Class Certification in Gender Discrimination Litigation

​In Cole v. Montana University System, the U.S. District Court for the District of Montana recently denied certification of a Title IX class action alleging discrimination and harassment on the basis of sex.

The decision in Cole is an important one for employers, as it is a reminder that Wal-Mart Stores v. Dukes is still a major obstacle to class certification of broad discrimination claims. Companies and their corporate counsel are well-served to heed the lessons of Cole and center their class certification defense strategy around the commonality requirement articulated in Wal-Mart Stores.

Background

In Cole, the plaintiffs were a group of women suing the Montana University System for alleged violations of Title IX and sought to certify a class of approximately 76 women who allegedly experienced harassment, retaliation, and/or discrimination on the basis of their sex. The plaintiffs alleged that the university system either forced them to resign, terminated their positions, or limited their options for professional growth.

Specifically, the plaintiffs alleged that the university system fostered a "good ole' boys club" culture, favoring male athletes and employees, while excluding the plaintiffs from participating in activities and benefits regularly afforded to their male counterparts.

Against this backdrop, the plaintiffs alleged that a "retaliatory culture blossomed" and that all plaintiffs experienced direct retaliation or the fear of retaliation for speaking out against the defendants' alleged discriminatory conduct.

Class Certification Ruling

After the parties filed competing motions in support of class certification, and to deny class certification, the court ruled that the plaintiffs failed to satisfy the requirements for class certification. At the heart of the court's analysis was Rule 23(a)'s commonality requirement, which ultimately drove the court's decision to deny class certification.

Analyzing the evidence and the parties' submissions, the court noted that the plaintiffs' claims appeared to be too disparate to be resolved in one stroke, which is key to satisfying Rule 23(a)'s commonality requirement. In reaching that conclusion, the court relied extensively on the U.S. Supreme Court's decision in Wal-Mart Stores v. Dukes. Specifically, the district court found that the plaintiffs failed to identify an employment practice that ties together the putative class members to satisfy the U.S. Supreme Court's reasoning in Wal-Mart Stores.

The plaintiffs argued that the Ninth Circuit had adopted a "permissive view of commonality" in employment discrimination claims and that the existence of shared legal issues with divergent factual predicates was sufficient to satisfy commonality. The district court, however, rejected this argument. It opined that its analysis was "constrained" by Wal-Mart Stores.

The court reasoned that commonality requires both a shared legal theory and shared facts such that determination of one claim can answer all others. The court noted that there are only two mechanisms to bring a class claim alleging broad discrimination, including: (1) show that the employer used a biased testing procedure to evaluate potential employees; or (2) provide significant proof that the employer operated under a general policy of discrimination.

Based on its analysis, the court held that the plaintiffs failed to demonstrate that the university system acted under a general policy of discrimination, and the alleged injuries required distinct inquiries into each the plaintiff's circumstances, qualifications, and the alleged discrimination.

For similar reasons, the court concluded that the plaintiffs could not satisfy Rule 23(b)'s predominance requirement because individualized issues were more prevalent than common ones, and the university system's liability was not subject to common proof. As a result, the court denied the plaintiffs' motion for class certification without prejudice.

Implications for Employers

The ruling in Cole underscores the importance that Wal-Mart Stores plays in employment discrimination cases. At times, the court was sympathetic to the plaintiffs and recognized the inherent evidentiary problems in broad employment discrimination cases. The court even lamented the "harsh nature of the standard as imposed on a discrimination case." Nevertheless, Wal-Mart Stores proved to be too much of an obstacle to the plaintiffs' class certification theories.

The lesson from this decision is that employers should center their class certification defense strategy on the key holdings in Wal-Mart Stores, particularly the fact that commonality requires both a shared legal theory and shared facts. Cole teaches that because it is somewhat easier for plaintiffs to assert shared legal theories, employers should focus on divergent facts.

Gerald L. Maatman, Jr., Jennifer A. Riley and Michael L. DeMarino are attorneys with Duane Morris in Chicago. © 2022. All rights reserved. Reprinted with permission.