Stockwell v. City & County of San Francisco, No. 12-15070 (April 24, 2014): In a recent decision, the Ninth Circuit Court of Appeals diluted the Supreme Court of the United States’ holding in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) that the issue of commonality involves a “rigorous analysis” that frequently “will entail some overlap with the merits of the plaintiff’s underlying claim.” In an age discrimination class action, the Ninth Circuit found that the district court went too far in looking at the merits and reversed the district court’s denial of class certification. This ruling is of concern to employers as it will make it more difficult at the class certification stage to defeat workplace class actions based on lack of commonality. In the future, if there is one common question with one possible common answer, employers can expect the Ninth Circuit to find that the commonality requirement of Federal Rule of Civil Procedure 23(a)(2) has been satisfied, at least in disparate impact cases.

In 1998, the San Francisco Police Department (SFPD) administered an examination to determine which assistant inspectors are qualified to be promoted to the Investigations Bureau. In 2005, the SFPD stopped using the list of officers who had passed that examination, instituted a different promotion procedure, and, in the coming years, administered a new examination to be used in determining promotion to the Investigations Bureau. The chief of police later promoted 35 officers chosen from a list of those who had passed the new examination. A group of San Francisco police officers, who are all over the age of 40, then filed a class action claiming age discrimination. Specifically, the officers alleged that the city’s decision to use the newer list for promotions constituted both a pattern and practice of discrimination and generated a disparate impact on older officers in violation of the Age Discrimination in Employment Act of 1967 (ADEA) and the California Fair Employment and Housing Act (FEHA).

The trial court denied the officers’ motion for class certification on the grounds that their claims lacked commonality under Rule 23(a)(2) and thus declined to evaluate whether the putative class satisfied the more rigorous Rule 23(b)(3) predominance and superiority requirements. The court determined that the statistical study that the police officers submitted to show disparate impact failed to include a regression analysis that may have explained how factors other than age would have accounted for the alleged age-based disparate impact. On appeal, the Ninth Circuit found that this level of merits inquiry crossed the line articulated by the Dukes Court for commonality and resulted in reversible abuse of discretion by the court.

The Ninth Circuit panel concluded that the officers had, identified a single, well-enunciated, uniform policy that, allegedly, generated all the disparate impact of which they complain: the SFPD’s decision to make investigative assignments using the [new list] instead of the [old list]. Each member of the putative class was on the [old list]. Each suffered the effects of its elimination, whatever those were.

The Ninth Circuit thus found a common question sufficient to meet the requirements of Rule 23(a)(2), stating, “The question whether the policy has an impermissible disparate impact on the basis of age necessarily has a single answer.” The Ninth Circuit dismissed the many reasons that the city had offered as to why the putative class or various members of the class may not prevail, including, the decision to scrap the old list affected all officers equally without regard to age; all of the officers on the old list could have taken the new examination so no detrimental impact occurred due to the policy change; there were no inspector appointments for several years of the class period; and many class members would not have been promoted even if the old list was used as the SFPD did not have enough positions for all of them. The Ninth Circuit panel found that the defects that the city identified may well exist but held that whether class members could actually prevail on the merits of their claims is not a proper inquiry in determining the preliminary question as to whether common questions exist.

Professional Pointer

This ruling signals that the Ninth Circuit is drawing a much more narrow line on merits analysis at the class certification stage than the Supreme Court suggested in Dukes. Employers challenging class certification in the Ninth Circuit should focus any merits arguments on the Rule 23(b)(3) predominance prong.


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