Hot Litigation Topic: 9th Circuit Opinion at odds with Supreme Court's decision in Wal-Mart v. Dukes

Britney Buscaglia

Is the 9th Circuit at odds with the Supreme Court's decision in Wal?Mart v. Dukes? On October 3, 2011, the Supreme Court vacated the judgment of the 9th Circuit and remanded Wang v. Chinese Daily News, Inc. for further consideration in light of Wal?Mart Stores, Inc. v. Dukes. Wang involved a Chinese newspaper where employees alleged that they were made to work over eight hours a day and forty hours a week. Further, the workers alleged that they were denied overtime compensation, meal and rest breaks, accurate and itemized wage statements, and penalties for wages due but not promptly paid at termination. The district court certified the federal Fair Labor Standards Act (FLSA) claim as a collective action, and it certified the state-law claims as a class action under Rule 23(b)(2).

In Wang, the 9th Circuit held that the monetary claims could be asserted with the injunctive and declaratory claims under Rule 23(b)(2). The court made it clear that the monetary claims were on equal footing with the claims for injunctive relief and did not predominate over the case. This standard is at odds with Wal?Mart v. Dukes, which does not authorize class certification when each class member would be entitled to an individualized award of monetary damages. The Supreme Court reasoned that individualized monetary claims belong in a 23(b)(3) action because of the procedural protections afforded to the (b)(3) class--predominance, superiority, mandatory notice, and the right to opt out--which are not present in the (b)(2) class. After the 23(b)(2) class is certified, members lose their ability to bring individual claims. As a result, if the 23(b)(2) class action is predominantly for money damages, or if there is a serious possibility that it may be so, then an absence of notice and opt-out violates the Due Process Clause by depriving people of their right to sue, and provides an additional reason not to read 23(b)(2) to include monetary claims.