Court Clarifies Commonality for Class Certification in Light of Wal-Mart: Fourth Circuit | Practical Law

Court Clarifies Commonality for Class Certification in Light of Wal-Mart: Fourth Circuit | Practical Law

In Brown v. Nucor Corporation, the US Court of Appeals for the Fourth Circuit held that the district court misapprehended the implications of Wal-Mart Stores, Inc. v. Dukes and its application to the commonality requirement set out in Federal Rule of Civil Procedure (FRCP) 23(a)(2).

Court Clarifies Commonality for Class Certification in Light of Wal-Mart: Fourth Circuit

by Practical Law Litigation
Published on 18 May 2015USA (National/Federal)
In Brown v. Nucor Corporation, the US Court of Appeals for the Fourth Circuit held that the district court misapprehended the implications of Wal-Mart Stores, Inc. v. Dukes and its application to the commonality requirement set out in Federal Rule of Civil Procedure (FRCP) 23(a)(2).
On May 11, 2015, in Brown v. Nucor Corp., the US Court of Appeals for the Fourth Circuit held that the district court misapprehended the implications of Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) and its application to the commonality requirement set out in Federal Rule of Civil Procedure (FRCP) 23(a)(2) (No. 13-1779, (4th Cir. May 11, 2015)).
The plaintiffs in this action were African-American steel workers who alleged racial discrimination at a South Carolina plant owned by Nucor Corporation and Nucor Steel Berkeley (collectively Nucor). The workers claimed they were subjected to both discriminatory job promotion practices and a racially hostile work environment under Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981. The plaintiffs based their promotions claim on allegations of a pattern or practice of racially disparate treatment in promotions decisions, and facially neutral promotions policies and procedures that had a racially disparate impact.
In 2007, the US District Court for the District of South Carolina denied the workers' motion for class certification. After a panel of the Fourth Circuit reversed, the district court certified the class.
While the case was still pending, the Supreme Court issued its Wal-Mart decision, holding that the plaintiffs in that case failed to present a common contention of employment discrimination capable of class-wide resolution under Rule 23(a)(2). In light of this decision, the district court amended its certification order and decertified the workers' promotions class. The workers appealed.
The Fourth Circuit held that the district court erred in refusing to certify the workers' promotions class because:
  • Statistics indicated that promotions at Nucor depended in part on whether an individual was African-American or white, even under Wal-Mart's heightened commonality requirement.
  • Substantial anecdotal evidence suggested discrimination in multiple plant departments.
  • The record reflected tolerance of discrimination from top management supporting a claim of class-wide injury.
  • There was significant evidence that promotions decisions were made in the context of a racially hostile work environment.
The court also acknowledged significant differences from Wal-Mart, including the class size. In contrast to Wal-Mart, which consisted of millions of members working across thousands of stores, this case concerned approximately 100 class members in a single steel plant. In Wal-Mart, the Supreme Court found it unlikely that thousands of managers across different regions would exercise their discretion in a common way without some common direction. However, the Fourth Circuit found that here the workers provided ample evidence supporting their allegation of a common, racially-based exercise of discretion throughout the plant, which was demonstrated through:
  • Alleged incidents of specific discrimination in promotions decisions.
  • Statistical disparities.
  • Facts suggesting pervasive plant-wide racism.