Decided: May 11, 2015
The Fourth Circuit vacated a South Carolina district court’s decertification order of a class of black steel workers who allege endemic racial discrimination at a South Carolina plant owned by Nucor Corporation. The workers’ employment discrimination claims rest upon the two theories of liability under Title VII: disparate treatment in promotions decisions and disparate impact of facially neutral promotions policies and procedures.
According to the Fourth Circuit, the appropriate standard of review for class certifications requires a two-step approach: (1) examining de novo whether the district court’s decision to reconsider the certification of the workers’ class violated Brown v. Board of Education, 347 U.S. 483 (1954) (Brown I), and (2) if no such violation occurred, whether the district court abused its discretion in decertifying the promotions class. While the present case was pending in the Fourth Circuit and in the South Carolina district court, the United States Supreme Court established new law in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the reestablished the requirements for class certification under Rule 23 of the Federal Rules of Civil Procedure. Specifically, in light of the Wal-Mart decision, the district court reexamined the issue of commonality for class certification after the Fourth Circuit ordered certification of the class on remand. On appeal, the standard for review is abuse of discretion.
The commonality element of class certification requires that “there are questions of law or fact common to the class.” According to the district court, the Wal-Mart decision “required decertification of the workers’ promotions class.” To decide the merits of the present case, the Fourth Circuit examined the new and old precedent to determine how Wal-Mart will alter a certification analysis. According to the Court’s analysis, it was bound by precedent in that: (1) the Court could engage in the merits of a claim only to the extent necessary to verify that Rule 23 has been satisfied; (2) plaintiffs may rely on other reliable data sources (such as Census data) when a company has destroyed or discarded the primary evidence in a discrimination case.
The Court observed that the statistical disparity is statistically significant from what would be expected if race were a neutral factor, the surrounding circumstances and anecdotal evidence of discrimination are present in the record, and plaintiffs present two common, class-wide contentions by asserting disparate treatment and disparate impact claims rooted in racial discrimination. Based these facts, the Court held that the district court abused its discretion by reconsidering the certification of workers under Brown I because the extent of the statistical disparity was sufficient to overcome the first prong of the two prong apporach. The Court also found that the district court abused its discretion in decertifying the workers’ promotions class based on the facts presented above and remanded the case to the district court with instructions to certify the class.
The dissent believes that the majority went beyond the bounds of the standard of review for a class certification decision. Decisions involving well-supported factual findings should be left to the district court, according to the dissent.