Chen-Oster v. Goldman Sachs: Court Distinguishes Dukes, Denies Motion to Strike Class Allegations

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A federal judge in the Southern District of New York has rebuffed a defendant’s attempt to block class treatment using the aggressive tactic of moving to strike class allegations.  See Chen-Oster v. Goldman Sachs, No. 10-6950 (S.D.N.Y. Jul. 17, 2012) (Opinion & Order) (available here).  Defendant’s motion, largely premised on Wal-Mart v. Dukes (131 S. Ct. 2541 (2011)), attacked the plaintiffs’ class allegations based on commonality, predominance, and standing for injunctive relief.  See Opinion at 2-3.  Judge Leonard B. Sand denied the defendant’s motion except as to class allegations under 23(b)(2), holding that, under Dukes, only current employees would have standing to pursue injunctive relief as a remedy, and the class contained both current and former employees.  Id. at 15.  However, Judge Sand clearly took issue with this, stating that “. . . the Dukes majority’s blanket rule that always denies standing to ex-employees cuts too broad a swath”, but nonetheless followed that rule.  Id. at 13.

In distinguishing Dukes as to the commonality and predominance issues, the court emphasized that the Chen-Oster plaintiffs alleged specific, company-wide employment practices, in contrast to the generalized allegations in Dukes Id. at 4-5.  Additionally, Dukes’ historically massive proposed class size was not an impediment to certification, since “Plaintiffs do not number in the millions; Plaintiffs all worked at—and the allegations all center around—Goldman’s New York office.”  Id. at 7.

This is the second time that the Chen-Oster case had generated a notable ruling, the first having come in connection with the U.S. Supreme court’s AT&T Mobility v. Concepcion decision.  In that prior ruling, the court held that, notwithstanding Concepcion, “it remains the law of the Second Circuit that an arbitration provision which ‘precludes plaintiffs from enforcing their [federal] statutory rights’ is unenforceable.” Chen-Oster v. Goldman, Sachs & Co., No. 10-06950, 2011 U.S. Dist. LEXIS 73200, at *15 (S.D.N.Y. Jul. 7, 2011), citing In re American Express Merchants’ Litigation, 634 F.3d 187 (2d Cir. 2011). Chen-Oster thus has the unique distinction of generating significant interpretations of both of the Supreme Court’s two landmark class action rulings from 2011.