In a case that continues to deal surprise rulings, the U.S. Supreme Court has denied a certiorari petition filed by Merrill Lynch in a case challenging the certification of a class of brokers alleging race discrimination. See Merrill Lynch v. McReynolds, No. 12-113, (U.S. Oct. 1, 2012). The Supreme Court’s declination to review McReynolds (despite its decision in Wal-Mart v. Dukes tightening class certification standards) follows the Seventh Circuit’s affirmative reversal of the trial court’s denial of class certification, thereby exhausting Merrill Lynch’s avenues for judicial review. Judge Richard Posner, generally regarded as holding to a conservative orientation, defied ideology-based expectations by authoring the Seventh Circuit’s opinion. See McReynolds v. Merrill Lynch, 672 F.3d 482 (7th Cir. 2012).
The Supreme Court’s denial of review, together with the Seventh Circuit’s ruling, are expected to be heralded as indications that Dukes is not the “death knell” for class actions, as many had predicted. Judge Posner’s opinion pointedly distinguished Dukes, noting that, while “there was no company-wide policy to challenge in Wal-Mart,” this was not the case with Merrill Lynch, whose policies were alleged to be company-wide and therefore better suited to class action treatment. McReynolds v. Merrill Lynch 672 F.3d at 488. While Dukes arguably imposes greater rigor on the analysis attendant to grants of class certification, McReynolds exemplifies that a similar rigor is required of judicial orders denying class certification. Thus, Dukes appears to have established standards that are fully accessible to plaintiffs presenting strong evidence of employer practices applicable across a tightly-defined class.
The denial of Merrill Lynch’s petition for review preserves the practical note that Judge Posner struck when he acknowledged the familiar argument by defendants that numerous “mini trials” could be necessary to resolve particular individual issues. Id. at 490-91. However, in a passage likely to appear in many reply briefs in support of class certification, Posner reasoned that “at least it wouldn’t be necessary in each of those trials to determine whether the challenged practices were unlawful.” Id. at 491.
Judge Posner also addressed the possibility of “issue classes,” stating: “Rule 23(c)(4) provides that ‘when appropriate, an action may be brought or maintained as a class action with respect to particular issues.’ The practices challenged in this case present a pair of issues that can most efficiently be determined on a class-wide basis, consistent with the rule just quoted.” Id.
Whether the parties will in fact propose the use of 23(c)(4) procedures on remand, and whether the rebuked trial court will adopt such procedures, remains to be seen. However, to the extent that the McReynolds case continues to demonstrate workable class action devices, it is expected to be copiously cited to by plaintiffs seeking to emulate its successful formula.