PAGES 1 - 232
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
BEFORE THE HONORABLE MARTIN J. JENKINS, JUDGE
BETTY DUKES, ET AL., )
)
)
PLAINTIFF, )
)
VS. ) NO. C01-2252 MJJ
)
WAL-MART STORES, )
INCORPORATED, )
)
)
DEFENDANT. )
____________________________)
SAN FRANCISCO, CALIFORNIA
WEDNESDAY, SEPTEMBER 24, 2003
TRANSCRIPT OF PROCEEDINGS
APPEARANCES:
FOR PLAINTIFF: THE IMPACT FUND
125 UNIVERSITY AVENUE
BERKELEY, CALIFORNIA 94710-1616
BY: BRAD SELIGMAN, ESQ.
COHEN, MILSTEIN, HAUSFELD & TOLL
1100 NEW YORK AVENUE N.W.
WEST TOWER, SUITE 500
WASHINGTON, D.C. 20005-3964
BY: JOSEPH M. SELLERS, ESQ.
FOR DEFENDANT: PAUL, HASTINGS, JANOFSKY & WALKER
515 SOUTH FLOWER STREET, 25TH FLOOR
LOS ANGELES, CALIFORNIA 92626-1924
BY: NANCY L. ABELL, ESQ.
PAUL GROSSMAN, ESQ.
REPORTED BY: SAHAR MCVICKAR, RPR - OFFICIAL REPORTER
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
(COMPUTERIZED TRANSCRIPTION BY ECLIPSE)
I N D E X
ORAL ARGUMENT:
PAGE
BY MR. SELIGMAN 6
BY MR. SELLERS 58
BY MR. GROSSMAN 104
BY MS. ABELL 149
REBUTTAL ARGUMENT:
BY MR. SELIGMAN 203
BY MR. GROSSMAN 220
---O0O---
3
1 WEDNESDAY, SEPTEMBER 24, 2003 9:30 A.M.
2 P R O C E E D I N G S
3 THE COURT: GOOD MORNING, PLEASE BE SEATED.
4 THE CLERK: CALLING CIVIL MATTER NUMBER 01-2252,
5 BETTY DUKES, ET AL, VERSUS WAL-MART STORES, INC.
6 MR. SELIGMAN: BRAD SELIGMAN AND JOSEPH SELLERS FOR
7 PLAINTIFFS.
8 ALSO PRESENT IN THE COURTROOM ARE THREE OF THE
9 PLAINTIFFS, BETTY DUKES, PATRICIA SURGESON, CHRISTINE
10 KWAPNOSKI, AND ALSO STEPHANIE ODLE, WHO HAD THE EARLIEST
11 CHARGE, AS THE COURT MAY RECALL.
12 THE COURT: GOOD MORNING.
13 MS. ABELL: GOOD MORNING, YOUR HONOR.
14 NANCY ABELL AND PAUL GROSSMAN FOR DEFENDANT,
15 WAL-MART. WITH US AT COUNSEL TABLE IS CHARLYN JARRELLS PORTER,
16 SENIOR VICE-PRESIDENT OF WAL-MART.
17 THE COURT: OKAY. WELCOME.
18 I TRUST, AND THE RECORD SHOULD REFLECT THAT THIS
19 MATTER IS SET DOWN TODAY FOR THE PLAINTIFF'S MOTION FOR CLASS
20 CERTIFICATION, AND THAT THE COURT HAS READ AND CONSIDERED THE
21 BRIEFS. IT IS QUITE A LARGE AND ENORMOUS RECORD IN THE MATTER,
22 THE SUBJECT OF WHICH WILL BE DISCUSSED TODAY.
23 I HAVE READ AND CONSIDERED THE BRIEFS, AND I DID
24 SEND TO BOTH SIDES SOME PREFACE QUESTIONS THAT I WANTED YOU TO
25 FOCUS ON, FOR PURPOSES OF THE ARGUMENT.
4
1 THE RECORD SHOULD ALWAYS NOTE THAT THERE WAS A
2 REQUEST DURING THE PRECERTIFICATION DISCUSSIONS OF ABOUT A
3 TWO-HOUR TIMEFRAME FOR ARGUMENT, AND I AGREED TO THAT. I AM
4 INTERESTED IN WANTING TO KNOW WHETHER OR NOT THE PLAINTIFF --
5 BECAUSE IT LOOKS TO ME LIKE WE'LL RUN INTO THE AFTERNOON, AND
6 IT WILL BE MY PREFERENCE THAT YOU RESERVE TIME NOW FOR REBUTTAL
7 AND TO INDICATE TO ME HOW MUCH TIME YOU ACTUALLY DO WANT TO
8 RESERVE.
9 MR. SELIGMAN: I WOULD EXPECT WE WOULD RESERVE ABOUT
10 A HALF AN HOUR.
11 THE COURT: OKAY.
12 AND SO IN THE COURSE OF THE MORNING, IT STRIKES ME
13 THAT I WOULD HEAR THE PLAINTIFF FIRST, AND WE WOULD PROBABLY
14 GET THROUGH HALF OF YOUR PRESENTATION BEFORE WE TAKE A LUNCH
15 BREAK OF SOMEWHERE AROUND NOON, COME BACK, AND THEN FINISH THE
16 DEFENDANT'S PRESENTATION, AND THEN YOUR HALF HOUR REBUTTAL;
17 THAT IS MY SENSE OF THE WAY THE MORNING AND THE AFTERNOON WILL
18 PROCEED.
19 THEN, SECONDLY, THERE IS THIS MINOR ISSUE OF A
20 NUMBER OF EVIDENTIARY MOTIONS THAT HAVE BEEN FILED. YOU WILL
21 NOTE THAT THE QUESTIONS I SENT TO YOU ACTUALLY ASSUME THE
22 ADMISSION OF SOME OF THAT EVIDENCE, NOTWITHSTANDING THE FACT
23 THAT YOU HAVE MADE THE MOTIONS.
24 NOW, IT IS NOT MY INCLINATION TO RULE ON THE MOTIONS
25 IN THE COURSE OF THIS HEARING. I THINK WE CAN SPEND, AT LEAST
5
1 FOR ME, BETTER TIME ACQUAINTING MYSELF WITH THE RECORD AND YOUR
2 VIEWS, BOTH OF THE RECORD AND THE QUESTIONS I HAVE SENT TO YOU.
3 AND SO THAT IS MY FOCUS THIS MORNING. I WILL RULE, THOUGH, ON
4 THE EVIDENTIARY MOTIONS IN THE CONTEXT OF THE ORDER THAT IS
5 SUBMITTED.
6 NOW, THAT DOES NOT MEAN THAT YOU, YOU KNOW -- AND
7 THERE IS A QUESTION OR TWO WITH RESPECT TO THE MOTIONS THAT ARE
8 PENDING BEFORE THE COURT, IN ANY RESPECT, BUT THAT IS NOT
9 NECESSARILY MY FOCUS THIS MORNING, AND I WANTED TO MAKE THAT
10 CLEAR. BUT YOU HAVE YOUR TIME, AND YOU CAN USE YOUR TIME AS
11 YOU SEE FIT, ALL RIGHT?
12 OKAY. NOW, WITH THAT SAID, LET'S DO THIS: I WANTED
13 TO ADD A QUESTION FOR THE PLAINTIFF THAT YOU CAN INCORPORATE IT
14 INTO YOUR PRESENTATION, AND IT ARISES OUT OF THE FOLLOWING:
15 WITH RESPECT TO THE EQUAL PAY CLAIM ON PAGE 25 OF
16 YOUR BRIEF REFERENCING DR. DROGIN, YOUR STATISTICIAN, AT ABOUT
17 LINES 15 THROUGH 19 YOU STATE THAT DR. DROGIN FOUND THAT "WOMEN
18 AT WAL-MART EARN LESS THAN MEN HOLDING THE SAME JOB FOR NEARLY
19 ALL JOBS IN EVERY YEAR SINCE 1996." SO THERE IS SOME AMBIGUITY
20 WITH RESPECT TO THE STATEMENT, "NEARLY ALL JOBS," AS TO WHAT
21 CLASSIFICATIONS YOU ARE ACTUALLY PUTTING IN PLAY WITH RESPECT
22 TO THE EQUAL PAY CLAIM.
23 AND THAT AMBIGUITY IS FURTHER REFLECTED WHEN I LOOK
24 AT THE TABLE ON THE NEXT PAGE, 26, AND THERE IS AN OMISSION IN
25 THE AVERAGE EARNINGS BY GENDER TABLE FOR 2001 FOR THE SUPPORT
6
ORAL ARGUMENT BY MR. SELIGMAN
1 MANAGER CATEGORY, WHICH IS IN PLAY HERE.
2 SO I THINK IT WOULD BE USEFUL FOR YOU TO PROVIDE
3 SOME EXPLANATION AS TO WHAT "NEARLY ALL JOBS" MEANS, RELATIVE
4 TO THE CLASSIFICATIONS IN PLAY WITH RESPECT TO THE EQUAL PAY
5 CLAIM AS A PART OF YOUR DISCUSSION THIS MORNING.
6 OKAY, WITH THAT SAID LET'S PROCEED.
7 OH, BY THE WAY, DID THE DEFENSE RECEIVE THE
8 PLAINTIFF'S SECOND STATEMENT OF RECENT DECISION IN THE ILLINOIS
9 CASE?
10 MR. GROSSMAN: YES, YOUR HONOR. WE DID.
11 ORAL ARGUMENT BY MR. SELIGMAN
12 MR. SELIGMAN: GOOD MORNING, YOUR HONOR. WE'RE
13 GOING TO DIVIDE, THE PLAINTIFFS ARE GOING TO DIVIDE PART OF THE
14 ARGUMENT. I'M GOING TO DO THE GENERAL RULE 23 CRITERIA AND THE
15 FIRST SERIES OF QUESTIONS THAT THE COURT ASKED. MY CO-COUNSEL,
16 JOE SELLERS, WILL ADDRESS THE MANAGEABILITY AND THE TRIAL
17 QUESTIONS THAT YOU RAISED ON QUESTIONS 8 THROUGH 13.
18 (COURT AND LAW CLERK CONFER.)
19 THE COURT: I'M GOING TO STEP OFF THE BENCH FOR JUST
20 A SECOND.
21 (BRIEF RECESS TAKEN.)
22 THE COURT: OKAY. YOU MAY PROCEED.
23 MR. SELIGMAN: YOUR HONOR, IT'S UNDISPUTED AT THIS
24 STAGE OF THE LITIGATION THAT WOMEN COMPRISE MORE THAN
25 TWO-THIRDS OF THE RETAIL HOURLY EMPLOYEES AT WAL-MART AND
7
ORAL ARGUMENT BY MR. SELIGMAN
1 78 PERCENT OF ALL THE DEPARTMENT MANAGERS AT WAL-MART. YET
2 DESPITE THIS, THEY HOLD APPROXIMATELY ONE-THIRD OF THE SALARIED
3 MANAGEMENT POSITIONS.
4 IT'S ALSO UNDISPUTED THAT THE VAST MAJORITY OF
5 REGIONAL MANAGERS, ALL OF THE DIVISIONAL MANAGERS AND SENIOR
6 VICE-PRESIDENTS OF WAL-MART, ARE MALE. IT IS UNDISPUTED BEFORE
7 THIS COURT THAT ON AVERAGE, EVEN THOSE WOMEN WHO MAKE IT INTO
8 MANAGEMENT TAKE LONGER TO GET PROMOTED INTO MANAGEMENT, DESPITE
9 THE FACT THAT IT IS ALSO UNDISPUTED THAT WOMEN HAVE GREATER
10 SENIORITY, BETTER PERFORMANCE RATINGS, AND LESS TURNOVER ON
11 AVERAGE THAN OTHER HOURLY EMPLOYEES.
12 IT'S ALSO UNDISPUTED ON THIS RECORD THAT FEMALE
13 RETAIL STORE EMPLOYEES, HOURLY AND SALARIED, SEPARATE OR
14 TOGETHER, ARE PAID LESS THAN MEN IN EVERY YEAR SINCE 1976 --
15 EXCUSE ME, 1996, AND IN EVERY REGION OF WAL-MART, AND THAT
16 FEMALE EMPLOYEES, ON AVERAGE ARE PAID LESS THAN MALE EMPLOYEES
17 IN VIRTUALLY EVERY MAJOR JOB POSITION IN THE RETAIL STORES.
18 THE ISSUE IN THIS CASE FOR THE COURT AND THE JURY,
19 IF THE CASE WERE TO GO TO TRIAL, IS WHY THESE DISPARITIES
20 EXIST, WHETHER IT'S THE RESULT OF DISCRIMINATION, OR SOME MORE
21 BENIGN EXPLANATION. THAT IS NOT THE ISSUE FOR THE COURT TODAY.
22 THE ISSUE FOR THE COURT TODAY IS WHETHER THE RECORD, BOTH
23 UNDISPUTED AND DISPUTED BEFORE THE COURT, ESTABLISHES THAT THE
24 REQUIREMENTS OF RULE 23 HAVE BEEN ESTABLISHED.
25 NOW, THIS CASE IS NOT A CASE THAT ASKS THE COURT TO
8
ORAL ARGUMENT BY MR. SELIGMAN
1 GO TO SOME NEW FRONTIER OF LAW. IT IS NOT A NOVEL OR A
2 PARTICULARLY COMPLEX CASE. THE CLASS ISSUES IN THIS CASE ARE
3 LIMITED TO TWO ISSUES, PROMOTION TO MANAGEMENT TRACK JOBS AND
4 PAY IN THE RETAIL STORES.
5 THE CASE DOES NOT INVOLVE APPLICANTS, DOESN'T
6 INVOLVE ISSUES OF TERMINATION, HARASSMENT, DEMOTION, AND OTHER
7 ISSUES THAT ARE OFTEN PRESENT IN ATTEMPTS TO CERTIFY CLASSES.
8 IT IS ALSO VERY IMPORTANT THAT THE RECORD IN FRONT
9 OF THIS COURT MAKES ABUNDANTLY CLEAR THAT WAL-MART STORES,
10 ALTHOUGH THERE IS A LOT OF THEM, ARE VIRTUALLY IDENTICAL IN
11 STRUCTURE, MANAGEMENT, POLICIES, JOB DUTIES.
12 MOREOVER, AS IS UNDISPUTED ON THE RECORD BEFORE THIS
13 COURT, THERE IS AN EXTRAORDINARY HIGH RATE OF INTER-STORE
14 TRANSFERRING OF THE STORE MANAGER. THE AVERAGE STORE MANAGER
15 CHANGES STORES 3.6 TIMES. THE MAJORITY OF THOSE CHANGES ARE
16 INTO DIFFERENT REGIONS.
17 IT IS UNDISPUTED ON THIS RECORD THAT EVERY STORE IS
18 CLOSELY SUPERVISED BY HEADQUARTERS IN BENTONVILLE. THERE IS A
19 DEGREE OF CENTRALIZED CONTROL THAT IS PERHAPS UNPRECEDENTED.
20 EVERY STORE IS CONNECTED IN A REALTIME WAY ELECTRONICALLY. IT
21 IS FREQUENTLY VISITED. THERE IS A HIGH DEGREE OF COMMON
22 TRAINING ON A COMPUTER SYSTEM THAT EVERY EMPLOYEE IS SUBJECT
23 TO. ALL THE MANAGERS ARE TRAINED TOGETHER IN BENTONVILLE.
24 THIS IS A COMPANY WHERE THERE IS A HIGH EMPHASIS ON A COMMON
25 CULTURE, WHICH IS THE GLUE THAT HOLDS THE PLACE TOGETHER.
9
ORAL ARGUMENT BY MR. SELIGMAN
1 IN SHORT, WAL-MART IS A HIGHLY STRUCTURED, HEAVILY
2 MONITORED COMPANY WHERE MANAGEMENT WORKERS ARE BASICALLY
3 FUNGIBLE, THEY MOVE FREELY BETWEEN DIFFERENT FACILITIES.
4 NOW, AGAINST THIS BACKDROP WE CHALLENGE,
5 ESSENTIALLY, FOUR THINGS AT WAL-MART. THE FIRST IS, WE
6 CHALLENGE WAL-MART'S POLICY TO MAKE AN EXCEPTION TO THIS HIGHLY
7 STRUCTURED SYSTEM TO ALLOW SUBJECTIVE UNGUIDED DETERMINATIONS
8 DEALING WITH PAY AND PROMOTION, DESPITE THE CLEAR
9 DISCRIMINATORY IMPACT OF THOSE DECISIONS.
10 SECOND, WE CHALLENGE WAL-MART'S FAILURE TO
11 MEANINGFULLY POST AND ALLOW APPLICATION TO VIRTUALLY ALL THE
12 MANAGEMENT POSITIONS AT ISSUE IN THIS CASE.
13 THIRD, WE CHALLENGE WAL-MART'S RELOCATION POLICY
14 WHICH, ACCORDING TO THE RECENT DEPOSITION OF THE CEO OF
15 WAL-MART, MR. COUGHLIN, FOR THE LAST TEN YEARS HAS REQUIRED
16 RELOCATION AS A CONDITION OF ENTRY INTO MANAGEMENT. WE
17 CHALLENGE THAT, DESPITE THE FACT THAT WAL-MART HAS KNOWN ABOUT
18 THE CLEAR DETERRENT EFFECT OF THAT POLICY.
19 AND FINALLY, WE CHALLENGE WAL-MART SENIOR MANAGEMENT
20 AT THE HIGHEST LEVELS BECAUSE OF ITS KNOWLEDGE, ACQUIESCENCE
21 AND APPROVAL OF THESE POLICIES.
22 THIS IS A CASE, YOUR HONOR, NOT INVOLVING DISPARATE
23 AUTONOMOUS STORES WHERE THE SENIOR MANAGEMENT CAN CLAIM IT HAS
24 NO IDEA OF WHAT IS GOING ON. THIS IS A CASE FOR SENIOR
25 MANAGEMENT OF DISCRIMINATION IN PLAIN SIGHT. IT KNOWS THROUGH
10
ORAL ARGUMENT BY MR. SELIGMAN
1 ITS REALTIME MONITORING AND --
2 THE COURT: ONE OF THE PROBLEMS THOUGH, ISN'T IT,
3 THAT I ACTUALLY FIND IN SOME OF THESE CASES I'VE READ, ABRAM
4 AND DONALDSON, TO A DEGREE, AND REID VERSUS LOCKHEED MARTIN IS
5 THAT IT STRIKES ME THAT A COMPANY, FROM AN ORGANIZATIONAL
6 STANDPOINT, HAS TO HAVE SOME INFRASTRUCTURE FOR HOW THEY MANAGE
7 EMPLOYEES, AND THAT EVEN A FOOTNOTE IN THE FALCON CASE IN THE
8 SUPREME COURT THAT AT LEAST INDICATES BY EXAMPLE THAT WHERE YOU
9 HAVE A CENTRALIZED OVERARCHING MANAGEMENT STRUCTURE THAT THAT
10 CAN, IN THE RIGHT SET OF CIRCUMSTANCES, GIVE RISE TO A FINDING
11 OF ACTUAL DISCRIMINATION.
12 IT STRIKES ME THAT HERE THE EMPHASIS ON THE USE OF
13 MANAGEMENT OVER SUPERSTRUCTURE IS ARGUED IN A WAY THAT IS -- AT
14 LEAST CREATES A PROBLEM FOR ME AS TO WHETHER OR NOT THAT
15 STRUCTURE, IN AND OF ITSELF, IS A PROPER PREDICATE FOR
16 ACTIONABLE DISCRIMINATION.
17 MR. SELIGMAN: OH, WE CERTAINLY DO NOT CLAIM THAT
18 HAVING A STRUCTURED MANAGEMENT EQUALS DISCRIMINATION. NOR DO
19 WE CLAIM --
20 THE COURT: AND THE INHERENT TENSION BETWEEN
21 CENTRALIZATION AND DECENTRALIZATION AND HOW THAT READS ON
22 ACTIONABLE DISCRIMINATION, BECAUSE THAT SEEMS TO BE PRESENT
23 HERE, TOO.
24 THE ARGUMENT IS THAT THEY ARE VERY HIGHLY STRUCTURED
25 AND CONTROLLED. AT THE SAME TIME, THERE IS PRESENT MORE THAN A
11
ORAL ARGUMENT BY MR. SELIGMAN
1 MODICUM OF SUBJECTIVE DISCRETION THAT IS EXERCISED IN THE LOCAL
2 STORES.
3 MR. SELIGMAN: NO DOUBT, YOUR HONOR. BUT I THINK IN
4 TERMS OF THE QUESTION TODAY, THE COMMONALITY QUESTION, THE
5 HIGHLY STRUCTURED NATURE OF THIS COMPANY LEADS TO SEVERAL BASIC
6 COMMON ISSUES. FIRST OF ALL, THE HIGHLY STRUCTURED UNIFORM
7 SYSTEM INDICATES THAT INDIVIDUAL STORE DIFFERENCES ARE LESS
8 LIKELY TO BE SIGNIFICANT BECAUSE THE COMPANY HAS A TEMPLATE.
9 IT ALSO INDICATES THAT THE COMPANY HAS KNOWLEDGE --
10 THAT IS THE POINT I WAS GETTING TO -- IT KNOWS EXACTLY WHAT
11 HAPPENS AS A RESULT OF SUBJECTIVITY. IT TRACKS THE PROMOTION
12 RATES OF WOMEN. IT TRACKS PAY DECISIONS. AT THE HIGHEST
13 SENIOR MANAGER LEVEL, THERE IS A QUESTION, ARE THEY AWARE OF
14 THE DISCRIMINATORY CONSEQUENCES OF THESE POLICIES?
15 NOW, THERE ARE MANY CASES, YOUR HONOR, THAT HOLD
16 SOLELY A DECENTRALIZED SUBJECTIVE PRACTICE CREATES A COMMON
17 QUESTION. YOU CAN GO TO THE METRO NORTH CASE AND OTHER CASES.
18 WHAT HAPPENED IN ABRAM AND SOME OF THOSE OTHER CASES, YOU CAN
19 FIND CASES THAT SAY THAT ALONE ISN'T SUFFICIENT. BUT IF YOU
20 LOOK AT THOSE CASES, THE FACTORS ARE NOT LIMITED MERELY TO THE
21 FACT THAT THEY ARE SUBJECTIVE CRITERIA.
22 ABRAM, FOR EXAMPLE, THE PARTIES AGREED THAT THE
23 COMPENSATION SYSTEM WAS INDIVIDUALIZED AND DECENTRALIZED.
24 THAT'S AT 200 FRD AT 426. THE COURT EXPLICITLY REJECTED THE
25 FOLLOWING CASES, INCLUDING A CASE FROM THE VERY SAME DISTRICT,
12
ORAL ARGUMENT BY MR. SELIGMAN
1 THE MORGAN CASE, THAT HELD THAT SUBJECTIVE IMPACT COULD BE A
2 BASIS FOR CLASS CERTIFICATION.
3 WHAT IS PROBABLY OF MOST IMPORTANCE IN MORGAN IS
4 THAT THERE WAS NO STATISTICAL CASE THERE. THE STATISTICS
5 OFFERED TO THE COURT, WHICH IS A COMMON QUESTION, IN THAT CASE
6 SHOWED THAT IN THE MAJORITY OF THE FACILITIES, THERE WAS NO
7 STATISTICAL SIGNIFICANCE. NOW, WE'RE GOING TO TALK LATER ABOUT
8 WHETHER ONE OR TWO EXCEPTIONS UNDERMINES COMMONALITY. BUT THIS
9 CASE IS NOTHING LIKE MORGAN. THERE IS A LOT MORE GLUE THAT
10 HOLDS THIS CASE TOGETHER.
11 NOW, IT IS TRUE, YOUR HONOR, THAT, AS I MENTIONED
12 BEFORE, WE'RE NOT SUPPOSED TO RESOLVE THE MERITS AT THIS STAGE.
13 WE'RE NOT ASKING THE COURT, OBVIOUSLY, TO IGNORE THE CLAIMS IN
14 THIS CASE. WE'RE NOT IN FRONT OF THE COURT WITH THE BARE BONES
15 OF THE COMPLAINT. BUT I THINK THE JOB FOR THE COURT AND THE
16 PARTIES TODAY IS TO IDENTIFY WHAT ARE THE COMMON QUESTIONS THAT
17 UNITE THIS SYSTEM?
18 NOW, WAL-MART SUGGESTS THAT EVERY STORE MANAGER HAS
19 DIFFERENT REASONS FOR WHAT THEY DO. AND THEY HAVE A STORE
20 MANAGE SURVEY WHICH, OF COURSE, IS THE BASIS FOR A MOTION, BUT
21 EVEN ACCEPTING THAT EVIDENCE, WHAT THE STORE MANAGER SURVEY
22 WHICH IS THE LYNCH PIN, I THINK, OF THEIR CLAIM OF AUTONOMY AND
23 DIFFERENT CRITERIA AND NO COMMONALITY, DOES NOT UNDERCUT CLASS
24 CERTIFICATION. ALL THOSE SURVEYS SHOW IS THAT THESE STORE
25 MANAGERS ASSERT WHEN THEY CHECK A BOX THAT THEY FOLLOWED
13
ORAL ARGUMENT BY MR. SELIGMAN
1 CERTAIN PRACTICES IN MAKING A PAY DECISION.
2 THOSE DECLARATIONS DO NOT UNDERMINE A CLAIM THAT
3 THERE IS A SUBJECTIVE SYSTEM IN PLACE. THERE IS NO MONITORING
4 OF WHAT GOES ON IN EACH STORE.
5 MOREOVER, EVEN IF THOSE STORE MANAGERS ASSERT
6 DIFFERENT LEGITIMATE REASONS, THE LIABILITY QUESTION IS WHETHER
7 THOSE ARE REALLY THE REAL REASONS, WHICH IS SOMETHING YOU CAN
8 LOOK AT STATISTICALLY. IF STORE MANAGERS CLAIM THEY RELY ON
9 EXPERIENCE, WE HAVE DATA WE CAN LOOK AT TO FIND OUT IF THAT IS
10 TRUE OR NOT.
11 SO THE MERE ASSERTION BY STORE MANAGERS IN SOME
12 BOILER PLATE DECLARATION THAT, YOU KNOW, "I CHECKED 23 BOXES
13 ABOUT WHAT I DO," THAT DOESN'T PROVE ANYTHING. ALL THAT RAISES
14 IS THE COMMON QUESTION OF WHAT REALLY IS THE BASIS FOR
15 DECISION-MAKING THAT IS OUT THERE?
16 ONE FUNDAMENTAL QUESTION IN FRONT OF THE COURT WHICH
17 I THINK THE COURT NEEDS TO CONSIDER IS IF THE DEFENDANTS'
18 ARGUMENT IS ACCEPTED, WHAT IS THE ALTERNATIVE FOR THE WOMEN OF
19 WAL-MART TO CLASS CERTIFICATION? FOR MOST MEMBERS OF THIS
20 CLASS, THE ALTERNATIVE IS NOTHING. INDIVIDUALLY, THE PAY
21 DIFFERENCES ARE NOT SUFFICIENT TO ATTRACT COUNSEL TO LITIGATE
22 THESE ARE CLASSIC NEGATIVE VALUE CASES IN MOST --
23 THE COURT: CAN I OVERLOOK THE REQUIREMENTS OF RULE
24 23(A) IN LOOKING AT THE ALTERNATIVES AND CONSEQUENCES FOR THE
25 WOMEN THAT ARE A PART OF THIS CLASS?
14
ORAL ARGUMENT BY MR. SELIGMAN
1 MR. SELIGMAN: ABSOLUTELY NOT. AND WE'RE NOT
2 SUGGESTING THAT THIS IS A SUBSTITUTE FOR CLASS REQUISITES, BUT
3 I THINK IT'S IMPORTANT THAT WAL-MART'S SUGGESTION, WHICH IS
4 (B)(3) SUGGESTION THAT THERE IS A MEANINGFUL ALTERNATIVE OUT
5 THERE, IS LUDICROUS. WAL-MART COULD BE SUED BY ANY NUMBER OF
6 WOMEN, IT WILL NOT AFFECT THEIR POLICIES IN A NONCLASS BASIS.
7 AND THESE WOMEN, IN MOST CASES FOR PROMOTION AND PAY DECISIONS,
8 ARE NOT GOING TO GET COUNSEL.
9 WAL-MART'S OTHER ARGUMENT, WHICH I ULTIMATELY THINK
10 IS THEIR FUNDAMENTAL ARGUMENT, IS THAT THIS CASE IS SIMPLY TOO
11 BIG, IT IS TOO UNMANAGEABLE. WAL-MART ESSENTIALLY SAYS IN THIS
12 CASE, ALTHOUGH WE'RE CHALLENGING -- THE CLAIMS WE'RE MAKING ARE
13 MAINSTREAM CLAIMS OF DISCRIMINATION, THEY'RE JUST SAYING, "THIS
14 IS A NIGHTMARE, YOUR HONOR, DON'T GO THERE."
15 I THINK THAT WAL-MART'S CLAIM IGNORES THE BROAD
16 EQUITABLE AUTHORITY OF THIS COURT TO FASHION A REMEDY WHEN A
17 WRONG HAS BEEN ESTABLISHED. AND AS WE'LL TALK ABOUT LATER,
18 THERE ARE TOOLS FOR THIS COURT TO USE. THE COURT SHOULD REJECT
19 THE INVITATION THAT WAL-MART HAS MADE TO THROW UP ITS HANDS IN
20 FAILURE AND INABILITY TO DEAL WITH THIS PROBLEM.
21 WE HAVE COME UP WITH A MODEL WHICH WE'LL DISCUSS
22 LATER WHICH ALLOWS THE COURT TO LOOK AT LEGITIMATE OBJECTIVE
23 DATA THAT EXISTS IN ONE OF THE MOST EXTENSIVE DATA COLLECTION
24 SYSTEMS IN THE COUNTRY AT WAL-MART, WHERE THE COURT CAN MAKE
25 RATIONAL REASONABLE DETERMINATIONS ABOUT WHO IS ENTITLED AND
15
ORAL ARGUMENT BY MR. SELIGMAN
1 WHO SHOULD SHARE IN DAMAGES.
2 A VERY IMPORTANT DISTINCTION ABOUT THIS CASE WHICH
3 WAL-MART IGNORES WHICH IS TRUE IN ALMOST EVERY ONE OF THE CASES
4 THEY RELY ON IN ARGUING THERE IS TOO MANY INDIVIDUAL ISSUES,
5 THIS CASE ONLY SEEKS ECONOMIC DAMAGES AND PUNITIVE DAMAGES.
6 THERE IS NO CLAIM HERE FOR SUBJECTIVE EMOTIONAL DISTRESS
7 DAMAGES.
8 AND THE FINAL THING, WHICH I THINK WAL-MART DOES
9 IGNORE AND THE COURT HAS ASKED THE QUESTION ABOUT, IS IN THIS
10 CASE, DESPITE THE FACT WE'RE NOT SEEKING EMOTIONAL DISTRESS
11 DAMAGES, WE HAVE PROPOSED OPT-OUT RIGHTS FOR CLASS MEMBERS. SO
12 IF CLASS MEMBERS BELIEVE THEY ARE IN A CONFLICT SITUATION, IF
13 THEY BELIEVE THAT THEIR RIGHTS ARE NOT BEING FAIRLY
14 REPRESENTED, THEY HAVE THE RIGHT TO LEAVE THIS CASE.
15 YOUR HONOR, I'M GOING TO FOCUS IN MY DISCUSSION ON
16 THE BASIC CRITERIA FOR CLASS CERTIFICATION AND FOLLOW,
17 ESSENTIALLY, RULE 23. I TRUST I CAN SKIP THE NUMEROSITY
18 PROVISION.
19 (LAUGHTER.)
20 THE COURT: WELL, WE'RE ALL IN THE WRONG PLACE IF
21 YOU CAN'T SKIP THAT.
22 (LAUGHTER.)
23 MR. SELIGMAN: THAT WAS MY FIRST QUESTION WHEN THIS
24 CASE FIRST CAME TO ME, ARE THERE REALLY ENOUGH EMPLOYEES AT
25 WAL-MART TO JUSTIFY THIS CASE?
16
ORAL ARGUMENT BY MR. SELIGMAN
1 I'M GOING TO TURN TO COMMONALITY. I'M GOING TO TALK
2 ABOUT THE COMMON FEATURES, AND I'M GOING TO SEPARATELY DISCUSS
3 THE PROMOTION AND PAY CLAIMS, BECAUSE I THINK THERE IS SOME
4 DISTINCTIONS BETWEEN THEM, AND THEN TURN TO TYPICALITY
5 QUESTIONS AND REPRESENTATION AND CONFLICT QUESTIONS. AND ALONG
6 THE WAY, I'LL ANSWER THE COURT'S QUESTIONS 1 THROUGH 7 AND THE
7 ADDED QUESTION THAT YOU RAISED TODAY.
8 BEFORE TURNING TO COMMONALITY, THOUGH, I THINK IT'S
9 WORTH TAKING A SECOND TO DISCUSS WHY THE COURT IS NOT SUPPOSED
10 TO LOOK AT THE MERITS AT THIS STAGE AND THE IMPORTANCE OF THAT
11 RULE. THERE ARE REALLY TWO REASONS.
12 THE FIRST REASON, OF COURSE, IS TO THE EXTENT THAT
13 THIS IS A JURY CASE, WHICH THE PATTERN AND PRACTICE CLAIMS
14 CLEARLY ARE, IT'S A JURY ISSUE, AND THE JUDGE IS NOT SUPPOSED
15 TO MAKE A PRELIMINARY DETERMINATION. THE ULTIMATE QUESTION, IS
16 THERE A PATTERN AND PRACTICE OF INTENTIONAL DISCRIMINATION, IS
17 THERE A MERITS DECISION WHICH WILL BE DECIDED DOWN THE ROAD.
18 OUR BURDEN, CONTRARY TO THE DEFENDANT'S SUGGESTION,
19 IS NOT TO PROVE THAT THERE IS A PATTERN AND PRACTICE. WE DON'T
20 HAVE TO MEET THE TEAMSTERS LIABILITY STANDARD. WE JUST HAVE TO
21 SHOW THERE IS A COMMON QUESTION THAT HAS BEEN RAISED BY
22 PLAUSIBLE EVIDENCE AT THIS STAGE OF THE CASE.
23 THERE IS A SECOND REASON, THOUGH, WHICH I THINK IS
24 VERY IMPORTANT ON THIS RECORD WHY THE COURT SHOULDN'T GET TO
25 THE MERITS. DESPITE THE FACT THERE HAS BEEN A LOT OF DISCOVERY
17
ORAL ARGUMENT BY MR. SELIGMAN
1 IN THIS CASE, DISCOVERY HAS NOT BEEN COMPLETED. AND I WANT TO
2 POINT TO TWO THINGS THAT THE COURT SHOULD BEAR IN MIND.
3 UNDER THE CASE MANAGEMENT ORDER THAT WAS ISSUED IN
4 THIS CASE, PLAINTIFFS HAVE NOT BEEN ALLOWED DISCOVERY IN ANY
5 STORE, DISTRICT, REGION OR DIVISION THAT A NAMED PLAINTIFF
6 DIDN'T WORK IN. AND BECAUSE OF THE COURT'S VENUE ORDER WE WERE
7 LIMITED TO CALIFORNIA. WE GOT NATIONWIDE STATISTICS, BUT WE
8 WERE NOT ALLOWED TO EXPLORE THE MANY DIFFERENCES THAT WERE OUT
9 THERE.
10 THE SECOND THING WHICH I THINK IS VERY IMPORTANT, IN
11 TERMS OF THAT DISCOVERY ISSUE, WAL-MART TODAY, STANDING IN
12 FRONT OF THE COURT, IS LARGELY RELYING ON EVIDENCE THAT EITHER
13 WAS NOT IN EXISTENCE DURING THE DISCOVERY PERIOD, THE 237 STORE
14 MANAGER DECLARATIONS WHICH WE HAVE NO CHANCE TO REBUT, OR
15 CHANGES IN POLICIES THAT HAPPENED LITERALLY ON THE EVE OF THE
16 END OF DISCOVERY.
17 WAL-MART PURPORTED TO CHANGE, FOR THE FIRST TIME
18 EVER, THEIR NO-JOB-POSTING POLICY ON JANUARY OF 2003, THE SAME
19 MONTH OF THE DISCOVERY CUTOFF. WE HAVE NOT BEEN ALLOWED TO
20 EXPLORE, TO TAKE DEPOSITIONS ABOUT THE DECISION-MAKING PROCESS.
21 IN FACT, THE DEFENDANT HAS ERECTED AN ATTORNEY-CLIENT PRIVILEGE
22 ARGUMENT AGAINST THAT. SO DISCOVERY IS NOT HERE, AND SO WE'RE
23 NOT TO PROVE OUR CASE.
24 NOW, THE COURT HAS ASKED IN QUESTION NUMBER 5, I
25 THINK AN IMPORTANT QUESTION THAT RELATES TO THIS, WHICH IS
18
ORAL ARGUMENT BY MR. SELIGMAN
1 ABOUT THE DAUBERT STANDARD, WHICH IS SHOULD THE JUDGE REALLY,
2 IN LOOKING AT THE EXPERT TESTIMONY, APPLY THE FORMAL DAUBERT
3 RULE AND PRESUMABLY MOVING THE MOTIONS THAT HAVE BEEN MADE BY
4 EACH SIDE, STRIKE THE DECLARATIONS OF EXPERTS?
5 I THINK THAT THE DAUBERT QUESTION VERY MUCH
6 ILLUSTRATES THE STAGE-OF-THE-CASE PROBLEM I WAS RAISING RIGHT
7 NOW.
8 NORMALLY, DAUBERT IS A RULE WHERE THE JUDGE IS
9 ACTING GATEKEEPER TO KEEP THE JURY FROM HEARING ILLEGITIMATE
10 UNRELIABLE SCIENCE. THAT IS NOT THE STAGE WE'RE AT. THERE IS
11 NO JURY HERE. THE COURT GENERALLY --
12 THE COURT: IS IT YOUR VIEW THAT DAUBERT WOULD NOT
13 APPLY TO A BENCH TRIAL?
14 MR. SELIGMAN: NO, DAUBERT WOULD APPLY TO A BENCH
15 TRIAL, BUT I THINK THERE ARE SOME DIFFERENT CONSIDERATIONS.
16 AT A BENCH TRIAL THE JUDGE HAS TO MAKE A RULING ON
17 THE MERITS. NOW, YOU DON'T. RIGHT NOW, THE BURDEN OF THE
18 COURT RIGHT NOW, IS TO IDENTIFY COMMON QUESTIONS.
19 THE COURT: BUT, HYPOTHETICALLY, IF I FOUND THAT THE
20 METHODOLOGY USED BY AN EXPERT WAS SO LACKING IN INDICIA OF
21 RELIABILITY, I COULD RULE AND EXCLUDE SUCH EVIDENCE, CORRECT?
22 MR. SELIGMAN: I DO AGREE, YOUR HONOR.
23 I THINK THAT THERE IS --
24 THE COURT: AND THAT WOULD BE CONSISTENT WITH THE
25 COURT'S VIEW AND FOCUS WITH RESPECT TO CARRYING OUT ITS
19
ORAL ARGUMENT BY MR. SELIGMAN
1 OBLIGATION TO WEIGH THE PROVISION OF RULE 23(A).
2 MR. SELIGMAN: THAT IS CORRECT. AND I THINK THE
3 STANDARD, WHICH IS IDENTIFIED IN THE CASES THE COURT CITED, IS
4 REALLY, IS THE INFORMATION PLAUSIBLE, AND IT IS RELEVANT TO THE
5 CLAIMS BEFORE THE COURT?
6 THE FULL DAUBERT ANALYSIS, WHICH IS A HIGHER LEVEL
7 OF RELIABILITY, IS A MERITS DECISIONS. BUT WE DO AGREE THAT
8 THE COURT DOES NOT HAVE TO SIT HERE AND ACCEPT GARBAGE, DOES
9 NOT HAVE TO ACCEPT JUNK SCIENCE. AND I THINK THAT'S AN
10 IMPORTANT DISTINCTION BETWEEN THE MOTIONS IN FRONT OF YOU.
11 THE MOTION WE HAVE MADE TO STRIKE PORTIONS OF THE
12 HAWORTH DECLARATION, WHICH RELIES ON STORE MANAGER SURVEYS, WE
13 AREN'T ARGUING IN SOME ABSTRACT WAY ABOUT IT; SHE HAS TESTIFIED
14 IN HER DEPOSITION THAT THE MANNER OF COLLECTION OF THOSE
15 DECLARATIONS DO NOT COMPORT WITH SCIENTIFIC STANDARDS. SHE
16 ADMITTED THEY WERE COLLECTED BY LAWYERS. SHE ADMITTED SHE TOLD
17 WAL-MART THAT WAS A BAD IDEA. SHE ADMITTED SHE HAD NO IDEA HOW
18 THAT INFORMATION WAS COLLECTED. SHE ADMITTED IT VIOLATED THE
19 FEDERAL STANDARDS FOR SCIENTIFIC EVIDENCE.
20 THAT IS A PLAUSIBLE STANDARD THAT YOU CAN APPLY
21 THERE, THAT WHEN AN EXPERT ADMITS THAT LEVEL WHERE,
22 ESSENTIALLY, WHAT THE EXPERT IS SAYING IS, "I'M JUST RELYING ON
23 THIS, EVEN THOUGH I HAVE NO IDEA WHAT RELIABILITY IT HAS
24 WHATSOEVER," I THINK THE COURT IS EMPOWERED TO ACT AT THIS
25 POINT.
20
ORAL ARGUMENT BY MR. SELIGMAN
1 LET ME TURN TO WHAT IS PROBABLY THE CENTRAL QUESTION
2 IN ANY CLASS CASE, WHICH IS, ARE THERE COMMON QUESTIONS OF LAW,
3 IN FACT, SUFFICIENT TO BIND THIS CASE?
4 NOW, THE STATUTE -- THE RULE, RULE 23, TALKS ABOUT
5 LAW OR FACT. AND I WANTED TO JUST BRIEFLY MENTION WHAT IS
6 UNDISPUTED IN THIS CASE ABOUT LAW. THERE IS NO DISPUTE THAT WE
7 ARE SEEKING A COMMON LEGAL THEORY FOR THE CLASS. WE HAVE TWO
8 THEORIES, WHICH IS THE PATTERN AND PRACTICE AND THE ADVERSE
9 IMPACT THEORY. THERE IS NO DISPUTE THAT THE ISSUES ARISED
10 (SIC) ON THEM ARE COMMON TO THE CLASS. WE ESTABLISHED ADVERSE
11 IMPACT. THERE IS A BUSINESS NECESSITY DEFENSE. THERE IS NO
12 DISPUTE, ALSO, THAT WE ARE SEEKING COMMON REMEDIES FOR THE
13 CLASS, BACK PAY PUNITIVE DAMAGES, INJUNCTIVE RELIEF.
14 THE COURT: HOW ABOUT FRONT PAY?
15 MR. SELIGMAN: FRONT PAY WE ARE SEEKING ALSO, YOUR
16 HONOR, AS WE'LL TALK ABOUT. AND I THINK THERE IS A SIMPLE
17 EXPLANATION WHICH -- I DON'T WANT TO STEAL MR. SELLERS'
18 THUNDER, BUT THE STANDARDS FOR DETERMINING FRONT PAY AND THE
19 FACTORS ARE VIRTUALLY IDENTICAL TO BACK PAY. WE WILL DISCUSS
20 THAT WHEN WE GET TO IT, BUT WE ARE SEEKING THAT.
21 ECONOMIC DAMAGES IS WHAT WE'RE SEEKING FOR THIS
22 CLASS, AND PUNITIVE DAMAGES, WHICH TURN ON THE DEFENDANT'S
23 CONDUCTS. SO THERE IS NO DISPUTE THAT WE HAVE COMMON LEGAL
24 THEORIES FOR THE CLASS AND COMMON REMEDIAL THEORIES FOR THE
25 CLASS.
21
ORAL ARGUMENT BY MR. SELIGMAN
1 LET'S GO TO THE FACTUAL BASIS OF WHAT IS IN FRONT OF
2 THE COURT.
3 WE GO BEYOND MERELY SAYING THERE IS SOME COMMON
4 QUESTIONS, WHAT WE HAVE SHOWN IN OUR RECORD IS COMMON FACTUAL
5 BACKGROUND OF UNIFORMITY THROUGHOUT WAL-MART, COMMON POLICIES
6 THAT WE'RE CHALLENGING, AND COMMON STATISTICAL PATTERNS.
7 AS I MENTIONED BEFORE, THERE IS NO DISPUTE, REALLY,
8 THAT ANYONE CAN MAKE ON THIS RECORD THAT WAL-MART HAS COMMON
9 PERSONNEL POLICIES, UNIFORM OPERATIONS OF THE STORES, UNIFORM
10 TRAINING, UNIFORM CULTURE, ETCETERA. THERE IS NO POSSIBLE
11 DISPUTE ABOUT THAT.
12 THERE IS ALSO NO DISPUTE ON THE RECORD BEFORE THIS
13 COURT THAT THOSE POLICIES ARE VIRTUALLY IDENTICAL, WHETHER
14 YOU'RE LOOKING AT A REGULAR WAL-MART, A SUPER CENTER, OR A
15 SAM'S CLUB OR A NEIGHBORING MARKET. THERE IS NO DIFFERENCE.
16 IN FACT, THE TESTIMONY OF THE CEO OF WAL-MART,
17 MR. COUGHLIN, AS WELL AS THE TESTIMONY OF THE HEAD OF PERSONNEL
18 FOR SAM'S CLUB, WAS THAT THE PERSONNEL POLICIES AT SAM'S AND
19 WAL-MART ARE VIRTUALLY IDENTICAL, 99 PERCENT. IN FACT, THE
20 FORMER HEAD OF PERSONNEL FOR SAM'S CLUB SAID THE ONLY POLICY HE
21 COULD RECALL THAT WAS DIFFERENT WAS AN ATTENDANCE POLICY, WHICH
22 IS NOT AN ISSUE IN THIS CASE.
23 THIS EVIDENCE IS BUTTRESSED, I THINK, BY THE
24 DECLARATIONS OF THE 113 CLASS MEMBERS. AND I THINK WHAT'S
25 IMPORTANT TO NOTE, YOUR HONOR, IS THAT WE DIDN'T JUST PILE UP
22
ORAL ARGUMENT BY MR. SELIGMAN
1 BAY AREA CLASS MEMBERS. THE CLASS MEMBERS IN THIS CASE, AS THE
2 MAP ATTACHES -- EXHIBIT 125 SHOWS, COME FROM EVERY PART OF THIS
3 COUNTRY, THIRTY DIFFERENT STATES. WE HAVE TESTIMONY FROM THESE
4 DIFFERENT CLASS MEMBERS.
5 THAT TESTIMONY IS NOT ONLY THE TESTIMONY OF
6 INDIVIDUAL WOMEN WHO WORKED IN A SINGLE STORE, MANY OF THOSE
7 WOMEN WORKED AT MULTIPLE STORES. AND TEN OF THEM WERE AT THE
8 HIGHER MANAGEMENT LEVELS.
9 TO GIVE A COUPLE OF QUICK EXAMPLES, ANA STUMP, WHO
10 WAS A CO-MANAGER, AS WELL AS A DISTRICT MANAGER OF SHOES AND
11 JEWELRY, SAID IN HER DECLARATION THAT SUPER CENTER AND REGULAR
12 WAL-MART STORES HAD THE SAME MANAGEMENT TRAINING, THE SAME
13 CULTURE, THE SAME POLICIES, THE SAME PRACTICES; THERE WAS NO
14 DISTINCTION.
15 DIANE DURFIE, AN ASSISTANT MANAGER WHO WORKED IN
16 MANAGEMENT BOTH IN THE STATE OF WASHINGTON AND THE STATE OF
17 UTAH, TESTIFIED THAT PRACTICES ON PERSONNEL AND COMPANY
18 POLICIES WERE IDENTICAL.
19 SUE MCFARLAND, A CO-MANAGER, AS WELL AS A DISTRICT
20 ASSISTANT AND A DISTRICT MANAGER OF JEWELRY, WHERE SHE VISITED
21 MORE THAN 50 SEPARATE STORES THROUGHOUT THE COUNTRY, TESTIFIED
22 THE POLICIES WERE THE SAME. THE POLICIES WERE THE SAME,
23 WHETHER YOU LOOKED IN THE SPECIALTY DEPARTMENT, WHERE SHE WAS A
24 DISTRICT MANAGER, OR THE REGULAR DEPARTMENTS.
25 JOYCE MOODY, ANOTHER DISTRICT MANAGER OF JEWELRY, AS
23
ORAL ARGUMENT BY MR. SELIGMAN
1 WELL AS A "TLE," OR TIRE/LUBE EXPRESS MANAGER, THESE ARE TWO
2 SPECIALTY DEPARTMENTS, SAID THAT THE POLICIES WERE IDENTICAL
3 FOR REGULAR WAL-MART, FOR TLE AND FOR JEWELRY.
4 AND FINALLY, SUSAN SURVETIOUS, A FORMER DISTRICT
5 MANAGER, A REGULAR DISTRICT MANAGER OF WAL-MART, TESTIFIED WHAT
6 THE JOB OF A DISTRICT MANAGER IS, AND THE JOB IS TO ENSURE THE
7 STORES FOLLOW THE CENTRALIZED COMPANY POLICY. THEY MANAGE BY
8 EXCEPTION; THE STORES THAT DON'T FOLLOW THE POLICY ARE THE ONES
9 WHO GET VISITED.
10 BRIEFLY, THE EXPERT TESTIMONY NEEDS TO BE NOTED HERE
11 ALSO.
12 DR. BIELBY TESTIFIED, IN A SECTION WHICH WAL-MART
13 HAS LARGELY IGNORED IN THEIR MOTION TO DISMISS, THAT THERE IS
14 EXTENSIVE EVIDENCE OF CENTRALIZATION AND A COMMON CULTURE AT
15 WAL-MART, THE GLUE THAT HOLDS THIS COMPANY TOGETHER.
16 PROFESSOR BENDICK, AN ECONOMIST, TOOK A LOOK AT THE
17 PERCENTAGE OF WAL-MART MANAGEMENT THAT ARE IN THE HOME OFFICE
18 VERSUS OUT IN THE FIELD AND FOUND THAT COMPARED TO ITS 20
19 LARGEST COMPETITORS IT HAD TWICE AS MUCH PROPORTIONALLY --
20 THE COURT: NOT QUITE TWICE.
21 MR. SELIGMAN: PRETTY CLOSE TO TWICE.
22 THE COURT: 15.4 TO 8.1.
23 MR. SELIGMAN: OKAY, WELL, YOUR HONOR, I'LL GIVE
24 THAT .8 PERCENT, BUT IT'S NEARLY TWICE.
25 I'LL MAKE ONE POINT IN TERMS OF THAT STRUCTURE, AND
24
ORAL ARGUMENT BY MR. SELIGMAN
1 I THINK THIS IS A DISTINCTION BETWEEN WAL-MART AND OTHER
2 COMPANIES; WAL-MART DIVIDES THE COMPANY INTO 41 SEPARATE
3 REGIONS, 35 REGULAR WAL-MARTS AND 6 SAM'S. UNLIKE, I BELIEVE,
4 MOST COMPANIES, THE REGIONAL VICE-PRESIDENTS DON'T WORK IN THE
5 FIELD, THEY WORK IN BENTONVILLE. THEY ARE BENTONVILLE BASED.
6 THEY GO OUT AND VISIT THE FIELD.
7 BUT EVERY WEEK EVERY REGIONAL VICE-PRESIDENT MEETS
8 WITH SENIOR MANAGEMENT AT WAL-MART. THEY ALSO HAVE REGIONAL
9 PERSONNEL MANAGERS, PEOPLE MANAGERS. AGAIN, BASED IN WAL-MART,
10 THEY GO OUT IN THE FIELD, AND EVERY WEEK, THEY COME BACK AND
11 MEET WITH THE HIGHEST LEVELS.
12 NOW, AGAINST THIS EVIDENCE, WAL-MART ASSERTS BEFORE
13 THIS COURT THAT THERE ARE EIGHT DIFFERENT BUSINESSES, THAT
14 THERE ARE SEPARATE SALARY STRUCTURES, THAT THE STORES ARE
15 AUTONOMOUS, THAT THE DEPARTMENTS ARE ESSENTIALLY AUTONOMOUS IN
16 TERMS OF PAY, ALSO.
17 YOUR HONOR, UP TILL NOW THERE HAVE BEEN
18 APPROXIMATELY 200 DEPOSITIONS TAKEN, INCLUDING 19 30(B)(6)
19 DEPOSITIONS WHERE WAL-MART HAS PRODUCED THE PERSON WHO IS
20 QUALIFIED TO TALK ABOUT ITS POLICIES, AND MORE THAN 1.25
21 MILLION DOCUMENTS HAVE BEEN PRODUCED.
22 THERE IS NOT A SINGLE DOCUMENT THAT WAL-MART HAS
23 IDENTIFIED DURING THE COURSE OF DISCOVERY IN THIS CASE THAT
24 SUPPORTS ITS CLAIMS THAT THE STORES ARE AUTONOMOUS, THAT THE
25 DEPARTMENTS ARE AUTONOMOUS, THAT THE SPECIALTY GROUPS ARE
25
ORAL ARGUMENT BY MR. SELIGMAN
1 AUTONOMOUS, OR THAT THERE ARE SEPARATE PAY STRUCTURES. IN
2 FACT, THE ONLY DOCUMENTS IN THIS CASE SHOW THAT THERE IS ONE
3 PAY POLICY AT WAL-MART, SHOW THAT THE STORES ARE RIGIDLY
4 MONITORED ALL THE WAY TO THE TOP. I THINK THAT'S A CRITICAL
5 FACTOR IN THIS CASE.
6 THE COURT: THERE IS ROOM FOR THE EXERCISE OF
7 DISCRETION. I KNOW THAT IN THE CONTEXT OF THE ARGUMENT, YOUR
8 POSITION IS THAT THERE ARE TOO MUCH SUBJECTIVITY. IT'S MUSHY
9 AND ALLOWS FOR THE INTERFACE OF STEREOTYPICAL NOTIONS TO
10 INFLUENCE THE DECISIONS THAT ARE MADE.
11 BUT THERE IS EVIDENCE IN THE RECORD, I THINK FROM
12 THE HAYWARD DECLARATION, THAT INDICATES BOTH WITH RESPECT TO, I
13 THINK, SAM'S CLUB AND THE SUPER CENTERS, THAT THERE ARE ISSUES
14 OF BASE PAY AND DIFFERENT INCENTIVE PACKAGES, THE KINDS OF
15 THINGS THAT ARE DETERMINED ON A LOCAL LEVEL, GIVEN THE DICTATES
16 OF THE LOCALITIES.
17 DOESN'T THAT CUT AGAINST THE ARGUMENT OF THE
18 CENTRALIZED STRUCTURE THAT YOU HAVE JUST MADE? IT STRIKES ME
19 THAT THERE MAY BE AN ARGUMENT ON THIS RECORD THAT THEY COEXIST.
20 TO THE EXTENT THAT THEY DO, THAT MAY GIVE RISE TO A LACK OF
21 COMMONALITY.
22 MR. SELIGMAN: LET ME ADDRESS THAT. AND LET ME JUMP
23 DIRECTLY TO THE PAY POLICIES. I THINK THERE ARE TWO DIFFERENT
24 POINTS THAT I THINK THE COURT IS NOTING.
25 WAL-MART DOES HAVE DIFFERENT PAY POLICIES FOR ITS
26
ORAL ARGUMENT BY MR. SELIGMAN
1 STORE MANAGERS AND CO-MANAGERS. THOSE ARE NATIONALLY DEVELOPED
2 POLICIES THOUGH, THEY ARE NOT LOCAL POLICIES AT ALL. AS I'LL
3 SHOW IN A MOMENT, EVEN THOUGH THEY HAVE SOME DIFFERENCES IN
4 DETAIL, ULTIMATELY THEY ARE IDENTICAL, BECAUSE THOSE PAY
5 POLICIES TURN ON EXACTLY TWO FACTORS, THE SIZE OF THE STORE
6 YOU'RE IN, AND THE PROFITABILITY OF THE STORE YOU'RE IN.
7 IN FACT, YOUR HONOR, ONE OF WAL-MART'S DECLARANTS
8 TESTIFIED PRECISELY TO THAT POINT, IF YOU LOOK AT THE
9 DECLARATION OF CRAIG ARNOLD, WHO WAL-MART CITES TO SHOW THAT
10 THERE IS MANY DIFFERENT PAY POLICIES FOR MANAGEMENT.
11 IN FACT, IT ALL BOILS DOWN, AS MR. ARNOLD POINTS OUT
12 IN HIS DECLARATION, "THE COMPENSATION STRUCTURE FOR FIELD
13 MANAGEMENT AT WAL-MART STORES, SUPER CENTERS AND NEIGHBORHOOD
14 MARKETS IS IN LARGE PART BASED ON THE SIZE AND LOCATION OF THE
15 INDIVIDUAL STORE WHERE THE MANAGER WORKS AND HIS OR HER
16 POSITION IN THE STORE."
17 SO, BASICALLY, THE QUESTION IS, WHAT STORE DO YOU
18 GET? IF YOU ARE ASSIGNED -- ESSENTIALLY A PROMOTION DECISION.
19 IF YOU ARE PROMOTED TO A LARGER STORE, YOU GET A HIGHER BASED
20 SALARY. IF YOU ARE PROMOTED TO A MORE PROFITABLE STORE, YOU
21 GET A LARGER INCENTIVE --
22 THE COURT: AS OPPOSED TO WHAT IS DELINEATED IN THE
23 POLICIES, THEMSELVES.
24 MR. SELIGMAN: PARDON ME?
25 THE COURT: AS OPPOSED TO WHAT IS DELINEATED IN THE
27
ORAL ARGUMENT BY MR. SELIGMAN
1 POLICIES, THEMSELVES.
2 MR. SELIGMAN: NO, NO; THE POLICIES RECOGNIZE THIS.
3 THE POLICIES FOR STORE MANAGERS SAY, "YOUR BASE PAY IS GOING TO
4 BE TIED TO THE SIZE OF YOUR STORE AND THE PROFITABILITY OF YOUR
5 STORE." SO, ACTUALLY, FOR A STORE MANAGER THE ISSUE ABOUT PAY
6 IS REALLY A PROMOTION QUESTION, WHETHER YOU'RE GOING TO GET
7 PROMOTED TO A PROFITABLE STORE OR NOT.
8 THAT DECISION, WHICH STORE YOU GET, IS A COMPLETELY
9 SUBJECTIVE DECISION THAT SENIOR MANAGEMENT AT WAL-MART MAKES.
10 THERE IS NO OBJECTIVE FACTORS THAT TELL ME TO PICK JOE INSTEAD
11 OF MARY. JUST JOE TENDS TO GET PICKED.
12 THE OTHER PAY QUESTION WHICH I THINK IS IMPORTANT TO
13 FOCUS ON IS WHAT HAPPENS TO HOURLY EMPLOYEES. AND I THINK
14 THERE IS AN IMPORTANT SERIES OF DECISIONS THAT ARE THERE WHICH
15 I THINK THE EVIDENCE IS PRETTY CLEAR ON.
16 FIRST OF ALL, THERE IS NO QUESTION AT WAL-MART THAT
17 THERE IS A COMMON PAY POLICY THAT APPLIES TO ALL OF WAL-MART'S
18 STORES. AND THIS COMMON PAY POLICY IS ONE THAT HAS TREMENDOUS
19 PERFORMANCE TO WAL-MART. NOW, WAL-MART TODAY ARGUES TO THE
20 COURT THAT THE NATIONAL PAY POLICY IS VIRTUALLY INSIGNIFICANT,
21 IT'S REALLY ALL AUTONOMOUS. THE COURT MAY RECALL, THOUGH, THAT
22 WHEN WAL-MART SUBMITTED A COPY OF ITS NATIONAL PAY POLICY IT
23 MOVED TO SEAL THAT PAY POLICY.
24 IN FACT, ONCE AGAIN, MR. ARNOLD, IN HIS DECLARATION
25 IN SUPPORT OF WAL-MART'S MOTION TO SEAL CONFIDENTIAL
28
ORAL ARGUMENT BY MR. SELIGMAN
1 COMPENSATION DATA TESTIFIED THAT "WAL-MART'S COMPENSATION
2 STRUCTURE IS CONSIDERED TO BE A SIGNIFICANT COMPONENT IN
3 WAL-MART'S COMPETITIVE STRATEGIES AND PROVIDES A COMPETITIVE
4 BENEFIT TO WAL-MART. THE COMPANY HAS TAKEN AFFIRMATIVE STEPS
5 TO SAFEGUARD THE CONFIDENTIALITY OF THIS COMPENSATION
6 STRUCTURE."
7 NOW, WAL-MART CAN'T HAVE IT BOTH WAYS. IF THE
8 NATIONAL POLICY IS MEANINGLESS, WHY DID THEY ASK THE COURT TO
9 SEAL THIS AS SO SENSITIVE? IT CLEARLY HAS SOME IMPORTANCE TO
10 THE COURT, AND HERE IS HOW THE IMPORTANCE WORKS:
11 THE NATIONAL POLICY, AS THE UNDISPUTED EVIDENCE
12 SHOWS, ASSIGNS EACH JOB TO A PAY GROUP. THOSE PAY GROUPS ARE
13 IMPORTANT, BECAUSE THEY DETERMINE THE DIFFERENCE IN PAY BETWEEN
14 EACH PAY GROUP. THE LOWEST LEVEL JOB GOES INTO PAY GROUP 1.
15 THERE'S A RANGE FOR PAY IN THAT JOB. THE NEXT IS PAY GROUP 2,
16 AND PAY GROUP 2 HAS TO BE A CERTAIN DISTANCE APART FROM IT.
17 THAT POLICY IS EMBEDDED IN WAL-MART. IT IS EMBEDDED
18 SO MUCH IN WAL-MART THAT IF A STORE MANAGER PAYS SOMEBODY
19 OUTSIDE OF THOSE GUIDELINES -- I THINK THE TESTIMONY OF
20 WAL-MART'S DECLARANT, SANDRA ALLISON, WHO SUBMITTED TWO
21 DECLARATIONS, BUT THE SECOND DECLARATION SHE SUBMITTED, WHICH
22 WE ALSO ATTACHED IN EXHIBIT 128, SHOWS HOW EMBEDDED IT IS.
23 IF THAT PAY IS ABOVE 6 PERCENT OF WHAT THAT GROUP
24 IS, THERE IS A BOX THAT SHOWS UP ON THE COMPUTER THAT SAYS,
25 "YOU'RE VIOLATING PAY POLICIES." IT NEEDS TO BE MANUALLY
29
ORAL ARGUMENT BY MR. SELIGMAN
1 OVERRIDDEN. BUT THAT'S NOT ENOUGH. THE STORE MANAGER CAN
2 MANUALLY OVERRIDE IT, BUT AUTOMATICALLY AN EXCEPTION REPORT
3 SHOWING THE NAME, THE JOB AND THE PAY GOES UP THE MANAGEMENT
4 RANKS.
5 SO THIS IS A SITUATION WHERE, YES, THERE IS A
6 DISCRETION, BUT -- AND WE WOULD ARGUE THAT THERE IS NO
7 GUIDELINES AT ALL FOR STORE MANAGERS TO DECIDE WHEN TO DEPART
8 FROM THE GUIDELINES. BUT THIS ISN'T A CASE WHERE WAL-MART CAN
9 SAY, "THIS IS STRICTLY A LOCAL THING," BECAUSE UP THE LINE THEY
10 HAVE NOTICE OF EXACTLY WHAT IS HAPPENING. THEY KNOW WHAT'S
11 GOING ON.
12 THE COURT: NOW, IS THERE A FEATURE LIKE THAT
13 PRESENT IN ABRAM OR THE REID CASE? ANY OF THOSE CASES?
14 MR. SELIGMAN: THERE IS NO EVIDENCE IN THOSE
15 OPINIONS SUGGESTING THAT LEVEL OF DISCUSSION. IN FACT, ABRAM;
16 AGAIN, THE PARTIES VIRTUALLY STIPULATED THAT IT WAS
17 DECENTRALIZED LOCAL DECISION-MAKING. THERE WASN'T EVIDENCE
18 THAT NOT ONLY WAS SENIOR MANAGEMENT AWARE OF THE CONSEQUENCES,
19 BUT THEY SET UP A SYSTEM TO SET AN ALARM BELL OFF WHENEVER
20 ANYONE DEPARTED FROM THE PAY POLICIES.
21 THERE ARE SOME OTHER POLICIES AT EVERY STAGE; THERE
22 IS A NATIONAL POLICY PERFORMANCE EVALUATION THAT SAYS IF YOU
23 GOT A CERTAIN RANK, YOU SHOULD GET 4 PERCENT, ANOTHER RANK, YOU
24 GET 5 PERCENT. AGAIN, STORE MANAGERS CAN DEPART FROM THAT, BUT
25 WHEN THEY DO, AN EXCEPTION REPORT GOES UP THE LINE.
30
ORAL ARGUMENT BY MR. SELIGMAN
1 THERE'S A NATIONAL POLICY ALLOWING A STORE MANAGER
2 TO GIVE A SPECIAL MERIT ADJUSTMENT WITH NO GUIDANCE WHATSOEVER.
3 BUT WHEN THEY GIVE THOSE SPECIAL MERIT ADJUSTMENTS, THAT NOTICE
4 GOES UP THE LINE. SO WAL-MART HAS SET UP A SITUATION WHERE
5 THEY'VE GOT POLICIES, AND THEY TELL THE MANAGERS THAT, "IF YOU
6 DEPART FROM THEM, WE'RE GOING TO KNOW ABOUT IT."
7 NOW, THEY MAY HAVE CHOSEN TO DO NOTHING ABOUT THE
8 INFORMATION THEY GOT, BUT WE CERTAINLY HAVE RAISED A COMMON
9 QUESTION ABOUT THE EXISTENCE OF A NATIONAL POLICY AND
10 WAL-MART'S KNOWLEDGE OF EXACTLY WHAT HAPPENS ALL THE WAY UP.
11 WE KNOW, FOR EXAMPLE, ONE OF THE THINGS THAT HAPPENS
12 IS ALL THE WAY UP THE LINE THERE IS AN INCREASING DISPARITY.
13 WE KNOW THAT WOMEN AND MEN HIRED AT THE SAME TIME START WITH A
14 PAY GAP, AND THAT PAY GAP, AS DR. DROGIN SHOWED IN THIS TABLE
15 15, OVER TIME THAT PAY GAP JUST GETS BIGGER AND BIGGER, WHEN
16 PERFORMANCE ADJUSTMENTS ARE DONE, WHEN MERIT ADJUSTMENTS ARE
17 MADE, WHEN PROMOTION DECISIONS ARE MADE. THIS IS TABLE 15 OF
18 DR. DROGIN'S REPORT.
19 THAT BRINGS ME TO WHAT IS PERHAPS THE ULTIMATE
20 DUELING EXPERT BATTLE THAT WE HAVE HERE, WHICH IS THE BATTLING
21 REGRESSIONS. I KNOW THAT IT PROBABLY ISN'T AS FASCINATING TO
22 THE COURT AS IT MIGHT BE TO THE EXPERTS THEMSELVES AND THE
23 PARTIES THAT WENT THROUGH PILES AND PILES OF INFORMATION, BUT
24 THE GOOD NEWS IS THAT AT THIS STAGE OF THE CASE, THE JUDGE NEED
25 NOT RESOLVE THIS BATTLE OF THE EXPERTS.
31
ORAL ARGUMENT BY MR. SELIGMAN
1 IN FACT, WHAT THE EXPERT TESTIMONY ON PAY HAS SHOWN
2 IS THAT THERE IS SOME VERY CLEAR COMMON STATISTICAL QUESTIONS
3 THAT GO THROUGH THIS CASE. WHAT IS THE APPROPRIATE UNIT OF
4 ANALYSIS? WHAT VARIABLES SHOULD BE IN YOUR MODEL? HOW
5 AGGREGATED OR DISAGGREGATED SHOULD THE DATA BE? THOSE ARE
6 CLASSIC JURY QUESTIONS.
7 I'LL GIVE YOU TWO CITES THAT ARE IN OUR PAPERS, THE
8 HEMMINGS VERSUS TIDYMAN'S CASE, NINTH CIRCUIT, OR THE PAGE
9 CASE. I THOUGHT THE PAGE CASE WAS PROBABLY RIGHT ON POINT.
10 THERE'S AN ARGUMENT ABOUT HOW YOU AGGREGATE. DID THE
11 PLAINTIFFS AGGREGATE THE DATA RIGHT, OR SHOULD IT BE
12 DISAGGREGATED?
13 THE COURT SAID, QUOTE, "RIGHT OR WRONG," TO THE
14 PLAINTIFFS, "THEY'RE ENTITLED TO PROVE THEIR CASE." AND THAT
15 IS EXACTLY OUR POINT. WE HAVE A BATTLE OF EXPERTS HERE, AND
16 RIGHT OR WRONG, THE JUDGE, IF IT'S AN ADVERSE IMPACT CASE, AT
17 TRIAL OR THE JURY ON PATTERN AND PRACTICE WILL DECIDE WHO IS
18 RIGHT AND WHO IS WRONG.
19 THE COURT: IT STRIKES ME THAT PAGE, THOUGH, SAYS
20 THAT THE ISSUE OF AGGREGATION OR DISAGGREGATION IS IMPACTED BY
21 WHETHER OR NOT IT'S PROBATIVE --
22 MR. SELIGMAN: UM-HMM.
23 THE COURT: -- ON THE ISSUE OF DISCRIMINATORY
24 CONDUCT. ARE THE -- DOES THE AGGREGATION RISE TO A LEVEL OF
25 SHOWING THAT THERE ARE PROBATIVE AND SUBSTANTIAL SIMILARITIES
32
ORAL ARGUMENT BY MR. SELIGMAN
1 WITH RESPECT TO THE PURPOSE IN THE FIRST PLACE FOR AGGREGATION?
2 THAT IS A QUESTION ON THIS RECORD, IT SEEMS, THAT IS
3 RAISED BY THE COMPETING EXPERTS AS TO WHETHER OR NOT -- YOU
4 KNOW, YOUR VIEW IS THIS IS A FACTUAL ISSUE -- WHETHER OR NOT --
5 THE LENS I LOOK THROUGH IT IS TO TRY TO ASCERTAIN WHETHER OR
6 NOT, FROM A METHODOLOGICAL STANDPOINT, THE AGGREGATION AT THE
7 REGIONAL LEVEL IS PROBATIVE ON THE QUESTION OF WHETHER OR NOT
8 AT THAT LEVEL THERE IS A STATISTICAL SIGNIFICANT INDICATION OF
9 DISCRIMINATION, OR, LOOKING AT IT CONVERSELY, WHETHER OR NOT
10 YOU REALLY DO NEED TO LOOK AT IT FROM SPECIALTY TO SPECIALTY
11 BECAUSE THAT IS WHERE THE JOBS ARE SIMILARLY SITUATED, AND THAT
12 IS WHERE THE ANALYSIS WILL BE MORE PROBATIVE IN ESTABLISHING
13 WHETHER OR NOT THERE IS SOME DISPARITY.
14 MR. SELIGMAN: WELL, I AGREE THAT THOSE ARE
15 PROBATIVE QUESTIONS, BUT, YOUR HONOR, THE PAGE DECISION WAS ON
16 A LIABILITY QUESTION, NOT ON CLASS CERTIFICATION.
17 THOSE ARE QUESTIONS THAT WE'LL FIGHT, BUT WHAT IS
18 THE RECORD IN FRONT OF THE COURT RIGHT NOW? ALTHOUGH WAL-MART
19 ASSERTS AND THEIR EXPERT ASSERTS YOU HAVE SEPARATE PAY
20 STRUCTURES, THERE IS NOT A SCINTILLA OF EVIDENCE SHOWING THAT.
21 THERE IS A SINGLE PAY POLICY THAT APPLIES TO SPECIALTY AND
22 REGULAR JOBS, GROCERY AND NONGROCERY. THERE IS NOTHING, NOT A
23 SINGLE DOCUMENT OUT THERE THAT WAL-MART CAN POINT OUT THAT
24 SHOWS IT'S DIFFERENT.
25 THE SPECIALLY JOBS, THE GROCERY JOBS, THE NONGROCERY
33
ORAL ARGUMENT BY MR. SELIGMAN
1 JOBS ARE IN THOSE SAME FIVE JOB GROUPINGS. IN FACT, A SALES
2 WORKER, WHETHER YOU'RE IN GROCERY, IN SHOES, IN NONFOODS, IS IN
3 PAY GROUP 2. THIS IS NO DISTINCTION MADE IN THE RECORD IN
4 FRONT OF THE COURT RIGHT NOW.
5 IN FACT, WAL-MART RELIES FOR ITS CLAIM THAT THERE IS
6 THAT DISTINCTION ALMOST EXCLUSIVELY ON THIS STORE MANAGER
7 SURVEY AND ON THEIR SUPPLEMENTAL STORE MANAGER DECLARATIONS.
8 AND THEY MAKE A VERY BIG DEAL ABOUT THE ABOUT THE DIFFERENCE
9 BETWEEN GROCERY AND NONGROCERY.
10 YOUR HONOR, THEY SUBMITTED 16 STORE MANAGER
11 DECLARATIONS. I BELIEVE EIGHT OF THEM ARE FROM SUPER CENTERS,
12 WHICH HAVE GROCERY DEPARTMENTS. I INVITE THE COURT TO READ
13 THOSE EIGHT. NOT A SINGLE DECLARATION SAYS THERE IS A
14 DIFFERENT PAY STRUCTURE FOR GROCERY. NOT A SINGLE DECLARATION
15 SAYS THERE IS A DIFFERENT PAY RATE FOR GROCERY DEPARTMENTS.
16 WHAT THOSE DECLARATIONS TELL YOU IS THAT THE SAME STORE MANAGER
17 WHO MAKES PAY DECISIONS WITHIN A LIMITED DISCRETION IS IN
18 CHANGE OF GROCERY AND NONGROCERY. THAT IS WHAT THE TESTIMONY
19 SHOWS, NOT THAT THERE IS SOME DIFFERENT PAY STRUCTURE THAT IS
20 OUT THERE.
21 NOW, WAL-MART ARGUES -- THAT IS THEIR FACTUAL
22 ARGUMENT. AND THEY THEN MAKE A STATISTICAL ARGUMENT, ARGUING
23 THAT YOU HAVE TO SEPARATE THESE FACILITIES. AND IT'S THE
24 FAMOUS -- OR, ACTUALLY, NOT SO FAMOUS CHOW TEST. AND THE COURT
25 ASKED IN QUESTION NUMBER 4, ABOUT THE CHOW TEST, "ARE THESE
34
ORAL ARGUMENT BY MR. SELIGMAN
1 CLASS CERTIFICATION DECISIONS?" AND THE SHORT ANSWER IS NO.
2 IN FACT, YOUR HONOR, THE DEFENDANT, WHILE I'M SURE
3 THEY HAVE EVERY INCENTIVE TO LOOK, COULD ONLY FIND A SINGLE
4 CASE IN TITLE 7 LAW THAT CITES THE CHOW DECISION, AND THAT IS
5 THE COACH DECISION. THAT IS A POST-LIABILITY TRIAL CASE WHERE
6 THERE WAS A CERTIFIED CLASS. AND -- BUT THE COURT AT TRIAL
7 RULED AGAINST THE CLASS.
8 THE QUESTION THAT CHOW RAISED WAS WHETHER TO POOL
9 EVERY YEAR OR SEPARATELY, IT WAS AN AGGREGATION QUESTION. THE
10 COURT DECIDED TO BUY THE DEFENDANT'S ARGUMENT WHICH RAISED
11 CHOW. INTERESTINGLY, WHAT THE COURT OF APPEALS SAID WAS THERE
12 IS NO ONE TEST UNIVERSALLY FAVORED OVER THE OTHER. IN SHORT,
13 THE COURT SAID AT PAGE 542, "WE CONCLUDE THAT THE POOLING ISSUE
14 PRESENTS A CLOSE QUESTION, BUT ULTIMATELY NOT ONE THAT IS
15 CLEARLY ERRONEOUS."
16 I WENT BACK AND GOT ON MY WEST LAW, YOUR HONOR, AND
17 I ACTUALLY FOUND ONE OTHER TITLE 7 CASE THAT TALKS ABOUT THE
18 COACH DECISION. IT'S A FAMOUS CASE, VUYANICH VERSUS REPUBLIC
19 NATIONAL BANK OF DALLAS, WHICH IS 505 F. SUPP. 224. IT'S
20 FAMOUS BECAUSE IT PROBABLY IS THE LONGEST STATISTICAL OPINION
21 YOU WILL EVER READ, IT'S HUNDREDS OF PAGES LONG. IT'S A
22 PATTERN AND PRACTICE LIABILITY CASE.
23 IN THE COURSE OF ITS DISCUSSION, THE COURT NOTED
24 THAT THE DEFENDANT RAISED A CHOW TEST ARGUMENT -- THIS IS
25 POST-TRIAL -- ABOUT ARGUING -- PUTTING PROFESSIONAL AND
35
ORAL ARGUMENT BY MR. SELIGMAN
1 NONPROFESSIONAL EMPLOYEES IN THE SAME REGRESSION. THE COURT
2 REFUSED TO USE THAT AS A BASIS TO RULE ON LIABILITY AND SAID AT
3 PAGE 314, "BECAUSE THE CONTROVERSY HERE APPEARS TO CENTER ON AN
4 ISSUE ON THE FRONTIER OF ECONOMETRICS, THERE SEEMS TO BE A
5 GENUINE CONFLICT BETWEEN THE EXPERTS AS TO THE PROPER APPROACH.
6 WE DO NOT DECIDE THE ISSUE." SO THERE IS NO CHOW CLASS CERT
7 CASES. AND, IN FACT, THIS IS A RELATIVELY OBSCURE RULE THAT IS
8 OUT THERE.
9 WHAT DOES THAT MEAN? THE DEFENDANTS ASSERT THE CHOW
10 TEST UNDERMINES COMMONALITY, BUT THEY WAY OVERARGUED THE POINT.
11 IT'S UNDISPUTED THAT THE ONLY THING YOU CAN SAY WITH CERTAINTY
12 ABOUT CHOW IS THAT WHEN THEY COMPARED THEIR INDIVIDUAL STORE
13 MODELS, WHICH AREN'T REALLY INDIVIDUAL STORES, BUT WE'LL LEAVE
14 THAT ASIDE, TO A NATIONAL MODEL, THERE IS A POSITIVE CHOW TEST
15 RESULT.
16 THE ONLY THING YOU CAN SAY WITH CERTAINLY IS THAT
17 ONE OR MORE OF THE 3,600 STORES MIGHT PRESENT A DIFFERENT
18 PROFILE. IT DOESN'T TELL YOU HOW MANY STORES; IT DOESN'T TELL
19 YOU A MAJORITY; IT DOESN'T SAY THERE IS NO COMMON POLICY.
20 THE SECOND THING THAT IS IMPORTANT ABOUT THE CHOW
21 TEST IS DR. HAWORTH APPLIED THE CHOW TEST TO HER MODEL, WHICH
22 HAD 21 SEPARATE VARIABLES. HER CHOW TEST DOESN'T SAY WHICH
23 VARIABLE IT'S EVEN PRODUCING. THAT DIFFERENCE FROM THAT ONE OR
24 MORE STORE MAY BE, STRICTLY SPEAKING, AN ARTIFACT OF HER OWN
25 MODEL.
36
ORAL ARGUMENT BY MR. SELIGMAN
1 NOW, THEY'VE ARGUED, AND WE HAVE HAD SOME DISCOVERY
2 CLAIMS ABOUT THIS, THEY CLAIM THAT SHE APPLIED THE TEST TO
3 DR. DROGIN, AND WE'VE ASSERTED WE NEVER GOT THAT DISCOVERY, BUT
4 NEVERTHELESS, THE POINT IS THERE. CHOW DOES NOT DESTROY THE
5 COMMONALITY. IT MIGHT HAVE SOME RELEVANCE AT THE MERITS, BUT
6 AT MOST, IT'S AN INVITATION FOR FURTHER ANALYSIS.
7 THE COURT: SO IT'S JUST A DIFFERENT METHODOLOGY
8 THAT SHE USES IN HER DISAGGREGATION MODEL --
9 MR. SELIGMAN: WELL, SHE TRIES TO JUSTIFY BREAKING
10 WAL-MART INTO THOUSANDS OF PIECES BASED ON A CHOW TEST, WHICH
11 DOESN'T TELL YOU THERE IS THOUSANDS OF SEPARATE STRUCTURES, IT
12 TELLS YOU THERE MIGHT BE ONE OR MORE OF THOSE SEPARATE
13 STRUCTURES. SHE NEVER EXPLORED HOW MANY ACTUALLY HAVE A
14 SEPARATE STRUCTURE.
15 LET ME JUST MENTION BRIEFLY, DEFENDANT HAS SAID
16 REPEATEDLY TO THIS COURT THAT THEY'VE DONE A STORE-BY-STORE
17 ANALYSIS. THEY HAVE NOT. SHE HAS NEVER DONE A STORE-BY-STORE
18 ANALYSIS. SHE BROKE THE STORES UP INTO SEPARATE PIECES, 7,700
19 OF THEM.
20 THE COURT: SPECIALTY BY SPECIALTY.
21 MR. SELIGMAN: YES, SPECIALTY BY SPECIALTY, GROCERY
22 VERSUS NONGROCERY. AND I THINK THE ULTIMATE EVIDENCE OF WHAT
23 THEY HAVE DONE IS TO TAKE THE JEWELRY DEPARTMENT, WHICH I
24 MENTIONED, A SPECIALTY DEPARTMENT; THE JEWELRY DEPARTMENT IS
25 97 PERCENT FEMALE, AND THAT IS NOT WHERE THIS CASE IS, WHEN YOU
37
ORAL ARGUMENT BY MR. SELIGMAN
1 COMPARE JEWELRY WORKERS TO JEWELRY WORKERS.
2 DR. HAWORTH'S MODEL, BY HAVING A SEPARATE REGRESSION
3 FOR JEWELRY, AS WELL AS A SEPARATE DEPARTMENT VARIABLE, ONLY
4 COMPARES THOSE WOMEN TO THEMSELVES. IT DOESN'T COMPARE WOMEN
5 TO THE WOMEN OR MEN IN ANY OTHER DEPARTMENT.
6 NOT SURPRISINGLY, DR. HAWORTH SAYS, "WELL, WHEN I
7 LOOK AT JEWELRY, I DON'T FIND A BIG PATTERN." WELL, OF COURSE
8 NOT, THAT IS NOT WHERE THE MEN ARE. THE MEN ARE SOMEWHERE
9 ELSE.
10 I THINK IT'S ALSO INTERESTING THAT DR. HAWORTH NEVER
11 DID THE MOST COMMON STATISTICAL PRACTICE THAT SHE, HERSELF,
12 ADVISED TO DO, YOU BREAK A COMPANY DOWN TO LITTLE PIECES, YOU
13 THEN AGGREGATE IT TOGETHER TO SEE IF THERE IS AN OVERALL
14 PATTERN. SHE DIDN'T DO THAT, EVEN THOUGH SHE'S DONE IT IN
15 OTHER CASES.
16 IF YOU PUT IT ALL TOGETHER, EVEN WITH HER INCREDIBLY
17 DISAGGREGATED MODEL, WITH HER 21 DIFFERENT VARIABLES, MANY OF
18 WHICH WE THINK ARE TAINTED, THERE IS A STATISTICALLY
19 SIGNIFICANT PATTERN OF UNDERPAYMENT TO WOMEN.
20 NOW, THE DEFENDANT SAYS, "WELL, IT'S NINE CENTS AN
21 HOUR, AND THAT IS MEANINGLESS"; WELL, IT'S EASY FOR HIGHLY PAID
22 LAWYERS TO TALK ABOUT NINE CENTS AN HOUR BEING MEANINGLESS.
23 THIS IS THE DEFENDANTS' CASE, AND A JURY IS THE ONE THAT WILL
24 DECIDE WHAT IS MEANINGLESS AND WHAT IS NOT. EVEN THEIR MODEL,
25 AS SKEWED AS IT IS, SHOWS THAT.
38
ORAL ARGUMENT BY MR. SELIGMAN
1 LET ME TURN TO THE OTHER ISSUE, WHICH IS THE
2 PROMOTION CLAIMS IN THIS CASE, BECAUSE I THINK THERE ARE SOME
3 DIFFERENCES HERE IN TERMS OF THE ANALYSIS.
4 FOR PROMOTION, UNLIKE PAY, WAL-MART DOES NOT CLAIM
5 THERE IS DIFFERENT SEPARATE PROMOTION POLICIES STORE BY STORE.
6 THERE IS NO ASSERTION OF THAT IN THIS CASE. THEIR WHOLE
7 DEFENSE ON PROMOTION IS ONE WHICH I THINK VIRTUALLY CONCEDES
8 THERE IS A COMMON POLICY. WE KNOW THERE IS A COMMON POLICY AT
9 WAL-MART BECAUSE THIS IS A WRITTEN COMMON POLICY.
10 IF YOU LOOK AT EXHIBIT 98, WHICH IS THE NATIONWIDE
11 MANAGEMENT PROMOTION POLICY, GOES OUT TO EVERY STORE, EVERY
12 DISTRICT MANAGER, AND IT SAYS, "THE FOLLOWING OUTLINES THE
13 MANAGING SELECTION PROCESS FOR PROMOTION. THE CRITERIA HAS
14 BEEN SET TO HELP CLEARLY STATE THE EXPECTATION THAT MUST BE
15 FILLED IN ORDER TO BE PROMOTED."
16 ALL THE WAY UP THE LINE THAT POLICY IS WRITTEN DOWN.
17 IT SETS WHAT WAL-MART CLAIMS IS THE MINIMUM CRITERIA. THERE IS
18 ALSO A NATIONAL POLICY ABOUT WHO DECIDES AT EACH LEVEL. THERE
19 IS NO QUESTION ABOUT THAT, EITHER.
20 OUR CLAIM IS THIS NATIONAL POLICY, BEYOND SETTING A
21 MINIMUM, DOES NOT GIVE ANY INSTRUCTION TO LARGELY SENIOR
22 MANAGEMENT ABOUT WHO GETS PROMOTED.
23 THE COURT: SO HOW DOES THAT COMPARE TO WHAT THE
24 COURT HAD IN DONALDSON?
25 MR. SELIGMAN: WELL, IN DONALDSON, WHICH I THINK IS
39
ORAL ARGUMENT BY MR. SELIGMAN
1 AN INTERESTING CASE ALL ON ITS OWN, IF I CAN FIND MY NOTES --
2 DONALDSON, WHICH IS MICROSOFT, THAT IS A CASE WHICH
3 IS WILDLY MORE COMPLICATED THAN THIS ONE.
4 THE COURT: YOU KEEP TELLING ME THAT THIS CASE ISN'T
5 COMPLICATED, AND ALL I'VE BEEN DOING FOR THE LAST MONTH IS
6 READING.
7 MR. SELIGMAN: WELL, NO, I DIDN'T SAY THERE WAS NO
8 INFORMATION, THERE IS A LOT OF INFORMATION. BUT WHAT WE'RE
9 DOING IS SOMETHING RELATIVELY SIMPLE.
10 IN DONALDSON, THE COURT LOOKED AT A REPORT THAT HAD
11 VIRTUALLY NO STATISTICAL ANALYSIS AT ALL. THERE WAS NO SHOWING
12 OF ANY COMMON POLICY. IN FACT, PLAINTIFF'S EXPERT, IF HE
13 INCLUDED ALL THE DATA, WOULD HAVE SHOWN NO STATISTICAL
14 SIGNIFICANCE ACROSS THE BOARD. THERE WAS NO EVIDENCE
15 WHATSOEVER SWORE THAT THE COURT HAD IN FRONT OF ITSELF.
16 THE OTHER THING IN THAT CASE IS I THINK THAT CASE
17 DID NOT FOLLOW OTHER CASES THAT HAVE HELD THAT SUBJECTIVE
18 CRITERIA COULD BE A GLUE. THE COURT WAS CLEARLY MOTIVATED BY
19 THE FACT THERE WAS NO STATISTICAL CASE. I'M GOING TO TURN TO
20 THE STATISTICAL CASE IN ONE SECOND.
21 SO YOU HAVE A SUBJECTIVE PROCESS; AN EQUALLY
22 IMPORTANT FACTOR IN THIS CASE IS THIS SUBJECTIVE PROCESS IS ONE
23 THAT FOR VIRTUALLY ALL JOB POSITIONS THERE HAS NEVER BEEN AN
24 APPLICATION PROCESS OF ANY SIGNIFICANCE. I THINK THE KEY JOB
25 IN THIS CASE IS THE MANAGEMENT TRAINEE JOB. IT IS UNDISPUTED
40
ORAL ARGUMENT BY MR. SELIGMAN
1 IN THIS CASE THAT UNTIL JANUARY 15, 2003, THERE WAS NEVER AN
2 APPLICATION PROCESS. IT WAS THE CLASSIC PAT ON THE SHOULDER,
3 REACH OUT AND TOUCH SOMEBODY PROMOTION SYSTEM.
4 NOW, A YEAR AFTER THIS LAWSUIT WAS FILED, A YEAR
5 AFTER, SOMEBODY AT WAL-MART BEGAN TO REALIZE THERE WAS A
6 PROBLEM. AND, IN FACT, THE SENIOR VICE-PRESIDENT, WHO IS
7 SITTING HERE AT THE TABLE TODAY, CHARLYN JARELLS PORTER, SENT
8 AN E-MAIL, WHICH IS EXHIBIT 100, AN E-MAIL THAT WAS SENT TO THE
9 PEOPLE MANAGERS AT WAL-MART. THAT E-MAIL SAID, "AS OF
10 JUNE 27TH, 2002, I NEED TO GET SOMEONE WORKING IMMEDIATELY ON A
11 PROJECT OF HOW DOES AN HOURLY ASSOCIATE KNOW HOW TO GET
12 PROMOTED TO A MANAGER TRAINING PROGRAM. WE DO NOT HAVE A
13 POSTER, BROCHURE, NOTHING THAT I'M AWARE OF. WE DO NOT
14 EVEN" --
15 (LAUGHTER.)
16 THE COURT: LET ME JUST -- HANG ON FOR A SECOND.
17 IT'S REALLY INAPPROPRIATE TO REACT IN THAT FASHION
18 TO A PROCEEDING THAT IS AS SERIOUS AS THIS ONE. AND I DON'T
19 WANT YOU TO TAKE AT TIMES SOME OF THE REFERENCES THAT I MAKE AS
20 HUMOROUS TO DETRACT FROM THE SERIOUSNESS OF THE PROCEEDING.
21 OKAY.
22 MR. SELIGMAN: I APOLOGIZE, YOUR HONOR.
23 THEY KNEW THEY HAD NO POLICY. WE ALSO KNOW THE DATA
24 IN THIS CASE IS QUITE CLEAR AND UNDISPUTED. 80 PERCENT OF THE
25 SUPPORT MANAGER JOBS WERE NOT POSTED. ZERO PERCENT OF THE JOBS
41
ORAL ARGUMENT BY MR. SELIGMAN
1 PRIOR TO 2003 WERE NEVER POSTED. WE KNOW FROM DR. HAWORTH'S
2 TESTIMONY THAT VIRTUALLY NONE OF THE ASSISTANT MANAGER AND
3 CO-MANAGER JOBS WERE EVER POSTED. SO YOU HAVE A SYSTEM WHICH
4 IS SUBJECTIVE, AND NO PROCESS, OR MEANINGFUL APPLICATION
5 PROCESS IS OUT THERE, WHICH LEADS TO THE OTHER PROBLEM WITH THE
6 PROCESS.
7 WE HAVE MADE THE ARGUMENT IN THIS CASE THAT
8 RELOCATION FOR MANAGEMENT HAS BEEN APPLIED IN A WAY THAT HAS AN
9 ADVERSE IMPACT FOR WOMEN. THIS IS NOT A NEW PROBLEM, YOUR
10 HONOR. WE PUT IN THE RECORD AS EXHIBIT 87 AN EXCERPT FROM
11 SAM WALTON'S BOOK, WHICH IS REQUIRED READING FOR EVERY TRAINEE
12 AT WAL-MART, THIS IS PART OF THE CULTURE AT WAL-MART.
13 BACK IN 1993, MR. WALTON WROTE ON PAGE 217,
14 "TRADITIONALLY, WE'VE HAD THIS ATTITUDE THAT IF YOU WANT TO BE
15 A MANAGER AT WAL-MART, YOU BASICALLY HAD TO BE WILLING TO MOVE
16 ON A MOMENT'S NOTICE." AND THEN HE TALKS ABOUT AN EXAMPLE OF
17 THAT. "MAYBE THAT WAS NECESSARY BACK IN THE OLD DAYS, MAYBE IT
18 WAS MORE RIGID THAN IT NEEDED TO BE, NOW IT'S NOT REALLY
19 APPROPRIATE ANYMORE. AND WHY?" AND HE GIVES A SPECIFIC
20 EXAMPLE ABOUT THE IMPACT ON WOMEN.
21 "THE OLD WAYS REALLY PUT GOOD SMART WOMEN AT A
22 DISADVANTAGE IN OUR COMPANY, BECAUSE AT THE TIME THEY WEREN'T
23 AS FREE TO PICK UP AND MOVE AS MANY MEN WERE. NOW I'VE SEEN
24 THE LIGHT ON THE OPPORTUNITIES WE MISSED WITH THOSE WOMEN."
25 WELL, THAT WAS SAM WALTON IN 1993. I'M GOING TO
42
ORAL ARGUMENT BY MR. SELIGMAN
1 RETURN THE COURT TO THE COMPANY NATIONAL POLICY. AND IF YOU
2 NOTE, YOUR HONOR, FOR EACH LEVEL, WILLINGNESS TO RELOCATE IS AN
3 EXPLICIT CRITERIA. BUT YOU DON'T HAVE TO TAKE WAL-MART'S
4 WRITTEN TESTIMONY ON THIS, THEIR CEO TESTIFIED THIS YEAR IN HIS
5 DEPOSITION ATTACHED TO EXHIBIT 15 THAT RELOCATING A RESIDENCE
6 HAS BEEN A REQUIREMENT FOR AT LEAST THE LAST TEN YEARS, AND IT
7 CONTINUES TO BE A REQUIREMENT.
8 NOW, IF THERE IS ANY DOUBT IN THE RECORD ABOUT
9 WHETHER THAT HAS AN ADVERSE IMPACT ON WOMEN, WAL-MART'S OWN
10 EXPERT, DR. HAWORTH, DEMONSTRATED HOW IT HAS AN ADVERSE IMPACT.
11 SHE LOOKED AT THE APPLICATION DATA FOR STORE MANAGERS, WHICH WE
12 THINK IS FLAWED, BECAUSE YOU HAVE TO GET PERMISSION TO APPLY,
13 BUT NEVERTHELESS, SHE LOOKED AT IT AND COMPARED THOSE WOMEN AND
14 MEN WHO SOUGHT A JOB OUTSIDE OF THEIR OWN REGION, AND SHE
15 CONCLUDED IN HER DECLARATION AT PAGE 62 THE DIFFERENCE IN
16 REGION MOBILITY RATES BETWEEN WOMEN AND MEN IS STATISTICALLY
17 DIFFERENT. MEN SHOW A GREATER WILLINGNESS AND INTEREST IN
18 RELOCATION.
19 ESSENTIALLY, WHAT THAT EVIDENCE SHOWS, YOUR HONOR,
20 IS THE UNDISPUTED RECORD TODAY SHOWS THE EXISTENCE OF A
21 NATIONAL POLICY, DESPITE ITS KNOWN DETERRENT IMPACT, AND
22 EVIDENCE DEMONSTRATING THAT DETERRENT IMPACT.
23 FOR MOST OF THE PROMOTION ISSUES IN THIS CASE,
24 WAL-MART RAISES A SINGLE ARGUMENT, WHICH IS A MERITS ARGUMENT,
25 AND ONE THAT I DON'T THINK IS SUPPORTED BY THE RECORD. THEY
43
ORAL ARGUMENT BY MR. SELIGMAN
1 ASSERT WE'RE LOOKING AT THE WRONG BASE, YOU SHOULD LOOK AT
2 APPLICANT FLOW, THAT'S WHAT YOU SHOULD LOOK AT. AND THE CHOICE
3 OF THAT PROXY, OR THAT MODEL, IS THE CLASSIC MERITS QUESTION,
4 WHICH IS ONLY SOMETHING THE COURT SHOULD CONSIDER IF, AS A
5 MATTER OF LAW, THE COURT CAN SAY, "THAT'S THE ONLY WAY TO GO."
6 WHAT IS THE EVIDENCE? FOR MOST OF THE CLASS PERIOD,
7 IN FACT, FOR THE ENTIRE CLASS PERIOD UNTIL THE CLOSE OF
8 DISCOVERY, THERE WAS NOT APPLICANT FLOW FOR THE POSITIONS THAT
9 WE ARE ADDRESSING HERE. NOW, IT'S TRUE THERE IS A LOT OF
10 APPLICANT FLOW AT LOWER-LEVEL JOBS; WE'RE NOT CONTENDING AT
11 THOSE LOWER-LEVEL JOBS THAT WOMEN --
12 THE COURT: IS THERE APPLICANT FLOW DATA FOR THE
13 STORE MANAGER POSITION?
14 MR. SELIGMAN: YES, THERE IS. AND IN STORE MANAGER,
15 THERE IS SOME APPLICANT FLOW DATA, AND I THINK IT'S IMPORTANT
16 TO DISTINGUISH WHAT IT IS.
17 THERE IS NO APPLICANT FLOW DATA FOR SAM'S CLUB. FOR
18 REGULAR WAL-MART STORE MANAGER, THERE IS APPLICANT FLOW DATA
19 FOR A SIGNIFICANT PERCENTAGE; HOWEVER, IT'S NOT TRUE APPLICANT
20 FLOW DATA. UNLIKE A NORMAL SYSTEM, WHERE YOU SEE A POSTING AND
21 YOU CAN APPLY, THEY HAVE A GATEKEEPER. WOMEN ARE NOT ALLOWED
22 TO APPLY FOR A SPECIFIC STORE MANAGER JOB WITHOUT THE
23 PERMISSION OF THEIR DISTRICT MANAGER. SO IT'S NOT A TRUE
24 APPLICANT FLOW SYSTEM AT ALL.
25 THE COURT: WELL, IT MAY BE UNDERINCLUSIVE, IT
44
ORAL ARGUMENT BY MR. SELIGMAN
1 SOUNDS LIKE.
2 MR. SELIGMAN: WELL, I THINK IT'S WAY
3 UNDERINCLUSIVE, YOUR HONOR, IF THE SYSTEM SETS UP A BARRIER AND
4 THE SYSTEM IS ADMINISTERED BY MEN WITH NO OBJECTIVE CRITERIA,
5 AND THE RESULT IS THAT WOMEN GET NOT ONLY FEWER PROMOTIONS, BUT
6 THEY GET PROMOTIONS TO SMALLER STORES. I THINK THAT RAISES A
7 CLASSIC QUESTION.
8 AGAIN, WHAT POOL IS -- WHETHER YOU SHOULD LOOK AT
9 APPLICANT FLOW OR NOT, THAT IS ULTIMATELY A MERIT QUESTION.
10 THE ONLY JOB THAT DOESN'T HAVE A GATEKEEPER SYSTEM THAT
11 WAL-MART CITES IS THE SUPPORT MANAGER, WHICH THEY SAY IS A
12 POSTING SYSTEM.
13 I THINK IT'S VERY IMPORTANT TO NOTE THAT DESPITE THE
14 FACT THAT IT IS A, QUOTE, "POSTED JOB," WAL-MART BASICALLY
15 DOESN'T USE IT. IT IS UNDISPUTED ON THE RECORD THAT 80 PERCENT
16 OF THE SUPPORT MANAGERS WHO ARE HIRED ARE PROMOTED IN THAT
17 POSITION DID NOT GO THROUGH A JOB POSTING SYSTEM.
18 NOW HOW SIGNIFICANT IS THAT? TWENTY YEARS AGO,
19 TWENTY-FIVE YEARS AGO, THE FIFTH CIRCUIT, IN A CASE CALLED
20 JAMES VERSUS STOCKHAM VALVES, WHICH WE CITED IN OUR PAPERS,
21 LOOKED AT A CASE WHERE THE MAJORITY, NOT 80 PERCENT, BUT THE
22 MAJORITY OF ASSIGNMENTS TO A PARTICULAR POSITION WERE MADE
23 WITHOUT THE REQUIREMENT OF AN APPLICATION, AND THE COURT SAID,
24 "THE STATISTICS TO SHOW THAT A COMPARABLE NUMBER OF TIMELY
25 APPLICATIONS TO THE APPRENTICESHIP PROGRAM WERE GRANTED FOR
45
ORAL ARGUMENT BY MR. SELIGMAN
1 BLACK AND WHITE EMPLOYEES IS LARGELY IRRELEVANT." WHY?
2 BECAUSE THAT WAS THE EXCEPTION, THAT'S NOT THE NORMAL PROCESS
3 THAT IS THERE.
4 THE COURT ASKED THE DEFENDANT IN QUESTION 3, "THE
5 COURT NOTED THAT MOST OF THE JOB POSTINGS WERE AT LOWER LEVELS
6 THAT ARE NOT AT ISSUE. SHOULD WE USE THESE JOBS TO EXTRAPOLATE
7 AVAILABILITY FOR HIGHER-LEVEL JOBS? AND IF SO, CAN YOU
8 ESTIMATE THE NUMBER OF HIGHER-LEVEL JOBS THAT WERE ACTUALLY
9 POSTED?"
10 WELL, FIRST OF ALL, YOUR HONOR, IF YOU USED THE
11 BIDDING OF WOMEN AT LOWER-LEVEL JOBS TO EXTRAPOLATE INTEREST,
12 THAT SHOWS THAT WAL-MART IS WAY OUT OF SYNC, BECAUSE THE DATA,
13 ACCORDING TO DR. HAWORTH, IS THAT WOMEN BID PRETTY CLOSE TO
14 THEIR AVAILABILITY IN THE LOWER LEVELS. IF YOU LOOK AT HER
15 DECLARATION AT PAGE 41, SHE HAS A CHART IN WHICH SHE ADDED UP
16 ALL THE LOWER-LEVEL BIDDING AND LOOKED AT THE PERCENTAGE BID
17 RATE OF WOMEN, AND THAT SHOWED THAT WOMEN WERE 68 PERCENT OF
18 ALL THE BIDS.
19 NOW, COMPARE THAT TO ONE-THIRD IN MANAGER, COMPARE
20 THAT TO THE FALL-OFF, COMPARE THAT TO EVEN DR. DROGIN'S MODEL;
21 DR. DROGIN USED A POOL OF 60 PERCENT. SO IF YOU WERE TO LOOK
22 AT THAT DATA, IT CERTAINLY DOES NOT UNDERCUT OUR CASE, IT
23 OVERWHELMS THE CASE THAT IS THERE.
24 DR. HAWORTH CONCEDED IN HER DEPOSITION THAT SHE DOES
25 NOT KNOW WHAT PERCENTAGE OF THE HOURLY MANAGEMENT JOBS WERE
46
ORAL ARGUMENT BY MR. SELIGMAN
1 FILLED OUTSIDE OF THE POSTING. AND SHE DID NOT DISPUTE THE
2 80 PERCENT FOR SUPPORT MANAGER.
3 NOW, THE COURT ASKED WHAT DOES SHE KNOW ABOUT THE OTHER JOBS,
4 AND WE KNOW WHAT SHE KNOWS, BECAUSE AT HER REPORT ON PAGE 66,
5 SHOWS EXACTLY HOW MANY PEOPLE APPLIED FOR ASSISTANT MANAGER AND
6 CO-MANAGER.
7 FOR ASSISTANT MANAGER, THE DATA SHOWS EXACTLY 135
8 APPLICATIONS. HOW MANY OPENINGS WERE FILLED, THOUGH? 32,585.
9 NOW, I DON'T CARE WHAT KIND OF STATISTICAL ANALYSIS YOU WANT,
10 YOU CAN'T DERIVE ANYTHING FROM THAT 135 FIGURE.
11 CO-MANAGER: 151 APPLICATIONS IN THEIR SYSTEM FOR
12 5,884 POSITIONS. THAT IS DR. HAWORTH'S DATA. WE DON'T DISPUTE
13 THOSE NUMBERS. THOSE NUMBERS SHOW THERE WAS NO MEANINGFUL
14 APPLICATION PROCESS THAT IS THERE.
15 THE COURT ASKED THE QUESTION ABOUT IN QUESTION 1
16 ABOUT DR. DROGIN'S ANALYSIS, SAYING THERE IS NO STATISTICAL
17 SIGNIFICANCE IN A FEW REGIONS, AND WHETHER THAT SHOULD AFFECT
18 THE CLASS --
19 THE COURT: I'M INTERESTED, TOO, IF THERE IS ANY
20 CASE CITATION, ANYTHING THAT WOULD REFLECT HOW THE COURT IS TO
21 RESOLVE THE QUESTION IF THERE IS NOT EVIDENCE OF STATISTICAL
22 DISPARITY ACROSS ALL REGIONS, HOW THAT -- HOW THE COURT
23 RESOLVES THAT IN THE CALCULUS OF THE CERTIFICATION MOTION
24 BEFORE IT.
25 MR. SELIGMAN: OKAY, I THINK THAT'S A LEGITIMATE
47
ORAL ARGUMENT BY MR. SELIGMAN
1 QUESTION. YOU WILL NOT FIND A CASE THAT SAYS THE ABSENCE OF A
2 COUPLE OF REGIONS UNDERCUTS CLASS CERT. WHAT YOU WILL FIND IS
3 WHERE THE MAJORITY OF REGIONS THERE IS NO STATISTICAL
4 SIGNIFICANCE. THAT'S NOT THE CASE WE HAVE HERE.
5 THE REASON FOR THAT IS THE ULTIMATE LIABILITY
6 QUESTION, YOUR HONOR, IS NOT GOING TO TURN ON DR. DROGIN ALONE,
7 IT TURNS ON THE CUMULATIVE EVIDENCE. AND THAT EVIDENCE IS
8 DR. DROGIN'S EVIDENCE. AND IT'S ALSO DR. BENDICK'S EVIDENCE.
9 AND DR. BENDICK, BY THE WAY, FOUND A PATTERN IN 49 OR 50 STATES
10 AND FOUND IN URBAN AND RURAL AREAS A CONSISTENT PATTERN ACROSS
11 THE COUNTRY.
12 THE COURT: SO THE RULE IS IF YOU HAVE DIFFERENT
13 FACILITIES, IF YOU FIND MORE THAN 50 PERCENT, YOU CERTIFY THE
14 CLASS WITH RESPECT TO ALL THE REGIONS?
15 MR. SELIGMAN: NO, THAT'S NOT WHAT I THINK THE RULE
16 IS, YOUR HONOR. THE RULE IS WHETHER A COMMON QUESTION HAS BEEN
17 PRESENTED. AND WE HAVE SHOWN THE COURT A COMMON POLICY THAT
18 CUTS ACROSS EVERY SINGLE FACILITY. WE HAVE A COMBINATION OF
19 STATISTICAL AND ANECDOTAL EVIDENCE THAT CUTS ACROSS VIRTUALLY
20 ALL --
21 THE COURT: YOU ARE MAKING, THOUGH, SOME ASSUMPTIONS
22 ABOUT REGIONS THAT ARE NOT -- WHERE THERE HAS NOT BEEN
23 REFLECTED ANY STATISTICAL EVIDENCE THAT WOULD INDICATE THAT
24 THERE WAS DISCRIMINATION ONGOING.
25 MR. SELIGMAN: AND LET ME ADDRESS THIS, YOUR HONOR.
48
ORAL ARGUMENT BY MR. SELIGMAN
1 YOU POINTED OUT IN DR. DROGIN'S DECLARATION, WHICH
2 IS ON PAGE 37, HIS CHART WHICH SHOWS THE REGIONAL AMOUNTS, AND
3 YOU POINTED TO THE SUPPORT MANAGER THAT SHOWED THAT THERE
4 WAS -- WOMEN WHO WERE FAVORED IN PROMOTIONS IN TWO REGIONS.
5 AND THAT CAUSED US TO GO BACK AND LOOK AND FIND OUT WHAT THOSE
6 NUMBERS REALLY WERE.
7 I'LL REPRESENT TO THE COURT, AND I WOULD BE HAPPY TO
8 OFFER A DECLARATION, THOSE TWO REGIONS ACTUALLY WERE TWO SAM'S
9 REGIONS, WHERE THERE WERE A TOTAL OF TWO JOBS FOR SUPPORT
10 MANAGER. IT'S NOT USUALLY USED AT SAM'S. THOSE NUMBERS IN NO
11 WAY SHOW THERE'S A DIFFERENCE. MANAGEMENT TRAINEE, YOU HAVE
12 CONSISTENT PRACTICE ACROSS THE BOARD.
13 FURTHER UP THE LINE THERE ARE A FEW EXCEPTIONS, AND
14 I THINK THE COURT NEEDS TO PUT THAT IN SOME REFERENCE HERE.
15 FIRST OF ALL, FOR THE FURTHER UP LINE, EVEN THOUGH
16 THERE MAY BE A COUPLE OF EXCEPTIONS, MOST STORE MANAGERS CROSS
17 REGIONS. YOU CAN'T SEPARATE OUT -- THE DATA IN THE CASE SHOWS
18 THAT A THIRD OF THE POSITIONS FILLED FOR STORE MANAGER ARE
19 CROSS-REGION FILLS. AND WE KNOW THAT THE MAJORITY OF STORE
20 MANAGERS GO PAST REGIONS. THERE IS NO CLEAR WAY TO SEPARATE
21 THAT OUT. AND THAT IS WHAT DR. DROGIN FOUND ON PAGE 23 OF HIS
22 REPORT.
23 THERE IS ANOTHER IMPORTANT POINT, AND THAT IS WHEN
24 YOU GET TO CO-MANAGER AND STORE MANAGER, A LOT OF WOMEN ARE
25 ALREADY CUT OUT ON THE DEAL. THEY ARE FURTHER UP ON THE
49
ORAL ARGUMENT BY MR. SELIGMAN
1 PIPELINE. THIS IS EXACTLY THE SITUATION THAT JUDGE PATEL FACED
2 IN THE STANDARD VERSUS LUCKY STORES CASE. WE HAD NO
3 STATISTICAL SIGNIFICANCE, ZERO FOR STORE MANAGER AND FOR
4 ASSISTANT MANAGER, BECAUSE BY THE TIME YOU GOT UP THERE, THERE
5 WERE NOT ENOUGH WOMEN IN THE POOL.
6 WHAT JUDGE PATEL SAID IS THAT LIABILITY COULD STILL
7 BE FOUND FOR THE UPPER LEVELS, FOR THE UPPER LEVELS BECAUSE IT
8 WAS A RESULT OF WOMEN BEING BLOCKED AT THE LOWER RUNGS OF THE
9 PROMOTIONAL LADDER. SHE SAID YOU LOOK AT THE CUMULATIVE
10 EVIDENCE. AND SHE CONCLUDED THAT THERE WAS DISCRIMINATION IN
11 THE PROMOTIONAL PROCESS, AS A WHOLE.
12 YOUR HONOR, I WANT TO MAKE SURE I DON'T MISS ANY OF
13 THE QUESTIONS THAT ARE THERE, SO I WANT TO TURN TO THE
14 TYPICALITY AND ADEQUACY, UNLESS THE COURT HAS OTHER QUESTIONS
15 ON COMMONALITY AT THIS STAGE.
16 RULE 23 REQUIRES THE NAMED PLAINTIFF TO HAVE CLAIMS
17 THAT ARE TYPICAL OF THOSE IN THE CLASS. IN THIS CIRCUIT, WHAT
18 THAT REQUIRES IS THAT THE NAMED PLAINTIFF'S CLAIMS BE
19 REASONABLY COEXTENSIVE WITH CLASS MEMBERS. IT DOES NOT REQUIRE
20 THAT THEY BE IDENTICAL. FACTUAL VARIATIONS ARE NOT THE
21 CRITICAL QUESTION. THE CRITICAL QUESTION IS WHETHER THE CLAIMS
22 ASSERTED AND THE RELIEF SOUGHT ARE COMMON TO THE CLASS. HERE
23 EVERY CLASS MEMBER FROM THE BOTTOM TO THE TOP MAKES THE SAME
24 CLAIM THAT THE PLAINTIFFS MAKE, THAT YOU HAD A SUBJECTIVE
25 CLOSED PROCESS.
50
ORAL ARGUMENT BY MR. SELIGMAN
1 NOW, THE COURT ASKED IN QUESTION NUMBER 2, WHY DO WE
2 NOT HAVE A CLASS REPRESENTATIVE WHO HAS HELD A HIGH-LEVEL
3 POSITION IN THE STORE? I FIRST WANT TO MAKE AN IMPORTANT
4 POINT, YOUR HONOR, WHICH IS WHAT WE'RE TALKING ABOUT HERE. WE
5 ARE NOT TALKING ABOUT HIGH-LEVEL POSITIONS, ALTHOUGH WAL-MART
6 WANTS TO CLAIM THE STORE MANAGERS HAVE VIRTUAL FIEFDOMS, THESE
7 ARE NOT POLICY-MAKING POSITIONS. THEY DON'T HAVE ANY AUTHORITY
8 AT ALL TO MAKE SALARIED MANAGEMENT DECISIONS.
9 IN FACT, THE EVIDENCE IN THIS CASE IS THAT AT THE
10 SALARIED LEVEL, THOSE DECISIONS ARE MADE AT BENTONVILLE. THE
11 PROMOTION INTO MANAGEMENT AND THEIR PAY LEVELS, THESE ARE
12 PEOPLE THAT ARE CONSTANTLY MONITORED EVERY STAGE OF THE WAY.
13 SO WE TAKE ISSUE, I THINK, WITH THE SUGGESTION THAT STORE
14 MANAGERS ARE AT SOME HIGHLY ELEVATED LEVEL.
15 NEVERTHELESS, THE SHORT ANSWER TO THE COURT'S
16 QUESTION OF WHY DON'T WE HAVE A STORE MANAGER IS UNDER THE
17 PERMISSIVE TYPICALITY RULES, PARTICULARLY APPROVED BY HANLON
18 AND BY THE STATON CASES. YOU DON'T NEED TO HAVE SOMEBODY AT
19 EVERY LEVEL. IF YOU DO STORE MANAGER, WHICH HAS 3,600
20 POSITIONS, WHY NOT CO-MANAGER? WHY NOT A SMALLER AND SMALLER
21 POSITION, CHOPPING IT SMALLER AND SMALLER?
22 WHAT WE DO HAVE IS WE HAVE HOURLY AND SALARIED
23 PLAINTIFFS IN THIS CASE. PLAINTIFF KWAPNOSKI HAS HELD THREE
24 SEPARATE MANAGEMENT POSITIONS. SHE'S BEEN A MANAGEMENT
25 TRAINEE, AN AREA MANAGER AND ASSISTANT MANAGER. SHE HAS RAISED
51
ORAL ARGUMENT BY MR. SELIGMAN
1 CLAIMS THAT ARE TYPICAL OF THOSE THAT ARE THE CLASS.
2 THE COURT ALSO ASKS THE QUESTION OF, IN TERMS OF
3 ACTUAL JOB FUNCTIONS AND RESPONSIBILITIES, HOW SIMILAR OR
4 DISTINCT ARE THE MANAGEMENT POSITIONS THAT MS. KWAPNOSKI HAS
5 HELD TO THE HIGHER IN-STORE MANAGEMENT POSITIONS? I THINK THE
6 SHORT ANSWER IS, IT'S A QUESTION OF SCOPE. SHE HAS BEEN AN
7 HOURLY SUPERVISOR, AN ENTRY-LEVELED SALARIED EMPLOYEE, A
8 MANAGEMENT TRAINEE, AND AN ASSISTANT MANAGER. AND THERE'S NO
9 QUESTION THAT EACH JOB HAS MORE RESPONSIBILITY. IN FACT,
10 WAL-MART HAS A VERY CLEAR PROMOTIONAL PROGRESSION.
11 (REFERRING TO CHART.)
12 MR. SELIGMAN: THIS IS THEIR PROMOTIONAL
13 PROGRESSION. THIS IS WHAT THEY TELL EMPLOYEES NOW. AND THIS
14 IS EXHIBIT 103.
15 YOU GO FROM SUPPORT MANAGER TO MANAGEMENT TRAINEE,
16 ASSISTANT MANAGER, CO-MANAGER, STORE MANAGER. IT'S THE SAME
17 PROGRESSION THAT YOU MOVE UP THE LINE. AND AS YOU GO UP THAT
18 LINE, THERE IS INCREASING RESPONSIBILITY. IT'S ALSO CLEAR IN
19 THE RECORD THAT IN THE ABSENCE OF THE STORE MANAGER, THE
20 CO-MANAGER ACTS. IN THE ABSENCE OF THE CO-MANAGER, THE
21 ASSISTANT MANAGER ACTS. AND IN THE ABSENCE OF THE ASSISTANT
22 MANAGER, THE SUPPORT MANAGER ACTS. SO IT'S A QUESTION OF
23 DEGREE, GOING UP THE LINE.
24 THERE IS NO QUESTION THAT A STORE MANAGER HAS MORE
25 AUTHORITY THAN LOWER-LEVEL EMPLOYEES. BUT I TURN YOUR HONOR TO
52
ORAL ARGUMENT BY MR. SELIGMAN
1 DEFENDANT'S OWN CASE, WAGNER VERSUS TAYLOR WHERE THE QUESTION
2 IS NOT WHERE YOU ARE ON THAT PYRAMID. IN THAT CASE THEY DID
3 THE OPPOSITE OF WHAT WE DID. IN THAT CASE THEY HAD ONLY ONE
4 REP AT THE VERY TOP OF THAT PYRAMID.
5 THE ISSUE WAS NOT, AS THE COURT SAID, WHETHER HIS
6 DUTIES WERE DIFFERENT THAN LOWER-LEVEL PEOPLE, THE QUESTION IS
7 WHETHER HIS CLAIMS WERE TYPICAL. AND CHRIS KWAPNOSKI'S CLAIMS
8 ARE TYPICAL OF THE CLASS OF SALARIED AS WELL AS OF HOURLY
9 EMPLOYEES.
10 THAT BRINGS ME TO WAL-MART'S LAST MAJOR ARGUMENT,
11 AND I THINK ONE THE COURT HAD SOME CONCERNS ABOUT, WHICH IS
12 THEY CLAIM THAT THERE IS A CONFLICT OF INTEREST BETWEEN ITS
13 FEMALE STORE MANAGERS AND THE PLAINTIFFS. I THINK IT'S
14 IMPORTANT TO GO BACK TO RULE 23.
15 RULE 23 ASKS THE QUESTION OF WHETHER THE CLASS
16 REPRESENTATIVE IS AN ADEQUATE REPRESENTATIVE OF THE CLASS. IT
17 DOESN'T ASK THE QUESTION OF WHETHER CLASS MEMBERS ARE AN
18 ADEQUATE REPRESENTATIVE, IT REQUIRES A CLASS REPRESENTATIVE
19 WITH COMMON INTEREST WITH THE CLASS.
20 NOW, THERE IS NO EVIDENCE IN THIS CASE THAT THE
21 CLASS REPRESENTATIVES IN THIS CASE HAVE ANY CONFLICT WITH
22 ANYBODY. WAL-MART'S ARGUMENT IS THAT SOME OF THE CLASS MEMBERS
23 MAY BE ITS FEMALE MANAGERS, AND THOSE FEMALE MANAGERS MAY HAVE
24 A CONFLICT. NOW, I'M NOT SAYING THE COURT SHOULDN'T CONSIDER
25 THAT, BUT I THINK IT'S IMPORTANT TO LOOK AT WHAT THE RULE 23
53
ORAL ARGUMENT BY MR. SELIGMAN
1 QUESTION ULTIMATELY IS.
2 SO THE DEFENDANT MAKES THAT ARGUMENT. NOW, WE KNOW
3 FROM THE STATON CASE THERE IS NOT A PER-SE RULE THAT SAYS THERE
4 IS AN AUTOMATIC CONFLICT, YOU HAVE THE LOOK AT THE FACTS.
5 AGAIN, WE TURN TO WAGNER VERSUS TAYLOR. THE STATON COURT
6 LOOKED AT THAT AND MADE THE POINT THAT IN THAT CASE YOU HAVE
7 ONLY ONE CLASS REPRESENTATIVE, AND IT WAS ONLY A SENIOR
8 MANAGER.
9 THAT PRESENTED -- NOT ONLY DID THAT NOT ESTABLISH
10 THE CONFLICT ALONE, IN ADDITION, THERE WAS SOME PROBLEMS ABOUT
11 THAT PERSON ACTING IN PRO PER AND THE CASE LAW SAYING PRO PERS
12 CAN'T BE --
13 THE COURT: SO DONALDSON IS CONSISTENT WITH THE RULE
14 THAT IS SET FORTH IN THE NINTH CIRCUIT WITH RESPECT TO THE
15 ADEQUACY ISSUE. HOW DO YOU READ DONALDSON IN TERMS OF THE
16 DEFENDANT'S ASSERTION HERE THAT THERE IS A CONFLICT THAT SHOULD
17 DEFEAT CERTIFICATION?
18 MR. SELIGMAN: I THINK DONALDSON IS NOT THE LAW OF
19 THE NINTH CIRCUIT, VERY SIMPLE. DONALDSON APPLIES A PER SE
20 RULE. THERE IS NO PER SAY RULE THAT SAYS YOU CAN NEVER HAVE A
21 MANAGER IN THE CLASS. IF YOU BOUGHT THAT RULE, YOUR HONOR --
22 OKAY, LET'S GET RID OF THE CONFIDENT.
23 LET'S SAY THIS CASE WAS SOLELY A STORE MANAGER CASE,
24 AND I HAD A STORE MANAGER SUING WAL-MART; UNDER WAL-MART'S
25 THEORY, THERE WOULD BE AN INEVITABLE CONFLICT BECAUSE SOME OF
54
ORAL ARGUMENT BY MR. SELIGMAN
1 THOSE CLASS MEMBERS MIGHT HAVE TO TESTIFY. THEIRS IS A THEORY
2 THAT MAKES IT IMPOSSIBLE TO EVER LITIGATE ONE OF THOSE CASES.
3 THE COURT: HOW ABOUT PRACTICALLY? PRACTICALLY, HOW
4 DOES THIS WORK OUT?
5 MR. SELIGMAN: WELL, I THINK THAT IS REALLY THE
6 CRITICAL QUESTION. WHAT DOES THE LIABILITY TRIAL LOOK LIKE IN
7 THIS CASE?
8 FIRST OF ALL, LIABILITY DOES NOT TURN ON WHETHER
9 STORE MANAGERS INDIVIDUALLY DISCRIMINATE. IN FACT, WE KNOW
10 FROM NINTH CIRCUIT CASE LAW THAT STORE MANAGERS CAN'T BE
11 DEFENDANTS. THAT'S THE MILLER VERSUS MAXWELL INTERNATIONAL
12 CASE, 991 F.2D 583. SO THE ARGUMENT THAT THEY'RE EACH LIABLE,
13 THAT IS NONSENSE, ONLY WAL-MART CAN BE LIABLE.
14 AND THE LIABILITY AGAINST WAL-MART IS ABOUT WHAT
15 WAL-MART HAS DONE, WHAT WAL-MART KNOWS, AND WHAT THE EVIDENCE
16 SHOWS. AND THAT IS PATTERN AND PRACTICE EVIDENCE. THE CASE
17 LAW IS ABUNDANTLY CLEAR THAT IT DOES NOT TURN ON SELF-SERVING
18 STATEMENTS BY INDIVIDUAL MANAGERS, AND IT ISN'T GOING TO HAVE
19 3,600 MANAGERS COME FORWARD. WHAT IS IT GOING TO TURN ON IS
20 WHETHER THE PLAINTIFFS SHOW THERE IS A COMMON PRACTICE AT
21 WAL-MART, NOT THE EXCEPTION, BUT THE RULE. CONVERSELY,
22 EXCEPTIONS DON'T NEGATE THE COMMON PRACTICE.
23 SO WHAT IS GOING TO HAPPEN AT TRIAL, EACH SIDE WILL
24 HAVE SOME ANECDOTAL TESTIMONY, BUT AS A PRACTICAL MATTER THE
25 COURT IS GOING TO SET SOME REASONABLE LIMITATIONS OF THE LENGTH
55
ORAL ARGUMENT BY MR. SELIGMAN
1 OF THIS TRIAL AND WILL MAKE SOME JUDGMENTS.
2 EVEN GIVEN THAT, IT IS IMPORTANT TO DETERMINE WHERE
3 THIS CONFLICT, WHICH IS REALLY ONLY THEORETICAL, WHERE IT
4 APPLIES. IT DOESN'T APPLY TO ALL THE ISSUES IN THIS CASE. THE
5 CONFLICT APPLIES ONLY WHERE YOU HAVE FEMALE STORE MANAGERS WHO
6 CHOOSE NOT TO OPT OUT. IF THEY FEEL THEY HAVE A CONFLICT, THEY
7 HAVE THE RIGHT TO OPT OUT. AND IF THEY OPT OUT, THERE IS NO
8 CONFLICT FOR THOSE STORE MANAGERS.
9 THE SECOND QUESTION IS ANY CONFLICT WOULD APPLY
10 SOLELY TO THE HOURLY PAY ISSUE, BECAUSE THOSE STORE MANAGERS DO
11 NOT HAVE THE AUTHORITY TO MAKE PROMOTION DECISIONS INTO
12 MANAGEMENT AND THEY DON'T HAVE AUTHORITY TO MAKE DECISIONS
13 ABOUT PAY AT THE MANAGEMENT LEVEL.
14 THAT CONFLICT, EVEN IF IT THEORETICALLY APPLIES,
15 DOES NOT APPLY TO THE ADVERSE IMPACT THEORY IN THIS CASE,
16 BECAUSE INTENT IS IRRELEVANT FOR ADVERSE IMPACT. WAL-MART
17 WANTS THESE WOMEN TO GET UP AND SAY, "I DON'T DISCRIMINATE";
18 THAT IS NOT EVEN ADMISSIBLE EVIDENCE ON AN ADVERSE IMPACT CASE.
19 THAT TURNS ON WHAT THE STATISTICAL RECORD SHOWS.
20 SO I THINK AS A PRACTICAL MATTER, YOUR HONOR, THERE
21 IS NOT A SIGNIFICANT PATTERN THAT IS OUT THERE FOR -- EXCUSE
22 ME, A SIGNIFICANT CONFLICT THAT HAS BEEN SHOWN. IT IS AT BEST
23 A THEORETICAL CONFLICT.
24 NOW, I REALIZE I WENT BY AND I HAVE NOT ANSWERED THE
25 ONE QUESTION THAT YOUR HONOR ASKED THIS --
56
ORAL ARGUMENT BY MR. SELIGMAN
1 THE COURT: HOLD ON. LET ME ASK:
2 MADAM REPORTER, HOW ARE YOU DOING?
3 THE COURT REPORTER: COULD WE TAKE A QUICK BREAK?
4 THE COURT: ALL RIGHT.
5 WE'LL TAKE ABOUT A TEN-MINUTE RECESS.
6 (RECESS TAKEN AT 10:57 A.M.)
7 (PROCEEDINGS RESUMED AT 11:12 A.M.)
8 THE COURT: OKAY, AGAIN, THE RECORD SHOULD REFLECT
9 THAT ALL PARTIES ARE PRESENT, COUNSEL ARE PRESENT. THE COURT
10 IS HEARING ARGUMENT IN THE CONTEXT OF A RULE 23 MOTION.
11 BEFORE WE TOOK OUR RECESS, MR. SELIGMAN, YOU WERE
12 DISCUSSING THE ISSUE OF CONFLICT, AND WE'RE NOW MOVING TO, I
13 THINK, THE FINAL QUESTION I ASKED EARLIER THIS MORNING.
14 MR. SELIGMAN: THAT'S CORRECT, YOUR HONOR.
15 IT MAY BE A LITTLE ANTICLIMACTIC, BUT WE'LL GO BACK
16 TO THAT.
17 YOU ASKED THE QUESTION ABOUT STORE MANAGER, AND
18 WHETHER THERE WAS A PAY DIFFERENCE IN THAT, AND --
19 THE COURT: ACTUALLY, IT'S BROADER THAN THAT. I
20 JUST WANT TO MAKE SURE THAT I HAVE ON THE RADAR SCOPE THE
21 CLASSIFICATIONS THAT ARE IN PLAY WITH RESPECT TO YOUR REQUEST
22 FOR CERTIFICATIONS.
23 MR. SELIGMAN: CERTAINLY.
24 I THINK THE ANSWER IS, ALL CLASSIFICATIONS AND THE
25 REASON WE DO THAT IS BECAUSE OUR ULTIMATE ANALYSIS -- WE GIVE
57
ORAL ARGUMENT BY MR. SELIGMAN
1 AVERAGE PAY DIFFERENCES, AND DR. DROGIN SAID IN ALMOST ALL JOBS
2 THERE IS AN AVERAGE. BUT HE ALSO DOES A REGRESSION MODEL WHICH
3 COVERS ALL JOBS WITH ONE EXCEPTION, WHICH IS A PHARMACY
4 MANAGER, WHICH WOULD BE EXCLUDED FROM THE CLASS BECAUSE THOSE
5 ARE PROFESSIONAL JOBS.
6 IF THE COURT WANTS THE SPECIFIC DATA, LOOK AT
7 DR. DROGIN'S REPORT, APPENDIX 8 GIVES THE HOURLY RATE FOR ALL
8 HOURLY JOBS. AND IT SHOWS -- IT DOES SHOW IS THAT AS OF 2001
9 WOMEN MADE SLIGHTLY MORE THAN MEN AS SUPPORT MANAGERS ON
10 AVERAGE. WOMEN MADE $10.99 AN HOUR, MEN MADE $10.69.
11 WHAT DOES THAT MEAN? IF YOU LOOK AT APPENDIX 12A,
12 WHAT IS THE REQUISITE SENIORITY? HOW LONG HAVE THEY BEEN
13 THERE? WHAT 12A SHOWS, AND THE JOB POSITION FOR BOTH TO LOOK
14 AT IS JOB CODE 1050, CALLED TEAM LARGER, THAT'S THE SUPPORT
15 MANAGER JOB, IF 050.
16 IF YOU LOOK AT EXHIBIT 12-A, ON THE AVERAGE LEVEL OF
17 SENIORITY FOR THOSE JOBS, WHAT IT SHOWS IS AS OF 2001, THE
18 FIRST COLUMN HERE IS MEN, THE SECOND COLUMN IS WOMEN, THAT
19 WOMEN HAVE AN AVERAGE OF 6.86 YEARS, WHILE MEN HAVE AN AVERAGE
20 OF 4.44. SO THE AVERAGE EARNINGS -- IT'S TRUE THEY MAKE
21 SOMEWHAT MORE, BUT THAT IS PROBABLY MOSTLY BECAUSE THOSE WOMEN
22 HAVE BEEN THERE TWO AND A HALF YEARS LONGER THAN MEN, WHICH IS
23 WHY, IN DR. DROGIN'S REGRESSIONS HE USES SENIORITY. AND THOSE
24 REGRESSIONS WHICH HE DID FOR ALL HOURLY EMPLOYEES SHOW A
25 STATISTICAL PATTERN.
58
ORAL ARGUMENT BY MR. SELIGMAN
1 THE COURT: OKAY.
2 ORAL ARGUMENT BY MR. SELLERS
3 MR. SELLERS: GOOD MORNING, YOUR HONOR.
4 THE COURT: GOOD MORNING.
5 MR. SELLERS: I WOULD LIKE TO ADDRESS THE ISSUE OF
6 PLAINTIFF'S OVERALL TRIAL PLAN AND HOW TO FORMULATE THE
7 MONETARY REMEDIES.
8 APPRECIATE THE COURT'S QUESTIONS ON THIS. THE
9 LIMITS ON THE NUMBER OF PAGES WE COULD USE IN BRIEFING REALLY
10 LIMITED OUR ABILITY TO ADDRESS THIS, AND WE APPRECIATE THE
11 OPPORTUNITY TO ADDRESS IT MORE FULLY HERE.
12 I BEGIN WITH A VERY SIMPLE PROPOSITION, WHICH WE'LL
13 DISCUSS MORE FULLY AS WE GET INTO SOME OF THESE CASES, BUT THE
14 PRINCIPLES THAT WE PROPOSE WOULD GOVERN THE TRIAL OF THIS CASE,
15 THE FORMULATION AND THE REMEDIES ARE NOT NOVEL PRINCIPLES.
16 THERE IS NO SPECIAL EXCEPTION TO THE CIVIL RIGHTS LAWS FOR
17 LARGE COMPANIES THAT WOULD MAKE THE CLASS INHERENTLY
18 UNCERTIFIABLE BECAUSE WAL-MART IS A VERY LARGE COMPANY. AND I
19 THINK THE PRINCIPLES THAT GOVERN THE FORMULATION OF REMEDIES
20 AND THE TRIAL OF THESE CASES IN THE PAST ARE SUFFICIENTLY
21 ELASTIC TO PERMIT THE KIND OF TRIAL THAT WE HAVE IN MIND HERE,
22 AS I'LL DESCRIBE.
23 WE BEGIN, OF COURSE, WITH THE PATTERN AND PRACTICE
24 DETERMINATION OF JUST THE LIABILITY, THAT WOULD BE DETERMINED
25 BY THE JURY. THE ADVERSE IMPACT CLAIM, OF COURSE, WOULD BE
59
ORAL ARGUMENT BY MR. SELLERS
1 TRIED BY THE COURT. IF THE PLAINTIFFS PREVAILED ON LIABILITY,
2 THE RIGHT TO CLASS-WIDE INJUNCTIVE RELIEF WOULD, OF COURSE, BE
3 DETERMINED BY THE COURT AS WELL.
4 THE AWARD, AN AWARD OF PUNITIVE DAMAGES, IF THE
5 PLAINTIFFS WERE PERMITTED TO PRESENT A REQUEST FOR PUNITIVE
6 DAMAGES, WOULD BE DECIDED BY THE JURY. WE BELIEVE, AND THE
7 CASE LAW SUPPORTS IT, THAT WE CAN MAKE A REQUEST FOR PUNITIVE
8 DAMAGES TO THE SAME JURY THAT WOULD HAVE DETERMINED LIABILITY.
9 WE WOULD ASK THE JURY TO AWARD A CLASS-WIDE AWARD OF PUNITIVE
10 DAMAGES THAT COULD THEN BE DISTRIBUTED BY THE COURT IN A NUMBER
11 OF WAYS THAT I WILL GET TO IN A MOMENT.
12 BUT THE COURT ASKED AN IMPORTANT QUESTION THAT I
13 WANT TO GET TO, AND THAT IS ABOUT PUNITIVE DAMAGES,
14 SPECIFICALLY. THAT IS, HOW CAN THE JURY DETERMINE PUNITIVE
15 DAMAGES WITHOUT HAVING HAD AN AWARD OF BACK PAY IN ADVANCE?
16 THE CRITICAL ANSWER IS THAT WHAT THE JURY OUGHT TO
17 HAVE IN FRONT OF IT, AND WHAT THE SUPREME COURT'S JURISPRUDENCE
18 SUGGESTS IT SHOULD HAVE IN FRONT OF IT, IS SOME EVIDENCE OF
19 HARM. AND HARM IS DISTINGUISHED FROM MEASURE OF BACK PAY.
20 THE TXO VERSUS ALLIANCE RESOURCES CASE, WHICH IS
21 FOUND AT 509 U.S. -- THE PARTICULAR PAGE IS 458, NOTE 37, TALKS
22 ABOUT THE -- THAT THE -- AS THE COURT LOOKS BACKWARD, THE
23 SUPREME COURT LOOKS BACKWARD AFTER THE JURY HAS RETURNED AN
24 AWARD OF PUNITIVE DAMAGES TO SEE WHETHER IT'S REASONABLE, IT
25 LOOKS TO SEE WHETHER THERE IS A RELATIONSHIP TO THE HARM
60
ORAL ARGUMENT BY MR. SELLERS
1 SUFFERED.
2 INDEED, WE SEE SOME COURTS AROUND THE COUNTRY,
3 INCLUDING AN OPINION IN THE SEVENTH CIRCUIT BY
4 JUDGE EASTERBROOK, IN THE TIMM CASE WE CITED IN OUR BRIEF, THAT
5 PUNITIVE DAMAGES MAY BE ALLOWED, EVEN WHERE THERE HAS BEEN NO
6 AWARD OF COMPENSATORY DAMAGES OR BACK PAY.
7 THE KEY, AS THE COURT IN THE SEVENTH CIRCUIT SAID,
8 IS WAS THERE EVIDENCE OF HARM PRESENTED TO THE JURY? AND WE
9 BELIEVE THAT THE ECONOMIC MODELS THAT WE WILL USE TO SUPPORT A
10 CLAIM OF LIABILITY, BOTH AS TO THE REGRESSION THAT WOULD
11 SUPPORT THE LIABILITY FOR UNEQUAL PAY AND THE COMPARISON OF THE
12 POOLS, THE POOLS ANALYSES WE USED TO SUPPORT OUR CLAIM FOR
13 DISCRIMINATION IN PROMOTIONS, WILL ALSO GIVE THE JURY A SENSE
14 OF THE SCOPE OF THE HARM THAT HAS BEEN SUFFERED BY THE CLASS,
15 EVEN THOUGH THE COURT MAY PREFER TO DECIDE THE BACK PAY AND
16 FRONT PAY ISSUES AT A LATER DATE.
17 SO THE JURY WILL BE ADEQUATELY INFORMED ABOUT THE
18 SCOPE OF THE HARM, AND I THINK THAT'S ALL THAT IS NECESSARY IN
19 ORDER FOR IT TO MAKE AN INFORMED AND APPROPRIATE --
20 THE COURT: SO YOU WOULD ENVISION TESTIMONY BY WAY
21 OF EXPERTS OF A FORMULAIC NATURE THAT, IF I UNDERSTAND YOUR
22 ARGUMENT CORRECTLY, WOULD ALSO PRESENT EVIDENCE OF HARM, AS
23 YOU'VE DESCRIBED IT, FROM WHICH THERE COULD BE AN ASSESSMENT OF
24 PUNITIVE DAMAGES?
25 MR. SELLERS: THAT IS CORRECT.
61
ORAL ARGUMENT BY MR. SELLERS
1 WE ENVISION THAT WE WOULD HAVE A TRIAL ON LIABILITY;
2 IF THE JURY WERE TO RETURN A LIABILITY FINDING FOR THE CLASS,
3 WE MIGHT HAVE A BRIEF SUBSEQUENT PORTION OF THE TRIAL WITH THE
4 SAME JURY AS TO THAT EVIDENCE, THAT PORTION OF THE EVIDENCE
5 THAT MIGHT BE UNIQUE TO THE QUESTION OF PUNITIVE DAMAGES. NET
6 WORTH, FOR INSTANCE, IS ONE EXAMPLE.
7 BUT THE JURY WOULD HAVE ALREADY HAD BEFORE IT THE
8 KIND OF ECONOMIC MODELS THAT WE THINK WOULD APPRISE IT
9 SUFFICIENTLY OF THE EXTENT OF THE HARM AT THE TIME THAT IT WAS
10 DETERMINING LIABILITY.
11 SO WE THINK IT WILL HAVE SOME MEASURE OF THAT. AND
12 YOU'LL RECALL, YOUR HONOR, THAT THIS IS NOT A CASE, AS
13 MR. SELIGMAN SAID, WHERE WE WERE SEEKING COMPENSATORY DAMAGES.
14 SO THE REAL MEASURE OF HARM HERE IS THE ECONOMIC MEASURE OF
15 LOST EARNINGS. AND THAT MEASURE WILL BE BEFORE THE JURY,
16 REGARDLESS OF WHAT THE COURT ULTIMATELY DOES, IN TERMS OF HOW
17 IT ALLOCATES AND AWARDS BACK PAY.
18 THE COURT: IT MAY BE A QUESTION FOR A DIFFERENT
19 TIME, BUT THE NOTION OF STATISTICAL PROJECTION IN A FORMULAIC
20 CONTEXT AND EXTRAPOLATING FROM THAT SOMETHING THAT WOULD
21 COMPORT WITH DUE PROCESS ABOUT PUNITIVE DAMAGES IS OF CONCERN
22 TO ME.
23 MR. SELLERS: WELL, YOUR HONOR, I THINK -- AS I'LL
24 GET INTO IN A MOMENT, I THINK THAT THE ECONOMIC MODELS THAT
25 BOTH PARTIES HAVE USED, WHETHER WE AGREE OR DISAGREE WITH EACH
62
ORAL ARGUMENT BY MR. SELLERS
1 OTHER ON AGGREGATION OR DISAGGREGATION INCLUDE AN ENORMOUS BODY
2 OF MATERIAL OF RECORDS ABOUT THE ATTRIBUTES OF THESE EMPLOYEES.
3 SO THESE ARE NOT STATISTICAL MODELS THAT YOU HAVE TO PROJECT A
4 LONG TIME INTO THE FUTURE OF ABOUT WHAT MIGHT HAPPEN, THESE ARE
5 MODELS THAT --
6 THE COURT: AND THAT SUFFICES FOR THE KIND OF
7 INDIVIDUALIZATION THAT IS REALLY INCUMBENT, IT SEEMS TO ME, IN
8 DISCERNING WITH SOME DEGREE OF ACCURACY THE RELATIONSHIP OF
9 THAT HARM TO THE ASSESSMENT OF PUNITIVE DAMAGES CLASS-WIDE?
10 MR. SELLERS: WELL, YOUR HONOR, LET ME START WITH
11 THE PROPOSITION THAT I THINK IS CLEAR.
12 IF WE MAKE THE APPROPRIATE SHOWING, WE CAN ASK THE
13 JURY TO AWARD A CLASS-WIDE AWARD OF PUNITIVE DAMAGES. WE DO
14 NOT HAVE TO HAVE INDIVIDUAL-BY-INDIVIDUAL AWARDS OF PUNITIVE
15 DAMAGES.
16 I WOULD BE SHOCKED IF WAL-MART ULTIMATELY, OTHER
17 THAN HOPING THAT PERHAPS IT COULD SCUTTLE OUR EFFORTS, WOULD
18 REALLY WANT TO HAVE THOUSANDS AND THOUSANDS OF PUNITIVE DAMAGES
19 TRIALS WHICH WOULD LEAD TO INCONSISTENT VERDICTS, LEAD TO THEM
20 FAILING TO BE ABLE TO APPRECIATE THEIR ULTIMATE EXPOSURE.
21 THE COURT, OBVIOUSLY, HAS AVAILABLE TO IT,
22 ULTIMATELY, A REMITTITUR, IF IT CONCLUDES AFTER DETERMINING
23 BACK PAY THAT THERE IS SOME REASON TO THINK THAT THERE IS NOT
24 AN APPROPRIATE RELATIONSHIP BETWEEN THE PUNITIVE DAMAGES AWARD,
25 IF THEY ARE AWARDED, AND THE BACK PAY THAT IT AWARDS.
63
ORAL ARGUMENT BY MR. SELLERS
1 WE THINK THAT THE MODEL IS QUITE SOPHISTICATED AND
2 WILL PERMIT THE JURY THE OPPORTUNITY TO ASSESS THE REAL EXTENT
3 OF THE HARM.
4 OF COURSE, WAL-MART HAS MADE MUCH OF THE NINTH
5 CIRCUIT'S UNPUBLISHED DECISION, BECK VERSUS BOEING. AND I
6 BRING IT UP HERE NOT AS PRECEDENT, BUT, RATHER, JUST TO ASSURE
7 THE COURT THAT WE ARE AWARE THAT WE WOULD BE ASKING THE COURT,
8 IF THE JURY WERE TO AWARD PUNITIVE DAMAGE TO THE CLASS, THAT
9 THE DAMAGES ONLY BE ALLOCATED TO THOSE MEMBERS OF THE CLASS WHO
10 ULTIMATELY RECEIVED BACK PAY, THAT IS, WHO ARE -- SOME EVIDENCE
11 THAT THEY WERE HARMED.
12 THE COURT: OKAY.
13 MR. SELLERS: THERE ARE A VARIETY OF WAYS THAT THE
14 COURT MIGHT ALLOCATE PUNITIVE DAMAGES, AND WE DON'T THINK THAT
15 THIS ISSUE HAS TO BE DECIDED NOW. IT WOULD BE BETTER TO BE
16 DECIDED ON A COMPLETE RECORD. I'LL JUST POINT OUT THAT THIS
17 COURT -- THE COURT'S DECISION IN BAREFIELD AGAINST CHEVRON
18 RECOGNIZED THAT THE CLASS-WIDE PUNITIVE DAMAGE AWARD, WHICH WAS
19 ALLOWED BY JUDGE HENDERSON IN THAT CASE, COULD BE ALLOCATED
20 PROPORTIONATE TO THE AMOUNT OF BACK PAY THAT IS AWARDED TO THE
21 INDIVIDUAL CLASS MEMBERS. AND THOSE WHO HAVE LARGER ECONOMIC
22 HARM MIGHT BE ENTITLED TO A LARGER SHARE OF PUNITIVE DAMAGE
23 AWARD.
24 WE SUBMITTED A CASE YESTERDAY, THE PALMER AGAINST
25 COMBINED INSURANCE COMPANY CASE, WHICH ALSO ALLOWED FOR
64
ORAL ARGUMENT BY MR. SELLERS
1 CERTIFICATION OF A CLASS THAT HAD A CLASS-WIDE PUNITIVE DAMAGE
2 AWARD BEING SOUGHT. AND THERE THE COURT SEEMED TO CONTEMPLATE
3 THE POSSIBILITY OF DISTRIBUTING THE PUNITIVE DAMAGES PRO RATA.
4 AGAIN, I DON'T THINK THIS HAS TO BE DECIDED NOW.
5 THE KEY IS THAT THESE ARE BOTH READILY MANAGEABLE WAYS OF
6 DISTRIBUTING PUNITIVE DAMAGES. AND WHEN THE RECORD IS MORE
7 FULLY DEVELOPED AND WE HAVE A CHANCE TO BRIEF AND ARGUE THIS
8 MORE COMPLETELY, I THINK THE COURT MAY BE IN A BETTER POSITION
9 TO DECIDE WHETHER EITHER OF THESE METHODS WORK, OR A THIRD OR
10 FOURTH METHOD MIGHT BE BETTER.
11 LET ME TURN TO THE QUESTION THAT THE COURT ALSO
12 ASKED ABOUT WHETHER OR NOT BACK PAY -- AND, YES, WE ARE SEEKING
13 FRONT PAY -- ARE TO BE TRIED TO THE COURT OR TO A JURY.
14 OUR BRIEF SUGGESTS THAT THE BACK PAY AND FRONT PAY
15 ISSUES WOULD BE DECIDED BY A JURY. WE HAVE TAKEN THE
16 OPPORTUNITY, AS A RESULT OF THE COURT'S QUESTIONS, TO LOOK AT
17 THIS A LOT MORE CAREFULLY, AND WE THINK THAT THE BETTER
18 AUTHORITY, AND THERE IS A SPLIT IN THE CIRCUITS ABOUT THIS, BUT
19 WE THINK A MUCH BETTER AUTHORITY, AND THE AUTHORITY THAT
20 ULTIMATELY THE SUPREME COURT WOULD EMBRACE, IS THAT THE COURT
21 WOULD DETERMINE BACK PAY AND FRONT PAY. AND I TAKE A MOMENT TO
22 EXPLAIN WHY I SAY THAT.
23 THE COURT IS UNDOUBTEDLY AWARE OF THE DECISION A
24 COUPLE OF YEARS AGO IN POLLARD AGAINST DUPONT, WHERE THE
25 QUESTION PRESENTED WAS WHETHER OR NOT FRONT PAY WAS SUBJECT TO
65
ORAL ARGUMENT BY MR. SELLERS
1 THE CAPS THAT ARE SET IN THE CIVIL RIGHTS ACT OF 1991, OR
2 WHETHER IT IS MORE IN THE NATURE OF EQUITABLE RELIEF THAT WOULD
3 BE EXEMPT FROM THOSE CAPS.
4 THE COURT CONCLUDED THAT IN LARGE PART, BECAUSE
5 HISTORICALLY, FRONT PAY WAS THE NATURAL OUTGROWTH OF BACK PAY,
6 AND BACK PAY AND FRONT PAY, BEFORE 1991 AND UNDER TITLE 7, WAS
7 ALWAYS TRIED TO THE COURT, THAT THERE WAS NO REASON THAT
8 CHANGED, THAT, INDEED, THE CIVIL RIGHTS ACT OF 1991 DID NOT
9 CHANGE THE CENTRAL CHARACTER OF BACK PAY OR FRONT PAY. IN THAT
10 CASE, FRONT PAY WAS AT ISSUE.
11 WE THINK THAT IF GIVEN THE OCCASION TO DECIDE NOW
12 WHETHER BACK PAY IS AN EQUITABLE REMEDY THAT WOULD BE TRIED TO
13 THE COURT, IT WOULD CLEARLY CONCLUDE THAT IT IS. AND WE THINK
14 THAT IS THE BETTER AUTHORITY TO SUPPORT THE PROPOSITION.
15 THE COURT: OKAY.
16 MR. SELLERS: THE STATUTE, AS WELL, THE CIVIL RIGHTS
17 STATUTE OF 1991, CERTAINLY TREATS BACK PAY AND FRONT PAY IN A
18 DIFFERENT CATEGORY THAN DAMAGES, AND, I THINK, REINFORCES --
19 INDICATES THAT CONGRESS CONTINUES TO BELIEVE THAT BACK PAY AND
20 FRONT PAY ARE EQUITABLE IN NATURE AND WOULD BE TRIED TO THE
21 COURT.
22 THE CASE LAW ALSO MAKES CLEAR THAT THE FRONT PAY --
23 THE MANNER IN WHICH THE COURT WERE TO COMPUTE FRONT PAY IS TO
24 MIRROR THE FORMULATION OF THE BACK PAY. FRONT PAY IS SIMPLY,
25 AS YOU KNOW, A CONTINUATION OF BACK PAY LIABILITY PAST THE
66
ORAL ARGUMENT BY MR. SELLERS
1 POINT OF THE JUDGMENT --
2 THE COURT: RIGHT.
3 MR. SELLERS: -- UNTIL THE INCIDENTS THAT GAVE RISE
4 TO THE HARM THAT ENDED.
5 SO WE DON'T THINK THERE IS AN UNUSUAL OR NEW KIND OF
6 INQUIRY TO BE UNDERTAKEN FOR THE COURT TO DETERMINE FRONT PAY.
7 I WILL GET INTO THE FRONT PAY IN A MOMENT WITH RESPECT TO BOTH
8 OUR PROMOTION AND UNEQUAL PAY CLAIMS, BUT AS A GENERAL
9 PROPOSITION, I DON'T THINK THE TWO ARE DIFFERENT IN ANY
10 SIGNIFICANT RESPECT.
11 BEFORE I GET TO THE SPECIFICS OF OUR PROPOSALS ON
12 BACK PAY AND FRONT PAY FORMULATIONS FOR THE PROMOTION AND
13 COMPENSATION CLAIMS, I WOULD LIKE TO START WITH A BRIEF REVIEW
14 OF SOME OF THE BASIC PRINCIPLES THAT I THINK OUR JURISPRUDENCE
15 SUGGESTS ABOUT THE FORMULATION OF BACK PAY, BECAUSE THEY WOULD
16 UNDOUBTEDLY INFORM THE WAY THE COURT WOULD GO ABOUT DOING THIS.
17 AND IT WOULD HELP THE COURT. I APPRECIATE THAT. THIS IS A
18 MANAGEABLE PROCESS, AND A FAIR ONE THAT WE HAVE IN MIND.
19 FIRST OF ALL, THE RELIEF IS DESIGNED TO MAKE VICTIMS
20 WHOLE, AND BECAUSE OF THE REMEDIAL NATURE OF BACK PAY AND FRONT
21 PAY AND THE DIFFICULTY OF RECONSTRUCTING EMPLOYEES' CAREER
22 PATHS IN THE ABSENCE OF DISCRIMINATION, THE COURTS HAVE LONG
23 SAID THAT UNREALISTIC EXACTITUDE IN THE COMPUTATIONS IS NOT TO
24 BE EXPECTED, AND THAT DOUBTS ABOUT THE AMOUNTS OF BACK OR FRONT
25 PAY TO BE AWARDED ARE TO BE RESOLVED AGAINST THE THEN-PROVEN
67
ORAL ARGUMENT BY MR. SELLERS
1 DISCRIMINATOR.
2 I THINK WE OUGHT TO DISCUSS FOR A MOMENT THE
3 QUESTION WHICH I KNOW IS ON THE COURT'S MIND ABOUT WHETHER IT
4 IS NECESSARY, AS A GENERAL PROPOSITION, TO HAVE INDIVIDUAL
5 PROCEEDINGS IN ORDER TO DETERMINE BACK PAY.
6 THE COURT: AND WHEN YOU SAY, "BACK PAY," I MEAN, I
7 DISTINGUISH BETWEEN THE EQUAL PAY CLAIM AND THE PROMOTION
8 CLAIM --
9 MR. SELLERS: YES.
10 THE COURT: -- SO THAT I KNOW WHAT YOU'RE TALKING
11 ABOUT.
12 MR. SELLERS: AT THIS POINT, I'M GOING TO TREAT EACH
13 OF THOSE SEPARATELY, YOUR HONOR. I'M NOW TALKING ABOUT --
14 THE COURT: GENERALLY.
15 MR. SELLERS: JUST GENERALLY ABOUT THE PROPOSITION
16 OF -- I RECOGNIZE THAT THERE ARE, I THINK, SUBSTANTIALLY LESS
17 POWERFUL FACTORS THAT WOULD COMPEL INDIVIDUAL DETERMINATIONS
18 FOR BACK PAY IN THE UNEQUAL PAY CLAIMS THAN THERE WOULD BE FOR
19 PROMOTIONS, BUT I WANTED TO JUST GENERALLY ADDRESS THE
20 PROPOSITION, TWO PROPOSITIONS, ONE IS ABOUT WHAT THE TEAMSTERS
21 DECISION WAS ABOUT, BECAUSE IT OBVIOUSLY INFORMS ALL THAT WE'RE
22 DOING HERE ON THIS SUBJECT.
23 THE OTHER IS TO TALK FOR A MOMENT ABOUT THE SHIPES
24 CASE, WHICH THE COURT, I THINK, ASTUTELY RAISED AS A MODEL THAT
25 WE MAY WANT TO LOOK AT CLOSELY.
68
ORAL ARGUMENT BY MR. SELLERS
1 FIRST, I WANT TO TALK ABOUT TEAMSTERS, BECAUSE I
2 THINK IT'S IMPORTANT TO RECOGNIZE THAT WHILE THE TEAMSTERS CASE
3 OF THE SUPREME COURT SPOKE IN TERMS OF DISTRICT COURTS USUALLY
4 CONDUCTING ADDITIONAL PROCEEDINGS AFTER LIABILITY IS
5 DETERMINED, WE NOW RECOGNIZE THE DOMINGO CASE AMONG OTHERS AS
6 AN EXAMPLE. THAT IS NOT A UNIVERSAL REQUIREMENT. THE QUESTION
7 IS, WHEN WOULD WE DEPART FROM THAT AND HOW?
8 I THINK IN ORDER TO APPRECIATE WHAT THE SUPREME
9 COURT HAD IN MIND IN TEAMSTERS, WE NEED TO RECOGNIZE THAT THE
10 CLAIMS THAT WERE AT ISSUE IN TEAMSTERS THAT GAVE RISE FOR THE
11 COURT TO BELIEVE THAT INDIVIDUAL PROCEEDINGS WERE NECESSARY
12 WAS, IN THAT CASE, A CHALLENGE TO THE SENIORITY SYSTEM.
13 THE REMEDY WOULD HAVE INCLUDED RESTORING PEOPLE TO
14 POSITIONS THEY WOULD HAVE HELD IN THE ABSENCE OF THE
15 DISCRIMINATORY SENIORITY SYSTEM, IF IT WERE PROVED TO BE
16 DISCRIMINATORY.
17 THE COURT: IS THE ARGUMENT THAT IT IS DISTINGUISHED
18 FROM AN EQUAL PAY CLAIM?
19 MR. SELLERS: CERTAINLY DISTINGUISHES IT FROM EQUAL
20 PAY CLAIMS.
21 THE COURT: RIGHT.
22 MR. SELLERS: I THINK IT DISTINGUISHES IT FROM THE
23 NATURE OF THE REMEDIES THAT ARE MONETARY IN NATURE. I KNOW --
24 DISTINGUISH IS TOO STRONG A WORD, BUT HERE IS WHAT I MEAN BY
25 THAT:
69
ORAL ARGUMENT BY MR. SELLERS
1 WE HAVE HERE -- THE SUPREME COURT WAS QUITE CLEAR,
2 AND ITS CONCERNS ARE EXPRESSED AT 431 U.S. AT 371 THROUGH 372,
3 ABOUT BALANCING THE REMEDIAL INTERESTS OF THE CLASS MEMBERS
4 WITH WHAT IT, QUOTE, DESCRIBES AS, "THE LEGITIMATE EXPECTATIONS
5 OF OTHER EMPLOYEES INNOCENT OF ANY WRONGDOING."
6 IT WAS CONCERNED THAT IT NOT GIVE PEOPLE RETROACTIVE
7 RIGHTFUL PLACEMENT INTO POSITIONS THAT WERE GOING TO INTERFERE
8 WITH THE LEGITIMATE EXPECTATIONS OF EMPLOYEES WHO WERE INNOCENT
9 OF ANY OF THE DISCRIMINATION.
10 MUCH LIKE THE ANALYSIS THAT IS DONE IN THE
11 AFFIRMATIVE ACTION AREA, WHERE YOU WORRY ABOUT WHETHER OR NOT
12 YOU'RE TRAMPLING ON THE INTERESTS OF INNOCENT PEOPLE, HERE WE
13 HAVE THE SITUATION WHERE IN TEAMSTERS THE COURT WAS
14 LEGITIMATELY QUITE CONCERNED ABOUT MAKING SURE THAT THE
15 REMEDIES BE TAILORED TO EACH PERSON'S INDIVIDUAL CIRCUMSTANCES,
16 BECAUSE THE SEQUENCES WERE THAT THEY WERE GOING TO BE MOVING
17 PEOPLE AROUND IN THE WORKPLACE AND DISRUPTING THE EXPECTATIONS
18 OF OTHERS WHO HAD NOT CONTRIBUTED TO THE DISCRIMINATION.
19 HERE WHAT WE HAVE AT ISSUE IS BACK PAY AND FRONT
20 PAY, MONETARY REMEDIES, NOT TO SAY THAT WAL-MART HAS NO
21 INTEREST IN THE AGGREGATE EXPOSURE OF THE BACK PAY, INTEREST IN
22 BACK PAY, BUT AS A FAR DIFFERENT MATTER THAN IF WE WERE SEEKING
23 HERE TO RETROACTIVELY OBTAIN RETROACTIVE PROMOTIONS TO -- FOR
24 VARIOUS EMPLOYEES ON ITS WORK FORCE ON A CONTINUUM, IF YOU
25 WILL, BETWEEN THE PRESSURE TO HAVE INDIVIDUALIZED PROCEEDINGS.
70
ORAL ARGUMENT BY MR. SELLERS
1 ON THE ONE EXTREME, YOU HAVE PEOPLE WHO ARE
2 REINSTATED OR WHO ARE GIVEN RIGHTFUL PLACE POSITIONS IN THE
3 WORK FORCE. AND I THINK I SUBMIT ON THE OTHER DIRECTION YOU
4 HAVE AWARDS OF BACK PAY, OF MONETARY RELIEF, WHICH IS OF A FAR
5 DIFFERENT MATTER, AND CERTAINLY LESS DISRUPTIVE TO THE
6 EMPLOYER'S WORKPLACE.
7 HAVING SAID, HOWEVER, THAT EVEN IF WE PROCEED WITH A
8 FORMULAIC APPROACH, AND AGAIN, I'M TALKING GENERALLY AT THE
9 MOMENT, I THINK IT'S IMPORTANT TO RECOGNIZE THAT JUST BECAUSE
10 YOU USE A FORMULA DOESN'T MEAN THAT YOU DON'T CONSIDER THE
11 INDIVIDUAL CHARACTERISTICS OF EMPLOYEES.
12 THE SHIPES CASE, I THINK, IS QUITE INSTRUCTIVE. WE
13 ARE FULLY SUPPORTIVE OF THE APPROACH THAT THE SHIPES COURT, THE
14 FIFTH CIRCUIT AND THE DISTRICT COURT ENDORSED, WHICH IS ONE IN
15 WHICH THE INDIVIDUAL CIRCUMSTANCES, THE EXPERIENCE, THE
16 COMPARABLE POSITIONS THAT PEOPLE HELD, ARE TAKEN INTO ACCOUNT
17 IN AN ECONOMIC MODEL IN MAKING COMPARISONS THAT WOULD LEAD TO
18 BACK PAY DETERMINATIONS RATHER THAN THE APPROACH THAT THE
19 EMPLOYER RECOMMENDED, WHICH THE COURT REJECTED, WHICH WAS
20 SIMPLY A PRO RATA APPROACH.
21 SO IT'S IMPORTANT TO RECOGNIZE THE USE OF A FORMULA
22 DOES NOT MEAN THAT WE ARE ADVOCATING IN ANY RESPECT THAT THE
23 BACK PAY COMPUTATIONS WILL NOT TAKE INTO ACCOUNT INDIVIDUAL
24 CHARACTERISTICS. INDEED, WE THINK THAT THERE IS AN ABUNDANCE
25 OF EVIDENCE ALREADY IN THE RECORD IN THE COMPUTERIZED --
71
ORAL ARGUMENT BY MR. SELLERS
1 COMPUTER-READABLE DATA THAT ARE IN THESE ECONOMIC MODELS THAT
2 DOES TAKE INTO ACCOUNT INDIVIDUAL CHARACTERISTICS OF THESE
3 EMPLOYEES, AS I'LL DESCRIBE IN A MOMENT, BUT --
4 THE COURT: I GUESS IT'S A QUESTION OF DEGREE.
5 YOU ARGUE THAT TEAMSTERS CAN AND SHOULD BE READ AS
6 REFLECTIVE OF THE PROPOSITION THAT THE -- WHERE THE COURT IS
7 CONSIDERING A MONETARY REMEDY THAT THE TEAMSTERS FRAMEWORK
8 MIGHT NOT HAVE TO BE WHOLESALE IMPORTED INTO THE PROVE-UP.
9 MR. SELLERS: THAT'S CORRECT.
10 THE COURT: AND IS THERE ANY CASE THAT SUPPORTS THAT
11 VIEW?
12 MR. SELLERS: WELL, I THINK --
13 THE COURT: OTHER THAN THE LOGIC THAT YOU ARGUE?
14 MR. SELLERS: YOUR HONOR, I THINK IF YOU LOOK AT
15 DOMINGO, IF YOU LOOK AT SHIPES, IF YOU LOOK AT SEEGER, THESE
16 ARE ALL CASES THAT ARE FORMULA CASES WHERE THE COURTS WERE
17 CONCERNED THAT THE SYSTEM THERE, AS HERE, IS SO SUBJECTIVE THAT
18 IT WOULD BE VIRTUALLY IMPOSSIBLE TO RECONSTRUCT THE PAY THAT
19 PEOPLE WOULD HAVE RECEIVED IN A NONDISCRIMINATORY --
20 THE COURT: SEE, THIS GETS US INTO, IT SEEMS TO ME,
21 THE DISTINCTION THAT YOU HAVE ALREADY ACCEPTED AND ADOPTED THAT
22 WITH RESPECT TO THE EQUAL PAY CLAIM THE PRONG ESTABLISHING
23 LIABILITY -- IT STRIKES ME THAT YOUR USE OF FORMULA MAY BE
24 OVERBROAD, BECAUSE IF THE COURT WERE TO CERTIFY THE CLASS, IT
25 WOULD BE ABLE TO DISCERN, IT SEEMS TO ME, FROM CORPORATE
72
ORAL ARGUMENT BY MR. SELLERS
1 RECORDS, AND THINGS OF THAT NATURE, THE DISPARITY AND PAY. AND
2 IT WOULD BE AN INDIVIDUALIZED ASSESSMENT --
3 MR. SELLERS: CORRECT.
4 THE COURT: -- AS OPPOSED TO THE SAME ARGUMENT YOU
5 MAKE WITH RESPECT TO THE PROMOTIONS CONTEXT, WHICH IS WHERE
6 THERE IS THE INTERFACE BETWEEN THE CASE LAW YOU CITE TO ME
7 ABOUT HYPOTHETICAL ASSESSMENTS BEING MADE, THE NECESSITY FOR
8 IT, AND THE TRUE USE OF A FORMULA IN THAT REGARD.
9 MR. SELLERS: UM-HMM.
10 THE COURT: AND WHETHER IN ONE SCENARIO, PROMOTION
11 VERSUS THE EQUAL PAY SCENARIO, THERE IS HOW THE TEAMSTERS
12 FRAMEWORK INNERVATES EACH OF THOSE.
13 MR. SELLERS: WELL, LET ME SAY, FIRST OF ALL, WITH
14 RESPECT TO THE EQUAL PAY CLAIM -- THE UNEQUAL PAY CLAIM, I
15 THINK THAT THE MODEL THAT WE PROPOSE IS ONE THAT WOULD DEPEND
16 ON THE ECONOMIC -- THE REGRESSION MODELS THAT THE PARTIES CAN
17 EACH PRESENT TO THE COURT ULTIMATELY.
18 THOSE MODELS WOULD TAKE INTO ACCOUNT THINGS LIKE
19 WHICH STORE SOMEBODY WORKED AT, THE JOB THEY HELD, TO MAKE SURE
20 THE PEOPLE WORKING IN THE NEW YORK AREA ARE GOING TO BE
21 COMPARED WITH PEOPLE IN NEW YORK, WHERE THEY MAY HAVE DIFFERENT
22 PAY RATES THAN PEOPLE IN OKLAHOMA OR IN TEXAS. WE WILL BE ABLE
23 TO MAKE SUCH REFINEMENTS, AND HAVE MADE SUCH REFINEMENTS IN OUR
24 ANALYSIS ALREADY, USING WAL-MART'S OWN RECORDS.
25 WHAT WE HAVE IS A 21ST CENTURY VERSION OF SOME OF
73
ORAL ARGUMENT BY MR. SELLERS
1 THESE CASES THAT HAVE HAPPENED BEFORE, BECAUSE WE HAVE A
2 COMPANY THAT IS MORE TECHNOLOGICALLY ADVANCED THAN A FISH
3 CANNERY THAT WAS IN DOMINGO, OR SOME OF THESE OTHER COMPANIES
4 THAT WE WERE DEALING BEFORE, WHERE THE QUESTION WAS, "ARE WE
5 GOING TO PULL ALL THESE RECORDS, HARD COPY OUT OF SOME CLERK'S
6 OFFICE TO ANALYZE THEM?"
7 WE HAVE THE SAME KIND OF OPPORTUNITY HERE THAT WAS
8 ENDORSED IN SHIPES, THAT YOU CAN HAVE AN AGGREGATE AMOUNT
9 DETERMINED, AND THEN WE'LL DEAL WITH ALLOCATION AFTERWARDS,
10 WHICH I WILL GET TO.
11 SO I THINK WITH RESPECT TO THE UNEQUAL PAY CLAIM,
12 OUR POSITION IS THERE IS NO NEED FOR, AND, INDEED, IT WOULD BE
13 INAPPROPRIATE, TO REQUIRE INDIVIDUAL HEARINGS TO DETERMINE WHAT
14 PEOPLE WOULD HAVE EARNED IN THE ABSENCE OF DISCRIMINATION.
15 INDEED, THE EXHIBIT THAT YOU SAW EARLIER ABOUT PAY
16 PLAN THAT LISTED -- REFERRED TO VARIOUS ATTRIBUTES OF THE PAY
17 PLAN, MAKES ALLOWANCE FOR A NUMBER OF WAYS IN WHICH MANAGERS
18 CAN DISREGARD THE GUIDELINES, THE GUIDELINES THAT ARE SET IN
19 THE PAY PLAN.
20 SO THOSE ARE THE KIND OF SUBJECTIVE FACTORS THAT WE
21 BELIEVE OPERATE IN A DISCRIMINATORY FASHION THAT CAN'T BE
22 RECONSTRUCTED IN THE ABSENCE OF THE DISCRIMINATION TO DETERMINE
23 TO WHAT EXTENT THE BACK PAY OR THE EARNINGS WOULD HAVE BEEN
24 COMPARABLE OR DIFFERENT IN THE ABSENCE OF DISCRIMINATION.
25 THE COURT: EVEN WITH RESPECT TO THE EQUAL PAY
74
ORAL ARGUMENT BY MR. SELLERS
1 CLAIM?
2 MR. SELLERS: CORRECT. CORRECT. THERE IS A
3 SIGNIFICANT AMOUNT OF EVIDENCE IN THE RECORD OF MANAGERS
4 SAYING, QUITE PROUDLY, AS WELL AS TESTIMONY FROM MR. ARNOLD,
5 WHO IS THE 30(B)(6) WITNESS OF WAL-MART ON COMPENSATION, WHO
6 TESTIFIED ABOUT HOW FREELY MANAGERS COULD DEPART FROM THE GOALS
7 AND THE GUIDELINES THAT ARE SET -- THE NUMBERS THAT ARE SET IN
8 THE GUIDELINES.
9 THEY -- WAL-MART HAS NOT GIVEN THESE MANAGERS
10 GUIDANCE AS TO WHEN THEY CAN DEPART, HOW MUCH THEY CAN DEPART;
11 THOSE ARE THE KINDS OF THE SUBJECTIVE FACTORS THAT WOULD BE
12 IMPOSSIBLE TO RECREATE BUT WHICH ARE ULTIMATELY AT WORK HERE,
13 WE BELIEVE, THAT GIVE RISE TO SOME OF THE DISPARITIES.
14 IT'S THAT KIND OF FAILURE TO RECORD THE INFORMATION,
15 FAILURE TO GUIDE THE MANAGERS IN THE EXERCISE OF DISCRETION
16 THERE WHICH WOULD EMBROIL THE COURT IN THE PROVERBIAL QUAGMIRE
17 OF HYPOTHETICAL JUDGMENTS THAT DOMINGO AND HEADWAY AND SEEGER
18 AND OTHER COURTS HAVE SAID LEAD US TO CONCLUDE THAT WE OUGHT
19 NOT TO BE ENGAGED IN INDIVIDUAL-BY-INDIVIDUAL PROCEEDINGS.
20 THE COURT: AND IF I DISAGREED WITH YOU AND FOUND
21 THAT THERE WASN'T A NEED TO RESORT TO THE USE OF A FORMULA YOU
22 DESCRIBE HERE, WHAT WOULD THE PROVE-UP ON THE EQUAL PAY LOOK
23 LIKE?
24 MR. SELLERS: I AM SORRY?
25 THE COURT: WHAT WOULD THE PROVE-UP LOOK LIKE.
75
ORAL ARGUMENT BY MR. SELLERS
1 MR. SELLERS: IF THE COURT BELIEVED YOU HAD TO HAVE
2 INDIVIDUAL-BY-INDIVIDUAL PROCEEDINGS?
3 THE COURT: RIGHT.
4 MR. SELLERS: I THINK -- LET ME JUST -- I WILL
5 ANSWER THAT. I THINK THAT WE WILL HAVE INDIVIDUAL INFORMATION.
6 THE COURT: THAT'S WHAT I AM TRYING TO TEASE OUT.
7 MR. SELLERS: I'M SORRY.
8 TO BE CLEAR ABOUT IT, THERE IS GOING TO BE, AND
9 THERE ALREADY IS IN THE MODEL, EVIDENCE OF THE JOB PEOPLE HELD,
10 THE PERFORMANCE AT THE LEVEL THEY ACHIEVED, THE STORE AT WHICH
11 THEY WORKED, THE SENIORITY THEY HAD, THE CHARACTERISTICS THAT
12 ARE ALL RELEVANT, ULTIMATELY, TO WHETHER OR NOT ONE EMPLOYEE IS
13 PAID MORE THAN ANOTHER.
14 AND BY COMPARING PEOPLE WHO WORK AT THE SAME
15 FACILITIES IN THE SAME TIME PERIOD HOLDING THE SAME JOBS, WE
16 ARE REALLY COMPARING APPLES AND APPLES. WE ARE NOT COMPARING
17 PEOPLE WHO WORK IN MONTANA WITH PEOPLE WHO WORK IN NEW YORK.
18 THEY INEVITABLY HAVE DIFFERENT BASE PAY BECAUSE THE COST OF
19 LIVING IS DIFFERENT.
20 THOSE COMPARISONS THAT I'VE JUST DESCRIBED ARE IN
21 THE MODEL ALREADY.
22 THE COURT: UM-HMM.
23 MR. SELLERS: THE POINT I WAS TRYING TO MAKE BEFORE
24 IS THE FACT THAT WE RECOMMEND THE USE OF A FORMULA DOES NOT BY
25 ANY MEANS MEAN THAT WE ARE ABANDONING THE INDIVIDUAL
76
ORAL ARGUMENT BY MR. SELLERS
1 CHARACTERISTICS OF THE EMPLOYEES. THERE WOULD BE NO OTHER KIND
2 OF INFORMATION, OTHER THAN SUBJECTIVE INFORMATION, THAT
3 WAL-MART MANAGERS COULD CONJURE UP THAT ANY PARTY WOULD BRING
4 TO THE COURT, IF THE COURT WERE INCLINED TO HAVE
5 INDIVIDUAL-BY-INDIVIDUAL HEARINGS.
6 INSTEAD, IT WOULD INVITE THE PARTIES TO EACH TRY TO
7 RECONSTRUCT -- THE MANAGER WOULD HAVE COME IN AND SAID, "I
8 WOULD HAVE PAID MS. 'X' THAT AMOUNT ANYWAY," EVEN IN THE
9 ABSENCE OF DISCRIMINATION, AND RELY ON SOME UNRECORDED,
10 UNDOCUMENTED VARIABLE OR FACTOR TO JUSTIFY. AND WE HAVE NO WAY
11 OF KNOWING WHETHER THAT'S TRUE OR NOT, BECAUSE THEY DIDN'T
12 GUIDE THEM IN THE EXERCISE OF DISCRETION AND DIDN'T RECORD THE
13 BASIS FOR WHICH THEY MADE THESE DEPARTURES.
14 TURNING TO THE PROMOTION ISSUE, WHICH I KNOW IS ALSO
15 ON THE COURT'S MIND, I THINK THE COURT ASKED THE QUESTION, ONE
16 OF THE WRITTEN QUESTIONS WAS ABOUT WHETHER OR NOT MEMBERS OF
17 THE CLASS HAVE TO SHOW INTEREST AS A CRITERION FOR BEING
18 ELIGIBLE FOR BACK PAY ATTRIBUTED TO DISCRIMINATION AND
19 PROMOTION.
20 THE COURT: RIGHT. AND YOU UNDERSTAND, THE CONTEXT
21 OF THAT QUESTION WAS TO TRY TO DISTINGUISH BETWEEN THOSE WHO
22 MAY BE QUALIFIED FOR A PROMOTION AND THOSE WHO WOULD HAVE
23 APPLIED FOR THE PROMOTION, BUT THEN TO GET TO THE NUMBERS WITH
24 RESPECT TO INJURY.
25 MR. SELLERS: I UNDERSTAND.
77
ORAL ARGUMENT BY MR. SELLERS
1 I THINK, ONCE AGAIN, WE BELIEVE THAT THERE ARE TWO
2 DISTINCTIONS BETWEEN THIS CASE AND DOMINGO THAT COUNSEL AGAINST
3 REQUIRING INDIVIDUAL SHOWINGS OF INTEREST. ONE IS THAT DOMINGO
4 HAD WHAT THE COURT OF APPEALS DESCRIBED AS AN "INFORMAL
5 APPLICATION PROCESS."
6 HERE, AS YOU HEARD FROM MR. SELIGMAN, WAL-MART HAD
7 NO APPLICATION PROCESS FOR ENTRY INTO THE MANAGEMENT TRAINING
8 PROGRAM. EVEN THE SUPPORT MANAGER POSITION, FOR WHICH THEY
9 CLAIMED THEY HAD AN APPLICATION PROCESS, 80 PERCENT OF THE
10 POSITIONS FILLED WERE FILLED WITHOUT POSTING. THEY DECLINED TO
11 POST THE ASSISTANT MANAGER POSITION, THE CO-MANAGER POSITION.
12 THERE WAS NO ORGANIZED WAY ANYBODY COULD COME FORWARD AND SHOW
13 AN INTEREST IN THOSE POSITIONS.
14 AND VERY IMPORTANTLY, THERE WAS NO RECORD THAT WE
15 KNOW OF THAT WAS MADE OF SOMEBODY'S INTEREST. IF I CAME TO YOU
16 AS MY SUPERVISOR AND SAID, "I WOULD LIKE ONE OF THOSE JOBS,"
17 IF I KNEW WHO TO GO TO TO BEGIN WITH, YOU HAD NO OBLIGATION TO
18 RECORD IT, YOU HAD NO OBLIGATION TO DO ANYTHING ABOUT IT. THE
19 MANAGER COULD GO TO ANYBODY HE OR SHE WISHED TO MAKE A
20 SELECTION.
21 SO THERE WAS A WORD-OF-MOUTH PROCESS FOR ANNOUNCING
22 VACANCIES IN DOMINGO, BUT THE COURT OF APPEALS MADE CLEAR THAT
23 THIS WAS AN INFORMAL APPLICATION PROCESS THERE. THERE IS NONE
24 HERE. AND IT'S HARD TO IMAGINE HOW THE COURT WOULD EXPECT
25 PEOPLE TO COME FORWARD AND RECONSTRUCT WHETHER THEY HAD AN
78
ORAL ARGUMENT BY MR. SELLERS
1 INTEREST IN PROMOTION FOR A JOB WHERE THERE WAS NO PROCESS TO
2 APPLY, NO RECORD MADE OF ANY EXPRESSION OF INTEREST.
3 THE COURT: AND SORT OF A NAKED DECLARATION THAT
4 INDICATES THAT OVER AND ABOVE QUALIFICATION THAT THERE WAS
5 INTEREST --
6 MR. SELLERS: WELL --
7 THE COURT: -- WOULD NOT ILLUMINATE THAT ISSUE AND
8 BE A PART OF A PROCESS THAT YOU WOULD THINK WOULD BE
9 APPROPRIATE.
10 MR. SELLERS: I DON'T THINK IT WOULD ADD MUCH TO
11 THIS FOR THE FOLLOWING REASON: YOU ASK THE WOMEN GOING BACK
12 TWO, THREE, FOUR YEARS GOING FORWARD AND SAY INDIVIDUALLY, "I
13 WOULD HAVE BEEN INTERESTED IN SUCH AND SUCH PROMOTIONS," AND
14 YOU WOULD THEN EXPECT, I ASSUME, INDIVIDUAL MANAGERS TO COME
15 FORWARD AND SAY, "OH, MS. JONES WAS NOT INTERESTED IN THE
16 PROMOTION, I HAPPEN TO KNOW."
17 FRANKLY, EACH SIDE IS RECOLLECTING FROM YEARS OF
18 MEMORY OF WHETHER ONE WAS INTERESTED AND WHETHER ONE SAYS THE
19 OTHER WAS NOT INTERESTED. I DON'T SEE HOW THAT REALLY PROVIDES
20 AN INFORMED RELIABLE PROCESS FOR DETERMINING HOW TO ALLOCATE --
21 DETERMINING WHO SHOULD BE ELIGIBLE FOR -- AT LEAST FOR THE
22 AGGREGATE AMOUNT OF BACK PAY FOR PROMOTIONS.
23 HAVING SAID THAT, I WANT TO ADD THAT IF THE COURT
24 WOULD DRAW THE DISTINCTION BETWEEN COMPUTING THE AGGREGATE
25 AMOUNT OF BACK PAY ATTRIBUTABLE TO DISCRIMINATION PROMOTIONS,
79
ORAL ARGUMENT BY MR. SELLERS
1 AND HOW THE COURT MIGHT ALLOCATE THE BACK PAY AMONGST THE
2 ELIGIBLE CLASS MEMBERS, THERE, ALTHOUGH WE SUBMIT THAT THERE IS
3 A SECOND REASON WHY INTEREST IS NOT A RELIABLE INDICATOR OF
4 SOMEBODY'S ELIGIBILITY, AND THAT IS THAT THE RECORD IS QUITE
5 EXTENSIVE HERE THAT MANAGERS ENGAGED IN CONDUCT THAT
6 DISCOURAGED WOMEN FROM BEING INTERESTED IN MANAGEMENT.
7 WE HAVE ON THE RECORD EVIDENCE OF MANAGERS TELLING
8 WOMEN, "WOMEN DON'T BELONG IN MANAGEMENT," "IF YOU HAVE A
9 FAMILY, YOU SHOULDN'T BE IN MANAGEMENT," VARIATIONS OF THAT.
10 WE HAVE A REFERENCE IN THE RECORD TO TOP MANAGEMENT, THE
11 HIGHEST-LEVEL MANAGEMENT IN THE COMPANY REFERRING TO WOMEN IN
12 THE STORES AS "LITTLE JANIE Q'S" AND "GIRLS"; THOSE ARE KINDS
13 OF THINGS THAT HAPPEN IN THE WORKPLACE THAT HARDLY ENCOURAGE
14 WOMEN TO FEEL THAT THEY BELONG IN MANAGEMENT.
15 SO EVEN IF THE COURT WERE INCLINED TO ASK WOMEN,
16 "WERE YOU INTERESTED BACK IN 1999 IN MANAGEMENT," IT'S NOT
17 ENTIRELY CLEAR THAT A WOMAN MIGHT COME IN AND SAY, "YOU KNOW, I
18 REALLY WASN'T, BECAUSE WHEN I SAW THE WAY THEY TREATED WOMEN, I
19 DIDN'T WANT TO BE IN MANAGEMENT." AND THAT IS -- FOR THAT
20 REASON THEY ENGAGED IN CONDUCT THAT DISCOURAGED WOMEN FROM
21 SERVING IN MANAGEMENT.
22 THAT DOESN'T MEAN THEY SUCCEEDED ENTIRELY, BECAUSE
23 THERE OBVIOUSLY ARE SOME WOMEN IN MANAGEMENT. BUT THAT
24 CERTAINLY DOES NOT -- THAT DISTINGUISHES DOMINGO AS WELL.
25 THERE IS NO EVIDENCE IN THE RECORD OF THAT KIND OF CONDUCT THAT
80
ORAL ARGUMENT BY MR. SELLERS
1 AFFIRMATIVELY DISCOURAGES EMPLOYEES FROM SEEKING POSITIONS.
2 AND SO WHEN THE COURT IN THE NINTH CIRCUIT SAID INQUIRY ABOUT
3 INTEREST WOULD BE USEFUL FOR -- BY INDIVIDUAL, IT WAS RELYING
4 ON THE RECORD THAT THERE WOULD HAVE BEEN NO BASIS TO DISCOURAGE
5 PEOPLE FROM EVEN SHOWING AN INTEREST.
6 HAVING SAID THAT, WHEN YOU GET PAST THE AGGREGATE
7 FORMULATION OF BACK PAY FOR PROMOTION DISCRIMINATION, YOUR
8 HONOR, THERE ARE PROXIES WHICH COULD BE USED TO DETERMINE
9 WHETHER WOMEN WERE INTERESTED IN PROMOTION. I WILL MENTION A
10 FEW, BUT I WANT TO CAUTION THE COURT THAT I AM NOT, AT THIS
11 POINT, CONVINCED THAT THEY ARE -- WHETHER THEY ARE ENTIRELY
12 RELIABLE. THEY ARE, NONETHELESS, IN THE RECORD ALREADY AND NOT
13 SOMETHING THAT REQUIRES INDIVIDUAL HEARINGS TO ASCERTAIN FROM A
14 WOMAN WHETHER SHE WAS INTERESTED AND A MANAGER WHO DISAGREES
15 WITH HER.
16 THE COURT: SO BEFORE WE GET THERE, YOUR POSITION,
17 REALLY, IS THAT INTEREST IS NOT A RELIABLE INDICATOR, NOT
18 SOMETHING THAT THE COURT SHOULD FACTOR IN, NECESSARILY, BECAUSE
19 OF THE FACTUAL RECORD HERE.
20 MR. SELLERS: THAT'S CORRECT. I THINK THERE ARE
21 CIRCUMSTANCES IN THIS CASE THAT DISTINGUISH THEM.
22 YOUR HONOR, TO GIVE YOU A FEW EXAMPLES --
23 THE COURT: BUT I SUSPECT BEFORE WE'RE THROUGH,
24 YOU'RE GOING TO OFFER SOMETHING THAT WOULD INDICATE HOW IT IS
25 THAT THE COMPONENT PARTS OF THE FORMULA WOULD DISTINGUISH
81
ORAL ARGUMENT BY MR. SELLERS
1 FOR --
2 MR. SELLERS: YES.
3 THE COURT: -- POTENTIAL VICTIMS OF DISCRIMINATION,
4 AS COMPARED TO ACTUAL --
5 MR. SELLERS: ABSOLUTELY.
6 IF YOU START WITH, AGAIN, THE POOLS, THE ECONOMIC
7 ANALYSIS OF THE POOLS, AS THE COURT IS AWARE IN THE PROMOTION
8 ANALYSIS, EACH SIDE DIVIDED THE WORK FORCE INTO DIFFERENT
9 POOLS. WE HAD DIFFERENT SIZED POOLS AND DIFFERENTLY
10 CONSTRUCTED POOLS, BUT POOLS IS A COMMON FEATURE HERE. AND WE
11 MADE COMPARISONS TO SEE WHETHER WOMEN AND MEN IN THE SAME POOL
12 WHO ARE PRESUMPTIVELY COMPARABLY QUALIFIED AND COMPARABLY
13 ELIGIBLE FOR PROMOTION GOT PROMOTIONS, AND TO WHAT EXTENT THAT
14 HAPPENED AT DIFFERENT TIMES.
15 THAT PERMITS US TO LOOK AT WHETHER THERE WERE
16 VACANCIES IN PARTICULAR PLACES. SOME PLACES THERE WERE MORE
17 VACANCIES THAN OTHERS. WE, FOR INSTANCE, DO NOT HAVE TO
18 PRESUME THAT ALL WOMEN WERE ELIGIBLE FOR ALL VACANCIES. SOME
19 JOBS ARE MORE LIKELY, FROM THE RECORD HERE, FILLED FROM WITHIN
20 THE STORE, SUCH AS THE SUPPORT MANAGER POSITIONS.
21 ONE LIMITATION THE COURT COULD IMPOSE -- AGAIN, I
22 WOULD PROPOSE ON A DEVELOPED RECORD, WHEN IT WAS SURE TO THE
23 COURT THAT IT'S MANAGEABLE TO DO IT AT THIS POINT, IS THAT IT
24 COULD LIMIT THE SUPPORT MANAGER POSITIONS IN WHICH WOMEN MIGHT
25 OTHERWISE BE ELIGIBLE TO THOSE THAT ARE OPEN IN THE STORES IN
82
ORAL ARGUMENT BY MR. SELLERS
1 WHICH THEY WORKED AT THE TIME.
2 A SECOND IS ASSISTED -- THE MANAGER TRAINEE
3 POSITIONS, WHICH ARE, AS THE COURT IS AWARE, THE GATE INTO
4 MANAGEMENT. THOSE WERE TYPICALLY FILLED AMONG EMPLOYEES WHO
5 WERE WITHIN THE PARTICULAR DISTRICT IN WHICH THE VACANCY, THE
6 MANAGEMENT POSITION WAS ANTICIPATED TO BE OPEN. SO YOU CAN
7 LIMIT THAT GROUP THERE.
8 ANOTHER WAY YOU COULD DO IT IS -- YOU WOULD
9 CERTAINLY BE COMPARING PEOPLE WITH THE SAME MINIMUM
10 QUALIFICATIONS.
11 THE COURT: UM-HMM.
12 MR. SELLERS: YOU WOULD ALSO BE COMPARING PEOPLE WHO
13 HAD THE SAME LEVEL OF JOB AT THE TIME OF THE VACANCY; THAT IS,
14 WE WOULD NOT PRESUME THAT HOURLY WORKERS WOULD BE COMPETING FOR
15 STORE MANAGER JOBS, FOR INSTANCE.
16 WE WOULD BE -- WE COULD, I THINK, LOOK TO SEE WHICH
17 JOBS TYPICALLY HAVE FED INTO OTHER JOBS SO THAT WE COULD LOOK
18 TO SEE AND LIMIT THE POOL OF PEOPLE WHO ARE ELIGIBLE FOR
19 PARTICULAR JOBS IN SEEKING BACK PAY TO THOSE WHO HELD JOBS THAT
20 WERE TYPICALLY FEEDERS INTO THE POSITIONS FOR WHICH THE VACANCY
21 AROSE.
22 THOSE ARE ALL FACTORS THAT COULD READILY LEAD TO A
23 MUCH MORE REFINED ANALYSIS THAN SIMPLY SAYING, AND INDEED WERE
24 USED ALREADY, RATHER THAN SIMPLY SAYING ALL WOMEN WERE ELIGIBLE
25 FOR ALL PROMOTIONS AT ALL LEVELS AT ALL TIMES.
83
ORAL ARGUMENT BY MR. SELLERS
1 THE OTHER THING, AGAIN, IF THE COURT WERE INCLINED,
2 THAT IT COULD LOOK TO AS A PROXY FOR INTEREST, ONCE IT HAD
3 DETERMINED THE ULTIMATE AGGREGATE BACK PAY IN DETERMINING HOW
4 TO ALLOCATE IT, IT COULD LOOK AT THE POOL OF WOMEN WHO HAD EVER
5 BID FOR A PROMOTION. WE WOULDN'T BE TALKING ABOUT SALARIED
6 POSITIONS, BECAUSE THEY DIDN'T KEEP RECORDS OF THOSE. BUT
7 THERE WERE DEPARTMENT MANAGER POSITIONS THAT ARE LOWER-LEVEL
8 SALARIED -- HOURLY SUPERVISORY POSITIONS. THAT IS ONE WAY TO
9 LOOK TO SEE A LEVEL OF INTEREST.
10 OBVIOUSLY, DEPARTMENT MANAGER AND STORE MANAGER
11 SALARIED POSITIONS ARE DIFFERENT, BUT DOMINGO MADE CLEAR THAT
12 EVEN AS TO INTEREST SHOWING THAT EMPLOYEES WHO SHOWED SOME
13 INTEREST, EVEN IF IT WAS FOR PROMOTIONS OUTSIDE THE LIABILITY
14 PERIOD, WOULD BE CREDITED WITH HAVING SHOWN AN INTEREST IN
15 PROMOTION.
16 ANOTHER THING THAT THE COURT COULD REQUIRE IS THAT
17 WOMEN MAKE A -- SUBMIT A CLAIM FORM THAT SIMPLY STATES UNDER
18 OATH THAT THEY WERE INTERESTED IN THE PROMOTION. AGAIN, THIS
19 IS AT THE STAGE WHERE THE COURT HAS ALREADY DETERMINED THE
20 AGGREGATE AMOUNT OF BACK PAY. AT THAT JUNCTURE, AS THE HILAO
21 VERSUS ESTATE OF MARCOS CASE MAKES CLEAR, WAL-MART'S INTEREST
22 IN THE ALLOCATION OF THE BACK PAY IS NOT SUBSTANTIAL IF IT
23 DOESN'T EXIST AT ALL. IT WOULD REALLY BE UP TO THE COURT.
24 THE COURT: THOSE OPTIONS DON'T -- I JUST WANT TO
25 MAKE SURE I COMPLETELY COMPREHEND IT -- THEY DON'T REALLY
84
ORAL ARGUMENT BY MR. SELLERS
1 FACTOR IN AN INTEREST FACTOR WITH RESPECT TO DETERMINING THE
2 BASE THAT YOU WOULD USE TO THEN AGGREGATE.
3 MR. SELLERS: THAT'S CORRECT. THESE ARE ALL WITH
4 RESPECT TO DISTRIBUTION.
5 THE COURT: RIGHT.
6 MR. SELLERS: I THINK, ONCE AGAIN, WHAT IS IMPORTANT
7 TO RECOGNIZE IS THAT WAL-MART -- THE PROBLEM WE FACE IS IT'S
8 WAL-MART'S CREATION. THEY WERE THE ONES WHO OPERATED A
9 PROMOTION SYSTEM THAT WAS HIGHLY SUBJECTIVE, THAT DIDN'T RECORD
10 INFORMATION ON WHICH TO -- WHICH THEY MADE THESE PROMOTION
11 DECISIONS. THEY ALLOWED MANAGERS TO MAKE DECISIONS BASED ON
12 CRITERIA THEY NEVER PUBLISHED. AND THEY CREATED A SYSTEM WHERE
13 MANAGERS DISCOURAGE WOMEN FROM BEING INTERESTED IN PROMOTIONS.
14 AND, INDEED, AS MR. SELIGMAN POINTED OUT --
15 THE COURT: WELL, I UNDERSTAND THAT AS -- IN TERMS
16 OF A CONCLUSION, I UNDERSTAND THAT, BUT, I MEAN, YOU KNOW -- I
17 UNDERSTAND THAT, BUT IT STRIKES ME THAT IN TERMS OF TRYING TO
18 DEVELOP FROM A FORMULAIC APPROACH THE BASIC BUILDING BLOCKS
19 THAT WOULD ALLOW SOME DETERMINATION THAT WOULD DISTINGUISH
20 BETWEEN POTENTIALLY ELIGIBLE AND ACTUAL VICTIMS OF
21 DISCRIMINATION, THERE HAS TO BE SOMETHING THAT ACCOUNTS FOR
22 THAT DISTINCTION BETWEEN THOSE TWO GROUPS AND THE MEASURE OF
23 AGGREGATED DAMAGES.
24 MR. SELLERS: YOUR HONOR, WHAT THE COURT IS ASKING
25 IS WHETHER IT SHOULD IMPOSE ON WOMEN IN DETERMINING WHETHER THE
85
ORAL ARGUMENT BY MR. SELLERS
1 OVERALL AGGREGATE AMOUNT OF BACK PAY ATTRIBUTABLE TO THE
2 PROMOTION DISCRIMINATION A REQUIREMENT THAT WAL-MART ITSELF
3 NEVER IMPOSED.
4 WAL-MART DID NOT REQUIRE A SHOWING OF INTEREST. THE
5 RECORD IS QUITE EXTENSIVE THAT -- WHERE WAL-MART MANAGERS CAME
6 TO WOMEN AND MEN AND SAID, "WOULD YOU LIKE TO BE PROMOTED?"
7 THE COURT: AND SO THERE IS NO GREATER HARM WITH
8 RESPECT TO THEM IN TERMS OF THE AMOUNT THE COURT ULTIMATELY
9 DISCERNS, IN TERMS OF THE AGGREGATE NUMBER, BECAUSE OF THE
10 PATTERN AND PRACTICE AND CONDUCT THEY'RE ENGAGED IN?
11 MR. SELLERS: WELL, IF SOMEBODY WAS OFFERED A
12 POSITION AND THEY ACCEPTED IT, THEN THEY WERE PROMOTED.
13 THE POINT I'M MAKING IS THAT WAL-MART DID NOT
14 REQUIRE A SHOWING OF INTEREST IN ORDER TO BE PROMOTED.
15 MANAGERS REGULARLY INITIATED CONTACTS WITH EMPLOYEES TO ASK
16 THEM IF THEY WERE INTERESTED; AND THEREFORE, IT WOULD BE
17 INCONSISTENT WITH THE PRINCIPLES OF TITLE 7 TO TRY TO
18 RECONSTRUCT A PROXY FOR INTEREST WHEN WAL-MART DIDN'T -- WHEN
19 WAL-MART NEVER REQUIRED A SHOWING OF INTEREST TO BEGIN WITH TO
20 GET PROMOTED. IT'S IMPOSING A HIGHER STANDARD THAN WAL-MART
21 IMPOSED. AND I DON'T SEE HOW TITLE 7 LEGITIMATELY WOULD
22 REQUIRE THAT.
23 I SUBMIT, YOUR HONOR, THAT INTEREST IS A --
24 CERTAINLY COULD BE IN SOME CASES A LEGITIMATE FACTOR, IT
25 APPARENTLY WAS IN DOMINGO. THE CIRCUMSTANCES OF THIS CASE DO
86
ORAL ARGUMENT BY MR. SELLERS
1 NOT REQUIRE THE KIND OF SHOWING OF INTEREST THAT I THINK WAS
2 CONTEMPLATED BY DOMINGO FOR PROMOTIONS IN DETERMINING AGGREGATE
3 BACK PAY FOR PROMOTIONS OR FOR UNEQUAL PAY.
4 I GUESS THE OTHER THING I WOULD SAY IS THAT THE
5 AGGREGATE IS LIKELY TO SHOW SOME LEVEL, APPROXIMATE IN SOME
6 RESPECTS, THE POPULATION OF PEOPLE WHO WERE INTERESTED. THERE
7 WERE PEOPLE WHO WERE IN POSITIONS IMMEDIATELY BELOW THE LEVELS
8 WHERE THE POSITIONS WERE OPEN, AND WE CAN TELL FROM OUR OWN
9 ANALYSIS THE PROPORTIONS OF WOMEN WHO WERE PROMOTED,
10 PROPORTIONS OF MEN WHO WERE PROMOTED, AND FROM THAT BE ABLE TO
11 MAKE SOME ASSESSMENT OF -- INFER SOME LEVELS OF INTEREST.
12 THE COURT: THAT WOULD BE DEPRESSED TOO, THOUGH, BY
13 DISCRIMINATION --
14 MR. SELLERS: IT WOULD. THAT IS THE PROBLEM WE
15 FACE. THAT IS WHY I SAY THAT I DON'T THINK, ULTIMATELY, IT'S A
16 RELIABLE INDICATOR.
17 I WANT TO EMPHASIZE, AGAIN, THAT IF WE GET PAST THE
18 AGGREGATE, AND I UNDERSTAND THAT'S WHERE THE COURT'S QUESTION
19 IS RIGHT NOW --
20 THE COURT: RIGHT. I UNDERSTAND WHAT YOUR POSITION
21 IS FOR DISTRIBUTION.
22 MR. SELLERS: ALL RIGHT. BUT I THINK WHAT'S
23 IMPORTANT TO RECOGNIZE IS THAT THE ABSENCE, THE FAILURE TO
24 RECONSTRUCT INTEREST IN DETERMINING AGGREGATE EXPOSURE FOR BACK
25 PAY, IS THE RESULT OF THE CIRCUMSTANCES OF THIS CASE.
87
ORAL ARGUMENT BY MR. SELLERS
1 YOUR HONOR, I WOULD BE HAPPY TO TURN VERY QUICKLY,
2 IF THE COURT --
3 THE COURT: NO, LET ME ASK: YOU READ DOMINGO A
4 LITTLE BIT DIFFERENT THAN I; ONE OF THINGS I'M ALSO CONCERNED
5 WITH IS, AND I'VE ASKED THIS QUESTION -- I MIGHT AS WELL ASK IT
6 OF YOU, TOO -- UTILIZATION OF A FORMULAIC RESOLUTION OF WHAT
7 THE BACK PAY AWARD WOULD BE, LET'S SAY, IN A PROMOTIONAL
8 CONTEXT; DOES THAT PROCESS ALSO ENTITLE THE DEFENSE TO SOME
9 SORT OF INDIVIDUALIZED ASSESSMENT ABOUT THE -- OTHER THAN THE
10 COMPONENT PARTS OF THE FORMULA ITSELF, SOMETHING IN THE NATURE
11 THAT IS SET FORTH IN DOMINGO, ITSELF, WHERE IT INDICATES THERE
12 THAT THE EMPLOYER WOULD HAVE THE BURDEN OF ESTABLISHING A LACK
13 OF QUALIFICATION, OR SOME OTHER VALID REASON, AND IT READS THAT
14 ONTO THE FORMULAIC PROCESS?
15 MR. SELLERS: RIGHT.
16 YOUR HONOR, WHAT I THINK IS HELPFUL HERE IS THAT WE
17 ALREADY HAVE IN THE DATABASE VIRTUALLY ALL COMPUTER -- IN
18 COMPUTER READABLE FORM ALL THE OBJECTIVE FACTORS THAT BEAR ON
19 PROMOTION.
20 IF YOU LOOK AT THE FACTORS THAT WAL-MART IDENTIFIES
21 IN ITS PROMOTION GUIDELINES FOR ELIGIBILITY FOR PROMOTION, IT
22 LISTS PERFORMANCE, YOU HAVE TO HAVE A CERTAIN PERFORMANCE
23 LEVEL, YOU HAVE TO HAVE BEEN IN POSITION FOR A CERTAIN AMOUNT
24 OF TIME.
25 ONE FACTOR THAT IS NOT IN THE DATABASE NOW, BUT
88
ORAL ARGUMENT BY MR. SELLERS
1 COULD BE CONSTRUCTED FROM RECORDS THAT WAL-MART HAS, IS WHETHER
2 THE EMPLOYEE HAS BEEN THE SUBJECT OF A RECENT DISCIPLINARY
3 ACTION. BUT THAT IS KNOWABLE IN A NONSUBJECTIVE MANNER. THAT
4 -- THERE IS SOME -- ONE OF THE THINGS -- ONE OF THE FACTORS
5 THAT IS LISTED MORE --
6 THE COURT: SO WE HAVE A UNIVERSE OF JOBS.
7 MR. SELLERS: YES.
8 THE COURT: PROMOTIONS, POSSIBLE PROMOTIONS.
9 MR. SELLERS: YES.
10 THE COURT: NOT EVERYONE WHO IS INTERESTED IN THE
11 JOB WILL GET IT. BUT THEY MAY ALL BE SIMILARLY SITUATED WITH
12 RESPECT TO THE BASELINE QUALIFICATIONS.
13 MR. SELLERS: CORRECT.
14 THE COURT: AND HOW IS IT THAT YOU PROPOSE THE COURT
15 ISOLATE OUT THE DISTINCTION BETWEEN WHAT YOU'VE JUST TALKED
16 ABOUT, AND I UNDERSTAND THAT YOU HAVE IN THE DATABASE THESE
17 OBJECTIVE FACTORS THAT READ ON QUALIFICATION, BUT THEY DON'T
18 NECESSARILY READ ON WHETHER OR NOT --
19 MR. SELLERS: BECAUSE YOUR HONOR, THE ONLY THING
20 THAT IS -- WHAT OUR DATABASE WILL TAKE INTO ACCOUNT ARE ALL THE
21 OBJECTIVE JOB-RELATED FACTORS THAT WERE CONSIDERED OR COULD BE
22 CONSIDERED IN PROMOTIONS.
23 WHAT THE COURT IS ASKING IS --
24 THE COURT: NO, I'M TAKING OUT THE SUBJECTIVE PIECE,
25 BECAUSE I UNDERSTAND THAT IS WHERE THE RUBBER MEETS THE ROAD,
89
ORAL ARGUMENT BY MR. SELLERS
1 AND YOU CANNOT RECONSTRUCT THAT.
2 MR. SELLERS: RIGHT. BUT I GUESS THE POINT IS,
3 THERE MIGHT BE -- LET'S SAY THERE ARE SEVERAL THOUSAND
4 VACANCIES FOR A PARTICULAR JOB IN A PARTICULAR YEAR, AND THERE
5 MIGHT BE MANY MORE WOMEN WHO ARE ELIGIBLE -- AS WELL AS MEN --
6 WHO ARE ELIGIBLE FOR THOSE PROMOTIONS THAN THOSE VACANCIES --
7 THE COURT: RIGHT.
8 MR. SELLERS: -- THE JURISPRUDENCE IN THIS AREA
9 RECOGNIZES THAT WE DON'T HAVE TO POSITION AN INDIVIDUAL AND
10 DECISIVELY SELECT THAT PERSON AS THE CANDIDATE WHO WOULD HAVE
11 RECEIVED THE PROMOTION. THIS IS A REMEDY WHERE THERE HAS BEEN
12 AN ENVIRONMENT OF DISCRIMINATION.
13 WHAT THE ECONOMIC MODEL PERMITS US TO DO IS TO SAY
14 THAT WOMEN COMPRISED A CERTAIN PROPORTION OF THAT POPULATION;
15 THEIR CHANCES OF GETTING PROMOTED IN A NEUTRAL SYSTEM WOULD
16 HAVE BEEN "X." AND WE CAN THEN PROJECT THE LIKELIHOOD THAT IF
17 A MAN WAS SELECTED WHETHER IT SHOULD HAVE BEEN A WOMAN.
18 FROM THAT, YOU CAN ATTRIBUTE A CERTAIN AMOUNT OF
19 BACK PAY TO THE SELECTION OF A MAN OR A WOMAN. AND THEN THE
20 QUESTION IS -- THAT IS HOW YOU GET TO THE AGGREGATE AMOUNT OF
21 BACK PAY. AND THE QUESTION IS AN ALLOCATION ISSUE.
22 SO I DON'T THINK THAT THE MODEL THAT WE'RE TALKING
23 ABOUT TAKES INTO ACCOUNT ALL THE RELEVANT JOB-RELATED OBJECTIVE
24 FACTORS THAT WAL-MART ITSELF SAYS GO INTO A PROMOTION DECISION.
25 THE COURT: NOW, FROM A MANAGEABILITY STANDPOINT,
90
ORAL ARGUMENT BY MR. SELLERS
1 STAYING ON THE ISSUE OF PROMOTION, DOES DOMINGO HAVE ANYTHING
2 TO SAY ABOUT WHETHER OR NOT THE EMPLOYER IS ALLOWED TO PRESENT
3 ANY KIND OF EVIDENCE WITH RESPECT TO THE MERITS OF THE
4 QUALIFICATION FOR THE POSITION?
5 MR. SELLERS: WELL, I THINK DOMINGO SAYS THAT THE
6 EMPLOYER DOES. AND I THINK WAL-MART WILL HAVE THAT
7 OPPORTUNITY.
8 IN THE ANALYSIS IT'S GOING TO PRESENT, IT'S GOING TO
9 OFFER EVIDENCE THAT THIS WOMAN HAD THESE QUALIFICATIONS, AND
10 THAT MAN HAD THOSE QUALIFICATIONS; IT CAN PRESENT ITS OWN
11 COMPETING MODEL. FOR INSTANCE, ONE ISSUE WHICH I KNOW IS
12 SOMETHING THAT WAL-MART FEELS STRONGLY ABOUT IS THAT EMPLOYEES
13 WHO WORK IN THE GROCERY AREA MAY NOT BE SUITED TO WORK IN SOME
14 OF THE OTHER AREAS, AND VICE-VERSA. WELL, THAT IS AN ISSUE
15 THAT THEIR MODEL WILL TAKE ACCOUNT OF. OUR MODEL VIEWS -- IS
16 BASED ON EVIDENCE THAT WE THINK VIEWS THE RECORD DIFFERENTLY.
17 THE COURT: AND THAT'S ALL THE PROCESS THEY'RE DUE?
18 MR. SELLERS: WELL, I THINK THAT IS THE PROCESS THAT
19 THESE DECISIONS CONTEMPLATE. OTHERWISE, WE'RE IN A POSITION
20 WHERE WAL-MART IS IN A POSITION TO TRANSFORM THE REMEDIAL PHASE
21 OF THE CASE INTO THOUSANDS AND THOUSANDS AND MILLIONS OF
22 INDIVIDUAL HEARINGS. AND AGAIN, RELYING ON INFORMATION THAT IT
23 DIDN'T RECORD, THAT IT DIDN'T GUIDE THE MANAGERS IN HOW TO USE,
24 AND IS SUBJECTIVE AND IS ULTIMATELY PART OF THE EVIDENCE THAT
25 WE CONTEND ARE TAINTED FACTORS.
91
ORAL ARGUMENT BY MR. SELLERS
1 YOU CANNOT RELY ON TAINTED FACTORS BY THE TIME WE
2 GET PAST LIABILITY, AND THAT IS WHAT IT WOULD CALL FOR DOING.
3 AT THE SAME TIME, IT WOULD CALL FOR TRANSFORMING THIS INTO AN
4 UNMANAGEABLE PROCESS.
5 YOUR HONOR, CONSCIOUS OF THE TIME, I'M HAPPY TO GO
6 ON TO TALK ABOUT FRONT PAY, AND THE LIKE, I SENSE THAT THOSE
7 WERE THE COURT'S MAJOR CONCERNS, BUT I WOULD LIKE TO TALK
8 BRIEFLY ABOUT THE ISSUE OF THE MIXED MOTIVE DEFENSE, BECAUSE I
9 KNOW THAT WAS A TOPIC THAT --
10 THE COURT: YEAH, BUT I THINK THAT WE SHOULD STICK
11 WITH, FOR INSTANCE, THE RESPONSE TO QUESTION 9, SUBPARAGRAPH 1,
12 LET'S GET THAT.
13 MR. SELLERS: OKAY.
14 THE COURT: YOU'VE ANSWERED THE QUESTION WITH
15 RESPECT TO --
16 MR. SELLERS: I'M SORRY; 9(A)1?
17 THE COURT: RIGHT. YOU'VE ANSWERED THE QUESTION
18 WITH RESPECT TO --
19 MR. SELLERS: WE ARE SEEKING FRONT PAY.
20 THE COURT: RIGHT.
21 MR. SELLERS: WE BELIEVE -- LET ME SPEAK FOR A
22 MOMENT ABOUT THE WAY FRONT PAY WOULD BE HANDLED.
23 THE COURT: OKAY.
24 MR. SELLERS: WITH RESPECT TO THE FORMULATION OF
25 FRONT PAY IN THE UNEQUAL PAY CLAIMS, THE COURT IS, OBVIOUSLY,
92
ORAL ARGUMENT BY MR. SELLERS
1 THE -- FRONT PAY WOULD ORDINARILY CUT OFF AT SUCH TIMES AS THE
2 WOMEN'S PAY RATES ARE SET COMPARABLE TO WHERE THEY SHOULD HAVE
3 BEEN. THE COURT CAN MEASURE THAT IN SEVERAL DIFFERENT WAYS.
4 IT CAN SIMPLY CONCLUDE ON THE BASIS OF THE RECORD THAT THAT
5 MIGHT TAKE A CONSIDERABLE AMOUNT OF TIME AND JUST AWARD A FRONT
6 PAY AMOUNT BASED ON A YEAR OR TWO YEARS OR SIX MONTHS, OR
7 WHATEVER IT CONCLUDES IS A REASONABLE TIME FOR WAL-MART TO HAVE
8 ADJUSTED THE PAY RATES.
9 OR, IT CAN REVISIT THIS ISSUE AS EVIDENCE COMES IN
10 THAT WAL-MART HAS ADJUSTED THE PAY RATES UPWARD, AND THEN THE
11 FRONT PAY CUTS OFF. I THINK IT'S A FAIRLY STRAIGHTFORWARD
12 CALCULATION EITHER WAY. IT IS A QUESTION OF HOW MUCH THE COURT
13 WANTS TO BE INVOLVED IN AN ONGOING PROCESS.
14 WITH RESPECT TO THE PROMOTIONS, THE FRONT PAY, AS I
15 THINK WE'VE MADE CLEAR IN OUR PAPERS, WE ARE NOT SEEKING
16 RETROACTIVE PROMOTIONS, NOT BECAUSE OUR CLIENTS AREN'T ENTITLED
17 TO THEM, BUT BECAUSE WE THINK THAT WOULD EMBROIL THE COURT IN
18 HYPOTHETICAL JUDGMENTS AND BECAUSE IT WOULD BE UNDULY LENGTHY
19 AND CUMBERSOME.
20 NOT WITHSTANDING THAT, OUR CLIENTS ARE ENTITLED TO
21 SOME MEASURE OF FRONT PAY. AND THAT, AGAIN, COULD BE
22 FORMULATED BASED ON SOME PROJECTION OF THE AMOUNT OF TIME IT
23 MIGHT TAKE FOR WAL-MART TO OVERCOME THE DEFICIT IN PROMOTIONS
24 OF WOMEN, IN -- OR SOME OTHER METHODS. BUT I THINK IT'S
25 READILY SUSCEPTIBLE TO A FORMULAIC ANALYSIS, USING THE SAME
93
ORAL ARGUMENT BY MR. SELLERS
1 KIND OF ECONOMIC MODELS THAT WE HAVE USED IN BACK PAY
2 CALCULATIONS.
3 AND, AS I SAID, THE POLLARD CASE MAKES CLEAR THAT
4 THE FORMULAS USED FOR FRONT PAY AND BACK PAY OUGHT TO BE
5 SIMILAR, ONE SIMPLY EXTENDING THE BACK PAY EXPOSURE BEYOND
6 JUDGMENT. SO I HOPE THAT ANSWERS THE COURT'S QUESTIONS ABOUT
7 THAT.
8 THE COURT: OKAY.
9 ALL RIGHT. SUB-3 THERE, LET'S GO THROUGH THAT ONE.
10 MR. SELLERS: ALL RIGHT. 9 -- I'M SORRY -- OH, 3.
11 I'M SORRY.
12 THE COURT: YEAH.
13 MR. SELLERS: "ASSUMING THAT THE COURT DECIDES THIS,
14 HOW COULD A PHASE ONE JURY DETERMINE A CLASS-WIDE PUNITIVE
15 DAMAGE AWARD WITHOUT KNOWING THE AGGREGATE AMOUNT OF LOST
16 EARNINGS OWED THE CLASS." I ATTEMPTED TO ADDRESS THAT --
17 THE COURT: YOU HAVE POSTULATED, AT LEAST, THAT AS I
18 UNDERSTAND IT, THE TRIER OF FACT WOULD BE GIVEN FORMULAS THAT
19 WOULD POSIT THE AGGREGATE LOSS FROM WHICH THERE WOULD BE SOME
20 EVIDENCE OF THE HARM THAT THEY WOULD THEN UTILIZE TO
21 EXTRAPOLATE FROM THAT A PUNITIVE DAMAGE AWARD CLASS-WIDE.
22 MR. SELLERS: THAT'S CORRECT.
23 AGAIN, I WANT TO BE CLEAR, YOUR HONOR, THE SUPREME
24 COURT JURISPRUDENCE IN THIS DOES NOT REQUIRE THE SUBMISSION OF
25 EVIDENCE OF DAMAGES OR BACK PAY, OR ANYTHING OF THE SORT. WHAT
94
ORAL ARGUMENT BY MR. SELLERS
1 IT DOES IS THAT LOOKING BACKWARD, THE APPELLATE COURTS GET TO
2 SECOND GUESS WHAT THE TRIAL COURT AND THE PARTIES DID, WHICH IS
3 THEIR PREROGATIVE. UNDER THOSE CIRCUMSTANCES, THEY CAN
4 DETERMINE TO WHAT EXTENT THE JURY'S AWARD OF PUNITIVE DAMAGES
5 MIGHT BE REASONABLY RELATED TO THE EXTENT OF THE HARM.
6 BUT, YES, WE WOULD BE USING AN ECONOMIC MODEL. AND,
7 AGAIN, THE COURT WOULD HAVE THE AUTHORITY TO GRANT A
8 REMITTITUR, IF IT CONCLUDED AFTER DETERMINING THE BACK PAY AND
9 FRONT PAY THAT THE PUNITIVE DAMAGE AWARD, IF ANY, WAS OUT OF
10 LINE.
11 THE COURT: ALL RIGHT.
12 LET'S MOVE TO THE ISSUES RAISED BY MOLSKI IN
13 QUESTION 10.
14 MR. SELLERS: ALL RIGHT.
15 MOLSKI, YOUR HONOR, THE COURT ASKED THE QUESTION AS
16 TO WHETHER OR NOT NOTICE AND OPPORTUNITY TO OPT OUT THAT IS A
17 HYBRID MODEL THAT IS AVAILABLE UNDER RULE 23(B)(2), THE COURT
18 HAS THE AUTHORITY TO GRANT NOTICE AND A RIGHT TO OPT OUT, UNDER
19 A 23(B)(2) CLASS, WHETHER THAT WOULD SUFFICE TO SATISFY THE
20 CONCERNS, THE DUE PROCESS CONCERNS RAISED.
21 I THINK MOLSKI ANSWERS THAT PRETTY DEFINITIVELY IN
22 THE AFFIRMATIVE, AND OTHER COURTS HAVE ADDRESSED THIS MORE
23 EXTENSIVELY.
24 THE EUBANKS DECISION IN THE D.C. CIRCUIT DISCUSSES
25 IT IN SOME LENGTH THAT WHERE THERE ARE NONECONOMIC MONETARY
95
ORAL ARGUMENT BY MR. SELLERS
1 RELIEF, THAT IS, SOMETHING OTHER THAN BACK PAY, WHICH I THINK
2 EVERY CIRCUIT AT THIS POINT PRETTY MUCH RECOGNIZES AS EQUITABLE
3 IN NATURE AND CONSISTENT, HISTORICALLY, WITH A (B)(2)
4 CERTIFICATION, BUT THE PUNITIVE DAMAGE AWARD, IF ONE WERE
5 ALLOWED, WOULD CERTAINLY BE A LEGAL REMEDY.
6 AS MR. SELIGMAN POINTED OUT, EVEN IF THERE WERE, FOR
7 SOME OTHER REASON, A MANAGER THOUGHT, FOR INSTANCE, THOUGHT
8 THAT HE OR SHE -- THAT SHE THOUGHT THAT SHE WANTED TO PURSUE
9 HER OWN CLAIM, OR THAT SHE DIDN'T WANT TO BE A PART OF THIS,
10 THE OPPORTUNITY TO OPT OUT AND TO GIVE NOTICE TO EVERYONE IS, I
11 THINK, BECOMING INCREASINGLY RECOGNIZED. AND IT'S CERTAINLY
12 ENDORSED BY THE NINTH CIRCUIT AS A SAFETY VALVE.
13 I THINK THAT SHOULD SATISFY THE CONCERNS THAT
14 WAL-MART RAISED.
15 THE COURT: NOW, WITH RESPECT TO QUESTION 11, THEN I
16 MAY BE INACCURATELY STATING YOUR POSITION, BUT IT STRIKES ME
17 THAT YOUR POSITION WITH RESPECT TO THE PROMOTION CLAIM WOULD BE
18 THAT IN THE BUILDING OF THE COMPETING MODELS, THERE WOULD BE A
19 RECOGNITION OF THE DEFENSE'S DUE PROCESS INTEREST, AND THAT
20 WOULD BE THE METES AND BOUNDS OF IT.
21 MR. SELLERS: WITH RESPECT TO THE AGGREGATE EXPOSURE
22 FOR BACK PAY --
23 THE COURT: RIGHT.
24 MR. SELLERS: -- THAT IS CORRECT. AND I WANT TO
25 HASTEN TO ADD THAT THE REASON FOR THAT IS BECAUSE THOSE MODELS
96
ORAL ARGUMENT BY MR. SELLERS
1 WOULD TAKE INTO ACCOUNT, AND ALREADY IN LARGE PART DO TAKE INTO
2 ACCOUNT ALL THE OBJECTIVE FACTORS THAT WENT INTO THE
3 COMPENSATION DECISIONS, THAT WENT INTO THE PROMOTIONS
4 DECISIONS.
5 GIVEN THE OTHER CIRCUMSTANCES IN THIS CASE THAT I
6 DESCRIBED, I DON'T THINK THERE IS ANY UTILITY SERVED BY TRYING
7 TO RECONSTRUCT WHAT PROMOTIONS SOMEBODY WOULD HAVE RECEIVED IN
8 AN ENVIRONMENT WHERE WOMEN WERE DISCOURAGED FROM SEEKING
9 PROMOTIONS, AND WHERE THEY DIDN'T KEEP TRACK OF WHO WAS
10 INTERESTED AND DIDN'T REQUIRE ANY SHOWING OF INTEREST. AND THE
11 SAME IS TRUE WITH RESPECT TO THE UNEQUAL PAY CLAIMS.
12 THE COURT: ALL RIGHT.
13 JUST PRACTICALLY SPEAKING, I MEAN, YOU'RE TALKING
14 ABOUT A POTENTIAL CLASS OF OVER A MILLION --
15 MR. SELLERS: YES.
16 THE COURT: -- WOMEN; ONCE THE FORMULA, THE MODEL IS
17 BUILT, LET'S SAY, WITH RESPECT TO THE UNEQUAL PAY CLAIM, HOW DO
18 YOU ENVISION THE ANALYSIS OF THE INFORMATION AND DETERMINATION
19 AS TO REQUISITE PAYOUT AND DISTRIBUTION? HOW IS THAT GOING TO
20 BE MADE? HOW IS THAT GOING TO BE DONE?
21 MR. SELLERS: WELL, ONCE THE COURT HAS DETERMINED AN
22 AGGREGATE AMOUNT OF BACK PAY ATTRIBUTABLE TO EACH OF THESE
23 CLAIMS, AND IT HAS DETERMINED TO WHICH CLASS MEMBERS IT WANTS
24 TO AWARD BACK PAY, AT THAT POINT WE WILL -- THE MODELS THAT WE
25 HAVE WILL PERMIT US TO IDENTIFY INDIVIDUAL BY INDIVIDUAL HOW
97
ORAL ARGUMENT BY MR. SELLERS
1 MUCH A PARTICULAR WOMAN WAS UNDERPAID, COMPARED TO COMPARABLY
2 SITUATED MEN.
3 WE WILL BE IN A POSITION, WHEN WE ADD THOSE
4 TOGETHER, TO SAY THAT ATTRIBUTABLE TO UNEQUAL PAY, WOMAN "X"
5 WAS PAID, YOU KNOW, $300 LESS PER MONTH, OR WHATEVER IT MAY BE
6 FOR A PERIOD OF TIME --
7 THE COURT: UM-HMM.
8 MR. SELIGMAN: -- AND SUM THAT UP. AND THE SAME IS
9 TRUE WITH RESPECT TO PROMOTIONS.
10 SO THE MODELS WE HAVE WILL GENERATE THE KIND OF
11 INDIVIDUAL-BY-INDIVIDUAL SPECIFIC INFORMATION THAT WILL PERMIT
12 A COMPUTATION OF THE AMOUNTS OF BACK PAY THAT COULD BE AWARDED
13 EACH CLASS MEMBER.
14 THE COURT: SO PRACTICALLY SPEAKING, NO USE OF ANY
15 SPECIAL MASTERS, ANYTHING OF THAT NATURE IN THAT PROCESS?
16 MR. SELLERS: WE DON'T FORESEE IT. I RECOGNIZE THAT
17 AS WE GET DOWN THE ROAD WE MAY ENCOUNTER AN ISSUE THAT WE
18 HADN'T FORESEEN, BUT WE DON'T THINK THAT IT'S NECESSARY.
19 I HASTEN TO ADD, AGAIN, THAT THAT'S BECAUSE WAL-MART
20 HAS SUCH AN EXTENSIVE TECHNOLOGICAL CAPACITY TO ALREADY
21 TRANSFORM INTO COMPUTER-READABLE INFORMATION MOST OF THE
22 RELEVANT FACTORS THAT WOULD GO INTO THESE FORMULA.
23 THE COURT: AND YOU WANTED TO ADD SOMETHING ABOUT
24 MIXED MOTIVE.
25 MR. SELLERS: I WANT TO ADDRESS MIXED MOTIVE. AND
98
ORAL ARGUMENT BY MR. SELLERS
1 I, OF COURSE, WANT TO ADDRESS THE ESTIMATION ABOUT THE ROUGH
2 ESTIMATE OF THE TRIAL LENGTH.
3 THE COURT: OKAY.
4 MR. SELLERS: YOUR HONOR, I THINK YOUR QUESTION,
5 QUESTION 13 AS TO WHETHER THE MIXED MOTIVE THEORY, IF WE WERE
6 TO SAY THAT WE'RE NOT GOING TO PURSUE THAT THEORY, A THEORY OF
7 LIABILITY, WHETHER THAT WOULD, IN EFFECT, ELIMINATE ANY NEED TO
8 ACCOMMODATE WHATEVER INDIVIDUALIZED PROOF THAT WAL-MART THINKS
9 IT'S ENTITLED TO WITH RESPECT --
10 THE COURT: THE DEFENDANT'S ARGUMENT IS THAT THAT IS
11 DRIVEN BY THE FACTS.
12 MR. SELLERS: WELL, THE FIRST THING, I THINK, IS,
13 YOUR HONOR, THAT THE STATUTE ITSELF IS PRETTY CLEAR. I'M
14 REFERRING NOW TO 42 U.S.C. 2000 E-2M, WHICH SAYS -- IT MAKES
15 CLEAR THAT IT'S AN EXCEPTION TO THE GENERAL PRINCIPLE OF HOW TO
16 PROVE LIABILITY.
17 WE HAVE DISPARATE TREATMENT, SYSTEMIC DISPARATE
18 TREATMENT, A PATTERN AND PRACTICE, IF YOU WILL, AND WE HAVE
19 DISPARATE IMPACT. THOSE ARE THE TRADITIONAL MODELS.
20 THIS THIRD MODEL FOR ESTABLISHING LIABILITY WAS
21 CREATED, BUT IT IS BY NO MEANS SOMETHING THAT THE PLAINTIFFS
22 HAVE TO PURSUE. AND IT IS CLEAR THAT THIS IS AN EXCEPTION TO
23 THE GENERAL APPROACH THAT TEAMSTERS LAID OUT FOR HOW WE WOULD
24 PROVE LIABILITY FOR A PATTERN AND PRACTICE CASE.
25 SECTION 42 U.S.C. 2000 E-5G(2)(B) -- LOTS OF LETTERS
99
ORAL ARGUMENT BY MR. SELLERS
1 THERE -- SAYS, "ON A CLAIM IN WHICH AN INDIVIDUAL PROVES A
2 VIOLATION UNDER THIS TITLE AND/OR RESPONDENT DEMONSTRATES THAT
3 THE RESPONDENT WOULD HAVE TAKEN THE SAME ACTION IN THE ABSENCE
4 OF IMPERMISSIBLE MOTIVATING FACTOR." AND THEN IT GOES ON TO
5 STATE THE CONSEQUENCES. THE PREMISE IS THAT AN INDIVIDUAL
6 PROVES A VIOLATION UNDER THIS SECTION. THAT CONTEMPLATES THAT
7 WE WOULD BE ASKING THE COURT TO GIVE THE JURY AN INSTRUCTION
8 THAT THAT IS A PERMISSIBLE THEORY OF LIABILITY. AND IF IT
9 ISN'T, THEN THE SUBSEQUENT PORTIONS OF THE STATUTE DON'T APPLY.
10 HAVING SAID THAT, THERE ARE A COUPLE OF OTHER
11 RESPONSES TO THIS, IF I MIGHT JUST ADD, AS TO WHY A
12 MIXED-MOTIVE DEFENSE THAT WAL-MART HAS THROWN UP IS NOT OF
13 CONCERN HERE.
14 THE FIRST IS SIMPLY THAT IT'S AN AFFIRMATIVE
15 DEFENSE. WAL-MART NEVER PLED IT IN ITS ANSWER. UNDER RULE
16 8(C) -- OR 8(A) OF THE FEDERAL RULES OF CIVIL PROCEDURE, IT'S
17 BEEN WAIVED. WE'RE NOT AT THIS POINT TALKING ABOUT A SMALL,
18 SLIGHT DELAY IN PLEADING IT, THIS IS SOMETHING -- THIS FIRST
19 SURFACED IN WAL-MART'S OPPOSITION OF CLASS CERTIFICATION TWO
20 YEARS AFTER THE CASE WAS FILED. AND I DON'T THINK ANYBODY
21 FORESAW, AND I THINK EVEN --
22 THE COURT: WOULDN'T IT BE A QUESTION OF PREJUDICE,
23 THOUGH?
24 MR. SELLERS: WELL, I GUESS IT COULD BE. BUT IF
25 WAL-MART IS OFFERING IT AS A WAY OF UPSETTING ALL -- THE
100
ORAL ARGUMENT BY MR. SELLERS
1 ABILITY TO CERTIFY THE CLASS, I DON'T SEE WHY THAT DOESN'T
2 CREATE PREJUDICE, PARTICULARLY WHEN I DON'T THINK THAT IT'S
3 REQUIRED AS AN ALTERNATIVE THEORY OF LIABILITY.
4 THE COURT: WELL, THE FIRST PART OF YOUR ARGUMENT
5 STRIKES ME AS WHAT YOU REALLY RELY UPON.
6 MR. SELLERS: WELL, THERE IS A THIRD ONE THAT I WANT
7 TO MENTION, AND THAT IS THAT WHAT THE STATUTE PROVIDES IS THAT
8 WAL-MART, IF WE WERE TO SHOW THAT GENDER WAS A MOTIVATING
9 FACTOR IN THE PRACTICES AT ISSUE, THEN WAL-MART CAN SHOW THAT
10 IT WOULD HAVE TAKEN THE SAME ACTION IN THE ABSENCE OF THE
11 IMPERMISSIBLE MOTIVATING FACTOR. AND IT GOES ON TO DESCRIBE
12 THE CONSEQUENCES, WHETHER TO AWARD FEES OR NOT, AND THE LIKE.
13 AND THE COURT IS AWARE OF THAT.
14 THERE IS NOTHING IN THIS SECTION THAT REQUIRES THAT
15 THE PROOF BE DONE INDIVIDUAL BY INDIVIDUAL; THAT IS, WAL-MART,
16 IF IT WISHED TO, COULD COME FORWARD. JUST AS AN EXAMPLE,
17 WAL-MART BELIEVES THAT WOMEN ARE LESS INTERESTED IN PROMOTIONS
18 THAN MEN. WAL-MART COULD COME FORWARD AND MAKE A CASE FOR HOW,
19 YOU KNOW, THIS MORE RECENT POSTING, FOR INSTANCE, THAT WE
20 HAVEN'T HAD A CHANCE TO STUDY, BUT THAT WOMEN REALLY DON'T HAVE
21 AN INTEREST IN PROMOTION TO THE SAME EXTENT AS MEN, AND
22 THEREFORE, IT WOULD HAVE TAKEN THE SAME ACTION IN DENYING
23 PROMOTIONS TO THESE WOMEN IN THE ABSENCE OF THE DISCRIMINATION
24 THAT WE WOULD HAVE BY THEN PROVED.
25 THERE IS NOTHING ABOUT THIS SECTION THAT REQUIRES
101
ORAL ARGUMENT BY MR. SELLERS
1 THAT IT BE DONE INDIVIDUAL BY INDIVIDUAL. AND I HASTEN TO ADD
2 THAT THE REFERENCE TO THE TERM "INDIVIDUAL" SAYS "ON A CLAIM IN
3 WHICH AN INDIVIDUAL PROVES A VIOLATION." I ANTICIPATED THIS
4 BEING RAISED. IT DOES NOT SIGNAL THAT IT HAS TO BE DONE
5 INDIVIDUAL BY INDIVIDUAL, BECAUSE TITLE 7 IS REPLETE WITH THE
6 REFERENCE TO INDIVIDUAL.
7 SECTION 703 THAT DEALS WITH ESTABLISHING LIABILITY
8 UNDER SYSTEMIC DISPARATE TREATMENT AND DISPARATE IMPACT USES
9 THE TERM "INDIVIDUAL." AND CLEARLY, THE SUPREME COURT IN
10 TEAMSTERS SAID, "WHEN YOU GET TO LIABILITY, YOU DON'T HAVE TO
11 PROVE A PATTERN AND PRACTICE CASE OR DEFEND IT INDIVIDUAL BY
12 INDIVIDUAL." SO CLEARLY --
13 THE COURT: BUT THE FACT THAT THEY -- IT'S
14 INTERESTING, THE TWO DIFFERENT ISSUES. THE FACT THAT IT MAY
15 NOT BE MANDATED IS SOMETHING DIFFERENT THAN WHAT MIGHT COMPORT
16 WITH DUE PROCESS IN TERMS OF THE DEFENSE IN A PATTERN AND
17 PRACTICE CASE WHICH SEEKS TO ESTABLISH A BROAD-BASED
18 STATISTICAL RECORD THAT EVIDENCES DISCRIMINATION.
19 SO THERE IS SOMETHING FOR THE COURT TO MAKE SOME
20 DETERMINATION, WHETHER IT'S MOTION IN LIMINE, OR OTHERWISE, AS
21 TO HOW BROADLY THEY GET TO PUT ON THE KIND OF INDIVIDUALIZED
22 EVIDENCE TO COMPORT WITH THE ABILITY TO DEFEND EVEN THE
23 BROADER --
24 MR. SELLERS: RIGHT. AND THE COURT MAY CONCLUDE
25 THEY HAVE SOME RIGHT TO MAKE SOME SHOWING CONSISTENT WITH HOW
102
ORAL ARGUMENT BY MR. SELLERS
1 YOU DEFEND AND LITIGATE AND PROSECUTE A PATTERN AND PRACTICE
2 CASE.
3 THEIR ARGUMENT WOULD AFFECT B, THAT IN DEFENDING A
4 PATTERN AND PRACTICE CASE, THEY CAN PUT ON A DEFENSE TO AN
5 ADVERSE IMPACT CASE. IT'S A COMPLETELY DIFFERENT THEORY. ONE
6 IS NOT A LEGITIMATE RESPONSE TO ANOTHER, JUST AS IF WE PUT ON A
7 PATTERN AND PRACTICE CASE INSISTING ON INDIVIDUAL-BY-INDIVIDUAL
8 DEFENSES UNDER A MIXED MOTIVE THEORY --
9 THE COURT: STAY WITH DISPARATE TREATMENT AND 41
10 REGIONS ACROSS THE COUNTRY.
11 MR. SELLERS: I UNDERSTAND.
12 THE COURT: THAT'S ACTUALLY -- FROM A MANAGEMENT
13 STANDPOINT, THAT IS GOING TO INVOLVE QUITE A BIT OF ANECDOTAL
14 TESTIMONY WITH RESPECT TO THOSE CLAIMS.
15 MR. SELLERS: I THINK THEY'LL HAVE AN OPPORTUNITY TO
16 PUT ON SOME OF THAT EVIDENCE.
17 YOU KNOW, THE PATTERN AND PRACTICE CASE WILL HEAVILY
18 RELY ON STATISTICAL EVIDENCE. BUT THE SUPREME COURT HAS
19 RECOGNIZED THAT THE PARTIES ARE EXPECTED TO OFFER ANECDOTAL
20 TESTIMONY, AS WELL AS PAPER RECORDS. WAL-MART WILL HAVE A
21 CHANCE, IF IT WANTS TO, TO PUT ON SOME EVIDENCE, JUST NOT
22 INDIVIDUAL BY INDIVIDUAL. BUT IT COULD PUT ON A VICE-PRESIDENT
23 WHO SAYS, "WE DON'T DISCRIMINATE IN MY REGIONS."
24 THE COURT: WHAT IS YOUR SENSE OF HOW LONG THE TRIAL
25 WILL TAKE?
103
ORAL ARGUMENT BY MR. SELLERS
1 MR. SELLERS: WELL, I THINK WE CAN PUT ON OUR CASE
2 IN CHIEF IN ABOUT 20 TRIAL DAYS. AND I THINK, GIVEN IT'S OUR
3 BURDEN OF PROOF TO PREVAIL ON LIABILITY, I WOULD THINK THAT
4 WAL-MART WOULDN'T NEED ANY MORE THAN THAT FOR ITS CASE IN
5 CHIEF. I'M SURE WE'LL HEAR -- WE MAY HEAR SOMETHING DIFFERENT,
6 BUT I THINK WE CAN PUT ON OUR CASE IN CHIEF IN ABOUT ONE MONTH,
7 ABOUT 20 TRIAL DAYS.
8 I WOULD EXPECT THAT IF WE WERE TO ESTABLISH
9 LIABILITY, AND THE COURT WOULD PERMIT US TO PURSUE A CLASS-WIDE
10 PUNITIVE DAMAGE AWARD, WE MIGHT NEED A COUPLE OF MORE DAYS, OR
11 EVEN AS MUCH AS A WEEK, DEPENDING ON WHAT KIND OF EVIDENCE IN
12 REBUTTAL THERE IS IN RESPONSE, TO PRESENT THE JURY THE EVIDENCE
13 THAT WOULD INFORM IT ON A PUNITIVE DAMAGE AWARD.
14 WE ESTIMATE SOMEWHERE AROUND NINE, MAYBE TEN WEEKS,
15 BY THE TIME WE'RE DONE WITH BREAKS FOR JURIES, AND THAT SORT OF
16 THING.
17 THANK YOU, YOUR HONOR.
18 THE COURT: OKAY.
19 WE DIDN'T GET TO WHERE I WANTED TO GET TO, BUT
20 THAT'S OKAY. WHY DON'T WE TAKE ABOUT AN HOUR FOR LUNCH. AND I
21 HAVE 12:30, SO WE'LL MEET BACK HERE AT 1:30.
22 MR. GROSSMAN: COULD WE REMAIN IN THE COURTROOM,
23 YOUR HONOR?
24 THE COURT: ABSOLUTELY.
25
104
ORAL ARGUMENT BY MR. SELLERS
1 (LUNCH RECESS TAKEN AT 12:23 P.M.)
2 (PROCEEDINGS RESUMED AT 1:32 P.M.)
3 THE COURT: OKAY, LET THE RECORD REFLECT THAT ALL
4 PARTIES ARE PRESENT. ALL COUNSEL ARE PRESENT, AND WE ARE IN
5 THE COURSE OF THE ARGUMENTS WITH RESPECT TO CERTIFICATION IN
6 THIS MATTER.
7 WHEN WE TOOK OUR LUNCH RECESS, WE HAD JUST FINISHED
8 THE OPENING ARGUMENT OF THE PLAINTIFF, AND WE'LL NOW HEAR FROM
9 THE DEFENSE.
10 ORAL ARGUMENT BY MR. GROSSMAN
11 MR. GROSSMAN: GOOD AFTERNOON, YOUR HONOR.
12 THE TEN MAJOR DIVERSITY AWARDS THAT WAL-MART HAS
13 RECEIVED IN THE LAST THREE YEARS WOULD NOT HAVE BEEN POSSIBLE
14 WITHOUT THE EFFORTS OF TOM COUGHLIN AND CHARLYN JERRELLS
15 PORTER. AND OTHER HIGH EXECUTIVES OF WAL-MART PROPOSING
16 AFFIRMATIVE ACTION. WAL-MART'S EFFORTS OVER THE LAST FIVE
17 YEARS, THE VERY TIMEFRAME RELEVANT TO THIS LITIGATION, LEAD TO
18 THOSE DIVERSITY AWARDS.
19 IS WAL-MART SATISFIED WITH THE PERCENTAGE OF WOMEN
20 THAT IT HAS AT THE HIGHEST LEVELS OF MANAGEMENT? NO, WE'RE
21 NOT. DID WAL-MART DISCRIMINATE IN PAY AND PROMOTIONS OVER THE
22 LAST FIVE YEARS, THE RELEVANT TIMEFRAME? ABSOLUTELY NOT.
23 CONSIDER THE FOLLOWING: WAL-MART HAS 36.9 PERCENT
24 FEMALE IN THE RETAIL OFFICIALS AND MANAGERS CATEGORY, NATIONAL
25 RETAIL, 29 PERCENT FEMALE, 8 PERCENT LESS; ALL NATIONAL PERCENT
105
ORAL ARGUMENT BY MR. GROSSMAN
1 FEMALE IN MANAGEMENT, OFFICIALS IN MANAGERS CATEGORY,
2 32 PERCENT, 35 PERCENT LESS. PLAINTIFF'S EXPERT, DR. BENDICK,
3 VALIDATED THESE STATISTICS. IF WAL-MART LISTED ITS DEPARTMENT
4 MANAGERS IN THE OFFICIALS AND MANAGERS EEO-1 CATEGORY, AS,
5 ADMITTEDLY, MANY OF OUR COMPETITORS DO, ITS PERCENTAGE WOULD BE
6 OVER 60 PERCENT FEMALE, NEARLY DOUBLE THE NATIONAL AVERAGE.
7 CONSIDER THIS: ON HOURLY PAY, IF EVERY ONE OF
8 PLAINTIFF'S BROAD ASSUMPTIONS IS ACCEPTED, INCLUDING NATIONAL
9 AGGREGATION, THEIR CONTENTION IS THAT WOMEN'S HOURLY PAY IS
10 ONLY 97 TO 99 PERCENT OF MEN'S, THAT IS WHERE THAT NINE CENTS
11 COMES FROM THAT MR. SELIGMAN MENTIONED; EVERY ONE OF THOSE
12 AGGREGATIONS IGNORES THE CRITICAL FACTORS THAT ACTUALLY
13 DETERMINE PAY, SUCH AS PRE-WAL-MART EXPERIENCE, WHICH IS THE
14 SINGLE MOST IMPORTANT FACTOR IN SETTING HOURLY PAY ABOVE THE
15 MINIMUM AT THE START WHEN SOMEONE IS HIRED.
16 WHY? BECAUSE CONTRARY TO WHAT YOU'VE HEARD, NO
17 ONE'S DATABASE CONTAINS THE CRITICAL INFORMATION THAT ACTUALLY
18 DETERMINES PAY RATES, SUCH AS PRE-WAL-MART EXPERIENCE, AND
19 OTHER FACTORS THAT WE'LL MENTION. IT'S NOT IN ANYONE'S
20 COMPUTER BASE. AND THAT'S WHY NEITHER THEIR EXPERT NOR OURS
21 COULD FACTOR THAT IN.
22 PROMOTIONS: IN EVERY INSTANCE, THE PERCENT OF
23 FEMALES SELECTED IS HIGHER THAN OR COMPARABLE TO APPLICANT
24 FLOW.
25 ALL HOURLY POSITIONS HAVE BEEN DROPPED FROM THE
106
ORAL ARGUMENT BY MR. GROSSMAN
1 CASE. THE CASE STARTED OUT WITH LOTS OF HOURLY POSITIONS, BUT
2 SELECTIONS FAR EXCEEDED APPLICANT FLOW.
3 ON SUPPORT MANAGER, THE ONLY REMAINING ONE, WE'VE
4 GOT 40,000 APPLICATIONS; NO RELOCATION REQUIREMENT, IT WAS
5 WITHIN THE STORE, NO ONE'S PERMISSION WAS NEEDED TO APPLY FOR
6 THE JOBS THAT WERE POSTED. 46 PERCENT WOMEN. FEMALE SELECTION
7 RATE: 47 PERCENT.
8 THE SECOND OF THE THREE MOST SIGNIFICANT PROMOTIONAL
9 POSITIONS; ASSISTANT MANAGER TRAINEE. THEY'RE OBJECTING
10 BECAUSE WE DID WHAT THEY SAID WE SHOULD DO IN THEIR LAWSUIT,
11 WHICH IS POST NATIONALLY WITHOUT ANY REQUIREMENT OF RELOCATION.
12 THE COURT: WHEN DID YOU DO IT?
13 MR. GROSSMAN: JANUARY, APRIL, AND JUNE.
14 THE COURT: WHAT DO WE KNOW ABOUT POSTING PRIOR IN
15 TIME?
16 MR. GROSSMAN: THERE WAS NO POSTING PRIOR TO THAT
17 TIME.
18 THE COURT: SO DOES APPLICANT FLOW CAPTURE WHO WOULD
19 APPLY FOR THOSE POSITIONS IN THAT TIME?
20 MR. GROSSMAN: IT CAPTURES THE PERCENTAGE INTEREST.
21 IT CAPTURES -- NO ONE CAN EVEN ARTICULATE --
22 THE COURT: HOW IS THAT? HOW IS THAT, IF THERE IS
23 -- IF IT DOES NOT -- IF IT WERE NOT POSTED, WHAT WE ARE LEFT
24 WITH -- I DON'T NECESSARILY DISAGREE WITH YOU THAT IT IS
25 EVIDENCE OF SOMETHING, THE QUESTION IS, WHAT IS IT EVIDENCE OF?
107
ORAL ARGUMENT BY MR. GROSSMAN
1 IF, IN FACT, THOSE JOBS WERE NOT POSTED, BUT YOU
2 HAVE APPLICATIONS, THAT MAY BE A SUBSET OF THOSE THAT WERE
3 INTERESTED.
4 MR. GROSSMAN: WE HAVE APPLICATIONS ONLY FOR THE
5 2003 PERIOD, WHEN THEY WERE POSTED.
6 THE POINT IS THIS, YOUR HONOR, NO ONE CAN EVEN
7 ARTICULATE ANY CONTENTION THAT THE INTEREST IN HOURLY WOMEN IN
8 BEING PROMOTED TO OUR ADMITTEDLY VERY DEMANDING LONG HOURS
9 FIRST-LEVEL MANAGEMENT JOBS IS ANY LESS AS OF JANUARY OF 2003
10 THAN IT WAS IN 2002 OR 2001 OR 2000. IN FACT, WE BELIEVE THE
11 INTEREST IS HIGHER, BECAUSE WE PUBLICIZED THE OPENINGS, WE
12 PUBLICIZED THE FACT THAT THERE WAS NO RELOCATION, WE PUBLICIZED
13 OUR DESIRE FOR A DIVERSE GROUP, AND EVERYBODY KNOWS ABOUT THIS
14 LAWSUIT. SO WE BELIEVE THAT'S A TOO-HIGH FIGURE.
15 NO ONE CAN ARTICULATE THAT, "OH, MY GOSH, YOU HAD 42
16 PERCENT APPLICATIONS, 55,000 APPLICATIONS, BUT THAT'S FAR LOWER
17 THAN IT WOULD HAVE BEEN LAST YEAR BECAUSE OF..." CAN'T EVEN
18 ARTICULATE A REASON.
19 SO FOR AN ASSISTANT MANAGER, THE ENTRY-LEVEL JOB TO
20 MANAGEMENT, THE BIGGEST PROMOTION AT ISSUE IN THIS LITIGATION,
21 WE'VE DONE EXACTLY WHAT THEY SAY WE SHOULD DO, AND IT
22 CORRESPONDS TO OUR HISTORIC SELECTION.
23 STORE MANAGER: DR. DROGIN'S CALCULATIONS, HE
24 ACKNOWLEDGED THAT 95 PERCENT OF STORE MANAGER POSITIONS WERE
25 HISTORICALLY POSTED. RELOCATION? WELL, ONLY IF YOU APPLY TO
108
ORAL ARGUMENT BY MR. GROSSMAN
1 GO TO TIMBUKTU. IF YOU'RE GOING TO APPLY TO GO TO A SPECIFIC
2 STORE LOCATION IN TYLER, TEXAS, WELL, YOU HAVE TO BE WILLING TO
3 GO TO TYLER, TEXAS, THAT'S WHERE THE JOB IS. NO ONE CAN
4 CONTEST THAT.
5 SO 95 PERCENT HISTORICALLY POSTED, ALL HAVE BEEN
6 POSTED RECENTLY; WHAT DID DR. DROGIN CALCULATE? 12 PERCENT
7 APPLICANT FLOW, 16 PERCENT SELECTION RATE. DID HE PUT THAT IN
8 HIS REPORT THAT THIS COURT HAS READ? NO. BUT WE FOUND IT IN
9 HIS BACKUP DATA, WHICH HE AUTHENTICATED. HE LEFT THAT OUT
10 BECAUSE IT DOESN'T CORRESPOND TO WHAT HE WAS TRYING TO SHOW.
11 WHAT WE HAVE IS AN ATTEMPT BY PLAINTIFFS THROUGH THE
12 NATIONAL MEDIA -- I HAVE NEVER SEEN A CASE WITH SO MUCH
13 NATIONAL MEDIA EXPOSURE SOUGHT AND OBTAINED BY PLAINTIFFS --
14 THROUGH THE EXPERT SOUND BYTES YOU HEARD RIGHT AT THE START OF
15 THE ARGUMENT TODAY TO PAINT WAL-MART AS SUCH AN OUTRAGEOUS EVIL
16 DISCRIMINATOR THAT THIS COURT SHOULD BEND OR BREAK ESTABLISHED
17 RULE 23 STANDARDS AND CERTIFY AN UNMANAGEABLE CLASS. THAT JUST
18 WON'T WORK. THE LAW IS GOING TO DETERMINE.
19 LET'S TURN, NOW, TO THE DETERMINATIVE LAW.
20 WE HAVE PREPARED OUR MOTION BOOK WITH YOUR QUESTIONS
21 LISTED.
22 AND MAYBE WE COULD DISTRIBUTE THE MOTION BOOKS,
23 NANCY.
24 WE HAVE COPIES FOR EVERYONE. IT CONTAINS EXCERPTS
25 FROM THE RECORD AND EXCERPTS FROM THE CASES. AND IT'S GOING TO
109
ORAL ARGUMENT BY MR. GROSSMAN
1 CONTAIN EXCERPTS FROM THE STATUTES, AND I'LL REFER TO IT. WE
2 HAVE COPIES FOR YOUR CLERKS, ALSO.
3 AS I'VE INDICATED, THE MOTION BOOK IS ORGANIZED
4 AROUND YOUR QUESTIONS, YOUR HONOR. AND BETWEEN NANCY AND
5 MYSELF, WE'LL ADDRESS THEM.
6 NANCY IS GOING TO TAKE RULE 23(A). SHE'LL
7 PARTICULARLY DISCUSS THE 10 MULTI-FACILITY CLASS CERTIFICATION
8 CASES WHERE DECISIONS WERE MADE FACILITY BY FACILITY WITH
9 DENIED CERTIFICATION IN THE LAST THREE YEARS. AND WE'LL
10 ESPECIALLY EMPHASIZE A CASE YOUR HONOR MENTIONED, THE ABRAM
11 CASE, WHICH IS ON ALL FOURS, PARTICULARLY THE FACT THAT OVER
12 THE COURSE OF THE MULTI-FACILITIES, THE STATISTICS SHOW THAT
13 THE PROTECTED GROUP WAS FAVORED ALMOST AS OFTEN AS IT WAS
14 DISFAVORED. AND ONLY IF YOU AGGREGATE DO YOU COME UP WITH ANY
15 KIND OF A PICTURE OF STATISTICALLY SIGNIFICANT DISCRIMINATION,
16 WHICH ABRAM SAID YOU CAN'T DO.
17 I WOULD LIKE TO BEGIN WITH 23(D), MANAGEABILITY,
18 PARTICULARLY WITH THE COURT'S QUESTION NUMBER 13 DEALING WITH
19 MIXED MOTIVE.
20 WHY? WELL, THE ANSWER TO QUESTION NUMBER 13,
21 WHETHER MIXED MOTIVE IS A CLAIM THAT THE PLAINTIFFS HAVE
22 ABSOLUTE CONTROL OVER, OR WHETHER IT'S A DEFENSE THAT AN
23 EMPLOYER HAS A RIGHT TO ASSERT AND PROVE IN EVERY
24 DISCRIMINATION CASE, IT'S CLEAR AS CLEAR CAN BE, AND IT'S
25 SELF-DETERMINATIVE ON MANAGEABILITY.
110
ORAL ARGUMENT BY MR. GROSSMAN
1 WHY IS IT CLEAR? WELL, WE'VE GOT THE BEST; WE'VE
2 GOT EN BANC NINTH CIRCUIT AUTHORITY FROM LAST YEAR, AFFIRMED
3 UNANIMOUSLY BY THE U.S. SUPREME COURT, SO STATED. IT'S A CLEAR
4 ANSWER IN THAT NINTH CIRCUIT CASE, AND ALL THE OTHER CIRCUIT
5 CASES, WHICH WE'LL GO THROUGH, IS THAT PLAINTIFFS ARE AS WRONG
6 AS WRONG CAN BE. THEY DON'T CONTROL OUR ABILITY TO PUT ON A
7 MIXED-MOTIVE DEFENSE. THEY DON'T HAVE THE RIGHT TO BRING OR
8 NOT BRING A MIXED-MOTIVE CASE.
9 NO PLAINTIFF, YOUR HONOR, EVER BRINGS A MIXED-MOTIVE
10 LAWSUIT. THERE HAS NEVER BEEN ONE. IN EVERY DISCRIMINATION
11 CASE, INDIVIDUAL OR CLASS, PATTERN OR PRACTICE, MCDONALD
12 DOUGLAS, THE PLAINTIFF SAYS THE ADVERSE ACTION WAS BASED ON
13 SEX. THE DEFENDANT SAYS THE ADVERSE ACTION WAS CAUSED BY
14 LEGITIMATE FACTORS. BUT THERE IS A THIRD POSSIBILITY, YOUR
15 HONOR, IT COULD BE BOTH. IT COULD BE A MIX OF THE LEGITIMATE
16 FACTORS AND ILLEGITIMATE FACTORS.
17 A PARTICULAR DECISION COULD BE MADE BY A BIASED
18 DECISION MAKER. IN OUR VERNACULAR, THAT IS WHERE THERE IS A
19 PATTERN OR PRACTICE OF DISCRIMINATION. BUT THAT PARTICULAR
20 DECISION WAS BASED ON LEGITIMATE FACTORS. OR, THERE MAY BE
21 UNBIASED DECISION MAKERS AMONGST THE BIASED DECISION MAKERS
22 EVEN THOUGH THERE IS A PATTERN OR PRACTICE. THAT IS MIXED
23 MOTIVE, THE FACTS DETERMINE THE ABILITY OF THE EMPLOYERS'
24 MIXED-MOTIVE DEFENSE.
25 THE EMPLOYER HAS AN ABSOLUTE RIGHT TO ASSERT THE
111
ORAL ARGUMENT BY MR. GROSSMAN
1 FOLLOWING: ASSUMING ARGUENDO YOU RULE AGAINST ME, AND A
2 PATTERN OR PRACTICE OF DISCRIMINATION IS FOUND, THAT PATTERN OR
3 PRACTICE OF DISCRIMINATION MADE NO DIFFERENCE TO PARTICULAR
4 INDIVIDUALS OR PARTICULAR LOCATIONS.
5 THE BASIC POINT IS THAT AN EMPLOYER CANNOT BE
6 ORDERED TO PAY MONEY TO ANYONE IF IT CAN PROVE THAT IT DIDN'T
7 HARM THAT PERSON, EVEN IF IN OTHER INSTANCES IT ENGAGED IN A
8 PATTERN OR PRACTICE OF DISCRIMINATION. LET'S PUT IT IN OTHER
9 TERMS.
10 WAL-MART HAS A CONSTITUTIONAL DUE PROCESS AND
11 STATUTORY RIGHT NOW TO PAY MONEY TO ANY PERSON IT DIDN'T HARM.
12 IF WE HAVE EVIDENCE SUFFICIENT TO CARRY OUR BURDEN OF PROOF
13 THAT EVEN A SINGLE PERSON THAT PLAINTIFFS SAY IS ENTITLED TO
14 MONEY WAS NOT HARMED, WE'RE ENTITLED TO PUT ON THAT INDIVIDUAL
15 EVIDENCE.
16 PROMOTION CASE: WE'VE GOT EVIDENCE THAT JANE DOE
17 WAS ASKED IN 2002, "WOULD YOU BE WILLING TO GO INTO THE
18 MANAGEMENT TRAINING PROGRAM?" AND SHE SAYS, "NO, IT'S NOT A
19 GOOD TIME FOR ME. WITH MY KIDS WHERE THEY ARE, I CAN'T WORK
20 THOSE HOURS NOW. I'LL CONSIDER IT IN THREE OR FOUR YEARS."
21 ARE WE ENTITLED TO PUT ON THAT EVIDENCE TO SHOW THAT
22 JANE DOE WASN'T A PROMOTION DISCRIMINATEE? ABSOLUTELY.
23 OR DORIS DOE? DR. DROGIN'S CALCULATIONS SHOW THAT
24 SHE WAS UNDERPAID TEN CENTS AN HOUR IN HER DEPARTMENT MANAGER
25 POSITION. WHY WAS SHE UNDERPAID TEN CENTS AN HOUR? BECAUSE
112
ORAL ARGUMENT BY MR. GROSSMAN
1 SHE TURNED DOWN A TWENTY-FIVE CENT-AN-HOUR RAISE AND A TRANSFER
2 TO ELECTRONICS FROM APPAREL FOR PERSONAL REASONS.
3 ARE WE ENTITLED TO PUT ON THAT EVIDENCE?
4 ABSOLUTELY.
5 WHY IS THIS ISSUE SEPARATELY DETERMINATIVE? BECAUSE
6 IF WE HAVE THE RIGHT TO DEFEND OURSELVES, WE HAVE THE RIGHT TO
7 PUT ON THAT INDIVIDUAL EVIDENCE. PLAINTIFFS ALL BUT CONCEDE
8 THAT THE CASE IS NOT MANAGEABLE. SO LET'S TURN TO THE
9 DETERMINATIVE ISSUE OF WHAT IS MIXED MOTIVE? IS IT A
10 PLAINTIFF'S THEORY OF THE CASE THAT THEY CAN BRING OR NOT
11 BRING, OR IS IT A DEFENSE THAT WE HAVE AN ABSOLUTE RIGHT TO
12 ASSERT AND NOT TO PAY MONEY?
13 TAB 1, YOUR HONOR, SETS FORTH THE BASIC AMENDMENT TO
14 TITLE 7 CONTAINED IN THE CIVIL RIGHTS ACT OF 1991.
15 "ON A CLAIM IN WHICH AN INDIVIDUAL PROVES BIAS AND A
16 RESPONDENT DEMONSTRATES THAT THE RESPONDENT WOULD HAVE TAKEN
17 THE SAME ACTION IN THE ABSENCE OF THE IMPERMISSIBLE MOTIVATING
18 FACTOR, THE COURT SHALL NOT AWARD ANY PAYMENT." NO MONEY, NO
19 BACK PAY, NO PUNITIVE DAMAGES, NO NOTHING, IF THE INDIVIDUAL,
20 EVEN IN A BIASED CONTEXT, WASN'T HARMED. THIS ISN'T
21 EXTRAORDINARY. THIS IS NO DIFFERENT FROM TEAMSTERS. THAT IS
22 WHAT TEAMSTERS SAID IN THE CONTEXT OF A PATTERN OR PRACTICE
23 CASE.
24 IF YOU TURN TO TAB 2, YOUR HONOR, TAB 2 IS
25 TEAMSTERS. TEAMSTERS SAYS EXACTLY THE SAME THING IN THE
113
ORAL ARGUMENT BY MR. GROSSMAN
1 PATTERN OR PRACTICE CONTEXT. THE EMPLOYER HAS A RIGHT, QUOTE,
2 "TO DEMONSTRATE THAT THE INDIVIDUAL APPLICANT WAS DENIED AN
3 EMPLOYMENT OPPORTUNITY FOR LAWFUL REASONS," END QUOTE.
4 QUOTE, "ON REMAND EVERY APPLICANT WILL BE ENTITLED
5 TO A PRESUMPTION OF RELIEF, SUBJECT TO A SHOWING BY THE COMPANY
6 THAT ITS EARLIER REFUSAL TO PLACE THE APPLICANT IN A LINE
7 DRIVER JOB WAS NOT BASED ON ITS POLICY OF DISCRIMINATION."
8 SO IN OTHER WORDS, THE 1991 AMENDMENTS TO TITLE 7
9 SAID NO MORE THAN THE TEAMSTERS RULED. THE TEAMSTERS RULE,
10 EVERYBODY ADMITS THERE HAVE BEEN VERY RARE EXCEPTIONS TO IT.
11 AND THEY ALL PRECEDED THE CIVIL RIGHTS ACT OF 1991, AS WE'LL
12 DISCUSS.
13 PLAINTIFFS SAY, DESPITE THE FACT THAT IT SEEMS
14 PROPER ON ITS FACE, THAT YOU CAN'T BE ORDERED TO PAY MONEY TO
15 PEOPLE THAT YOU DIDN'T HARM, THAT MIXED MOTIVE IS SOMETHING
16 THEY CONTROL. THEY SAY, "WE'RE NOT SUING UNDER SUBSECTION (M),
17 WE'RE SUING UNDER SECTION 703(A)." ALL PLAINTIFFS, INCLUDING
18 CASES THAT END UP MIXED MOTIVE, SUE UNDER SECTION 703(A). THAT
19 IS WHAT YOU HAVE TO SUE UNDER, IF YOU'RE ALLEGING ADVERSE
20 IMPACT OR DISPARATE TREATMENT.
21 SECTION 703(A) WHICH IS TAB 3, YOUR HONOR, SAYS IT'S
22 AN UNLAWFUL EMPLOYMENT PRACTICE TO DISCRIMINATE BECAUSE OF SEX.
23 THE CAUSE-ALL ISSUE IS WHAT'S IMPORTANT UNDER SECTION 703(A).
24 THIS IS WHAT EVERYBODY SUES UNDER. THIS IS WHAT THEY'VE SUED
25 UNDER.
114
ORAL ARGUMENT BY MR. GROSSMAN
1 BUT WHAT DOES SUBSECTION (M) SAY, WHICH IS TAB 4?
2 SUBSECTION (M) RECOGNIZES THE THREE POSSIBILITIES; THAT THE
3 PLAINTIFFS COULD BE RIGHT, IT COULD BE SOLELY SEX; THE
4 DEFENDANT COULD BE RIGHT, IT COULD BE NOT SEX AT ALL; OR, IT
5 COULD BE A COMBINATION.
6 WHAT SUBSECTION (M) SAYS IS NOT YOU SUE UNDER THIS
7 SECTION, SUBSECTION (M) SAYS WHAT HAPPENS UNDER SUBSECTION (A)
8 IF THE EVIDENCE REVEALS IT'S A MIX.
9 TAB 4 IS SUBSECTION (M). IT JUST DEFINES WHAT
10 HAPPENS UNDER SUBSECTION (A). IT DOESN'T SAY, "THIS ISN'T
11 SOMETHING YOU SUE UNDER." NOBODY SUES UNDER (M).
12 THEN, IF THE FACTS DEMONSTRATE, IF THE EMPLOYER'S
13 FACTS AND THE PLAINTIFF'S FACTS DEMONSTRATE IT'S A MIX, THEN
14 YOU GO BACK TO TAB 1, YOUR HONOR, WHICH SAYS WE'VE GOT THE
15 BURDEN, BUT WE'VE GOT A RIGHT TO PROVE IT. AND WE'VE GOT A
16 RIGHT TO PROVE THAT THIS INDIVIDUAL, OR THIS GROUP OF
17 INDIVIDUALS, OR EVERYBODY AT THIS STORE WASN'T HARMED.
18 SO IF WE ASSERT OUR MIXED-MOTIVE DEFENSE, WE'VE GOT
19 A RIGHT TO PUT ON THAT EVIDENCE. IS IT CLEAR THAT THIS IS A
20 DEFENSE THAT WE CAN ASSERT? ABSOLUTELY. THE LAW COULD NOT BE
21 MORE CLEAR. AS I INDICATED, TAB 5, WE HAVE THE YEAR 2002 EN
22 BANC DECISION OF THE NINTH CIRCUIT AFFIRMED BY THE UNITED
23 STATES SUPREME COURT, SO STATING.
24 IF YOUR HONOR COULD TAKE A MOMENT AND READ THE
25 HIGHLIGHTED PORTION OF COSTA.
115
ORAL ARGUMENT BY MR. GROSSMAN
1 (COURT REVIEWS DECISION.)
2 THE COURT: YEAH?
3 MR. GROSSMAN: THE KEY LANGUAGE WHERE THE EMPLOYER
4 ASSERTS, AND WE HAVE THE RIGHT TO ASSERT IT, THAT THE EMPLOYER
5 WOULD HAVE TAKEN THE ADVERSE EMPLOYMENT ACTION FOR OTHER
6 REASONS. THE EMPLOYER MAY TAKE ADVANTAGE OF THE SAME DECISION,
7 AFFIRMATIVE DEFENSE.
8 NOW, DID WE WAIVE THIS BY FAILING TO PLEAD IT?
9 ABSOLUTELY NOT. UNDER AFFIRMATIVE DEFENSES, IN OUR ANSWER IN
10 AFFIRMATIVE DEFENSES TO THE THIRD AMENDED COMPLAINT, PARAGRAPH
11 126, "ALL OF WAL-MART'S EMPLOYMENT DECISIONS WITH RESPECT TO
12 PLAINTIFFS WERE BASED ON LEGITIMATE NONDISCRIMINATORY BUSINESS
13 REASONS."
14 PARAGRAPH 128, ANOTHER AFFIRMATIVE DEFENSE: "ALL OF
15 WAL-MART'S EMPLOYMENT DECISIONS WITH RESPECT TO PLAINTIFFS WERE
16 BASED ON BONA FIDE FACTORS OTHER THAN SEX, INCLUDING BUT NOT
17 LIMITED TO A BONA FIDE MERIT SYSTEM."
18 WE'VE PLED EXACTLY IT, AND, AS YOUR HONOR NOTED,
19 THERE WOULDN'T HAVE BEEN ANY PREJUDICE, ANYWAY, AT THIS STAGE
20 IN THE LITIGATION. BUT WE PLED IT. THAT WON'T WORK.
21 IS COSTA SOMEHOW ABERRATIONAL, EVEN THOUGH IT'S A
22 NINTH CIRCUIT EN BANC? NO. ALL THE OTHER CIRCUITS AGREE.
23 MIXED MOTIVE IS A DEFENSE.
24 IF YOU RULE AGAINST US AND FIND WE'RE BIASED IN
25 WHOLE OR IN PART, WE HAVE A RIGHT, AT LEAST, TO SHOW AT LEAST
116
ORAL ARGUMENT BY MR. GROSSMAN
1 THAT THIS DECISION WASN'T AFFECTED BY THAT.
2 TAB 6, YOUR HONOR, IT'S THE SECOND CIRCUIT, CABRERRA
3 VERSUS JAKABOVITZ: "IN SOME CASES THE EVIDENCE PERMITS THE
4 TRIER TO FIND THAT MORE THAN ONE FACTOR MOTIVATED THE ADVERSE
5 ACTION. IN THAT EVENT, IT WILL BE APPROPRIATE AT THE
6 DEFENDANT'S REQUEST" -- IT'S OUR REQUEST -- "TO INSTRUCT THE
7 JURY CONFIRMING THE DEFENDANT'S AFFIRMATIVE DEFENSE OF DUAL
8 MOTIVATION, I.E., THAT THE DEFENDANT WOULD HAVE TAKEN THE
9 ADVERSE ACTION ON THE BASIS OF PERMISSIBLE REASON." IT'S
10 CLEARLY THE EMPLOYER'S OPTION.
11 TAB 7, YOUR HONOR, THE OSTROWSKI CASE: "ONCE THE
12 PRESENTATION OF EVIDENCE IS SUFFICIENT TO CREATE THIS
13 POSSIBILITY" -- IT'S BOTH, IT'S A COMBINATION -- "THE EMPLOYER
14 HAS THE OPTION OF DEFENDING ON THE PRICE WATERHOUSE GROUND THAT
15 IT WOULD HAVE MADE THE SAME DECISION, EVEN IN THE ABSENCE OF
16 DISCRIMINATORY MOTIVE, PRICE WATERHOUSE IS THUS A DEFENSE."
17 PRICE WATERHOUSE WAS, OF COURSE, THE SUPREME COURT
18 DECISION WHICH DISCUSSED WHAT HAPPENS IF IT'S MIXED MOTIVE.
19 PRICE WATERHOUSE SAID IF THE EMPLOYER CAN SHOULDER ITS BURDEN
20 OF PROOF, THAT IT WOULD HAVE TAKEN THE SAME ACTION, ANYWAY, IT
21 FLAT OUT WINS.
22 THE ONLY CHANGE THE CIVIL RIGHTS ACT OF 1991 MADE
23 WITH SECTIONS WE'VE LOOKED AT IS TO SAY THAT IF THE PLAINTIFF
24 PROFFERS A BIASED EMPLOYER, AND THE EMPLOYER PROVES IT WOULD
25 HAVE MADE THE SAME DECISION, ANYWAY, PLAINTIFF WINS, BUT ONLY
117
ORAL ARGUMENT BY MR. GROSSMAN
1 INJUNCTIVE RELIEF AND ATTORNEY'S FEES, THE COURT CANNOT ORDER
2 ANY PAYMENT.
3 THE FIFTH CIRCUIT SAYS THE SAME THING, QUOTING PRICE
4 WATERHOUSE AT TAB H, YOUR HONOR: "ALTHOUGH PRICE WATERHOUSE
5 CAN BE CHARACTERIZED AS A METHOD TO PROVE DISCRIMINATION, THE
6 MIXED-MOTIVES THEORY IS PROBABLY BEST VIEWED AS A DEFENSE FOR
7 THE EMPLOYER." "SEE PRICE WATERHOUSE," QUOTING THE SUPREME
8 COURT, "THE EMPLOYER'S BURDEN IS MOST APPROPRIATELY DEEMED AN
9 AFFIRMATIVE DEFENSE."
10 AN EMPLOYER CAN ASSERT THIS DEFENSE, EVEN IF IT
11 TOTALLY DENIES DISCRIMINATING, TOTALLY DENIES THAT SEX PLAYED
12 ANY ROLE, AND EVEN OVER THE PLAINTIFF'S OBJECTION, BECAUSE THE
13 PLAINTIFF NORMALLY DOES OBJECT, AS THIS PLAINTIFF HAS OBJECTED.
14 TAB 9, YOUR HONOR: "A DEFENDANT NEED NOT" -- THIS
15 IS A 1999 DECISION FROM THE ELEVENTH CIRCUIT -- "A DEFENDANT
16 NEED NOT ADMIT A DISCRIMINATORY MOTIVE TO ASSERT A
17 MIXED-MOTIVES DEFENSE. IN SOME CASES DEFENDANTS MAY CHOOSE TO
18 MAKE NO MIXED-MOTIVES DEFENSE."
19 IN THIS CASE, THE PLAINTIFF OBJECTED. PLAINTIFF
20 SAID, "THEY DENIED IT TOTALLY. THEY DIDN'T SAY IT'S A MIX.
21 THEY DON'T HAVE A RIGHT TO A MIXED-MOTIVES DEFENSE," AND THE
22 ELEVENTH CIRCUIT MADE SHORT SHRIFT OF THAT.
23 THE ONLY CASE PLAINTIFFS HAVE CITED IN THE ENTIRE
24 SUBJECT OF MIXED MOTIVE IS A CASE THAT JUST SAID IT WASN'T
25 REVERSIBLE ERROR NOT TO GIVE A MIXED-MOTIVE INSTRUCTION, WHEN
118
ORAL ARGUMENT BY MR. GROSSMAN
1 THE JURY MASS ALREADY FOUND THAT THE ADVERSE ACTION, A
2 TRANSFER, WOULD NOT HAVE OCCURRED BUT FOR THE IMPERMISSIBLE
3 CRITERIA. IN OTHER WORDS, THE JURY'S FINDINGS PRECLUDED IT.
4 IF IT WAS AN AFTER THE FACT, IT DOESN'T MAKE ANY DIFFERENCE,
5 SINCE THEY PROVED BUT FOR.
6 I QUOTE FROM TAB 10, YOUR HONOR, THE ONLY CASE
7 PLAINTIFFS HAVE CITED ON THE POINT: "THIS FINDING PRECLUDES
8 APPELLANT'S MIXED-MOTIVE DEFENSE.
9 SO IT'S CLEAR, WAL-MART HAS AN ABSOLUTE RIGHT UNDER
10 TEAMSTERS, FROM WHICH THERE WERE RARE EXCEPTIONS, UNDER THE
11 STATUTE, AND WE ASSERT, UNDER THE DUE PROCESS CLAUSE OF THE
12 CONSTITUTION, NOT TO PAY MONEY TO PEOPLE WHEN WE CAN
13 DEMONSTRATE THAT THAT PERSON ON THAT OR THAT GROUP OF PEOPLE
14 WERE NOT DISCRIMINATED AGAINST, WERE NOT HARMED BY US.
15 WE CAN OFFER INDIVIDUAL OR GROUP MIXED-MOTIVE
16 NO-HARM EVIDENCE. PLAINTIFFS, DR. DROGIN: "FOR
17 BROADLY-DEFINED JOB CODES AT THE STORE" -- YOU'RE WELL AWARE OF
18 HOW BROADLY HE DEFINED HIS JOB CODES, ELECTRONICS AND APPAREL
19 SALES PEOPLE WERE THE SAME, HE SAYS, SAID, "PAY SHOULD BE SET
20 BASED ESSENTIALLY ON TWO FACTORS."
21 YOU MIGHT WANT TO QUESTION PLAINTIFFS WHEN THEY GET
22 BACK UP HERE, BUT IT BOILS DOWN TO TWO FACTORS, SENIORITY AND
23 EVALUATION. AND EVERYBODY AGREES THAT EVALUATIONS ARE DEAD
24 EVEN.
25 SO BASICALLY, ALL THAT FANCY STUFF THAT DR. DROGIN
119
ORAL ARGUMENT BY MR. GROSSMAN
1 DID, IT BOILED DOWN TO SENIORITY. IF YOU GOT FIVE YEARS OF
2 SENIORITY YOU SHOULD BE PAID THE SAME AS A MAN IN YOUR BROADLY
3 DEFINED GROUP OF SENIORITY.
4 SO DR. DROGIN SAYS DEPARTMENT MANAGER SALARY IN
5 MIDLAND, TEXAS, IS TWENTY CENTS BELOW THE MALE DEPARTMENT
6 MANAGERS' AVERAGE WHO HAVE "MEETS EXPECTATIONS" EVALUATIONS AND
7 FIVE YEARS OF SENIORITY. WAL-MART SAYS WE CAN PROVE THAT SALLY
8 TURNED DOWN A TRANSFER FROM MEN'S APPAREL TO THE DEPARTMENT
9 MANAGER OF LAWN AND GARDEN FOR PERSONAL REASONS, WHICH WOULD
10 HAVE CARRIED A THIRTY-CENT-AN-HOUR RAISE AND PUT HER ABOVE THE
11 DEPARTMENT MANAGER AVERAGE; ARE WE ENTITLED TO PRESENT THAT
12 EVIDENCE? ABSOLUTELY.
13 STORE MANAGER EDNA IN LAWRENCE, KANSAS, PAYS HER
14 FEMALE SALES ASSOCIATES, SAYS DR. DROGIN, THREE CENTS AN HOUR
15 LESS THAN HER MALES. BUT STORE MANAGER EDNA WILL TESTIFY THAT
16 CIRCUIT CITY MOVED IN NEXT DOOR AND OFFERED TWO-DOLLAR RAISES
17 TO EVERYONE IN HER ELECTRONICS DEPARTMENT, EVERY SINGLE PERSON.
18 AND SHE HAD TO MEET IT IN ORDER TO AVOID LOSING HER DEPARTMENT
19 EN MASS.
20 AND IF YOU TAKE OUT THAT INCREASE DICTATED BY THE
21 COMPETITION, IN REALITY IN HER STORE WOMEN DID TWO CENTS AN
22 HOUR BETTER, EVEN UNDER DR. DROGIN'S ANALYSIS. ARE WE ENTITLED
23 TO PRESENT THAT EVIDENCE? ABSOLUTELY.
24 SO WHAT BARS COMPLIANCE WITH RULE 23(B) IS THAT
25 DETERMINING BACK PAY INDIVIDUAL BY INDIVIDUAL IS NOT MANAGEABLE
120
ORAL ARGUMENT BY MR. GROSSMAN
1 IN A CASE WITH 1.5 MILLION AT THIS POINT AND 2.5 MILLION
2 ESTIMATED BY THE TIME OF TRIAL. IT REQUIRES A MIND-BOGGLING
3 NUMBER OF INDIVIDUALS DETERMINATIONS AS TO WHETHER A PARTICULAR
4 INDIVIDUAL WAS HARMED, OR WHETHER THE ALLEGED PATTERN OR
5 PRACTICE WAS OPERATIVE WITH RESPECT TO THE DECISIONS AT A
6 PARTICULAR STORE.
7 THE SAME LAW FIRM AS HEREIN, THE COHEN MILSTEIN
8 FIRM, A VERY, VERY COMPETENT FIRM, SAID IN 2001 IN BECK VERSUS
9 BOEING, "JUST DO IT BY FORMULA, ALL THE KEY STEPS IN THE
10 COMPUTER. YOU JUST PUNCH A BUTTON, AND OUT COMES A NUMBER FOR
11 EVERY PERSON WHO IS UNDERPAID."
12 AND BY THE WAY, I'LL DIGRESS JUST A SECOND FROM
13 BECK VERSUS BOEING, YOUR HONOR.
14 THIS GOES TO NOT JUST WHO GETS TO PAY, BUT HOW MUCH
15 IT IS, BECAUSE AS YOU HEARD COUNSEL SAY, THE AGGREGATE AMOUNT
16 OF BACK PAY DUE FOR UNDERPAYMENTS IS THE SUM OF THE INDIVIDUAL
17 PAYMENTS. SO IF WE CAN SHOW THAT SALLY TURNED DOWN A PROMOTION
18 OR SALLY TURNED DOWN A TRANSFER, OR NOBODY AT THIS STORE WAS
19 UNDERPAID, BECAUSE THE ONLY FACTOR THAT APPARENTLY GENERATED A
20 STATISTICAL UNDERPAYMENT WAS MATCHING CIRCUIT CITY, THAT LOWERS
21 THE AGGREGATE, NOT JUST WHO GETS IT.
22 ANYWAY, GOING BACK TO THE COHEN MILSTEIN FIRM
23 TELLING THE JUDGE IN BECK VERSUS BOEING, "JUST DO IT BY
24 FORMULA. THERE'S NO PROBLEM WITH THIS CASE, YOUR HONOR. WE'VE
25 ALL GOT COMPUTERS AND DATABASES, AND WE JUST PUNCH A BUTTON,
121
ORAL ARGUMENT BY MR. GROSSMAN
1 AND OUT IT WILL COME FOR EVERYBODY." LET'S LOOK WHAT THE COURT
2 SAID.
3 THIS IS AT TAB 11, YOUR HONOR. THE COURT IS AT A
4 LOSS TO FASHION A METHOD OF ARRIVING AT BACK PAY DAMAGES FOR
5 THE PLAINTIFFS AND CLASS MEMBERS WITHOUT INDIVIDUALIZED
6 HEARINGS. CLASS ACTION CAN'T BE CERTIFIED FOR PAY. IT JUST
7 CAN'T BE DONE.
8 THIS WAS APPEALED TO THE NINTH CIRCUIT, AND THE
9 NINTH CIRCUIT DID NOT DISTURB THAT FINDING. WHAT DID
10 PLAINTIFFS SAY IN THEIR REPLY BRIEF WHEN WE CITED THEIR CASE?
11 THEY SAID, "OH, THE JUDGE CHANGED HER MIND. THE JUDGE ISSUED A
12 SUBSEQUENT ORDER CHANGING HER MIND," AND THEY'VE ATTACHED THE
13 ORDER. WELL, I'VE ATTACHED THE ORDER, THAT'S TABS 2 AND 3 AT
14 TAB 11, IT SAYS NO SUCH THING. THE JUDGE DID NOT CHANGE HER
15 MIND.
16 ALL THE JUDGE SAID IS THAT THE STATUTE OF
17 LIMITATIONS DOESN'T START TO RUN, AND PLAINTIFFS DON'T HAVE TO
18 RUN OUT AND FILE PARTIAL LAWSUITS FOR PART OF THEIR CLAIMS
19 UNTIL THE WHOLE CASE IS OVER. THE COURT DID NOT CHANGE HER
20 MIND WHATSOEVER APPLYING NINTH CIRCUIT STANDARDS. YOU CAN'T DO
21 IT BY FORMULA.
22 I WOULD LIKE TO MAKE ANOTHER CRITICAL POINT:
23 NEITHER SIDE'S RESEARCH HAS DISCOVERED A SINGLE BACK PAY
24 FORMULA CASE WHERE THE RELEVANT TIMEFRAME IS AFTER THE CIVIL
25 RIGHTS ACT OF 1991, NOT A SINGLE ONE. NO COURT AFTER THE CIVIL
122
ORAL ARGUMENT BY MR. GROSSMAN
1 RIGHTS ACT IN 1991 HAS SAID THERE IS NO RIGHT TO PRESENT
2 INDIVIDUAL NO-HARM EVIDENCE.
3 IT'S IMPORTANT TO RECOGNIZE THAT WE HAVE THE RIGHT
4 TO PRESENT INDIVIDUAL EVIDENCE NOT ONLY AT PHASE TWO,
5 CALCULATING DAMAGES, BUT ALSO AT PHASE ONE. TEAMSTERS SAID SO.
6 TEAMSTERS SAID THERE IS NO LIMIT TO THE TYPES OF EVIDENCE THAT
7 THE PARTIES CAN PRESENT. AND OBVIOUSLY, IF WE HAVE STORES
8 WHERE NO DISCRIMINATION TOOK PLACE, WE WANT TO PRESENT THE
9 EVIDENCE THAT WHATEVER YOU FIND ABOUT A PATTERN OR PRACTICE,
10 THE TYLER, TEXAS STORE THERE WAS NO DISCRIMINATION AGAINST
11 WOMEN WITH RESPECT TO HOURLY PAY. SO TEAMSTERS SAID IT, AND
12 NUMEROUS OTHERS CASES HAVE SAID IT.
13 TAB 12 IS AN EXAMPLE WHERE THE EMPLOYER STIPULATED
14 TO THE PLAINTIFF'S STATISTICS BUT WON THE CASE THROUGH
15 INDIVIDUAL-BY-INDIVIDUAL EVIDENCE. IN THE INTEREST OF TIME, I
16 WON'T GO THROUGH IT IN DETAIL, YOUR HONOR.
17 THE CASE IS UNMANAGEABLE JUST BASED ON TEAMSTERS AND
18 THE MIXED-MOTIVE DEFENSE ADDED TO THE -- BY THE CIVIL RIGHTS
19 ACT OF 1991. IT'S OUR ABSOLUTE RIGHT NOT TO PAY MONEY TO
20 ANYBODY WE DIDN'T HARM.
21 I WOULD NOW LIKE TO TURN TO QUESTIONS 8 AND 12. I
22 HAVE ALLUDED TO IT SOMEWHAT, BUT I WANT TO GO INTO IT IN A
23 LITTLE MORE DETAIL.
24 COULD SPECIAL MASTERS BY FORMULA JUST DECIDE ALL THE
25 PAY ISSUES AND THE COURT DOESN'T REALLY HAVE TO BE WORRIED
123
ORAL ARGUMENT BY MR. GROSSMAN
1 ABOUT THAT? WELL, THE CASE IS UNMANAGEABLE IN THAT RESPECT,
2 EVEN IF YOU WERE TO ASSUME THAT WE'RE PASTED MIXED MOTIVE, WE
3 HAVE A COMPLETE LIST OF EVERY DISCRIMINATEE, THE JURY HAS FOUND
4 PATTERN AND PRACTICE OF DISCRIMINATION, OUR MIXED-MOTIVE PEOPLE
5 ARE OUT, OR WE'VE BEEN RULED AGAINST, AND THE PLAINTIFFS ALWAYS
6 SAY, "DON'T WORRY, JUST APPOINT A SPECIAL MASTER." IT'S NOT
7 THAT EASY.
8 ONCE AGAIN, DR. DROGIN, AT ESSENCE, WHEN YOU LOOK AT
9 A BROADLY-DEFINED JOB CLASSIFICATION WITHIN A STORE, JUST USE
10 THOSE TWO FACTORS, SENIORITY PLUS EVALUATIONS. BUT OUR STORE
11 MANAGERS CONSIDER HUNDREDS OF FACTORS WHICH AREN'T IN THAT
12 ALLEGEDLY FANCY COMPUTER BASE.
13 TAKE A LOOK AT TAB 13, YOUR HONOR. HERE WE'VE MADE
14 A LIST OF ALL THE DIFFERENT FACTORS.
15 THE COURT: DO THEY HAVE TO ACCOUNT FOR EACH AND
16 EVERY ONE OF THOSE FACTORS IN DETERMINATION OF --
17 MR. GROSSMAN: NO, BUT YOU HAVE TO AT LEAST SET PAY
18 THE WAY OUR STORE MANAGERS DO. AND YOU HAVE TO ALLOW A STORE
19 MANAGER TO EXPLAIN IF THERE IS AN APPARENT --
20 THE COURT: WHY WOULD THAT BE? WOULD THEY -- WHY
21 WOULD THE COURT HAVE TO INVITE OR OCCASION THE DEVELOPMENT OF A
22 PROCESS, FORMULAIC OR OTHERWISE, THAT APPROXIMATES IN EVERY
23 DETAIL WHAT IS DONE BY MANAGERS IN THE ALLEGED, SINCE THERE IS
24 A FINDING, DISCRIMINATORY ENTITY?
25 MR. GROSSMAN: YOU DON'T. YOU CLEARLY DO NOT HAVE
124
ORAL ARGUMENT BY MR. GROSSMAN
1 TO APPROXIMATE EVERY DETAIL OF WHAT A STORE MANAGER DOES IN
2 SETTING PAY.
3 THE POINT IS, THE CONTENTION THAT YOU CAN,
4 CONSISTENT WITH DUE PROCESS, COME UP WITH A FORMULA WITHOUT
5 INDIVIDUALIZED TESTIMONY, WITHOUT FOCUSING ON THE PARTICULAR
6 STORE, HOW, IN GENERAL, WAS IT DONE AT THIS STORE, AND HAVING
7 THE STORE MANAGER SAY, "WELL, GOLLY, IF YOU TAKE INTO ACCOUNT
8 THE FACT THAT I PAY TWENTY-FIVE CENTS AN HOUR FOR A WILLINGNESS
9 TO WORK WEEKENDS." AND IF YOU TAKE THAT OUT OF THE EQUATION,
10 IT ALTERS THINGS THIS MUCH.
11 WHAT I'M COMING DOWN TO, OF COURSE, YOUR HONOR, IS
12 THEY SHOULD HAVE FILED -- THIS WILL BE TOWARDS THE END --
13 STORE-BY-STORE CLASS ACTIONS.
14 THE COURT: UM-HMM.
15 MR. GROSSMAN: THEY SHOULD HAVE DONE A
16 STORE-BY-STORE STATISTICAL ANALYSIS, AND THEY SHOULD HAVE
17 LOOKED AT THE RELATIVELY FEW STORES WHERE THE STATISTICS
18 INDICATE THERE IS A PROBLEM, APPARENTLY 7 PERCENT, SEEING IF
19 THIS WAS AN EXPLANATION. AND THEN THERE SHOULD BE A
20 TRADITIONAL CLASS ACTION CONSISTENT WITH DUE PROCESS. WAL-MART
21 STORES ARE SO LARGE, THE TIMEFRAME IS SO BROAD, THE AVERAGE
22 CLASS WOULD BE SOMEWHERE BETWEEN 500 AND 1500 PEOPLE, A
23 TRADITIONAL-SIZED CLASS ACTION. AND THE COURT CAN APPROXIMATE
24 WHAT THE PAY-SETTING PROCESS WAS AT THAT STORE. BUT OUR POINT
25 IS THAT IT'S ABSOLUTELY UNMANAGEABLE ON A NATIONWIDE BASIS.
125
ORAL ARGUMENT BY MR. GROSSMAN
1 IF YOU TAKE A LOOK AT TAB 13, YOUR HONOR, THESE ARE
2 THE VARIOUS FACTORS. AND LET ME JUST MENTION, NONE OF THIS IS
3 IN OUR DATABASES. YOU DON'T PUT IN YOUR DATABASE WHAT YOU
4 LEARN WHEN INTERVIEWING A PROSPECTIVE HIRE AND DETERMINING WHAT
5 THEIR PRE-WAL-MART EXPERIENCE IS AND WHAT YOU SHOULD PAY THEM.
6 THE SAME IS TRUE FOR PROMOTION. NONE OF THE FACTORS
7 THAT GO INTO PROMOTION -- YOU'VE HEARD COUNSEL SAY, "OH, DON'T
8 WORRY. WE'VE GOT LOTS OF COMPUTER RECORDS. IT'S ALL IN THE
9 COMPUTER DATABASE." IT ISN'T. LET'S LOOK AT SOME OF THE
10 FACTORS.
11 AND I SHOULD ALSO MENTION; THEY TRIED TO SAY THAT
12 THIS IS A DOUBLE-BLIND SURVEY; THIS IS JUST WAL-MART'S LAWYERS
13 INTERVIEWING WAL-MART STORE MANAGERS AS TO THE CRITERIA THAT
14 THEY USED TO SET PAY AND PROVIDING THAT EVIDENCE TO THE COURT
15 AND TO THE EXPERTS. I'LL JUST GET A FEW EXAMPLES.
16 WILLINGNESS TO WORK WEEKENDS: SOME STORE MANAGERS
17 PAY EXTRA FOR THAT. IF YOU'RE IN A COLLEGE TOWN, NO, YOU
18 DON'T, BECAUSE THE KIDS LIKE TO WORK WEEKENDS.
19 WILLINGNESS TO WORK ROTATING SHIFTS: SOME PAY
20 EXTRA.
21 BILINGUAL SKILLS: DEPENDS ON WHERE YOU ARE. IF
22 YOU'RE IN AN AREA WHERE A LOT OF THE CUSTOMERS ARE BILINGUAL,
23 YEAH, YOU PAY EXTRA.
24 FIREARMS LICENSE: YOU HAVE TO HAVE AT LEAST ONE
25 LICENSED INDIVIDUAL TO SELL GUNS.
126
ORAL ARGUMENT BY MR. GROSSMAN
1 FORKLIFT LICENSE: PAY EXTRA FOR THAT.
2 MEATCUTTING KNOWLEDGE AND EXPERIENCE: WHEN WE WENT
3 INTO THE GROCERY BUSINESS, WE HAD TO HIRE EXPERIENCED MEAT
4 CUTTERS, AND YOU HAVE TO PAY THEM ONE HECK OF A LOT OF MONEY.
5 PRODUCE EXPERIENCE, ELECTRONICS EXPERIENCE, FISHING
6 EXPERIENCE, AND MY PERSONAL FAVORITE, LIVE CRICKETS: IN SOME
7 AREAS OF THE COUNTRY LIVE CRICKETS ARE USED FOR BAIT. AND IT
8 IS A REAL ART TO KEEP LIVE CRICKETS ALIVE FOR ANY APPRECIABLE
9 PERIOD OF TIME. ONE STORE MANAGER TELLS ME THAT THAT IS
10 SOMETHING HE PAYS SUBSTANTIALLY EXTRA FOR, IF YOU'VE GOT LIVE
11 CRICKET EXPERIENCE.
12 OPTICAL EXPERIENCE: DO YOU KNOW HOW TO TEST FOR
13 EYEGLASSES?
14 PHOTO EXPERIENCE, JEWELRY EXPERIENCE, SHOE
15 EXPERIENCE, CAKE DECORATING SKILLS: ALL OF THESE FACTORS GO
16 INTO SETTING PAY. IT'S NOT LIKE DR. DROGIN SAYS, GIVEN EQUAL
17 EVALUATIONS IT'S JUST A QUESTION OF SENIORITY. PRE-WAL-MART
18 EXPERIENCE IS EVEN MORE IMPORTANT.
19 QUESTIONS 8 AND 12, YOUR HONOR, REFERENCE SHIPES.
20 AND THEY ASK, "WELL, GOSH, WHY CAN'T WE JUST DO IT THAT WAY?"
21 LET'S LOOK AT SHIPES, TAB 14.
22 SHIPES WAS TWO PLANTS. NOBODY DARED SUE FOR ALL
23 THIRTY PLANTS OF THE COMPANY, THEY SUED FOR TWO PLANTS. THE
24 LIABILITY PORTION WAS TRIED IN 1984. THE JUDGE APPOINTED A
25 SPECIAL MASTER. YOU KNOW HOW LONG IT TOOK? EIGHT YEARS FOR
127
ORAL ARGUMENT BY MR. GROSSMAN
1 TWO RELATIVELY SMALL PLANTS TO TRY TO APPROXIMATE WHAT THE PAY
2 WOULD BE.
3 IF YOU'LL TURN TO THE NEXT PAGE OF TAB 14, YOUR
4 HONOR, IT WAS A VERY SIMPLE ASSIGNMENT AT SHIPES, SIMPLY HIRING
5 RATES. THE SPECIAL MASTER WAS ORDERED TO DETERMINE WHAT WAS
6 THE RIGHT HIRING RATE AND FOR COMPARABLE QUALIFICATIONS. IT
7 WAS JUST STARTING PAY AND PRE-COMPANY EXPERIENCE.
8 HERE IT'S NOT ONLY HIRING, BUT IT'S RAISES, IT'S
9 MERIT RAISES, IT'S EVALUATIONS, IT'S TRANSFERS, IT'S
10 PROMOTIONS, AND, OF COURSE, IT'S WHAT KINDS OF EXPERIENCE,
11 WHICH IS NOT CONTAINED IN COMPANY RECORDS.
12 MOREOVER, SHIPES WAS A RELATIVELY SIMPLE FACILITY.
13 WE HAVE, AS NANCY ABELL WILL EXPLAIN IN FURTHER DETAIL WHEN SHE
14 GETS INTO 23(A) IN MORE DETAIL, WE HAVE OVER 170 SEPARATE SKILL
15 AREAS, 170 SEPARATE JOBS IN A SINGLE STORE.
16 TAB 15, YOUR HONOR, IS SIMPLY THE FIRST PAGE OF AN
17 EXHIBIT NANCY WILL GET INTO IN MORE DETAIL WITH RESPECT TO ALL
18 THE VARIOUS DIFFERENT TYPES OF JOBS AND SKILL AREAS.
19 THE COURT CITED DOMINGO: DOMINGO WAS A VERY SIMPLE
20 CASE. THE COURT FOUND NO SKILLS WERE REQUIRED. THAT WAS ALL
21 PRETEXT. THEY HAD TWO-MONTH ASSIGNMENTS UP IN ALASKA TO DO
22 SALMON. EVERY YEAR THEY STARTED OVER AND ASSIGNED PEOPLE
23 SEPARATELY.
24 VERY ROUGHLY, THE FACTS WERE 50 PERCENT MINORITY,
25 50 PERCENT NONMINORITY. SO WITH NO SKILLS, YOU WOULD EXPECT
128
ORAL ARGUMENT BY MR. GROSSMAN
1 THE BETTER DEPARTMENTS TO BE 50 PERCENT MINORITY. THEY
2 WEREN'T. SO FOR A DEPARTMENT THAT WAS 20 PERCENT MINORITY YOU
3 HAD A 30 PERCENT SHORTFALL. VERY, VERY SIMPLE CASE. NO
4 SKILLS. WORK FORCE REPLICATED EVERY YEAR FOR TWO MONTHS. AND
5 LET'S TAKE A LOOK.
6 TAB 16: "SUBSTANTIAL EVIDENCE SUPPORTS THE DISTRICT
7 COURT'S CONCLUSION THAT THE COMPANIES ASSERTING REQUIREMENTS OF
8 SKILLS, TRAINING AND EXPERIENCE WERE LARGELY PRETEXTUAL."
9 NO ONE CONTENDS THAT WHEN WE HIRE A MEAT CUTTER,
10 WHEN WE HIRE A JEWELRY PERSON, WHEN WE HIRE AN OPTICAL PERSON,
11 WHEN WE HIRE AN ELECTRONICS PERSON THAT SKILLS ARE IRRELEVANT.
12 IT WAS A VERY, VERY SIMPLE CASE.
13 NEXT, SECOND PAGE OF TAB 16, YOUR HONOR, THERE WERE
14 1,500 TOTAL CLASS MEMBERS OVER THE SIX YEARS. THAT WAS THE
15 TOTAL CLASS. AND, AS YOUR HONOR HAS POINTED OUT, EVEN UNDER
16 THOSE CIRCUMSTANCES, WHERE IT'S VERY, VERY SIMPLE TO CALCULATE
17 THE SHORTFALL; YOU SHOULD HAVE BEEN 50 PERCENT, YOU WERE 20
18 PERCENT, YOU GET THE DIFFERENCE, INDIVIDUALIZED HEARINGS WERE
19 REQUIRED.
20 ONCE AGAIN, THE REALLY BIG POINT DOMINGO, AND EVERY
21 OTHER FORMULA CASE LOCATED BY EITHER SIDE'S RESEARCH, AND THERE
22 WERE ONLY FIVE OF THEM, THEY ARE ALL BUT ONE 20 YEARS OLD.
23 THAT ONE WAS TOTALLY TINY AND IRRELEVANT. AND NONE COVERED A
24 TIME PERIOD AFTER THE OPERATIVE EFFECT OF THE CIVIL RIGHTS ACT
25 OF 1991. FORMULA WAS RARE UNDER TEAMSTERS, AND IT HAS BEEN
129
ORAL ARGUMENT BY MR. GROSSMAN
1 NONEXISTENT AFTER THE CIVIL RIGHTS ACT OF 1991.
2 NOW LET'S TURN TO PUNITIVES, HOW TO DO PUNITIVES IF
3 A PATTERN AND PRACTICE CASE IS FOUND.
4 THE COURT: IS THERE A CASE THAT STATES THE
5 CONVERSE, THAT YOU CANNOT CERTIFY A CLASS ACTION AND RESORT TO
6 A FORMULAIC METHOD OF EQUITABLE RELIEF POST THE CIVIL RIGHTS
7 ACT?
8 MR. GROSSMAN: NO. I SUBMIT THAT COSTA STANDS FOR
9 THAT, BECAUSE IT SAYS WE'VE GOT A RIGHT TO PRESENT AN
10 AFFIRMATIVE DEFENSE.
11 I SUBMIT THAT TEAMSTERS, WHICH SAYS THAT THIS IS THE
12 NORMAL FORMAT, HAS BEEN CODIFIED WITH NO EXCEPTIONS. BUT, NO,
13 YOUR HONOR, I CANNOT POINT YOU TO A CASE THAT SAYS POST-CIVIL
14 RIGHTS ACT OF 1991 THERE CANNOT BE A FORMULA.
15 LET'S NOW TURN -- JUST HASN'T BEEN THERE.
16 LET'S NOW TURN TO QUESTIONS 9(A)(3) AND 10, "DOES
17 THE COURT SOLVE THE DUE PROCESS PROBLEMS BY CERTIFYING THE
18 CLASS UNDER G(2) AND ADDING AN OPT-OUT?" WELL, TWO POINTS.
19 FIRST, AND I'M SOMETHING OF A STUDENT ON THIS
20 SUBJECT, WHAT IS THE POINT? THAT IS WHAT B(3) IS FOR. B(3) IS
21 FOR A CLASS WHERE YOU NEED PROCEDURAL SAFEGUARDS, WHERE THE
22 CLASS IS COMPLEX, WHERE THERE IS A LOT OF MONEY AT ISSUE. THAT
23 IS WHY B(3) WAS WRITTEN. THAT'S WHY IT EXISTS. ALL YOU'RE
24 DOING IS CREATING B(3) WHEN YOU SAY, "WE'RE GOING TO DO A B(2)
25 PLUS AN OPT-OUT."
130
ORAL ARGUMENT BY MR. GROSSMAN
1 HERE IS THE KEY POINT, EVEN IF YOU SAY IT'S B(2),
2 AND THIS IS WHAT I'M GOING TO GO INTO IN SOME DETAIL A LITTLE
3 BIT LATER, YOU STILL HAVE TO DETERMINE MANAGEABILITY. SO THERE
4 IS JUST NO POINT TO IT. THAT IS WHAT B(3) IS FOR.
5 DOES THAT SOLVE THE DUE PROCESS PROBLEM FOR THE
6 PERSON WITH A DAMAGE CLAIM WHO WANTS TO ASSERT THEIR INDIVIDUAL
7 CLAIM? SURE. YOU'VE JUST CREATED B(3).
8 DOES THAT SOLVE WAL-MART'S DUE PROCESS RIGHTS?
9 ABSOLUTELY NOT. SUCH A PROCEDURE, A LUMP-SUM AWARD OF PUNITIVE
10 DAMAGES, VIOLATES WAL-MART'S DUE PROCESS RIGHTS, AS STATED BY
11 THE SUPREME COURT IN THE STATE FARM CASE AND THE NORTHERN
12 DISTRICT IN BECK VERSUS BOEING, THEIR CASE.
13 BOTH THOSE CASES SAID YOU CAN'T DO PUNITIVES OTHER
14 THAN INDIVIDUAL BY INDIVIDUAL. THE SUPREME COURT HAS BEEN
15 VERY, VERY CONCERNED ABOUT THE DUE PROCESS IMPLICATIONS OF
16 PUNITIVES.
17 THE IDEA, SAYS THE SUPREME COURT, THAT YOU CAN AWARD
18 PUNITIVES TO JOE BASED ON HARM TO OTHERS TOTALLY VIOLATES DUE
19 PROCESS. THE ONLY PUNITIVES THAT CAN BE AWARDED TO JOE ARE
20 BASED ON THE HARM TO JOE. AND IF JOE WASN'T HARMED, YOU CAN'T
21 AWARD PUNITIVES.
22 THE COURT: WELL, I THINK THAT IS WHERE THE RUBBER
23 MEETS THE ROAD.
24 MR. GROSSMAN: THAT IS WHERE THE RUBBER MEETS THE
25 ROAD.
131
ORAL ARGUMENT BY MR. GROSSMAN
1 THE COURT: THERE MAY BE MORE MANIFESTATIONS OR
2 DIFFERENT MANIFESTATIONS OF HARM THAN WHAT YOU ALLUDED TO.
3 MR. GROSSMAN: WELL, JOE HAS TO BE DISCRIMINATED
4 AGAINST.
5 THE COURT: RIGHT.
6 MR. GROSSMAN: JOE HAS TO HAVE SUFFERED DAMAGE. AND
7 THAT IS THE ISSUE.
8 OF COURSE, THAT IS WHERE WE HAVE THE RIGHT TO
9 PRESENT INDIVIDUAL EVIDENCE THAT JOE DIDN'T SUFFER HARM, OR, IN
10 OUR CASE, SALLY DIDN'T SUFFER HARM, BECAUSE SALLY WANTS TO
11 CONTEND SHE SHOULD HAVE BEEN PROMOTED, BUT WE CAN PROVE THROUGH
12 WITNESSES THAT SHE TURNED DOWN PROMOTIONS.
13 SHE NOW SAYS SHE WANTS TO BE PROMOTED BECAUSE THERE
14 IS MONEY IN IT. BUT WHEN THERE WASN'T MONEY IN IT, SHE SAID,
15 "MY PERSONAL CIRCUMSTANCES DON'T ALLOW ME TO WORK THE
16 EXTRAORDINARY HOURS THAT FIRST-LEVEL MANAGEMENT AT WAL-MART HAS
17 TO WORK."
18 SO THE ANSWER IS, NO, YOU CAN'T DO IT THE WAY YOU
19 ASKED IN YOUR QUESTIONS, BECAUSE IT WOULD VIOLATE WAL-MART'S
20 DUE PROCESS RIGHTS.
21 TAB 17 IS STATE FARM. I STILL HAVEN'T HEARD A WORD
22 ABOUT STATE FARM. WE CITED STATE FARM IN OUR OPPOSITION
23 EXTENSIVELY. IT HAD JUST COME DOWN FROM THE UNITED STATES
24 SUPREME COURT. IT SAID YOU CAN'T DO PUNITIVES OTHER THAN
25 INDIVIDUAL BY INDIVIDUAL, AND THE PUNITIVES AWARDED TO THAT
132
ORAL ARGUMENT BY MR. GROSSMAN
1 INDIVIDUAL HAVE TO BEAR A FAIR RELATIONSHIP TO THE HARM TO THAT
2 INDIVIDUAL.
3 WE SAID IT'S DETERMINATIVE IN OUR OPPOSITION. WHAT
4 DID THEY SAY IN THEIR REPLY BRIEF? WELL, IF YOU WILL TAKE A
5 LOOK AT THE INDEX TO THEIR REPLY BRIEF WHEN YOU GET A CHANCE,
6 YOUR HONOR, NOTHING. ZIPPO. THEY IGNORED IT. THEY HAD
7 NOTHING TO SAY.
8 STATE FARM IS AT TAB 17: "A DEFENDANT SHOULD BE
9 PUNISHED FOR THE CONDUCT THAT HARMED THE PLAINTIFF, NOT FOR
10 BEING AN UNSAVORY INDIVIDUAL OR BUSINESS."
11 THE SECOND PAGE OF TAB 17: "THE PRECISE AWARD IN
12 ANY CASE, OF COURSE, MUST BE BASED ON THE FACTS AND
13 CIRCUMSTANCES OF THE DEFENDANT'S CONDUCT AND THE HARM TO THE
14 PLAINTIFF."
15 NOW, WHY DID THEY SAY NOTHING ABOUT STATE FARM IN
16 THEIR REPLY BRIEF OR TODAY, FOR THAT MATTER? IT'S
17 DETERMINATIVE OF MANAGEABILITY. IF INDIVIDUALS -- IT'S
18 DETERMINATIVE OF A LUMP-SUM PUNITIVE DAMAGE AWARD. IF
19 INDIVIDUALS CANNOT BE AWARD PUNITIVES DAMAGES IF THEY HAVEN'T
20 BEEN HARMED, WE'VE GOT THE RIGHT TO SHOW THAT THEY WEREN'T
21 HARMED. IT'S JUST WHAT TEAMSTERS SAYS, AND IT'S JUST WHAT THE
22 CIVIL RIGHTS ACT OF 1991 SAYS.
23 I CAN DEMONSTRATE WHAT IS GOING ON HERE. WHY DID
24 PLAINTIFFS WAIVE COMPENSATORY DAMAGES? BECAUSE IT WOULD
25 REQUIRE INDIVIDUAL INQUIRIES. THEY DIDN'T JUST WANT TO BE NICE
133
ORAL ARGUMENT BY MR. GROSSMAN
1 TO WAL-MART.
2 WHY DID YOU HEAR TODAY THAT PLAINTIFFS AREN'T
3 SEEKING THE NORMAL REMEDY FOR PROMOTION DISCRIMINATION, WHICH
4 IS AN ORDER TO BE PROMOTED? WELL, BECAUSE YOU CAN'T CERTIFY
5 THE CLASS IF INDIVIDUAL HEARINGS ARE REQUIRED. AND TO ORDER
6 SOMEONE PROMOTED, YOU HAVE TO HAVE INDIVIDUAL HEARINGS.
7 SO THEY SAID, "WELL, HECK, WE'LL WAIVE
8 COMPENSATORIES, WE'LL WAIVE AN ORDER FOR PROMOTION, BUT WE'LL
9 GO FOR A LUMP SUM OF PUNITIVES, BECAUSE WE'LL SAY THAT CAN BE
10 DONE BY FORMULA." BUT NOW, WE KNOW IT CAN'T.
11 SO THE BOTTOM LINE IS, PLAINTIFFS WHO HAVE
12 ACKNOWLEDGED IMPLICITLY AND EVERY OTHER WAY THAT THIS CASE IS
13 UNMANAGEABLE, IF WE HAVE THE RIGHT TO DEFEND INDIVIDUAL
14 DECISIONS OR INDIVIDUAL STORE DECISIONS, ARE HOISTED ON THEIR
15 OWN PETARD. IS WHAT HAPPENED IN STATE FARM UNUSUAL? I MEAN,
16 DUE PROCESS RIGHTS? NO. THE NINTH CIRCUIT IN THEIR CASE, BECK
17 VERSUS BOEING, ANTICIPATED STATE FARM.
18 TAB 18, YOUR HONOR: WHILE THEY COULDN'T CONVINCE
19 THE JUDGE IN BECK VERSUS BOEING THAT BACK PAY COULD BE DONE
20 INDIVIDUALLY, THEY DID CONVINCE THE TRIAL COURT THAT PUNITIVES
21 COULD BE AWARDED BY A PHASE ONE JURY IN A LUMP SUM. WENT UP TO
22 THE NINTH CIRCUIT.
23 THEY CITED THE LOWER COURT DECISION IN THEIR OPENING
24 BRIEF AS THEIR AUTHORITY FOR THE PROPOSITION THAT YOU COULD
25 AWARD A LUMP SUM OF PUNITIVE DAMAGES, EVEN THOUGH IT WAS THEIR
134
ORAL ARGUMENT BY MR. GROSSMAN
1 CASE AND HAD BEEN REVERSED.
2 AT TAB 18, THE NINTH CIRCUIT REVERSAL, WHICH WE'RE
3 ENTITLED TO CITE BECAUSE THEY OPENED THE DOOR, AND THAT IS THE
4 LAW OF THE CASE, THE NINTH CIRCUIT COULDN'T HAVE BEEN CLEARER.
5 THE DISTRICT COURT ABUSED ITS DISCRETION WHEN IT CERTIFIED THE
6 CLASS FOR PURPOSES OF DETERMINING PLAINTIFF'S PUNITIVE DAMAGE
7 CLAIMS.
8 "A FIND THAT THE EMPLOYER ENGAGED IN A PATTERN OR
9 PRACTICE OF DISCRIMINATION DOES NOT AUTOMATICALLY ENTITLE EVERY
10 CLASS MEMBER TO DAMAGES."
11 HERE IS THE KILLER: "TO RECEIVE PUNITIVE DAMAGES IN
12 A TITLE 7 CASE, A PLAINTIFF MUST HAVE SUFFERED SOME HARM. IF
13 THE DISTRICT COURT'S CERTIFICATION WERE UPHELD, THE
14 BENEFICIARIES OF THE PUNITIVE DAMAGES AWARD WOULD NECESSARILY
15 INCLUDE THOSE CLASS MEMBERS NOT AFFECTED BY THE ALLEGED
16 DISCRIMINATORY POLICY, AS WELL AS THOSE WHO WERE. THIS MAY NOT
17 BE DONE."
18 THESE WERE NOT IDEOLOGICAL EXTREMES, THIS WAS
19 UNANIMOUS. JUDGE KOZINSKI AND JUDGE WILLIAM FLETCHER WERE ON
20 THAT PANEL.
21 SO WHAT DID THEY SAY IN THEIR REPLY BRIEF WHEN WE
22 POINTED OUT THAT THEY'D CITED A REVERSED CASE AND THE NINTH
23 CIRCUIT HAS SAID EXACTLY THE OPPOSITE OF WHAT THEY ARGUED?
24 WELL, I WON'T CHARACTERIZE IT. I WILL INVITE YOU TO GO TAKE A
25 LOOK AT WHAT THEY SAID IN THEIR REPLY BRIEF. AND IF IT'S
135
ORAL ARGUMENT BY MR. GROSSMAN
1 INTELLIGIBLE TO YOU, I WISH YOU WOULD EXPLAIN IT TO ME.
2 WE HEARD TODAY THAT HERE IN THIS DISTRICT IN
3 BEARFIELD -- IN THE BEARFIELD VERSUS CHEVRON CASE, A LUMP SUM
4 OF PUNITIVES WAS AWARDED. WELL, I TOOK A LOOK AT BEARFIELD, IT
5 INVOLVED A CLASS OF 116 PEOPLE. AND OBVIOUSLY, IT WAS
6 PRE-STATE FARM AND PRE-BECK, AND THAT WOULDN'T HAVE BEEN DONE
7 IF IT OCCURRED TODAY.
8 THEY ALSO CITED THAT CASE THEY FAXED US YESTERDAY,
9 THE INSURANCE COMPANY CASE, COMBINED INSURANCE COMPANY; THAT
10 DISTRICT JUDGE SAID, "I CAN AWARD PUNITIVES AND GIVE IT TO
11 CHARITY." BUT THERE WAS NO CITATION WHATSOEVER OF STATE FARM.
12 AND OBVIOUSLY, IT WASN'T GOVERNED BY BECK VERSUS BOEING. AND
13 THERE IS NO AUTHORITY FOR THE PROPOSITION THAT YOU CAN JUST
14 AWARD PUNITIVES AND, HECK, WE'LL JUST GIVE IT TO CHARITY OR PRO
15 RATA, OR SOMETHING LIKE THAT.
16 QUESTION NUMBER 11, YOUR HONOR, PROMOTION BACK PAY:
17 WAL-MART'S INTEREST AND TO WHOM IT GOES.
18 DO WE HAVE THE RIGHT, WHEN ACCORDING TO THE CLAIM
19 FORM PROCEDURE THEY ENVISION, SALLY SAYS, "YES, I WAS
20 INTERESTED AND WANTED A PROMOTION TO ASSISTANT MANAGER FROM DAY
21 ONE. AND I WOULD LIKE BACK PAY FROM DAY ONE TO THE PRESENT."
22 AND WE HAVE EVIDENCE THAT SALLY WAS OFFERED IT, BUT DECLINED
23 FOR PERSONAL REASONS; DO WE HAVE THE RIGHT TO PRESENT THAT
24 EVIDENCE? ABSOLUTELY.
25 WE HAVE A CONSTITUTIONAL DUE PROCESS RIGHT, A RIGHT
136
ORAL ARGUMENT BY MR. GROSSMAN
1 UNDER THE SUPREME COURT'S HOLDING IN TEAMSTERS AND STATE FARM,
2 AND A STATUTORY RIGHT NOT TO PAY MONEY TO SALLY, IF WE DIDN'T
3 WRONG HER.
4 SECOND, AND THIS IS REALLY SIGNIFICANT, YOU'VE HEARD
5 TODAY THAT THEY ARE WAIVING A NORMAL REMEDY IN A TITLE 7
6 DISCRIMINATION CASE, PROMOTION DISCRIMINATION CASE, WHICH IS AN
7 ORDER TO BE PROMOTED, THAT IS JUST ROUTINE.
8 IF THE COURT FINDS IN A ONE-STORE CLASS ACTION, FOR
9 EXAMPLE, THAT SALLY WOULD HAVE BEEN PROMOTED TO SUPPORT MANAGER
10 BUT FOR SEX, SALLY IS ENTITLED TO AN ORDER THAT SHE GETS THE
11 NEXT SUPPORT MANAGER POSITION AND FRONT PAY UNTIL SHE IS
12 PROMOTED.
13 THEY SAY THEY'RE WAIVING THAT, FOR OBVIOUS REASONS,
14 BECAUSE THE CASE IS UNMANAGEABLE IF THEY SEEK THE NORMAL REMEDY
15 ONE GETS IN A PROMOTION CASE.
16 THEY SAY WE'RE SUPPOSED TO NEVERTHELESS PAY SALLY
17 BACK PAY AND FRONT PAY, AND THAT WE HAVE NO INTEREST IN WHETHER
18 SHE GETS IT OR NOT, AND WE'RE NOT ENTITLED TO SHOW THAT SHE
19 WASN'T DISCRIMINATED AGAINST; CAN YOU IMAGINE WAL-MART DEALING
20 WITH HUNDREDS OF THOUSANDS OF WOMEN WHO GET A CHECK FROM THE
21 COURT SAYING, "YOU'VE BEEN DISCRIMINATED AGAINST, BUT YOU'RE
22 NOT BEING PROMOTED"? AND, "WHY AREN'T I BEING PROMOTED?"
23 NOTHING LIKE THAT HAS EVER BEEN DONE. YOU ARE SUPPOSED TO
24 AWARD BACK PAY TO PEOPLE WITHOUT DETERMINING THAT THEY'RE
25 REALLY ENTITLED TO THE PROMOTION?
137
ORAL ARGUMENT BY MR. GROSSMAN
1 THE COURT: ASIDE FROM THAT, THOUGH, WHAT IS YOUR
2 VIEW OF THE COURT'S DECISION IN HILAO WITH RESPECT TO THE DUE
3 PROCESS ISSUE?
4 MR. GROSSMAN: I'M GLAD YOU ASKED. HILAO, OF
5 COURSE, DEALT WITH THE MURDER AND TORTURE UNDER THE MARCOS
6 REGIME IN THE PHILIPPINES. HILAO WAS A TWO-TO-ONE DECISION,
7 JUDGE RYMER IN DISSENT, AND JUDGES FLETCHER AND
8 PREGERSON (PHONETIC) -- HARRY HAD A LITTLE TROUBLE YESTERDAY
9 WITH THE ELECTION CASE -- IN THE MAJORITY.
10 WHAT THEY SAID WAS, QUOTE, "WHILE THE DISTRICT
11 COURT'S METHODOLOGY IS UNORTHODOX, IT CAN BE JUSTIFIED BY THE"
12 -- HERE ARE THE KEY WORDS -- "EXTRAORDINARILY UNUSUAL NATURE OF
13 THE CASE," END QUOTE. 103 F.3D AT 786. OF COURSE, THAT WAS
14 NOT A TITLE 7 CASE. IT WASN'T GOVERNED BY TEAMSTERS. IT
15 WASN'T GOVERNED BY THE CIVIL RIGHTS OF 1991. IT WAS SUI
16 GENEROUS.
17 THE COURT: ALL THOSE ISSUES WITH RESPECT TO
18 MANAGEABILITY, PUT THOSE IN ONE HOPPER.
19 MR. GROSSMAN: UH-HUH.
20 THE COURT: I'M ASKING YOU TO GIVE ME YOUR VIEW OF
21 THE COURT'S DISCUSSION OF THE DEFENDANT'S DUE PROCESS INTEREST,
22 AS IMPLICATED BY THE FORMULA USED IN THAT CASE.
23 MR. GROSSMAN: OKAY.
24 WELL, I'LL ANSWER THAT IN A SECOND, BUT THE COURT
25 ALSO STATED THE MAJORITY OPINION. RHYMER IN DISSENT SAID THAT
138
ORAL ARGUMENT BY MR. GROSSMAN
1 DUE PROCESS WAS TOTALLY VIOLATED.
2 THE COURT ALSO STATED, QUOTE, "ALTHOUGH POORLY
3 PRESENTED, THE DUE PROCESS CLAIM DOES RAISE SERIOUS QUESTIONS,"
4 END QUOTE. AND THEY ACKNOWLEDGED THE SERIOUS QUESTIONS. AND
5 THEY SAID -- WELL, THE SHORT ANSWER IS --
6 THE COURT: WHAT DOES JUDGE RYMER ARTICULATE AS THE
7 SPECIFIC INTEREST THAT IS IMPAIRED IN THE DUE PROCESS BALANCE
8 AFTER THE MAJORITY CITES TO THE ELDRIDGE LINE OF CASES?
9 MR. GROSSMAN: BASICALLY, SHE INDICATED IT'S JUST
10 SLOPPY JUSTICE, THAT YOU ARE DEVIATING --
11 THE COURT: SO CAN I WRAP MY ARMS AROUND THAT FOR
12 PURPOSES OF DETERMINING WHAT DUE PROCESS INTEREST IS IMPAIRED
13 BY THE UTILIZATION OF A FORMULA IN THE EQUAL PAY/BACK PAY
14 CONTEXT?
15 MR. GROSSMAN: NO, BECAUSE, AS I MENTIONED EARLIER,
16 HILAO WAS GOVERNED BY NOTHING OTHER THAN GENERAL COMMON LAW.
17 IT DIDN'T HAVE A TEAMSTERS DECISION SAYING THAT YOU DON'T AWARD
18 BACK PAY TO ANYONE EXCEPT ON INDIVIDUAL HEARINGS.
19 ESSENTIALLY, THE AWARD, WHICH PRESUMABLY WILL NEVER
20 BE COLLECTED, WAS THAT ANYONE WHO CLAIMED THEY HAD BEEN
21 TORTURED GOT MONEY. AND THERE WAS GOING TO BE NO PROOF, NO
22 INDIVIDUAL PROOF, NO NOTHING. AND THAT JUST CAN'T BE DONE DUE
23 PROCESS-WISE.
24 THE COURT: BUT IT WAS DONE THERE?
25 MR. GROSSMAN: IT WAS DONE THERE.
139
ORAL ARGUMENT BY MR. GROSSMAN
1 JUDGES FLETCHER AND PREGERSON SAID, "WE'RE GOING TO
2 DO ROUGH JUSTICE, BUT WE'LL GRANT THAT IT'S UNORTHODOX. BUT
3 THIS IS," QUOTE, "EXTRAORDINARILY UNUSUAL," END QUOTE. I DON'T
4 THINK WAL-MART'S EXTRAORDINARILY UNUSUAL. THE ONLY THING
5 EXTRAORDINARILY UNUSUAL --
6 THE COURT: NOW, THEY DO -- THE MAJORITY DOES RELY
7 ON THAT CASE, THOUGH, IN TERMS OF ITS DISCUSSION OF DUE PROCESS
8 AND ITS CONCERN THERE, IT RELIES, IN PART, IN THE PROCESS AND
9 THE DEPOSITIONS. BUT IT ALSO RELIES ON THE FACT THAT THERE
10 WERE DECLARATIONS SUBMITTED THAT GAVE SOME INDICIA OF
11 RELIABILITY WITH RESPECT TO THE AMOUNTS THAT WERE CLAIMED.
12 MR. GROSSMAN: SURE.
13 THE COURT: ISN'T THAT TRUE?
14 MR. GROSSMAN: YEAH, THAT IS TRUE. THE COURT IS
15 EXACTLY RIGHT.
16 THE COURT: SO DOES THAT APPROXIMATE FOR THE COURT
17 THE KINDS OF FACTORS IT WOULD NEED TO BUILD IN, FROM A
18 FORMULAIC STANDPOINT?
19 MR. GROSSMAN: NO, BECAUSE THE COURT ACCEPTED AN
20 ARGUMENT THAT COUNSEL HAS MADE HERE, WHICH IS, "IF WE DON'T DO
21 THIS, THESE PEOPLE WHO HAVE BEEN TORTURED AND HAD THEIR FAMILY
22 MEMBERS MURDERED AND SUFFERED THE MOST EGREGIOUS INJURIES THAT
23 THE HUMAN MIND CAN CONCEIVE OF WILL GO UNREMEDIED. AND THERE
24 WILL BE NO PUNISHMENT OF THE WRONGDOER. AND IT'S EITHER THIS
25 OR NOTHING." THAT IS NOT THE CASE HERE, EVEN FORGETTING THE
140
ORAL ARGUMENT BY MR. GROSSMAN
1 FACT THAT THE INDIVIDUAL CLAIMS CAN BE BROUGHT BECAUSE
2 ATTORNEY'S FEES ARE AWARDED.
3 WHAT SHOULD BE DONE HERE IS INDIVIDUAL STORE CLASS
4 ACTIONS WHERE THE STATISTICS INDICATE THERE IS A PROBLEM.
5 SO A MAJOR, MAJOR ASPECT OF THE MAJORITY'S
6 DISCUSSION IN HILAO WAS, IT'S THIS OR NOTHING. AND THEREFORE,
7 THE EXTRAORDINARILY UNUSUAL NATURE OF THIS CASE WARRANTS A,
8 QUOTE, "UNORTHODOX," END QUOTE, APPROACH, WHICH, AS I SAY, WAS
9 NOT GOVERNED BY TEAMSTERS AND NOT GOVERNED BY THE CIVIL RIGHTS
10 ACT OF 1991, WHICH STATES THAT WAL-MART CANNOT BE FORCED TO PAY
11 MONEY TO ANYONE THAT IT DIDN'T HARM.
12 LET'S CONTINUE WITH B(2) VERSUS B(3).
13 TAB 20, YOUR HONOR, I POINT OUT THAT ALL CIRCUITS
14 EXCEPT THE SECOND AND THE NINTH, AND WE ARE, OF COURSE, IN THE
15 NINTH, SAY YOU CAN'T EVER DO B(2). THIS OPT-OUT STUFF DOESN'T
16 DO IT. YOU HAVE TO DO B(3) WHEN MEANINGFUL MONEY IS SOUGHT,
17 WHEN NON-INCIDENTAL MONEY IS SOUGHT.
18 IN THE INTEREST OF TIME, BECAUSE I'M VERY CONCERNED
19 ABOUT TIME, AND I WANT TO LEAVE TIME FOR NANCY ABELL ON THE
20 VERY CRITICAL 23(A) ISSUES, I'LL BE VERY BRIEF AND SUMMARIZE.
21 EVERY CIRCUIT EXCEPT THE SECOND AND NINTH SAYS YOU
22 CAN'T DO B(2), WITH OR WITHOUT AN OPT-OUT. THAT IS THE ALLISON
23 CASE IN THE FIFTH CIRCUIT, WHICH HAS BEEN FOLLOWED BY EVERY
24 CIRCUIT EXCEPT THE SECOND AND NINTH.
25 THE SECOND IN ROBINSON SAID, "WELL, CASE BY CASE.
141
ORAL ARGUMENT BY MR. GROSSMAN
1 WE'RE GOING TO LOOK AT IT CASE BY CASE." AND THEN THE NINTH,
2 IN MOLSKI, INTERESTINGLY, THAT WAS A SETTLEMENT CASE.
3 ORIGINALLY THEY OVERTURNED IT AND SAID, "WE FOLLOW ALLISON.
4 YOU CAN'T DO B(2). YOU HAVE TO HAVE OPT-OUTS."
5 AND THERE WAS A REQUEST FOR RECONSIDERATION SHOWING
6 IT WAS DICTA BECAUSE THE SAME RESULT COULD BE ACHIEVED UNDER
7 EITHER LEGAL PRINCIPLE. AND THEN THEY SAID, "OH, CHANGED OUR
8 MIND, WE FOLLOW ROBINSON."
9 WHAT I WOULD LIKE TO DO IS MAKE THE KEY POINT THAT
10 IT DOESN'T MATTER WHETHER IT'S B(2) OR B(3), YOU'VE STILL GOT
11 TO FIND MANAGEABILITY.
12 LET'S JUST SKIP AHEAD TO TAB 22. I'LL SKIP MOLSKI,
13 WHICH YOUR HONOR IS FAMILIAR WITH, WHICH FOLLOWS ROBINSON.
14 AND WHAT DOES ROBINSON SAY AT TAB 22? THIS IS THEIR
15 CASE THAT THEY CITED THAT THEY TRIED. IT SAYS THREE THINGS.
16 FIRST, BACK PAY MUST BE INDIVIDUALLY DETERMINED, JUST LIKE
17 WE'VE BEEN DISCUSSING; SECOND, YOU CAN'T DO A B(2) UNLESS
18 INJUNCTIVE RELIEF PREDOMINATES OVER THE MONEY, AND THAT IS A
19 LITTLE DIFFICULT TO ARGUE, GIVEN THE AMOUNT OF MONEY THAT
20 THEY'RE SEEKING IN PUNITIVES. THIRD, MOST IMPORTANT OF ALL,
21 ROBINSON FLATLY SAYS THERE MUST BE A MANAGEABILITY
22 DETERMINATION.
23 TAB 22: PAGE 159 IN THE UPPER RIGHT-HAND CORNER,
24 "IF INDIVIDUAL RELIEF SUCH AS BACK PAY IS SOUGHT, THE COURT
25 MUST CONDUCT THE REMEDIAL PHASE," THE PHASE TWO, THE INDIVIDUAL
142
ORAL ARGUMENT BY MR. GROSSMAN
1 PROOF. HOW BIG WAS THE CLASS IN ROBINSON? 1,300 PEOPLE. THAT
2 IS ONE-ONE-THOUSANDTH OF OUR CLASS. AND IT STATES THE
3 TEAMSTERS FORMULA AS TO WHAT THE EMPLOYER MUST PROVE TO AVOID
4 PAYING BACK PAY.
5 PAGE 160, YOUR HONOR, IN TAB 22, "IF THE EMPLOYER IS
6 UNABLE TO ESTABLISH A LAWFUL REASON FOR AN ADVERSE EMPLOYMENT
7 ACTION, THE EMPLOYEE IS ENTITLED TO INDIVIDUALIZED EQUITABLE
8 RELIEF." THAT MEANS A PROMOTION WHICH MAY INCLUDE BACK PAY AND
9 FRONT PAY.
10 AND THE MOST IMPORTANT PAGE, AND THIS IS PAGE 164,
11 THE LAST PAGE OF TAB 22, YOUR HONOR: "THE DISTRICT COURT MAY
12 ALLOW B(2) CERTIFICATION IF; ONE, THE MONEY DOESN'T OUTWEIGH
13 THE INJUNCTIVE," BUT MOST IMPORTANT, "TWO, CLASS TREATMENT
14 WOULD BE MANAGEABLE." SO IT DOESN'T DO ANY GOOD TO CERTIFY
15 UNDER B(2) WITH AN OPT-OUT. YOU'VE GOT TO DETERMINE
16 MANAGEABILITY ANYWAY.
17 TAB 23, YOUR HONOR, THE NINTH CIRCUIT IN STATON
18 VERSUS BOEING SAID THE SAME THING JUST THIS YEAR, IT'S GOT TO
19 BE MANAGEABLE. THIS WAS A CLASS THAT WAS ONE-ONE-HUNDREDTH THE
20 SIZE OF OUR CLASS. THE COURT OVERTURNED THE SETTLEMENT,
21 REMANDED FOR RENEGOTIATION OF THE SETTLEMENT, BUT THEN SAID,
22 "WE HAVE SOME CONCERNS RELATING TO LITIGATION MANAGEMENT AS TO
23 WHETHER THE CASE CAN BE MAINTAINED AS A CLASS ACTION IF THE
24 LITIGATION CONTINUES."
25 PLAINTIFFS IN UNMANAGEABLE CASES ALWAYS SAY, "OH,
143
ORAL ARGUMENT BY MR. GROSSMAN
1 JUST CALL EXPERTS, YOUR HONOR, AND THE JURY DECIDES WHICH
2 EXPERT. IT'S ALL UNDERSTOOD. IT'S ALL IN THE COMPUTER.
3 THAT'S ALL THERE IS TO IT. IT'S ALL IN THE COMPUTER. YOU
4 KNOW, WE'LL WORRY ABOUT IT LATER IF THERE ARE ANY PROBLEMS."
5 WELL, TWO POINTS. THAT'S WHY RULE 23(F) WAS ADDED
6 TO RULE 23. IF YOU LOOK AT WHAT THE SUPREME COURT SAID, ON
7 RULE 23(F), ITS PURPOSE IN ADDING THAT WAS THAT AN
8 INAPPROPRIATE CLASS CERTIFICATION PUTS UNWARRANTED PRESSURE ON
9 THE PARTY AGAINST WHOM THE CLASS IS CERTIFIED TO SETTLE THE
10 CASE, EVEN THOUGH THE UNDERLYING MERITS MIGHT NOT BE PRESENT.
11 SECOND, THE CASES UNANIMOUSLY SAY YOU CAN'T WORRY
12 ABOUT MANAGEABILITY LATER. IF THE PROBLEMS ARE APPARENT AT THE
13 CLASS CERTIFICATION STAGE, YOU CAN'T CERTIFY UNLESS THERE IS A
14 WAY AROUND MANAGEABILITY.
15 AND IN THE INTEREST OF TIME, THAT'S TAB 24 AND 25,
16 YOUR HONOR. I'M ANXIOUS TO GET IT TO NANCY ON 23(A).
17 THAT IS IT ON MANAGEABILITY AND 23(B), BUT I HAVE
18 TWO PRELIMINARY ASSIGNMENTS WITH RESPECT TO 23(A). MY FIRST
19 PRELIMINARY ASSIGNMENT IS THE LACK OF ANY PROPER CLASS
20 REPRESENTATIVE FOR THOSE WHO ARE ATTACKING PAY IN SALARIED JOBS
21 AND PROMOTION ABOVE FIRST-LEVEL SALARY. IN OTHER WORDS, THE
22 KWAPNOSKI, AND I APOLOGIZE IF I'M PRONOUNCING IT WRONG.
23 YOU ASKED US TO, IN TWO OF YOUR QUESTIONS, TO DETAIL
24 EXACTLY WHAT HER POSITION IS.
25 IF YOU TURN TO TAB 26, YOUR HONOR, I'VE INSERTED THE
144
ORAL ARGUMENT BY MR. GROSSMAN
1 FLOW CHARTS FOR EACH OF THE FOUR WAL-MART LINE OF BUSINESS.
2 THE FIRST IS SAM'S, WHERE MS. KWAPNOSKI WORKS. THE
3 SECOND IS WAL-MART DIVISION 1. THE THIRD IS SUPER CENTER. AND
4 THE FOURTH IS NEIGHBORHOOD MARKETS.
5 YOU WILL NOTE FIRST SAM'S IS IN A TOTALLY SEPARATE
6 LINES OF BUSINESS. IT IS A BULK SALES OPERATION. IT IS A
7 MEMBERSHIP CLUB OPERATION. YOU BUY IN BULK. IT IS A TOTALLY
8 SEPARATE CHAIN OF COMMAND.
9 YOU WILL NOTE AT SAM'S THAT THE CHAIN OF COMMAND
10 ENDS WITH KEVIN TURNER, THE PRESIDENT AND CEO OF SAM'S. ONLY
11 KEVIN TURNER REPORTS TO CORPORATE. EVERYBODY BELOW
12 KEVIN TURNER IS SOLELY A SAM'S PERSON. EVERY SINGLE DECISION
13 THAT AFFECTS ANYBODY AT SAM'S IS A TOTALLY SEPARATE CHAIN OF
14 COMMAND. SO POINT ONE, IT'S A SEPARATE BUSINESS. POINT TWO,
15 IT'S A TOTALLY SEPARATE CHAIN OF COMMAND.
16 NEXT, IN TERMS OF MS. KWAPNOSKI, SHE IS A BAKERY
17 MANAGER. THAT IS THE HIGHEST POSITION SHE HAS EVER HELD. SHE
18 REPORTS TO A MERCHANDISE MANAGER, AND IF THERE IS NO
19 CO-MANAGER, THE MERCHANDISE MANAGER REPORTS TO THE GENERAL
20 MANAGER.
21 SHE IS THEREFORE ONE LEVEL BELOW THE LOWEST LEVEL OF
22 SALARIED EMPLOYEES AT WAL-MART, BECAUSE IF YOU TAKE A LOOK,
23 SHE, IF THERE IS NO CO-MANAGER, IS TWO LEVELS BELOW THE STORE
24 MANAGER -- MAYBE I WASN'T CLEAR, COME TO THINK OF IT, ON THE
25 FLOW CHART.
145
ORAL ARGUMENT BY MR. GROSSMAN
1 WHERE IT SAYS "GENERAL MANAGER" ON THE FLOW CHART,
2 YOUR HONOR, THAT IS CLUB MANAGER.
3 SO ASSUMING NO CO-MANAGER, AND SOME SAM'S CLUBS HAVE
4 THEM AND SOME DON'T, SOME WAL-MARTS HAVE THEM AND SOME DON'T,
5 MS. KWAPNOSKI IS TWO LEVELS BELOW.
6 IF YOU TURN TO THE SECOND PAGE OF TAB 26, YOUR
7 HONOR, THIS IS WAL-MART. YOU'LL SEE STORE MANAGER. IF THERE
8 IS NO CO-MANAGER, THE ASSISTANT MANAGERS AT WAL-MART, WHICH ARE
9 THE LOWEST LEVEL AT WAL-MART, REPORT DIRECTLY TO THE STORE
10 MANAGER. SO THEY ARE ONLY ONE LEVEL BELOW.
11 NOW, IF A SAM'S CLUB AS A CO-MANAGER MS KWAPNOSKI
12 WOULD BE THREE LEVELS BELOW. IF A WAL-MART STORE HAS A
13 CO-MANAGER, THE ASSISTANT MANAGER, WHICH IS THE LOWEST SALARIED
14 AT WAL-MART, WOULD BE TWO LEVELS BELOW.
15 NOW, IF YOU'LL TURN TO TAB 27, YOUR HONOR, I HAVE
16 PREPARED A CHART CONTRASTING THE BASIC ELEMENTS OF
17 MS. KWAPNOSKI'S BAKERY MANAGER POSITION WITH A WAL-MART SUPER
18 CENTER STORE MANAGER. SUPERVISES 5 TO 20, SUPERVISES 400 TO
19 500, SUPERVISES ZERO SALARY, SUPERVISES DIRECTLY 10 TO 15
20 SALARY.
21 SUBSTANTIAL PORTION OF TIME ENGAGED IN WORK, IF YOU
22 WENT AND WATCHED MS. KWAPNOSKI, SHE BAKES. MINIMAL MANUAL
23 WORK, IF ANY.
24 MR. SELIGMAN: YOUR HONOR, I HAVE TO RAISE AN
25 OBJECTION.
146
ORAL ARGUMENT BY MR. GROSSMAN
1 THERE IS NOTHING THAT IS IN THE EVIDENCE OF THIS
2 RECORD. THIS IS A DOCUMENT WHICH --
3 THE COURT: WELL, I THINK THAT -- LET'S MOVE
4 FORWARD.
5 IT STRIKES ME THAT WHAT MIGHT BE MORE USEFUL FOR ME
6 IS TO DISCUSS THE NINTH CIRCUIT STANDARD IN STATON, WHICH IS
7 ARE THE CLAIMS REASONABLY COEXTENSIVE WITH THOSE OF ABSENT
8 CLASS MEMBERS, WHEN YOU'RE TALKING ABOUT THE ISSUE OF
9 TYPICALITY?
10 MR. GROSSMAN: I'D BE HAPPY TO ANSWER THE OBJECTION
11 FIRST, YOUR HONOR.
12 YOUR HONOR ASKED A QUESTION. AND YOU ASKED A
13 QUESTION JUST A FEW DAYS AGO, AND WE WOULD BE HAPPY TO CONFIRM
14 THIS, OBVIOUSLY, WITH DECLARATIONS.
15 THE COURT: IT'S NOT IN THE RECORD?
16 MR. GROSSMAN: I DIDN'T WANT TO --
17 THE COURT: IT'S NOT IN THE RECORD?
18 MR. GROSSMAN: ALL OF THIS IS NOT IN THE RECORD.
19 THE COURT: WELL, THEN LET'S MOVE ON.
20 MR. GROSSMAN: YEAH.
21 I DIDN'T WANT TO STAND UP AND SAY, "YOUR HONOR, I'M
22 NOT GOING TO ANSWER YOUR QUESTION, BECAUSE NOT EVERYTHING IS IN
23 THE RECORD."
24 THE COURT: YOU'VE GIVEN ME A PRETTY GOOD INDICATION
25 AS TO WHAT YOUR VIEW IS, ABSENT ANY FACTUAL SUPPORT FOR IT.
147
ORAL ARGUMENT BY MR. GROSSMAN
1 MR. GROSSMAN: WE WOULD BE --
2 DO WE HAVE INFORMATION IN THE RECORD?
3 MS. ABELL: YOUR HONOR, MS. KWAPNOSKI HAS JUST
4 RECEIVED THIS PROMOTION, SO THIS IS POST-DISCOVERY CLOSE.
5 THE COURT: OKAY, LET'S JUST MOVE FORWARD.
6 MR. GROSSMAN: ANYWAY, I BELIEVE THE FLOW CHARTS, OR
7 AT LEAST THE TESTIMONY ABOUT STRUCTURE, IS IN THE RECORD.
8 NOW LET'S TURN TO THE BASIC 23(A) REQUIREMENTS,
9 ASIDE FROM WHETHER MS. KWAPNOSKI IS AN APPROPRIATE
10 REPRESENTATIVE OF A MUCH, MUCH HIGHER-LEVEL CLASS.
11 TAB 28 IS WHAT EVERYONE AGREES IS THE FALCON CASE,
12 THE LEADING U.S. SUPREME COURT DECISION ON CERTIFICATION OF
13 CLASS ACTIONS AND TITLE 7 DISCRIMINATION ACTIONS.
14 FALCON MAKES THREE CRITICAL POINTS. FIRST, ACROSS
15 THE BOARD IS OUT, YOU CAN'T BRING IN AN ACROSS THE BOARD CASE.
16 YOU CAN'T JUST SAY, "WE'RE ATTACKING EVERYTHING, BECAUSE MY
17 CLIENTS WERE VICTIMIZED BY A GENERAL POLICY OF DISCRIMINATION,
18 AND THEREFORE EVERYTHING IS FAIR GAME." YOU CAN'T DO THAT.
19 SECOND, YOU MUST CONSIDER THE FACTS GOING TO THE
20 MERITS OF CLASS CERTIFICATION. EVEN THOUGH YOU'RE NOT GOING TO
21 DECIDE THE MERITS, HOW THE MERITS ARE GOING TO BE PROVEN IS
22 INTIMATELY RELATED TO CLASS CERTIFICATION, SAYS THE FALCON
23 COURT.
24 AND THIRD, CONTRARY TO WHAT PLAINTIFFS HAVE ARGUED,
25 IT'S GOT TO BE A, QUOTE, "RIGOROUS ANALYSIS," END QUOTE, OF THE
148
ORAL ARGUMENT BY MR. GROSSMAN
1 RULE 23(A) FACTORS. IT'S NOT PERMISSIVE, IT'S RIGOROUS.
2 EACH OF THOSE IS SAID AT TAB 28 IN FALCON. QUOTE,
3 "THE ERROR INHERENT IN THE ACROSS THE BOARD RULE IS THE FAILURE
4 TO EVALUATE CAREFULLY THE LEGITIMACY OF THE NAMED PLAINTIFF'S
5 PLEA THAT HE IS A PROPER CLASS REPRESENTATIVE."
6 SECOND, ON THE CONSIDERING THE MERITS INFORMATION AS
7 IT PERTAINS TO THE RULE 23 STANDARDS, QUOTE, "THE CLASS
8 DETERMINATION GENERALLY INVOLVES CONSIDERATIONS THAT ARE
9 ENMESHED IN THE FACTUAL AND LEGAL ISSUES COMPRISING THE
10 PLAINTIFF'S CAUSE OF ACTION."
11 THIRD, RIGOROUS ANALYSIS; WE REITERATE TODAY THAT A
12 TITLE 7 CLASS ACTION MAY ONLY BE CERTIFIED IF THE TRIAL COURT
13 IS SATISFIED AFTER A RIGOROUS ANALYSIS THAT THE PREREQUISITES
14 OF RULE 23(A) HAVE BEEN SATISFIED.
15 THE NINTH CIRCUIT HAS MADE IT CLEAR IT FOLLOWS
16 FALCON ON BOTH POINTS, INCLUDING CONSIDERING THE MERITS, THE
17 FACTS GOING TO THE MERITS, HOW THE MERITS ARE GOING TO BE
18 PROVEN AT CLASS CERTIFICATION, AND RIGOROUS ANALYSIS. THIS IS
19 TAB 29, NINTH CIRCUIT IN THE HANON CASE.
20 WITH THAT, YOUR HONOR, I'LL TURN IT OVER TO NANCY
21 BUT I WOULD LIKE TO HIGHLIGHT TWO OF HER 23(A) POINTS.
22 FIRST, SHE'S GOING TO GO THROUGH TEN MULTI-FACILITY
23 CASES WHERE THE ALLEGATIONS ARE THE SAME AS HEREIN, CENTRALIZED
24 POLICY OF DECENTRALIZATION; FACILITY-BY-FACILITY DECISION
25 MAKING, AND SHOW YOU HOW THOSE TEN CASES OVER THE LAST THREE
149
ORAL ARGUMENT BY MS. ABELL
1 YEARS, EACH OF THEM WITHIN THE LAST THREE YEARS, WERE NOT
2 CERTIFIED, PARTICULARLY THE ABRAM CASE, WHERE THE DISCUSSION IN
3 THE ABRAM CASE, AS I INDICATED EARLIER, IS ABSOLUTELY IDENTICAL
4 TO EVERYTHING THAT HAS BEEN ASSERTED HEREIN.
5 THE SECOND POINT I WANT TO EMPHASIZE THAT NANCY IS
6 GOING TO MAKE IS NEITHER SIDE'S RESEARCH HAS UNCOVERED ANY
7 MULTI-FACILITY CLASS CERTIFICATION WHERE IT IS UNDISPUTED THAT
8 A HIGH PERCENTAGE OF THE FACILITIES COVERED FAVORED THE
9 PROTECTED CLASS. ZERO. NOT A ONE.
10 NANCY?
11 ORAL ARGUMENT BY MS. ABELL
12 MS. ABELL: GOOD AFTERNOON, YOUR HONOR.
13 I'M GOING TO COVER RULE 23(A), THE STATISTICAL
14 ISSUES AND THE REMAINDER OF YOUR HONOR'S QUESTIONS.
15 THE PROPOSED CLASS THAT PLAINTIFFS SEEK TO CERTIFY
16 IS BREATHTAKING IN ITS SCOPE. COMMONALITY FAILS. PLAINTIFFS
17 SEEK TO ENCOMPASS WITHIN THIS SINGLE CASE 3,473 RETAIL
18 FACILITIES. BY THE TIME OF TRIAL, THERE WILL BE WELL OVER
19 2 MILLION, PERHAPS 2.5 MILLION PUTATIVE CLASS MEMBERS, GIVEN
20 THE ANNUAL TURNOVER.
21 THEY SEEK TO ENCOMPASS THE FOUR BUSINESS TYPES
22 MR. GROSSMAN MENTIONED; TRADITIONAL WAL-MART STORES, WHERE FIVE
23 OF THE SIX NAMED PLAINTIFFS WORK. THERE ARE 1,456 OF THOSE.
24 THEY ALSO SEEK TO ENCOMPASS WAL-MART'S SUPER CENTERS; THERE ARE
25 NO WAL-MART SUPER CENTERS IN THE STATE OF CALIFORNIA. THERE
150
ORAL ARGUMENT BY MS. ABELL
1 ARE 1,429 OF THOSE.
2 ALTHOUGH WAL-MART DID NOT START THE SUPER CENTER
3 GROCERY BUSINESS UNTIL 1988, THE RAPID GROWTH OF THESE 1,429
4 SUPER CENTER GROCERIES HAS MADE WAL-MART THE COUNTRY'S LARGEST
5 GROCER. AND THAT PRIOR GROCERY EXPERIENCE WILL BECOME CRITICAL
6 IN SOME OF OUR LATER DISCUSSIONS.
7 THEY ALSO SEEK TO ENCOMPASS 56 NEIGHBORHOOD MARKETS,
8 THESE ARE GROCERY STORES THAT ALSO SELL GENERAL MERCHANDISE.
9 THERE ARE NO NEIGHBORHOOD MARKETS IN THE STATE OF CALIFORNIA.
10 AND THEY SEEK TO ENCOMPASS 532 SAM'S CLUBS AND ONE
11 PLAINTIFF, PLAINTIFF KWAPNOSKI, WORKS AT A SAM'S.
12 THE SCOPE OF THE JOBS THAT PLAINTIFFS SEEK TO
13 INCLUDE IN THIS CLASS IS ALSO UNPRECEDENTED. JUST WITHIN ONE
14 STORE TYPE, THE WAL-MART SUPER CENTER, FOR EXAMPLE, THERE ARE
15 OFTEN 83 DIFFERENT DEPARTMENTS, THERE ARE SALES ASSOCIATES IN
16 44 DIFFERENT DEPARTMENTS, AND IN MANY CASES INVOLVING VERY
17 DIFFERENT SKILLS, REQUIREMENTS, DUTIES, THINGS THAT ARE
18 REWARDED. THERE ARE DEPARTMENT MANAGERS IN 33 DIFFERENT
19 DEPARTMENTS. THERE ARE 173 JOB CLASSIFICATION TITLES AND MORE
20 THAN 250 JOB CODE DEPARTMENT COMBINATIONS.
21 THE PURPORTED CLASS FAILS RULE 23(A)'S REQUIREMENTS
22 OF COMMONALITY, TYPICALITY AND ADEQUACY OF REPRESENTATION.
23 YOUR HONOR, NO COURT HAS CERTIFIED ANY EMPLOYMENT
24 DISCRIMINATION CASE EVEN CLOSE TO ONE-TENTH THIS SIZE.
25 YOUR HONOR ASKED FOR A MAP, AND WE HAVE FURNISHED
151
ORAL ARGUMENT BY MS. ABELL
1 WAL-MART'S OFFICIAL MAPS, ONE FOR SAM'S, AND ONE FOR WAL-MART.
2 AND AS YOU WILL SEE, NEITHER THE DISTRICTS NOR THE REGIONS
3 OVERLAP. THEY HAVE VERY SEPARATE MANAGEMENT STRUCTURES. AND
4 WAL-MART HAS AN ADDITIONAL LEVEL THAT SAM'S DOES NOT HAVE, AS
5 IT GOES AT WAL-MART STORE; DISTRICT, REGION, DIVISION. AND THE
6 SAM'S TAKES OUT THAT THIRD LEVEL.
7 FIVE OF THE NAMED PLAINTIFFS WORKED AT WAL-MART
8 DISCOUNT STORES. THEY WORKED IN FOUR DISTRICTS WHICH ARE
9 WITHIN TWO REGIONS. THERE ARE APPROXIMATELY 434 DISTRICTS, SO
10 THESE NAMED PLAINTIFFS COVER FOUR OF THEM. THE ONE SAM'S
11 PLAINTIFF WORKS IN ONE DISTRICT, WHICH IS WITHIN DIVISION A --
12 E, PARDON ME -- 18(A), PARDON ME.
13 MOST OF THE OPERATIONS AT ISSUE, AS YOU CAN SEE,
14 YOUR HONOR, FROM THE MAP, ARE NOT WITHIN THE VENUE OF THIS
15 COURT. IN OUR MOTIONS BOOK STARTING AT TAB 30, WE'VE INCLUDED
16 TEN CASES DECIDED WITHIN THE LAST THREE YEARS IN WHICH
17 PLAINTIFFS SOUGHT TO CERTIFY CLASSES COVERING MULTIPLE
18 ESTABLISHMENTS. THERE ARE ADDITIONAL CASES REFERENCED IN OUR
19 BRIEFS, AS WERE THESE.
20 EACH TIME THE COURT RULED CERTIFICATION DENIED.
21 WHY? NO SUBCLASSES. NO PARTIAL CERTIFICATIONS. AND THESE
22 PUTATIVE CLASSES RANGED IN SIZE FROM 100 EMPLOYEES TO 8,500
23 EMPLOYEES, NOT 2 MILLION OR PLUS PUTATIVE CLASS MEMBERS. AND
24 YET THESE CLASSES IN THESE TEN CASES WERE ALL HELD TO BE TOO
25 DIVERSE TO SATISFY RULE 23(A)'S REQUIREMENTS.
152
ORAL ARGUMENT BY MS. ABELL
1 THE SAME RESULT, YOUR HONOR, IS COMPELLED HERE. AND
2 AS WE LOOK AT SOME OF THESE CASES, WE WILL SEE THAT THE COURT'S
3 REASONING THERE ANSWERS SOME OF YOUR QUESTIONS AND COMPELS, IN
4 OUR VIEW, THE SAME RESULT HERE.
5 LET'S START WITH THIS QUESTION: WHAT EVIDENCE IS
6 THE DEFENDANT EMPLOYER ENTITLED TO PUT ON IN THESE
7 MULTI-FACILITY, MULTI-JOB CASES, WHERE DECENTRALIZED SUBJECTIVE
8 DECISION-MAKING IS ATTACKED? AND THE COURTS TELL US, NUMBER
9 ONE, AT THE LIABILITY STAGE, THE DEFENDANT EMPLOYER IS ENTITLED
10 TO PUT ON INDIVIDUALIZED PROOF ABOUT EACH OF THESE JOBS, EACH
11 OF THESE FACILITIES, AND EACH OF THE DECISION MAKER'S
12 RATIONALE, EVEN WHERE THE PLAINTIFF'S PROOF AT THE LIABILITY
13 STAGE IS ESSENTIALLY STATISTICAL.
14 THE CASES TELL US, SECONDLY, AT PHASE TWO, THAT THE
15 DEFENDANT EMPLOYER IS ENTITLED TO PUT ON EXTENSIVE PROOF ABOUT
16 EACH PUTATIVE CLASS MEMBER EXPLAINING WHY HER PAY IS AS IT IS,
17 WHY SHE DIDN'T GET EACH PROMOTION AT ISSUE, INCLUDING THE
18 DETAILS OF THE POSITION AT ISSUE, WHO APPLIED, WHO WAS
19 SELECTED, AND WHY. IN THIS CASE, YOUR HONOR, WITH TURNOVER,
20 THERE WILL BE MORE THAN 4,000 MANAGERS, AT A MINIMUM, WHO WOULD
21 HAVE TO TESTIFY ABOUT THE 3,473 STORES WITH RESPECT TO THE PAY
22 AND PROMOTION DECISIONS OVER THE CLASS PERIOD. SURELY, MORE
23 THAN ONE DAY OF TESTIMONY PER STORE WILL BE NECESSARY TO DEFEND
24 CLAIMS THAT ARE ALLEGED HERE THAT COVER DECISION-MAKING FROM
25 ANYWHERE FROM 400 EMPLOYEES ENCOMPASSED DURING THIS VERY
153
ORAL ARGUMENT BY MS. ABELL
1 EXPANSIVE CLASS PERIOD, TO LIKELY MORE THAN 2,000 EMPLOYEES WHO
2 WERE AT A SINGLE FACILITY OVER THE COURSE OF THE CLASS PERIOD
3 IN SOME OF THE LARGER FACILITIES.
4 EVEN IF EACH OF THESE 3,473 STORES HAD ONLY A SINGLE
5 DAY TO PUT ON ITS LIABILITY PHASE, IT'S STILL GOING TO TAKE 13
6 YEARS IN SESSION DAILY TO GO THROUGH THE EVIDENCE OF ALL OF
7 THESE STORES.
8 LET'S LOOK AT A FEW OF THE TEN MULTI-FACILITY CASES
9 DECIDED IN THE LAST THREE YEARS, TAB 30, YOUR HONOR, WRIGHT
10 VERSUS CIRCUIT CITY.
11 THE SCOPE OF THIS CLASS THAT PLAINTIFFS SOUGHT IN
12 THE CLASS PALES IN COMPARISON TO WHAT IS SOUGHT HERE. IT
13 ENCOMPASSED SOMEWHERE FROM 125 TO 160 FACILITIES, AND BASICALLY
14 CHALLENGED MOVEMENT INTO THE MANAGEMENT TRAINEE PROGRAM LEADING
15 INTO MANAGEMENT. AND THE CHALLENGE WAS ON THE GROUND THAT
16 CIRCUIT CITY HAD USED SUBJECTIVE CRITERIA THAT HAD A
17 DISCRIMINATORY EFFECT.
18 THE COURT DENIED CERTIFICATION, POINTING OUT AT THE
19 LIABILITY PHASE, PAGE 542, YOUR HONOR, ON THE LEFT-HAND SIDE,
20 "IT IS FORESEEABLE THAT DEFENDANT WOULD RAISE SPECIFIC EVIDENCE
21 AS TO WHY EACH PROPOSED CLASS REPRESENTATIVE, AS TO WHY HE OR
22 SHE WAS NOT PROMOTED. DELVING INTO THE BUSINESS PRACTICES OF
23 EACH STORE AND CONCEIVABLY INTO THE INDIVIDUAL DECISIONS IS
24 PRECISELY THE TYPE OF INDIVIDUALIZED INQUIRY THAT CLASS ACTIONS
25 WERE INTENDED TO AVOID."
154
ORAL ARGUMENT BY MS. ABELL
1 YOUR HONOR WILL SEE THAT THIS SAME POINT IS MADE IN
2 ALMOST THE SAME WORDS IN MANY OF THESE CASES. AND WHERE THIS
3 IS SO, AS IN THIS CASE, THERE CAN BE NO COMMONALITY AND NO
4 TYPICALITY.
5 THE COURT: OKAY.
6 MS. ABELL: OKAY. TURNING TO TAB 31, THE VINCENT
7 CASE, THE NAMED PLAINTIFFS WERE AT 6 OF 24 ADAMS MARK HOTELS.
8 THE COURT DENIED CERTIFICATION. AND IN DOING SO, IT GAVE MORE
9 GUIDANCE ON THE SCOPE OF PROOF THAT THE DEFENDANT EMPLOYER MUST
10 BE ALLOWED TO PUT ON.
11 YOUR HONOR, USING THE PAGE NUMBERS AT THE TOP
12 RIGHT-HAND CORNER OF THE PAGES, TO MAKE THIS EASIER, IF YOU
13 WILL TURN TO PAGE 20, THE BOTTOM RIGHT, THE COURT SAYS, QUOTE,
14 "AN ANALYSIS OF THE PROMOTION AND SALARY DECISIONS WITH RESPECT
15 TO EACH OF THESE POSITIONS WILL DEMAND EVIDENCE REGARDING,
16 AMONG OTHER THINGS, PREREQUISITE QUALIFICATIONS, HOURS NORMALLY
17 WORKED, PAY SCALES FOR EACH POSITION, AND SPECIFIC JOB DUTIES."
18 AND MOVING TO PAGE 22, THE LEFT-HAND COLUMN, THE
19 COURT NOTES, "THE COURT WOULD BE REQUIRED TO DELVE INTO THE
20 BUSINESS PRACTICES OF THE INDIVIDUAL HOTELS AND INTO THE MINDS
21 OF EVERY POTENTIAL DECISION MAKER FROM EVERY ONE OF THOSE
22 HOTELS."
23 NO COMMONALITY. NO TYPICALITY.
24 TURNING TO TAB 32, RHODES VERSUS CRACKER BARREL.
25 JUST AS HERE, LOCAL STORE MANAGERS SET STARTING HOURLY PAY AND
155
ORAL ARGUMENT BY MS. ABELL
1 AWARDED HOURLY RATE INCREASES. AND AGAIN, USING THE PAGE
2 NUMBERS AT THE TOP OF THE PAGE --
3 THE COURT: LET ME JUST ASK YOU THIS: GOING BACK TO
4 VINCENT; NOTWITHSTANDING THE FACT THAT THERE IS A MIGHTY
5 DISPUTE WITH RESPECT TO METHODOLOGIES UTILIZED BY THE EXPERTS,
6 I THINK THE CASE THAT YOU CITED TO ME, THE VINCENT CASE AT PAGE
7 22, IN THE LOWER-LEFT HAND DISCUSSES THE FACT THAT THAT RECORD
8 REFLECTED NO CLEAR CENTRALIZED DECISION-MAKING BODY EXISTS THAT
9 WAS COMMON TO THE EMPLOYEES. THAT IS WHAT THEY ARGUE HERE,
10 CORRECT?
11 ISN'T THAT WHAT THE PLAINTIFFS ARGUE HERE, THAT
12 THERE IS THAT CENTRALIZED CONNECTIVE, IN TERMS OF THE
13 ORCHESTRATION OF MANAGEMENT IN THE CASE, AND IT IS THAT THAT
14 TIES THE EMPLOYEES TOGETHER IN A WAY THAT ALLOWS THEM TO ASSERT
15 THAT THERE ARE COMMON QUESTIONS OF LAW AND FACT?
16 MS. ABELL: YOUR HONOR, WE HAVE TO LOOK AT THE
17 ALLEGED CAUSE AND THE ALLEGED EFFECT.
18 THE ALLEGED EFFECT HERE, TO TAKE THE END FIRST, IS
19 FOUR ISSUES. AND THEN WE'LL LOOK AT WHERE THE CAUSE REALLY
20 LIES IN THE HIERARCHY.
21 ISSUE ONE, PROMOTIONS TO SUPPORT MANAGER; WHERE ARE
22 THOSE DECISIONS MADE? BY THE STORE MANAGER AT WAL-MARTS.
23 WITHIN THE STATE COURT, NOT IN THE DISTRICT, NOT IN THE REGION,
24 NOT IN THE DIVISION, NOT AT THE HOME OFFICE. SUPPORT MANAGER
25 JOBS ARE MADE AT THE STORE.
156
ORAL ARGUMENT BY MS. ABELL
1 SECOND EFFECT PLAINTIFFS ALLEGE IS FAILURE TO GET
2 INTO THE MANAGEMENT TRAINING PROGRAM. THEY SAY THAT IS THE
3 MOST IMPORTANT PROMOTION ISSUE HERE. WHERE ARE THOSE DECISIONS
4 MADE? AT THE DISTRICT LEVEL WITH INPUT FROM THE SUPPORT
5 MANAGER. THESE DISTRICTS IN WAL-MART, 434 OF THEM, ARE ALL
6 OVER THE COUNTRY. THIS IS NOT CENTRALIZED. YOU'RE TALKING
7 ABOUT 434 DIFFERENT DISTRICT OPERATIONS GETTING INPUT FROM
8 3,000, ROUGHLY 3,000 FACILITY MANAGERS.
9 THIRD EFFECT; HOURLY PAY RATE DECISIONS. WHERE ARE
10 THOSE MADE? UNDISPUTED, YOUR HONOR, AND WE'LL COME TO THIS
11 LATER IN PLAINTIFF'S OPENING BRIEF AND THEIR REPLY BRIEF AND
12 THEIR EXPERT'S REPORTS MADE BY THE STORE MANAGER, NOT THE
13 DISTRICT MANAGER, NOT THE REGIONAL MANAGER, NOT THE DIVISIONAL
14 MANAGER, NOT THE HOME OFFICE, BY 3,400 DIFFERENT PEOPLE.
15 FOURTH EFFECT THEY CITE TO IS SALARY PAY. AND WITH
16 RESPECT TO THAT, YOUR HONOR, IT WOULD TAKE MANY HOURS TO GO
17 THROUGH THE HUGE NUMBER OF PERMUTATIONS OF SALARY PAY PLANS AND
18 WHO IS INVOLVED IN SETTING THE VARIOUS GOALS THAT TRIGGER
19 WHETHER OR NOT SOMEONE GETS THE PAYOUT IN THE GREATEST
20 PROPORTION. FOR EXAMPLE, THE STORE IN -- CLUB MANAGER'S PAY,
21 WHICH IS THE INCENTIVE. WHAT ARE THE GOALS SET? WHAT ARE THE
22 MEASUREMENTS, ETCETERA. SO, NO, THIS IS NOT HERE IN THIS
23 COURTROOM A CASE WITH CENTRALIZED DECISION MAKING.
24 THERE ARE GUIDELINES PROMULGATED BY WAL-MART'S HOME
25 OFFICE, AS THERE ARE IN ALL OF THESE CASES. EVERY ONE OF THESE
157
ORAL ARGUMENT BY MS. ABELL
1 CASES, THE HOME OFFICE OR THE CORPORATE OFFICE, PUT TOGETHER
2 POLICIES, PAPER, FORMS, STANDARDS, TESTS, RATING FORMS,
3 ETCETERA. BUT THE ISSUE IS, WHERE DOES THE DECISION MAKING
4 TAKE PLACE?
5 TURNING NOW TO TAB 32, RHODES VERSUS CRACKER BARREL;
6 LOCAL STORE MANAGERS SET HOURLY PAY RATES AND AWARDED HOURLY
7 RATE INCREASES; SAME AS IN THIS CASE.
8 AT PAGE 50, USING THE PAGE NUMBERS AT THE TOP, THE
9 COURT DENYING CLASS CERTIFICATION POINTED OUT THAT WHEN YOU
10 HAVE SO MANY DIFFERENT MANAGERS RESPONSIBLE FOR MAKING THE
11 CHALLENGED EMPLOYMENT DECISIONS, YOU HAVE A LACK OF
12 COMMONALITY.
13 AT PAGE 53, WHERE YOU SHOULD SEE A LITTLE BLUE
14 TAG -- A -- LITTLE RUBBER TAGS ON THE SIDE, PLAINTIFFS ARGUE,
15 AS THEY DO HERE, THAT THE METHOD OF PROOF AT TRIAL WILL NOT
16 INVOLVE INDIVIDUALIZED EVIDENCE ON THE ISSUES OF CLASS-WIDE
17 LIABILITY AND INJUNCTIVE RELIEF. SAME SCENARIO; WE CAN DO OUR
18 CASE IN 20 DAYS.
19 WHAT DOES THE COURT SAY? NOT SO. IT'S, QUOTE, "NOT
20 AS SIMPLE AS DESCRIBED BY PLAINTIFFS," SAID THE COURT, MIDDLE
21 LEFT. THE SPECIFIC CIRCUMSTANCES FOR EACH PLAINTIFF
22 NECESSITATE INDIVIDUALIZED PROOF AND DEFENSES AND, THUS,
23 UNDERMINE COMMONALITY.
24 THE COURT SAID THE EVIDENCE IS TOO COMPLEX,
25 DEFENDANT WILL ASSERT SPECIFIC NONDISCRIMINATORY REASONS WHY
158
ORAL ARGUMENT BY MS. ABELL
1 THE LOCAL MANAGER MADE THAT DECISION AT THE LIABILITY PHASE.
2 AND PHASE TWO, THE COURT POINTS OUT, GETS EVEN MORE COMPLEX.
3 PAGE 54, LEFT-HAND COLUMN.
4 WHAT DOES THE COURT SAY? "CRACKER BARREL WOULD BE
5 ENTITLED TO DEMONSTRATE THAT THE INDIVIDUAL WAS DENIED THAT
6 OPPORTUNITY FOR LAWFUL REASONS. THIS WOULD LEAD TO
7 INDIVIDUALIZED FACTUAL DETERMINATIONS FOR EACH PLAINTIFF AND
8 EACH CLASS MEMBER."
9 AND THEN THE COURT SETS FORTH A LONG LIST OF THE
10 EVIDENCE THAT THE DEFENDANT WOULD BE ENTITLED TO PRESENT FOR
11 EACH JOB AND OPENING AT ISSUE.
12 AND I WILL SKIP ZACHERY AND MOVE ON TO TAB 34.
13 REID VERSUS LOCKHEED MARTIN, YOUR HONOR MENTIONED
14 EARLIER: CLASS CERTIFICATION DENIED.
15 IN THIS CASE, THE COURT ANSWERS THE QUESTION, IT'S
16 IMPORTANT: "WHEN CAN A PLAINTIFF REPRESENT A MULTI-FACILITY
17 CLASS?" AND THE COURT ANSWERS THAT AT PAGE 667, AT THE BOTTOM
18 RIGHT. QUOTE, "THE CONSENSUS IS THAT A PLAINTIFF MAY REPRESENT
19 A MULTI-FACILITY CLASS ONLY WHERE CENTRALIZED AND UNIFORM
20 EMPLOYMENT PRACTICES, NOT POLICIES, NOT GUIDELINES, BUT
21 PRACTICES, EFFECT ALL," UNDERSCORE "ALL," "FACILITIES IN THE
22 SAME WAY."
23 AND, AS DR. HAWORTH'S STORE-BY-STORE REGRESSIONS,
24 WHICH ARE THE ONLY ONES THAT ARE DONE, FACILITY-BY-FACILITY
25 SHOW, ALL FACILITIES ARE NOT AFFECTED IN THE SAME WAY.
159
ORAL ARGUMENT BY MS. ABELL
1 SO WHAT IS THE IMPLICATION OF THIS FOR A DISPARATE
2 IMPACT CLAIM? WELL, AT PAGE 670, ON THE RIGHT SIDE, ABOUT
3 TWO-THIRDS OF THE WAY DOWN, THE COURT EXPLAINS, "THE FACT THAT
4 EMPLOYMENT DECISIONS ARE HANDLED BY ONE'S IMMEDIATE SUPERVISOR
5 BASED ON SUBJECTIVE CRITERIA," WHAT PLAINTIFFS ARE ALLEGING
6 HERE, "WORKS AGAINST CLASS CERTIFICATION OF A DISPARATE IMPACT
7 CLAIM WHEN THE PROPOSED CLASS IS SUBJECT TO THE SAME LOCAL
8 AUTONOMY AND GEOGRAPHICALLY DISPERSED FACILITIES." SAME
9 SITUATION WE HAVE IN OUR CASE.
10 WHAT ABOUT PATTERN AND PRACTICE CLAIMS? SAME PAGE,
11 BOTTOM RIGHT: QUOTE, "SIMILARLY, GEOGRAPHICALLY WIDESPREAD
12 FACILITIES MAKE IT MORE DIFFICULT TO PROVE A PATTERN AND
13 PRACTICE OF DISPARATE TREATMENT."
14 YOUR HONOR, LET'S SKIP RILEY, AND WE'LL MOVE ON TO
15 TAB 36, WHICH IS LOTT VERSUS WESTINGHOUSE. THEY SEEM TO BE THE
16 SIMPLEST OF THE CASES, BECAUSE THERE WERE OPERATIONS IN,
17 REALLY, ONE LOCATION.
18 THE COURT, AGAIN, FOUND THE CASE NOT CERTIFIABLE.
19 AT PAGE 558, IN TALKING ABOUT THE SALARIED PAY PLANS THE COURT
20 NOTES AT BOTTOM AT FOOTNOTE 11 THERE WERE SIX DIFFERENT
21 SALARIED PAY PLANS.
22 FURTHER UP ON THAT PAGE, 558, THE COURT SAYS, "EVEN
23 WITH A SINGLE CLASS OF EXEMPT EMPLOYEES, CLOSER EXAMINATION
24 REVEALS NUMEROUS SALARY PLANS, EACH CALLING FOR INDIVIDUALIZED
25 ASSESSMENT OF THE EMPLOYEE AGAINST FACTORS LIKE PERFORMANCE AND
160
ORAL ARGUMENT BY MS. ABELL
1 SALARY HISTORY."
2 TAB 37, WEBB VERSUS MERCK, THIS CASE DEALS WITH THIS
3 QUESTION: "CAN THE COURT PROHIBIT THE DEFENDANT FROM
4 PRESENTING EVIDENCE ABOUT EVERY STORE AND INSTEAD LIMIT
5 DEFENDANT'S DEFENSE TO EVIDENCE REGARDING A SAMPLE OF THE
6 STORES?" THE ANSWER IS NO. DEPICTING CLASS CERTIFICATION OF A
7 5,000 MEMBER CLASS, THE COURT EXPLAINED IN ORDER TO RESOLVE
8 EACH PUTATIVE CLASS MEMBER'S CLAIM, THE FACT FINDER WILL BE
9 FORCED TO EVALUATE THE INDIVIDUALIZED FACTS AND CIRCUMSTANCES
10 SURROUNDING DECISIONS.
11 LET'S TURN TO TAB 38, ABRAM VERSUS UNITED PARCEL
12 SERVICE. YOUR HONOR ASKED ABOUT THE CASE THIS MORNING. THE
13 FACTS ARE VERY, VERY SIMILAR TO WHAT WE HAVE HERE. IT'S ON
14 POINT. WHAT WERE THE INDICIA? LOOKING AT PAGE 2, AND AGAIN
15 USING PAGE NUMBERS IN THE UPPER RIGHT-HAND CORNER, THE COURT
16 OBSERVES THAT UPS HAD STANDARD PERSONNEL PROCEDURES THAT
17 AFFECTED COMPENSATION, INCLUDING PERFORMANCE APPRAISALS.
18 THE DISTRICTS ALL USE THE SAME FORM P ACTUAL
19 DECISION MAKING AS IT RELATES TO COMPENSATION. HOWEVER, IT WAS
20 INDIVIDUALIZED AND DECENTRALIZED. CENTER MANAGERS EVALUATED
21 PERFORMANCE, AND THEIR EVALUATIONS, WHICH AFFECTED SALARY, WERE
22 REVIEWED AT THE LEVEL HERE TO THE DISTRICT LEVEL.
23 PAGE 3, THE COURT OBSERVED THE DECENTRALIZATION IN
24 PERSONNEL MATTERS AS A PRACTICAL NECESSITY IN ANY LARGE
25 BUSINESS. AND THEN IT WENT ON TO SAY, "FROM THE PLAINTIFF'S
161
ORAL ARGUMENT BY MS. ABELL
1 PERSPECTIVE, THE STANDARDIZED PERSONNEL PROCEDURES DEVELOPED BY
2 UPS ALLOWED FOR TOO MUCH DISCRETION AND SUBJECTIVITY, IN FACT,
3 THE IMPERMISSIBLE CONSIDERATION OF, IN THAT CASE, RACE."
4 I'M GOING TO COME BACK TO THE STATISTICS IN THE
5 CASE. IF YOUR HONOR WOULD TURN TO, PLEASE, TO PAGE 6, YOUR
6 HONOR, RIGHT-HAND CORNER.
7 THE COURT: WHY DON'T WE -- I'M GETTING A SIGNAL
8 THAT THE REPORTER NEEDS A BREAK. SHE IS THE ONLY ONE THAT HAS
9 BEEN WORKING CONSISTENTLY ALL AFTERNOON, SO WE'LL TAKE ABOUT 15
10 MINUTES AND BE BACK HERE.
11 (RECESS TAKEN AT 3:05 P.M.)
12 (PROCEEDINGS RESUMED AT 3:21 P.M.)
13 THE COURT: OKAY. LET'S BE SEATED AGAIN AND COME TO
14 ORDER.
15 WE'LL AGAIN CALL THE MATTER OF DUKES VERSUS
16 WAL-MART. ALL PARTIES AND COUNSEL ARE PRESENT.
17 YOU MAY CONTINUE.
18 MS. ABELL: YOUR HONOR, WE LEFT OFF AT PAGE 6, THE
19 UPPER RIGHT-HAND CORNER.
20 THE COURT: UH-HUH.
21 MS. ABELL: IN THE ABRAM CASE, THE COURT FIGURED,
22 SURE, SOME MANAGERS ALLOW BIAS TO AFFECT THEIR DECISIONS, BUT
23 THE COURT WENT ON TO POINT OUT WHAT IS PARTICULARLY PERTINENT
24 HERE, "SUCH DISCRIMINATION, IF IT OCCURS," SAYS THE COURT, "IS
25 ONE STEP REMOVED FROM UPS'S DECISION TO ALLOW CONSIDERATION OF
162
ORAL ARGUMENT BY MS. ABELL
1 SUBJECTIVE FACTORS IN THE FIRST INSTANCE. IT'S DRIVEN BY THE
2 BIASES OF INDIVIDUAL MANAGERS. THE DECISION TO PERMIT SOME
3 CONSIDERATION OF SUBJECTIVE FACTORS IS NOT IN AND OF ITSELF A
4 DISCRIMINATORY PRACTICE THAT PROVIDES THE UNIFYING THREAD
5 NECESSARY FOR COMMONALITY TO EXIST."
6 THE COURT POINTS OUT FURTHER DOWN THE PAGE THAT IF
7 THE DECISION TO PERMIT SOME MEASURE OF SUBJECTIVITY COULD
8 ITSELF BE REGARDED AS A DISCRIMINATORY PRACTICE, THEN ALL TITLE
9 7 CASES AGAINST LARGE EMPLOYERS WOULD BE TRANSFORMED INTO
10 NATIONWIDE CLASS ACTIONS.
11 "THE CLASS ACTION DEVICE WAS NEVER INTENDED TO HAVE
12 SUCH BROAD APPLICATION," SAID THE COURT.
13 SO IN PAGE 8, IN DENYING CLASS CERTIFICATION, THE
14 COURT AGAIN GOES BACK TO THE FACT THAT THE DECISION MAKING
15 OCCURRED AT A CENTER LEVEL, BELOW A DISTRICT LEVEL, EVEN THOUGH
16 "MONITORED BY THE DISTRICT" MEANT THAT DECISIONS ABOUT PAY WERE
17 MADE AT THE LOCAL LEVEL AND COMMONALITY WAS DEFEATED.
18 TURNING TO TAB 39, THIS IS A CASE CITED BY
19 PLAINTIFFS FROM THE NINTH CIRCUIT. IT'S VERY OLD, YOUR HONOR,
20 PRE-CIVIL RIGHTS ACT, BUT AT PAGE 481, IT DOES MAKE ONE POINT.
21 IT SAYS, "WHERE DECISION MAKING IS REALLY DECENTRALIZED, THERE
22 CAN, OF COURSE, BE NO COMMON QUESTIONS OUTSIDE THE
23 ORGANIZATIONAL UNITS WITHIN WHICH THE RELEVANT DECISIONS AS TO
24 THE NAMED PLAINTIFFS WERE MADE."
25 AND, YOUR HONOR, IN THIS CASE, THE FIVE WAL-MART
163
ORAL ARGUMENT BY MS. ABELL
1 NAMED PLAINTIFFS WERE ALL -- ALWAYS HOURLY EMPLOYEES. THE
2 DECISIONS ABOUT THEM WITH REGARD TO THEIR PAY, WITH REGARD TO
3 WHETHER THEY GOT A PROMOTION TO ANY HOURLY POSITION, INCLUDING
4 SUPPORT MANAGER, WERE MADE AT THE STORE LEVEL.
5 TO THE EXTENT SOMEONE WANTS TO SAY, "I DIDN'T GET
6 INTO THE ASSISTANT MANAGER TRAINEE PROGRAM," ASSUMING THAT THE
7 INDIVIDUAL, IN FACT, WANTED ENTRY INTO THAT PROGRAM, CERTAINLY
8 NOT THE CASE FOR MANY OF THEM, THE FARTHEST YOU WOULD GO WOULD
9 BE THE DISTRICT, ONE LEVEL ABOVE, NOT THE REGION, NOT THE
10 DIVISION, NOT THE CORPORATE OFFICE.
11 TURNING TO TAB 40, THE EVIDENCE: WHERE WERE THE
12 HOURLY PAY AND PROMOTION DECISIONS MADE? UNDISPUTED;
13 PLAINTIFF'S OPENING BRIEF, LINE 13, "STORE MANAGERS SET THE PAY
14 FOR EACH HOURLY EMPLOYEE."
15 NEXT PAGE, EXPERT REPORT OF PLAINTIFF'S EXPERT,
16 DR. BIELBY GOES ON ABOUT ALL THE DISCRETION THAT THE STORE
17 MANAGERS HAVE IN SETTING PAY. THEY CAN GIVE A LARGER RAISE
18 THAN THE SPECIFIED AMOUNT AT HIS OR HER INDISCRETION. THEY CAN
19 GIVE MORE MERIT INCREASES THAN THE GUIDELINES PROVIDE,
20 ETCETERA. AND AGAIN, IN THEIR REPLY BRIEF, LINE 10, "IT IS
21 BEYOND DISPUTE THAT THE STORE MANAGER MAKES INITIAL DECISIONS
22 FOR ALL," IN ITALICS, "ALL EMPLOYEES."
23 PLAINTIFFS THIS MORNING REFERRED TO WAL-MART PAY,
24 QUOTE/UNQUOTE, "POLICIES." YOUR HONOR, AS YOU LOOK NOT ONLY AT
25 THE CITATIONS IN PLAINTIFF'S BRIEF, FOR EXAMPLE, THE FIRST PAGE
164
ORAL ARGUMENT BY MS. ABELL
1 OF TAB 40, BUT ALSO WHAT THEY FILED, YOU WILL SEE THAT THERE
2 ARE, QUOTE/UNQUOTE, "GUIDELINES," NOT POLICIES. THE STORE
3 MANAGERS HAVE THE RIGHT TO VARY, DEPENDING UPON THEIR UNIQUE
4 CIRCUMSTANCES.
5 WAL-MART HAS AN EEO POLICY. IT IS THE POLICY OF THE
6 COMPANY TO ABHOR DISCRIMINATION, TO PREVENT IT, AND TO TAKE
7 ACTION AGAINST PEOPLE WHO ENGAGE IN IT, THAT IS A POLICY. BUT
8 WHEN WE TALK ABOUT PAY AND WE TALK ABOUT PROMOTIONS, INCLUDING
9 THE DOCUMENT MR. SELIGMAN PUT UP ON THE SCREEN, IT SAYS
10 "GUIDELINES."
11 TURNING TO TAB 41, YOUR HONOR'S QUESTION 7, "HOW
12 WILL THE INCLUSION OF FEMALE IN-STORE MANAGERS PRESENT A
13 CONFLICT OF INTEREST, GIVEN THE LIMITED AMOUNT OF TESTIMONY BY
14 PERCIPIENT WITNESSES ORDINARILY PERMITTED IN A PATTERN AND
15 PRACTICE CASE?"
16 MR. GROSSMAN'S ALREADY TALKED ABOUT THE FACT THAT
17 HERE WE'RE NOT TALKING ABOUT A LIMITED AMOUNT OF EVIDENCE. AND
18 THE CASES I'VE JUST GONE THROUGH SHOW WHEN YOU'RE TALKING ABOUT
19 3,400, ETCETERA, STORES, THERE WILL NOT BE A, QUOTE/UNQUOTE,
20 "LIMITED AMOUNT OF EVIDENCE."
21 BUT IN ADDITION, AS YOU SEE AT TAB 41, THERE ARE 544
22 WOMEN WHO AS OF THE TIME WE RAN THIS CALCULATION, MAY 2, 2003,
23 HELD THE NUMBER ONE TOP JOBS, TOP STORE MANAGER OR CLUB MANAGER
24 JOB AT A WAL-MART OR A SAM'S OR A NEIGHBORHOOD MARKET.
25 NOW, THESE MANAGERS, YOUR HONOR, ARE GOING TO GET UP
165
ORAL ARGUMENT BY MS. ABELL
1 ON THE STAND, AND THEY ARE GOING TO DEFEND THESE DECISIONS.
2 AND THEY ARE GOING TO TALK ABOUT THE INPUT THAT THEY RELIED
3 UPON FROM ASSISTANT MANAGERS AND CO-MANAGERS AND DEPARTMENT
4 MANAGERS. AND ALL IN ALL, THAT IS LIKELY TO ENCOMPASS INPUT
5 FROM ABOUT 100,000 WOMEN, BECAUSE SUCH A LARGE PERCENTAGE OF
6 THESE DEPARTMENT MANAGERS AND ASSISTANT MANAGERS ARE WOMEN. SO
7 PLAINTIFF'S COUNSEL WILL BE FACED WITH THE NEED TO
8 CROSS-EXAMINE CLASS MEMBERS IN THIS EXTRAORDINARILY EXPANSIVE
9 CLASS.
10 NEXT: PLAINTIFFS IN THIS CASE, NAMED PLAINTIFFS,
11 THE SIX OF THEM, ARE, IN FACT, CHALLENGING THE ACTIONS OF
12 FEMALE STORE MANAGERS. THIS ISN'T HYPOTHETICAL. LET ME JUST
13 GIVE THREE EXAMPLES.
14 NAMED PLAINTIFF CLEO PAGE, SHE CLAIMS THAT SHE
15 APPLIED FOR AND WAS DENIED A SUPPORT MANAGER JOB IN '98, '99
16 AND 2000. WHO DENIED HER THESE JOBS? FIRST, HER FIRST FEMALE
17 STORE MANAGER, AND THEN LATER, HER SECOND FEMALE STORE MANAGER.
18 AND SHE COMPLAINS THAT ANOTHER WOMAN,
19 PATRICIA SELLEN, GOT ONE OF THE JOBS THAT SHE WANTED. SO THERE
20 IS A CONFLICT NOT ONLY BETWEEN THE NAMED PLAINTIFF AND THE
21 DECISION MAKER, BUT THERE IS A CONFLICT BETWEEN NAMED
22 PLAINTIFF, CLEO PAGE, AND OTHER CLASS MEMBERS WITH RESPECT TO
23 THE VERY SUPPORT MANAGER JOB AT ISSUE HERE.
24 NAMED PLAINTIFF DEBORAH GUNTHER; IN 1999 SHE
25 TESTIFIED -- THESE POINTS ARE ALSO CLEAR, YOUR HONOR, IN THE
166
ORAL ARGUMENT BY MS. ABELL
1 DECLARATIONS THAT HAVE BEEN FILED WITH THE COURT BY THE
2 PLAINTIFFS -- SHE SAYS SHE WAS TWICE DENIED TLE SUPPORT
3 MANAGER, THAT IS TIRE AND LUBE EXPRESS.
4 BY THE WAY, I WANT TO DIGRESS FOR A MOMENT AND POINT
5 OUT THAT PLAINTIFFS HAVE LUMPED TOGETHER ALL SORTS OF
6 DISSIMILAR JOBS. WHEN THEY TALK ABOUT "SUPPORT MANAGER," THEY
7 TALK ABOUT PEOPLE WHO MAY WORK IN AN OFFICE OF SUPPORT
8 MANAGERS, THEY TALK ABOUT PEOPLE WHO MAY WORK THE NIGHT SHIFT
9 AND SUPERVISE THE RECEIVING AREA, AND THEY TALK ABOUT TLE
10 SUPPORT MANAGERS WHO ARE OUT THERE WITH THE PEOPLE WHO ARE
11 WORKING ON CARS.
12 THESE ARE VERY DIFFERENT JOBS. THEY ALL HAPPEN TO
13 HAVE JOB CODE 1050, BUT WHEN YOU DON'T READ DEPARTMENT WITH THE
14 JOB CODE, WHICH DR. DROGIN FAILS TO DO, THEN YOU LUMP TOGETHER
15 ALL THESE DIFFERENT JOBS THAT ARE WHOLLY DISSIMILAR. SO THIS
16 IS ONE OF THOSE.
17 BUT WHAT DOES PLAINTIFF DEBORAH GUNTHER SAY? SHE
18 SAYS SHE WAS DENIED THE TLE SUPPORT MANAGER JOB BY STORE
19 MANAGER CATHY BISHOP, WHO TOLD HER THAT SHE WAS NOT QUALIFIED.
20 NAMED PLAINTIFF EDITH ARANA, HER DAMAGES ARE
21 ABSOLUTELY IMPACTED BY THE TESTIMONY OF THE CO-MANAGER, FEMALE
22 BARBARA MARTIN, WHO TERMINATED HER.
23 JUST A FEW EXAMPLES FOR STARTERS.
24 AND THE POST-CIVIL RIGHTS ACT OF '91 CASES ALSO MAKE
25 IT CLEAR THAT WHERE YOU HAVE DECENTRALIZED SUBJECTIVE DECISION
167
ORAL ARGUMENT BY MS. ABELL
1 MAKING, THEN THE DECISION MAKING UNITS GETS TO PUT ON EVIDENCE.
2 SO WE'RE TALKING ABOUT FEMALE AFTER FEMALE AFTER FEMALE CLASS
3 MEMBERS WHO ARE GOING TO BE THE KEY PIECES OF EVIDENCE IN THIS
4 TRIAL, YOUR HONOR.
5 AND WHEN THAT HAPPENS, YOU HAVE AN ABSENCE OF
6 COMMONALITY, AND YOU HAVE A VERY, VERY SERIOUS CONFLICT IN THE
7 CLASS. AND WE'LL TALK ABOUT THAT IN A MOMENT IN THE CONTEXT OF
8 DONALDSON.
9 TAB 42, YOUR HONOR, IN RESPONSE TO YOUR HONOR'S
10 QUESTION 5, YOU ASKED WHETHER THE COURT IS REQUIRED TO MAKE A
11 DAUBERT RULING, OR SIMPLY EVALUATE THE EXPERT EVIDENCE FOR
12 RELEVANCY AND RELIABILITY. DIFFERENT COURTS USE DIFFERENT
13 TERMINOLOGY, BUT THE ROLE OF THE COURT HERE IS CLEAR,
14 REGARDLESS OF THE LABEL, REGARDLESS OF WHETHER IT'S CALLED A
15 WEIGHING OF THE EVIDENCE, RULING ON AN OBJECTION TO THE
16 EVIDENCE OR A MOTION TO STRIKE, OR RULING ON A DAUBERT MOTION.
17 FEDERAL RULE OF EVIDENCE 702, WHICH APPLIES TO THE
18 CLASS CERTIFICATION PROCEEDINGS, TOO, OF COURSE IMPOSES ON THE
19 DISTRICT JUDGE THE SPECIAL OBLIGATION TO DETERMINE THE
20 RELEVANCY AND RELIABILITY OF EXPERT TESTIMONY TO THE QUESTIONS
21 BEFORE THE COURT AT THE CLASS CERTIFICATION STAGE.
22 THE QUESTION HERE IS WHETHER THE STATISTICAL
23 EVIDENCE RELIABLY SHOWS A PATTERN THAT AFFECTS THE PROTECTED
24 GROUP IN THE SAME WAY AT ALL OF THE LOCATIONS. IN A FEW
25 MOMENTS, I WILL SHOW THAT THERE IS NO EVIDENCE THAT, IN FACT,
168
ORAL ARGUMENT BY MS. ABELL
1 THAT IS THE CASE.
2 OUR BRIEF RELATES CASES THAT DEMONSTRATE THAT IN
3 ORDER TO MEET THESE REQUIREMENTS, STATISTICAL PROOF IN A
4 MULTI-FACILITY PUTATIVE CLASS ACTION, AMONG OTHER THINGS, MUST
5 SATISFY THESE TESTS. NUMBER ONE, IT MUST MODEL THE ACTUAL
6 DECISION-MAKING PROCESS. SO IF WE'RE TALKING ABOUT HOURLY PAY
7 DECISIONS, THEN IT NEEDS TO MODEL THE FACT THAT THE DECISIONS
8 ARE MADE BY STORES.
9 LET ME POINT OUT ONE VERY IMPORTANT POINT ON THAT
10 SCORE, YOUR HONOR. DR. DROGIN NOT ONLY NEVER DID A
11 STORE-BY-STORE ANALYSIS, HE DIDN'T DO A DISTRICT-BY-DISTRICT OR
12 A REGION-BY-REGION PAY ANALYSIS.
13 IN HIS REPORT HE REPORTS, HE REPORTED RESIDUALS BY
14 REGION. BUT A RESIDUAL IS TAKING HIS ONE ENORMOUS NATIONWIDE
15 PAY REGRESSION, IN WHICH HE DUMPS WAL-MART AND NEIGHBORHOOD
16 MARKETS AND SUPER CENTERS, JUST AS IF HE HAD DUMPED OLD NAVY,
17 BEST BUY, RITE-AID, SAFEWAY, PET BOYS, ETCETERA, ETCETERA, AND
18 SAID, "GOSH, I'VE GOT A MEANINGFUL RESULT."
19 SO HE'S DUMPED ALL THIS DATA INTO ONE EQUATION, AND
20 FROM THAT HE ESTIMATES THE AVERAGE EFFECT. AND THEN HE TAKES
21 WHAT WOMEN ARE BEING PAID IN ONE REGION, AND HE MEASURES THAT
22 AGAINST A NATIONWIDE EFFECT. WELL, THAT'S NOT TELLING US HOW
23 WOMEN IN A REGION ARE BEING PAID AGAINST MEN IN A REGION. IT'S
24 CERTAINLY NOT TELLING US HOW WOMEN IN A DISTRICT ARE PAID
25 VERSUS MEN IN A DISTRICT. AND IT'S DEFINITELY NOT TELLING US
169
ORAL ARGUMENT BY MS. ABELL
1 HOW WOMEN IN A STORE ARE PAID AGAINST MEN IN A STORE.
2 THE COURT: IS IT MORE PROBATIVE WHEN YOU COMPARE A
3 SUBSPECIALTY, LIKE JEWELRY VERSUS HARDWARE? DOES THAT GET YOU
4 THERE WITH ANY GREATER ACCURACY, WHICH IS WHAT HAYWARD DID?
5 MS. ABELL: YOUR HONOR, THAT WAS ONE ANALYSIS THAT
6 SHE DID. BUT THIS IS AN IMPORTANT POINT, AND I'LL SHOW YOU THE
7 DATA AS WE GET CLOSER.
8 WITH RESPECT TO FIVE OF THE NAMED PLAINTIFF STORES,
9 SHE HAS EVERYBODY IN THE STORE IN A SINGLE REGRESSION. THERE
10 IS NO SLICING AND DICING, AND THAT IS BECAUSE, AS I MENTIONED,
11 THERE IS NO GROCERY DIVISIONS IN CALIFORNIA IN THESE FIVE
12 WAL-MARTS WHERE THESE PLAINTIFFS WERE.
13 SO IN THOSE REGRESSIONS, IN ONE OF THE VARIATIONS
14 THAT SHE DID, YOU HAVE ALL YOUR SPECIALTIES, WHETHER IT'S TIRE
15 AND LUBE EXPRESS, JEWELRY, SHOES, ONE-HOUR PHOTO, ETCETERA, AS
16 WELL AS ALL YOUR OTHER WORKERS IN THE STORE.
17 THE COURT: OKAY.
18 MS. ABELL: OKAY. SO NUMBER ONE WAS, MODEL THE
19 DECISION-MAKING PROCESS. NUMBER TWO, DON'T IMPROPERLY
20 AGGREGATE DATA ACROSS FACILITIES; AND NUMBER THREE, CONTROL FOR
21 FACTORS THAT ARE MAJOR DETERMINANTS OF PAY SO THAT IMPORTANT
22 VARIABLES ARE NOT OMITTED.
23 LOOKING AT TAB 42, YOUR HONOR, DONALDSON VERSUS
24 MICROSOFT, THIS IS A THOUGHTFUL DECISION BY A DISTRICT JUDGE IN
25 THE NINTH CIRCUIT WHO WAS CONFRONTED WITH THE SAME SORTS OF
170
ORAL ARGUMENT BY MS. ABELL
1 ISSUES PRESENTED HERE. BUT THE DIFFERENCE IS THAT THERE WAS
2 SOMEWHERE BETWEEN 8- AND 10,000 PUTATIVE CLASS MEMBERS IN THAT
3 CASE.
4 AND, YOUR HONOR, I HAVE TO TAKE ISSUE WITH
5 MR. SELIGMAN'S CHARACTERIZATION OF THE EVIDENCE IN THAT CASE,
6 BECAUSE I DEPOSED THE EXPERT IN THAT CASE, AND I ARGUED THAT
7 MOTION TO THE COURT.
8 WHAT THAT EVIDENCE INVOLVED WAS, IN FACT, JUST WHAT
9 YOU HAVE HERE, ALLEGED STATISTICAL SIGNIFICANCE OF A GROSS
10 NATURE, BUT -- AND AN EXPERT NOT REPORTING UNIT-BY-UNIT
11 AGGREGATE -- OR DISAGGREGATIONS.
12 WHAT THE COURT RELIED ON WAS THE FACT THAT WHEN YOU
13 LOOK AT THE DISAGGREGATED UNITS, SOME FAVORED THE PROTECTED
14 GROUP, AND SOME DISFAVORED THE PROTECTED GROUP. SO THAT COURT
15 WAS CONFRONTED WITH PRECISELY THE SITUATION THAT THE COURT HAS
16 HERE.
17 IN DENYING CLASS CERTIFICATION, AT PAGE 556, THE
18 COURT FOUND PLAINTIFF'S STATISTICIAN'S CREDIBILITY SOMEWHAT
19 SUSPECT. WHY? BECAUSE HE EXCLUDED FROM HIS REPORT TO THE
20 COURT ALL THE DATA THAT SHOWED WHERE PROTECTED GROUP MEMBERS
21 DID BETTER. WE'VE SEEN THAT HERE; THAT IS WHAT DR. DROGIN DID,
22 AND THAT'S WHAT DR. BENDICK DID. THEY DIDN'T SHOW THAT COURT
23 THAT IN MORE THAN 40 PERCENT OF THE STORES, WOMEN DO BETTER
24 THAN MEN IN HOURLY PAY. THEY DIDN'T SHOW THE COURT WHAT WAS IN
25 DR. DROGIN'S BACKUP, THAT WHEN YOU HAVE TENS OF THOUSANDS OF
171
ORAL ARGUMENT BY MS. ABELL
1 JOBS POSTED THAT WOMEN, INCLUDING JOBS FOR SUPPORT MANAGER,
2 INCLUDING CO-MANAGER STORE, INCLUDING STORE MANAGER, THAT WOMEN
3 ARE SELECTED IN EVERY CASE AT A HIGHER RATE THAN THE RATE AT
4 WHICH THEY BID.
5 WHAT ELSE WAS FLAWED THAT THE COURT FOCUSED ON IN
6 DONALDSON VERSUS MICROSOFT? IT FOCUSED ON THE FACT THAT THE
7 PLAINTIFF'S EXPERT CONTROLLED FOR JOB TITLE, BUT HE DIDN'T
8 CONTROL FOR JOB LEVEL. WE'VE GOT THE SAME THING HERE, YOUR
9 HONOR. AND IN A FEW MOMENTS I'LL TAKE YOU TO THE PAGES THAT
10 SHOW THAT VERY SAME AND ABSOLUTELY FATAL FLAW.
11 FINALLY, THE DONALDSON COURT POINTED OUT THAT THE
12 BURDEN IS ON PLAINTIFFS TO ESTABLISH A CLASS-WIDE PATTERN, NOT
13 A CLASS AGGREGATE, A CLASS-WIDE PATTERN. AND IN THESE
14 MULTI-FACILITY CASES, THAT PATTERN IS CRITICAL.
15 AND THEN FINALLY, AT PAGE 568, THE COURT FOUND THAT
16 YOU COULD NOT HAVE CLASS REPRESENTATIVES WHO HAD ANTAGONISTIC
17 OR CONFLICTING INTERESTS AND CONCLUDED THAT THE COURT WAS
18 UNABLE TO ENVISION A CLASS WHICH WOULD INCLUDE BOTH THOSE WHO
19 IMPLEMENTED THE SYSTEM AND THOSE WHO ALLEGEDLY SUFFERED UNDER
20 IT. THE JUDGE SAID, "THIS CONFLICT APPEARS UNSURMOUNTABLE."
21 IT IS HERE, TOO, YOUR HONOR.
22 TAB 43, CRUZ VERSUS COACH STORES, SECOND CIRCUIT,
23 2000: AGAIN, THE DISTRICT COURT, AT THE CLASS CERTIFICATION
24 STAGE FOUND PLAINTIFF'S STATISTICAL EXPERT'S OPINION UNWORTHY.
25 AND THE SECOND CIRCUIT AGREED, FINDING THERE WAS NO ABUSE OF
172
ORAL ARGUMENT BY MS. ABELL
1 DISCRETION IN FINDING THAT THE EXPERT'S REPORT WAS
2 METHODOLOGICALLY FLAWED AT THE CLASS CERTIFICATION STAGE.
3 WHAT WAS FLAWED FOR A CLASS CERTIFICATION PAY
4 ANALYSIS? SAME THING AS IN DONALDSON, THE EXPERT DIDN'T
5 CONTROL FOR JOB LEVEL, AMONG OTHER THINGS.
6 TURNING TO TAB 44, YOUR HONOR'S QUESTION 4, DID WE
7 FIND A REPORTED CASE IN WHICH THE CHOW TEST WAS APPLIED AT THE
8 CLASS CERTIFICATION STAGE? NO, YOUR HONOR, WE DID NOT. BUT WE
9 CLEARLY FOUND THE ANALYTICAL EQUIVALENT, THAT CONDEMN
10 MULTI-FACILITY AGGREGATED SAMPLES. AND IN MORE LAY TERMS, THE
11 TWO CASES THAT I'VE INCLUDED PAGES AT TAB 44 REFERENCE THAT.
12 FIRST OF ALL, LOTT VERSUS WESTINGHOUSE, PAGE 561.
13 THE COURT, COMMENTING ON THE SAME KIND OF ROLL-UP ANALYSIS THAT
14 WE SEE FROM PLAINTIFFS HERE, SAYS, "SUCH AGGREGATED STATISTICS
15 FAILED TO REVEAL WHETHER THERE IS A PATTERN OF DISPARITIES
16 ACROSS THE VARIOUS DECISION-MAKING UNITS OR A RELIABLE SAMPLE
17 OF THEM AND ARE OF SCANT UTILITY TO THE COURT IN CONDUCTING A
18 CERTIFICATION ANALYSIS."
19 NEXT PAGE, ABRAM VERSUS UNITED PARCEL, THE CASE WE
20 TALKED ABOUT A FEW MOMENTS AGO, WHAT ABOUT AGGREGATED
21 STATISTICS? PAGE 431, LEFT-HAND SIDE, THE COURT SAYS, "THERE
22 IS A SIGNIFICANT GAP IN COMPENSATION BETWEEN AFRICAN-AMERICAN
23 AND WHITES WHEN THE DATA ARE CONSIDERED IN THE AGGREGATE.
24 HOWEVER, WHEN THE DATA ARE DISAGGREGATED" QUOTE, "THE LACK OF
25 ANY CONSISTENT PATTERN BELIES THE NOTION THAT CLASS MEMBERS
173
ORAL ARGUMENT BY MS. ABELL
1 HAVE BEEN AFFECTED IN COMMON WAYS BY THE SUPPOSED PRACTICE OF
2 SUBJECTIVE DECISION MAKING."
3 THE COURT GOES ON TO POINT OUT THAT THE NATIONWIDE
4 AVERAGE DISGUISES ENORMOUS VARIETY.
5 AND THEN ON PAGE 431, IN THE MIDDLE WHERE THE ORANGE
6 STICKER IS, THE COURT GIVES THE OFT-QUOTED EXAMPLE OF MICROSOFT
7 FOUNDER, BILL GATES, AND NINE MONTHS IN A ROOM. THE COURT
8 POINTS OUT THAT THE AVERAGE INCOME FOR THE TEN IN THE ROOM IS
9 VERY HIGH, EVEN THOUGH NINE HAVE TAKEN A VOW OF POVERTY.
10 BUT SAYS THE COURT, "THE RELIANCE ON AGGREGATE DATA
11 ILLUSTRATES THE PERILS AND MISUSES OF STATISTICAL EVIDENCE" --
12 "STATISTICAL ANALYSIS."
13 WHAT DR. DROGIN DID HERE, YOUR HONOR, IS NO
14 DIFFERENT. DR. HAWORTH'S STORE-BY-STORE ANALYSES, THE ONLY
15 ONES IN THE RECORD, SHOW THAT THERE IS NO MEANINGFUL PAY
16 DIFFERENCE IN NINE OUT OF TEN. AND WITH RESPECT TO EVERY ONE
17 OUT OF TEN REMAINING, SOMETIMES THE DIFFERENCE FAVORS MEN, AND
18 SOMETIMES IT FAVORS WOMEN.
19 AND SO JUST AS THE COURT FOUND IN ABRAM, QUOTE, "THE
20 NUMBERS DO NOT REVEAL A PATTERN OR PRACTICE OF DISCRIMINATION
21 INTENTIONAL OR OTHERWISE, THAT UNITES THE CLASS," WE SUBMIT,
22 YOUR HONOR, THAT THE STATISTICAL ANALYSIS IN THIS CASE,
23 LIKEWISE IS IN THAT POSITION, THERE IS NO COMMON PATTERN.
24 TAB 45: WHAT ROLE HAS THE CHOW TEST MADE IN
25 EMPLOYMENT DISCRIMINATION CLASS ACTIONS? WELL, COATES VERSUS
174
ORAL ARGUMENT BY MS. ABELL
1 JOHNSON AND JOHNSON WAS A RACE DISCRIMINATION CLASS ACTION, AND
2 THE CHOW TEST WAS IMPORTANT IN THAT CASE. AND WHAT HAPPENED
3 THERE IS INSTRUCTIVE.
4 THE DEFENDANT'S EXPERT SAID HE PERFORMED THE CHOW
5 TEST. HE NEVER PUT IT INTO EVIDENCE, BUT HE SAID HE PERFORMED
6 IT, AND THE TEST SUGGESTED THAT POOLING SEVERAL YEARS OF
7 DISCHARGED DATA WAS INAPPROPRIATE.
8 PLAINTIFF'S EXPERT NEVER SAID HE RAN THE CHOW TEST,
9 BUT UNLIKE DR. DROGIN HERE, PLAINTIFF'S EXPERT THERE DID RUN A
10 DIFFERENT TEST OF POOLING, DID RUN A DIFFERENT TEST TO
11 DETERMINE WHETHER IT WAS APPROPRIATE TO AGGREGATE DATA. SO
12 THERE YOU HAD DUELING STATISTICIANS TALKING ABOUT TWO DIFFERENT
13 STATISTICAL TESTS TO SHOW WHETHER OR NOT IT WAS APPROPRIATE TO
14 POOL DATA FROM MULTIPLE SUBSETS.
15 AND THE DISTRICT COURT RELIED ON THE CHOW TEST,
16 FINDING THAT IT WAS NOT APPROPRIATE TO AGGREGATE DATA OVER
17 YEARS. SEVENTH CIRCUIT AFFIRMED. SO HERE WE HAVE DR. DROGIN
18 AGGREGATING ALL THESE DIFFERENT OPERATIONS ALL OVER THE COUNTRY
19 ALL SORTS OF JOBS, 173 DIFFERENT JOB CLASSIFICATIONS, OR
20 SOMETHING CLOSE TO THAT, AND HE DOES NO TEST AT ALL THAT SAYS
21 WHETHER IT'S APPROPRIATE TO AGGREGATE.
22 TAB 46 AND 47, WEBB AND SHEEHAN, THEY'RE ADDITIONAL
23 EXAMPLES OF CASES IN WHICH THE COURT'S DENIED CERTIFICATION AND
24 IN DOING SO FOUND THE PLAINTIFF'S STATISTICIANS WERE, QUOTE,
25 "UNRELIABLE AND IRRELEVANT." WHY? AGAIN, PLAINTIFF'S
175
ORAL ARGUMENT BY MS. ABELL
1 STATISTICIANS FAILED TO CONTROL IN BOTH CASES FOR JOB GRADE,
2 PAY GRADE, WAL-MART'S TERM, "PAY CLASS."
3 AT TAB 47, THE SHEEHAN CASE, IN DENYING CLASS
4 CERTIFICATION, QUOTES THE NINTH CIRCUIT'S DECISION IN BECK IN
5 UPHOLDING THE DISTRICT COURT'S DISREGARD OF PLAINTIFF'S
6 STATISTICAL EVIDENCE AT THE CLASS CERTIFICATION STAGE.
7 WHERE I'VE PLACED THE GREEN TAG, YOUR HONOR, PAGE
8 103, THE COURT WRITES, "AS THE NINTH CIRCUIT STATED, BY FINDING
9 FAULT AND INFIRMITIES IN THE STATISTICAL EVIDENCE PRESENTED,
10 THE DISTRICT JUDGE WAS NEITHER EVADING HER RESPONSIBILITY TO
11 EXAMINE THE EVIDENCE, NOR PLACING IMPOSSIBLE BURDENS ON THE
12 PLAINTIFFS."
13 THE BECK DECISION IS SET OUT, IN PART, AT TAB 48.
14 THIS WAS A PATTERN AND PRACTICE DISPARATE TREATMENT PAY AND
15 PROMOTIONS CASE. AND IT TELLS US THE LAW OF THE CIRCUIT ABOUT
16 REGRESSIONS AND DISCRIMINATION CASES.
17 PAGE 464, "STATISTICAL EVIDENCE BASED UPON
18 MATHEMATICAL REGRESSION SHOULD APPROXIMATE THE ACTUAL
19 DETERMINATIVE FACTORS AND THE EMPLOYMENT DISCRIMINATION" -- I'M
20 SORRY, "EMPLOYMENT DECISION-MAKING PROCESS. AND WHERE IT
21 DOESN'T, THEN," THE COURT SAYS AT 464, "A DEFENDANT SHOULD BE
22 ENTITLED TO CHALLENGE THE ABILITY OF STATISTICAL EVIDENCE BASED
23 UPON MATHEMATICAL REGRESSIONS TO APPROXIMATE THE ACTUAL
24 DETERMINATIVE FACTORS IN THE EMPLOYMENT DECISION-MAKING
25 PROCESS." NOT THE HYPOTHETICAL FACTORS, THE ACTUAL
176
ORAL ARGUMENT BY MS. ABELL
1 DETERMINATIVE FACTORS.
2 WHY? THE COURT EXPLAINS WHY. PAGE 465, IN FOOTNOTE
3 ONE, BOTTOM RIGHT, "BECAUSE OTHERWISE, THE COURT IS BEING ASKED
4 TO DECIDE LEGAL PROPOSITIONS ON HYPOTHETICAL EVIDENCE. AND
5 COURTS ARE NOT FREE TO DECIDE LEGAL PROPOSITIONS ON
6 HYPOTHETICAL EVIDENCE, ESPECIALLY WHERE THEY'RE ASKED TO DRAW
7 INFERENCES AS TO THE EXISTENCE OF HIDDEN DISCRIMINATORY MOTIVES
8 FROM STATISTICAL EVIDENCE."
9 SO THE NINTH CIRCUIT FOUND THAT THE PLAINTIFF'S
10 EXPERT'S ANALYSIS OMITTED IMPORTANT DECISION-MAKING VARIABLES.
11 IT WAS UNRELIABLE.
12 IN THE INTEREST OF TIME, LET'S SKIP TO TAB 50.
13 STATISTICS IN THIS CASE: YOUR HONOR, DR. HAWORTH RAN ALL SORTS
14 OF ALTERNATIVE REGRESSIONS. IT DOESN'T MATTER WHICH OF HER
15 MANY VARIATIONS YOU LOOK AT, BECAUSE NO MATTER HOW SHE GROUPS
16 PEOPLE, WHETHER SHE PUTS TOGETHER ALL OF THE DEPARTMENTS EXCEPT
17 GROCERY PLUS/ALONG WITH TIRE AND LUBE EXPRESS, PHOTO, PHARMACY,
18 JEWELRY, SHOES, OPTICAL; EVEN WHEN SHE PUTS THAT ALL TOGETHER,
19 SHE FINDS IN ABOUT 90 PERCENT OF THE STORES THERE IS NO
20 STATISTICALLY SIGNIFICANT DIFFERENCE IN HOURLY PAY FOR MEN AND
21 WOMEN.
22 AND TAKING HER WAL-MART DIVISION 1 ANALYSIS, WHICH
23 IS THE FIRST PAGE, TAB 50, SHE SHOWS THAT 92.8 PERCENT OF THE
24 STORES HAVE NO SIGNIFICANCE IF YOU INCLUDE STARTING PAY RATE.
25 AND IF YOU DON'T USE THAT VARIABLE, THEN IT'S 89.8 PERCENT.
177
ORAL ARGUMENT BY MS. ABELL
1 AND IN EACH CASE YOU SEE A VERY SIGNIFICANT PERCENTAGE OF THE
2 STORES HAVE WOMEN MAKING MORE THAN MEN.
3 SAM'S, THE NEXT PAGE, HOURLY PAY RATES, SOMEWHERE
4 BETWEEN 95.6 PERCENT AND 94.6 PERCENT OF THE STORES ARE
5 STATISTICALLY INSIGNIFICANTLY DIFFERENT. AND ALMOST HALF OF
6 THE STORES FAVOR WOMEN. AND SHE HAS FURTHER SEPARATE ANALYSES
7 LATER ON IN THAT TAB.
8 SO WHETHER YOU INCLUDE DEPARTMENT MANAGERS OR YOU
9 DON'T. WHETHER YOU INCLUDE PEOPLE WHO HAVE BEEN DEMOTED OR YOU
10 DON'T, WHETHER YOU INCLUDE PEOPLE WHO ONCE HELD SALARIED JOBS
11 OR YOU DON'T, WOMEN ARE PAID HIGHER IN ABOUT 40 PERCENT OF THE
12 JOBS. IN 90 PERCENT OF THE STORES THERE IS NO STATISTICALLY
13 SIGNIFICANT DIFFERENCE BETWEEN MEN AND WOMEN.
14 YOUR HONOR, OUR CASE IS JUST LIKE THE ABRAM CASE,
15 THIS IS NO PATTERN OF DISCRIMINATION ADVERSE TO WOMEN.
16 SO THIS DECENTRALIZED SUBJECTIVE DECISION MAKING
17 THAT PLAINTIFFS CHALLENGE IN THIS CASE DOES NOT HAVE THE SAME
18 EFFECT IN ALL LOCATIONS. AND IT WAS THEIR BURDEN TO ESTABLISH
19 THAT THAT SAME CAUSE, DECENTRALIZED SUBJECTIVE DECISION MAKING,
20 HAD THE SAME EFFECT FROM LOCATION TO LOCATION TO LOCATION. BUT
21 THE STORES HERE VARY DRAMATICALLY. THIS DESTROYS COMMONALITY,
22 IT DESTROYS TYPICALITY, AND IT DESTROYS MANAGEABILITY.
23 TURNING TO TAB 51, ARE THE NAMED PLAINTIFF'S
24 SITUATIONS COMMON AND TYPICAL OF THE CLASS THEY CLAIM TO
25 REPRESENT, AS PLAINTIFFS ARE REQUIRED TO DEMONSTRATE?
178
ORAL ARGUMENT BY MS. ABELL
1 ABSOLUTELY NOT. NO MATTER WHICH REGRESSION MODEL YOU LOOK AT,
2 THE NAMED PLAINTIFFS IN FOUR OR FIVE OF THE SIX STORES DO
3 BETTER THAN MEN. SO THEIR ENVIRONMENT IS NOT TYPICAL OF WHAT
4 THEY'RE CLAIMING TO REPRESENT, WHICH IS STORE DECENTRALIZED
5 DECISION MAKING HAVING AN ADVERSE EFFECT ON THE PAY OF WOMEN.
6 THE MAJORITY OF THESE NAMED PLAINTIFFS ARE IN STORES WHERE THAT
7 ABSOLUTELY DIDN'T HAPPEN.
8 MAKE NO MISTAKE, YOUR HONOR, THESE ARE LARGE SAMPLES
9 THAT EASILY GENERATE STATISTICALLY SIGNIFICANT RESULTS FOR A
10 MEANINGFUL DISPARITY. FOR EXAMPLE, PLAINTIFF ARRIVED AT THE
11 STATISTICS THAT YOU SEE ON THIS PAGE 26 HERE; WE'RE TALKING
12 ABOUT 316 EMPLOYEES IN HER STORE AS OF THE DATE THAT THIS
13 SNAPSHOT WAS DONE.
14 PLAINTIFF SURGESON, 267. PLAINTIFF DUKES, 284. AND
15 WHEN YOU AGGREGATE THEM OVER YEARS, OBVIOUSLY, YOU HAVE LARGE
16 NUMBERS.
17 THERE IS NO SUBDIVISION, AS I MENTIONED, OF GROCERY
18 IN ANY OF THE FIVE NAMED PLAINTIFF STORES THAT ARE THE WAL-MART
19 PLAINTIFFS, SO YOU DON'T HAVE ANY SPLIT OUT OF DATA FROM THEIR
20 NUMBERS. THAT IS THE ENTIRE STORE, EVERYTHING IN IT.
21 TAB 52: THE ONLY EVIDENCE BEFORE THE COURT OF THE
22 TYPE REQUIRED FOR A CLASS CERTIFICATION ANALYSIS OF A
23 MULTI-FACILITY CASE IS DR. HAWORTH'S. DID DR. DROGIN DO
24 STORE-BY-STORE ANALYSES? IT'S NOT CLEAR, YOUR HONOR. HE
25 VACILLATED AT HIS DEPOSITION. WHETHER HE DID THEM, WHETHER HE
179
ORAL ARGUMENT BY MS. ABELL
1 ASKED ONE OF HIS PEOPLE TO DO THEM, WHERE HIS BACKUP WAS. THE
2 BOTTOM LINE WAS, HE DOESN'T RECALL RUNNING ANY THAT WERE ANY
3 DIFFERENT FROM DR. HAWORTH'S, AND HE ISN'T SURE WHERE HIS
4 OUTPUT OF THOSE REGRESSIONS IS, SO HE TESTIFIED.
5 THE BOTTOM LINE IS, PLAINTIFFS PRESENTED NO
6 STORE-BY-STORE ANALYSIS, SO THEY ARE LACKING THE PROOF THAT
7 THEY NEEDED TO CERTIFY AN HOURLY PAY CLAIM, STATISTICAL PROOF
8 THAT DECENTRALIZED DECISION MAKING, QUOTE, "IN THE WORDS OF
9 REID, ZACHERY, LOTT, ETCETERA," QUOTE, "AFFECTS ALL FACILITIES
10 IN THE SAME WAY."
11 NOW, EVEN IF THE COURT WERE TO CONSIDER, AND WE
12 BELIEVE IT SHOULD NOT, DR. DROGIN'S AGGREGATED ANALYSES, I
13 WOULD LIKE TO SPEND JUST A COUPLE OF MOMENTS ON THREE KEY PAY
14 DETERMINATIVE VARIABLES THAT HE OMITTED WITHOUT LEGITIMATE
15 REASON, AND THEREFORE RENDERED HIS PAY ANALYSIS IRRELEVANT AND
16 UNINSTRUCTIVE.
17 NUMBER ONE, HE OMITS DEPARTMENT AS A VARIABLE. HE
18 TREATS AS THE SAME JOB ALL PERSONS, FOR EXAMPLE, IN CODE 101,
19 DEPARTMENT MANAGERS; ALL PERSONS SEPARATELY IN CODE 201, NO
20 MATTER WHICH DEPARTMENT THEY WORK FOR, NO MATTER WHAT THEY DO.
21 AND I'LL COME BACK TO THAT IN A MINUTE.
22 NUMBER TWO, HE INEXCUSABLY OMITS PAY CLASS, ALSO
23 KNOWN AS PAY GRADE, PAY LEVEL. IT'S A NUMBER, ONE THROUGH
24 FIVE.
25 NUMBER THREE, HE FAILS TO ACCOUNT FOR HIGHER PAY
180
ORAL ARGUMENT BY MS. ABELL
1 THAT IS BUILT INTO AN EMPLOYEE'S BASE RATE WHEN THE EMPLOYEE
2 WORKS GRAVEYARD SHIFT. THAT IS A BIG DEAL, YOUR HONOR. IT'S
3 IN THE DATABASE TO WHICH DR. DROGIN HAD ACCESS. AND HE ADMITS
4 THAT HE HAS NO FACTS WHICH INDICATE THAT IT'S ATTAINED A
5 VARIABLE.
6 TAB 50 SHOWS DR. DROGIN'S REGRESSION. ONE DOESN'T
7 EVEN CONTROL FOR JOB TITLE, IT SIMPLY CONTROLS FOR SENIORITY.
8 SO HE TREATS ALL 173 JOB CLASSIFICATIONS AS IF EVERYBODY IN
9 THEM OUGHT TO BE PAID THE SAME.
10 THE OTHER ONE CONTROLS FOR SENIORITY AND JOB TITLE,
11 BUT NOT DEPARTMENT, PAY CLASS, SHIFT, ETCETERA, EVEN THOUGH
12 THAT DATA WAS AVAILABLE TO HIM.
13 NOW, WHAT ABOUT JUST CONTROLLING FOR JOB TITLE AND
14 NOT CONTROLLING FOR DEPARTMENT? WELL, YOUR HONOR, THAT IS
15 MEANINGLESS. IF YOU TAKE A LOOK AT TAB 54, AND I HAVE TRIED TO
16 COLOR HIGHLIGHT, AND HOPEFULLY IT'S COME THROUGH CLEARLY, IF
17 YOU TURN TO THE THIRD PAGE IN, I'LL GIVE YOU AN EXAMPLE.
18 YOU WILL SEE THAT THERE ARE COUNTLESS DEPARTMENTS,
19 THIS GOES ON FOR PAGES, THAT HAVE JOB CODE 101. AND THE
20 DEPARTMENTS ARE NAMED TAB B THERE.
21 NOW, IF YOU TURN TO WHERE THE LITTLE PURPLE STICKER
22 IS, YOU SAW IN THE PAGE I DIRECTED YOU TO BEFORE THAT 201 IS
23 SALES ASSOCIATE ON THAT PAGE, BUT IF YOU GO TO THE PAGE WITH
24 THE YELLOW TAB, AND YOU LOOK AT DEPARTMENT 86, JOB CODE 201 IS
25 A GAS STATION ASSOCIATE.
181
ORAL ARGUMENT BY MS. ABELL
1 SO WHAT DR. DROGIN HAS DONE, AND WE CAN SEE IT IN
2 HIS ANALYSES IN A MOMENT, IS IF YOU ARE A 201, BY FAILING TO
3 READ DEPARTMENT, HE COUNTS YOU AS ALL THE SAME JOB. AND, YOUR
4 HONOR, A GAS STATION ASSOCIATE ISN'T REMOTELY CLOSE TO AN
5 ELECTRONICS SALES ASSOCIATE, WHO WELL MAY BE A COMPUTER
6 SCIENCES COLLEGE STUDENT WHO IS A WHIZ AT COMPUTERS, HANDHELDS,
7 PERIPHERALS, SOFTWARE, ELECTRONIC GAMES, AND THE LIKE. THEY'RE
8 NOT ANYWHERE CLOSE.
9 THERE ARE DIFFERENT PREREQUISITES FOR MANY OF THESE
10 JOBS IN JOB CODE 201. THERE ARE LICENSES FOR SOME. YOU WANT
11 TO SELL GUNS? YOU HAVE TO HAVE A LICENSE. EDUCATION IS A PLUS
12 AND RESULTS, AS YOU CAN SEE FROM THE STORE MANAGER
13 QUESTIONNAIRES, AS ADDITIONAL PAY.
14 THERE ARE DIFFERENT MARKET RATES, AND WE'LL COME TO
15 THAT IN A MINUTE FOR DIFFERENT 201S, EVEN THOSE THAT ARE SALES
16 ASSOCIATES. DIFFERENT SKILLS; DIFFERENT DEPARTMENTS HAVE
17 DIFFERENT PROFITABILITY, AND THAT IMPACTS SOME OF THE PAY.
18 THERE ARE DIFFERENT DEGREES OF COMPETITION FOR SKILLED PEOPLE
19 IN THE VARIOUS DEPARTMENTS THAT IMPACT PAY.
20 SO, YOUR HONOR, IF WE COULD TURN TO TAB 56 -- I'M
21 SORRY; LET'S ACTUALLY TURN TO TAB 58. YOU WILL SEE THAT
22 DR. DROGIN LUMPS TOGETHER ALL OF THESE PEOPLE THAT HAVE A
23 SINGLE JOB CODE. HE DOESN'T DIFFERENTIATE THOSE EXAMPLES THAT
24 I JUST GAVE YOU. SO HIS REGRESSIONS ARE NOT YIELDING ANY
25 RESULT THAT HAS ANY PROBATIVE VALUE, EVEN IF THEY HAD BEEN
182
ORAL ARGUMENT BY MS. ABELL
1 DISAGGREGATED BY STORE, AS THEY SHOULD HAVE BEEN.
2 TURNING TO TAB 59, THIS IS WAL-MART'S PAY CLASSES.
3 MOST COMPANIES CALL THEM PAY GRADES. AND YOU CAN SEE AT TAB 59
4 RIGHT ACROSS THE TOP THERE ARE FIVE PAY CLASSES, PAY LEVELS, 1,
5 2, 3, 4, 5.
6 IF YOU JUST TAKE THE TITLE SALES ASSOCIATE, FOR
7 EXAMPLE, YOU SEE THAT THERE ARE SALES ASSOCIATES WHO ARE IN
8 CLASS 1, PAY CLASS 1, BUT THERE ARE ALSO SALES ASSOCIATES IN
9 PAY CLASS 2. IT'S A HIGHER RATE. BUT THEY ARE ALL 201 CODES.
10 SO DR. DROGIN DOESN'T DIFFERENTIATE THAT.
11 IF YOU LOOK AT DEPARTMENT MANAGER, FOR EXAMPLE,
12 THERE ARE DEPARTMENT MANAGERS IN PAY CLASS 3 AND PAY CLASS 5,
13 BUT THEY'RE ALL 101S. AND HIS ANALYSES DON'T DIFFERENTIATE
14 THOSE, EITHER. SO HE FAILS TO CAPTURE WHAT IS GOING TO BE A
15 STARTING RATE DIFFERENTIAL OF SOMEWHERE BETWEEN TWENTY-FIVE
16 CENTS AND FIFTY CENTS OR MORE AN HOUR, AT A MINIMUM.
17 MR. SELIGMAN SAID THIS MORNING THE PAY GROUP OR PAY
18 CLASS IS, QUOTE/UNQUOTE, "IMPORTANT." HE IS RIGHT, IT'S ONE OF
19 THE THINGS THAT IS IMPORTANT IN DETERMINING PAY, HOURLY PAY.
20 AND DR. DROGIN COMPLETELY IGNORED IT.
21 TURNING TO TAB 60, HE WAS ASKED AT HIS DEPOSITION
22 ABOUT THIS, AND HE ADMITTED, "I DON'T THINK THAT IT WOULD BE
23 CONSIDERED A TAINTED VARIABLE." SO HE HAS NO REASON TO HAVE
24 PUT BEFORE THE COURT A REGRESSION ANALYSIS THAT OMITS WHAT
25 MR. SELIGMAN ACKNOWLEDGES, AND OBVIOUSLY HAS TO BE
183
ORAL ARGUMENT BY MS. ABELL
1 ACKNOWLEDGED, AS AN IMPORTANT VARIABLE. COMPLETELY OMITS IT.
2 NO BASIS WHATSOEVER CAN JUSTIFY THAT.
3 TAB 61, DR. DROGIN ALSO FAILED TO INCLUDE
4 DEPARTMENT. NOW, LET'S TAKE THE HYPOTHETICAL EXAMPLE SET OUT
5 IN OUR OPPOSITION. YOU'VE GOT THREE DEPARTMENTS, AND THE
6 AVERAGE PAY OF MEN AND WOMEN IN EACH ONE OF THE THREE IS
7 PRECISELY THE SAME. BUT THE PAY IN DIFFERENT DEPARTMENTS IS
8 DIFFERENT. IN ELECTRONICS IT'S $12 AN HOUR. IN SPORTING GOODS
9 IT'S $10 AN HOUR. IN APPAREL, IT'S 8 A HOUR.
10 SO WITH RESPECT TO SIMILARLY SITUATED MEN AND WOMEN
11 IN EACH OF THESE DEPARTMENTS YOU WOULD HAVE A NONDISCRIMINATORY
12 PAY SYSTEM. BUT IF YOU AGGREGATE ALL THREE DEPARTMENTS IN THIS
13 EXAMPLE, THE AVERAGE FEMALE PAY IS $8.75 AN HOUR, AND THE
14 AVERAGE MALE PAY IS $10.46 AN HOUR, BECAUSE YOU DON'T HAVE THE
15 SAME NUMBER OF MEN AND WOMEN REPRESENTED IN EACH OF THE
16 DEPARTMENTS.
17 TURNING TO TAB 62, YOUR HONOR, THAT IS THE REAL
18 WORLD THAT WAL-MART COMPETES IN. IF WE LOOK AT TAB 62, THIS IS
19 FROM DR. BENDICK, WHO WAS ONE OF THE PLAINTIFF'S EXPERTS, FROM
20 HIS DEPOSITION EXHIBITS, THIS IS FROM THE U.S. BUREAU OF LABOR
21 STATISTICS. WHAT IT SHOWS IS THE GENDER MIX IN JOBS ISN'T THE
22 SAME. THEY'RE NOT ALL, YOU KNOW, 50 PERCENT MEN AND 50 PERCENT
23 WOMEN. THERE ARE DIFFERENT EMPLOYMENT PATTERNS IN THIS
24 COUNTRY.
25 FOR EXAMPLE, LOOKING DOWN TO THE RIGHT-HAND COLUMN
184
ORAL ARGUMENT BY MS. ABELL
1 WHERE YOU SEE WOMEN, YOU CAN CALCULATE, BASED UPON THE NUMBER
2 OF WORKERS THAT 77 PERCENT OF APPAREL WORKERS IN THE UNITED
3 STATES, THESE ARE APPAREL SALES WORKERS, ARE WOMEN, BUT ONLY
4 29 PERCENT OF ELECTRONICS AND APPLIANCES SALES WORKERS, IT'S
5 CALLED SALES WORKERS, RADIO, TELEVISION, HI-FI AND APPLIANCES,
6 ARE WOMEN. SO IT SHOWS THE OBVIOUS, DIFFERENT EMPLOYMENT
7 PATTERNS. DR. HAWORTH TALKED ABOUT THAT IN HER REPORT, AND
8 DR. BENDICK ACKNOWLEDGED IT IN HIS DEPOSITION.
9 THIS ALSO SHOWS THAT THERE ARE DIFFERENT MARKET
10 RATES FOR SALES WORKERS WHO SELL DIFFERENT PRODUCTS. FOR
11 EXAMPLE, LOOKING JUST AT WOMEN'S PAY, THE FAR RIGHT COLUMN, IF
12 YOU ARE A WOMAN AND YOU SELL APPAREL, YOUR AVERAGE PAY IS $329
13 A WEEK. BUT IF YOU'RE A WOMAN AND YOU SELL ELECTRONICS OR
14 APPLIANCES, YOUR AVERAGE PAY IS $465 A WEEK. SO FEMALE APPAREL
15 SALES PEOPLE ARE MAKING ABOUT 70 PERCENT OF WHAT FEMALE
16 ELECTRONIC SALES PEOPLE ARE MAKING.
17 SO TO TAKE DEPARTMENT OUT OF THE ANALYSIS AND READ
18 JOB CODE WITHOUT THE DEPARTMENT CODE ATTACHED TO IT RENDERS THE
19 ANALYSIS MEANINGLESS IN THE REAL WORLD. WAL-MART OBVIOUSLY HAS
20 TO PAY ACCORDING TO THE MARKET.
21 TAB 63: WHY DO WE SEE THIS PHENOMENON, WHERE SALES
22 WORKERS OF DIFFERENT PRODUCTS MAKE DIFFERENT AMOUNTS OF MONEY?
23 WELL, PLAINTIFF'S EXPERT, DR. BENDICK, TESTIFIED AT HIS
24 DEPOSITION THAT HE COULD GO ON FOR AN HOUR WITH THE REASONS
25 THAT IN THE UNITED STATES LABOR MARKET SALES WORKERS OF CERTAIN
185
ORAL ARGUMENT BY MS. ABELL
1 PRODUCTS MAKE MORE THAN SALES PERSONS OF OTHER PRODUCTS ON
2 AVERAGE. AND HE LISTED A BUNCH OF THINGS, AND LET ME JUST NAME
3 A FEW.
4 HOW MUCH KNOWLEDGE IS PREREQUISITE TO THE JOB? HOW
5 DIFFICULT IS IT TO ACQUIRE THE KNOWLEDGE? ARE SPECIAL LICENSES
6 INVOLVED, SUCH AS WAL-MART REQUIRES FOR JOBS AND SPORTING
7 GOODS, OPTICAL, ETCETERA. DOES THE SALES JOB ALSO INVOLVE HARD
8 PHYSICAL LABOR, HEAVY LIFTING? WHAT ALTERNATIVE OCCUPATIONS
9 THESE SALES PEOPLE COULD ENGAGE IN. HE GIVES EXAMPLES THAT
10 PEOPLE SELLING HARDWARE MIGHT ALSO HAVE THE OPTION TO WORK AS
11 SKILLED CRAFT WORKERS, CARPENTERS. BUT THAT'S LESS LIKELY TO
12 BE THE CASE WITH A SALES PERSON WHO'S SELLING APPAREL.
13 NOW, BEFORE PLAINTIFFS FILED THEIR CLASS
14 CERTIFICATION MOTION, THERE WERE SEVEN NAMED PLAINTIFFS. THE
15 PLAINTIFFS ONLY PROPOSED SIX OF THEM AS CLASS REPRESENTATIVES.
16 THE NAMED PLAINTIFF THAT PLAINTIFFS OMITTED WHEN THEY FILED
17 THEIR CLASS CERTIFICATION MOTION IS KAREN WILLIAMSON. AND IT'S
18 NO SURPRISE THAT PLAINTIFFS HAVE DROPPED HER, BECAUSE HER
19 DEPOSITION TESTIMONY ILLUSTRATES THE VERY POINT I'VE BEEN
20 MAKING, WILLIAMSON WAS ONE OF THOSE CODE 201 SALES ASSOCIATES,
21 AND HER MANAGER TRIED TO MOVE HER INTO ELECTRONICS TO BROADEN
22 HER KNOWLEDGE AND EXPERIENCE, GIVE HER MORE OPPORTUNITY. AND
23 WHAT DID SHE TESTIFY TO? IT WAS TOO NOISY. SHE ASKED TO GET
24 OUT A MONTH AFTER BEING MOVED THERE.
25 WHAT ABOUT LAWN AND GARDEN? WELL, SHE DOESN'T LIKE
186
ORAL ARGUMENT BY MS. ABELL
1 THE HEAT OR THE COLD, SO THAT WASN'T A FIT, EITHER.
2 THE BOTTOM LINE, YOUR HONOR, IS THAT SALES ASSOCIATE
3 JOBS ARE NOT THE SAME FOR ALL DEPARTMENTS. DEPARTMENTS ARE
4 DIFFERENT. THEIR PAY IS MARKET DRIVEN.
5 TURNING TO TAB 64, JUST LAST WEEK, THE WALL STREET
6 JOURNAL REMINDED WAL-MART OF THAT VERY POINT, NOTING THE THREAT
7 THAT BEST BUY POSES TO WAL-MART'S ELECTRONICS BUSINESSES.
8 WAL-MART WILL COMPETE FOR THIS KNOWLEDGEABLE SALES FORCE OF
9 ELECTRONICS THAT BEST BUY TOUTS. AND IN ORDER TO COMPETE,
10 OBVIOUSLY, WAL-MART IS GOING TO HAVE TO PAY THE RATE THAT IT
11 TAKES TO GET THIS KNOWLEDGEABLE SALES FORCE.
12 MR. SELIGMAN: YOUR HONOR, I HATE TO OBJECT, BUT
13 THIS IS NOT IN EVIDENCE.
14 THE COURT: YEAH, IT DIDN'T APPEAR TO.
15 MR. SELIGMAN: AND I JUST HAVE TO --
16 THE COURT: LET'S JUST GO FORWARD.
17 MS. ABELL: OKAY.
18 THE COURT: YOU CAN MAKE YOUR POINTS BASED ON THE
19 REGRESSION ANALYSIS THAT YOU'VE BEEN TAKING ME THROUGH FOR THE
20 LAST HALF HOUR, FORTY-FIVE MINUTES.
21 MS. ABELL: OKAY.
22 THE COURT: OKAY.
23 MS. ABELL: ON THE SUBJECT OF DEPARTMENT, ONE FINAL
24 POINT.
25 PLAINTIFFS HAVE NOT MOVED TO CERTIFY A JOB
187
ORAL ARGUMENT BY MS. ABELL
1 ASSIGNMENTS CASE, SO ANY ATTACK ON JOB ASSIGNMENTS WOULD HAVE
2 TO BE MADE STORE BY STORE, BECAUSE THOSE DECISIONS ARE MADE
3 BELOW OR AT THE STORE MANAGER LEVEL. THERE IS NO EVIDENCE OF A
4 PATTERN OF NOT PLACING WOMEN IN THE DEPARTMENTS IN WHICH THEY
5 PREFER TO WORK.
6 IT IS TRUE THAT THEIR INTEREST DEPARTMENT BY
7 DEPARTMENT IS NOT THE SAME, BUT THERE IS NO PROOF THAT
8 DEPARTMENT AFTER DEPARTMENT WAL-MART IS NOT PUTTING WOMEN,
9 GENERALLY, WHERE THEY CHOOSE TO BE BASED UPON THE BID DATA.
10 JUST A COUPLE OF COMMENTS WITH RESPECT TO SALARY
11 PAY. DR. DROGIN'S REGRESSIONS OMIT A NUMBER OF IMPORTANT
12 VARIABLES. FOR EXAMPLE, WHEN HE TALKS ABOUT ANNUAL EARNINGS,
13 HE FAILS TO ACCOUNT FOR HOURS. AT WAL-MART, A FULL-TIME
14 EMPLOYEE, AS OF THE TIME HE DID HIS REGRESSIONS, CAN WORK
15 ANYWHERE FROM 28 HOURS A WEEK TO MORE THAN 40 HOURS A WEEK.
16 ONE OF THE THINGS THAT IS VERY SPECIAL ABOUT
17 WAL-MART IS IT REALLY DOES CATER TO PART-TIME SCHEDULES FOR
18 WOMEN. SO ALTHOUGH CLASSIFIED AS FULL TIME, YOU HAD PEOPLE IN
19 THIS ENORMOUS RANGE OF HOURS, LARGELY SELF-DRIVEN, WHO HE HAS
20 AGGREGATED UP AND ASSUMED THAT THEY ALL SHOULD BE PAID THE
21 SAME. WELL, SOMEBODY WHO WORKED 28 HOURS A WEEK OBVIOUSLY
22 WOULD NOT BE PAID THE SAME AS SOMEBODY WHO WORKED 40-PLUS HOURS
23 A WEEK.
24 IN ADDITION, HE'S ANALYZED THE TOTAL EARNINGS, AND
25 THAT, OF COURSE, INCLUDES SUCH THINGS AS STOCK OPTIONS YOU
188
ORAL ARGUMENT BY MS. ABELL
1 MIGHT CASH IN IN A YEAR, IT ENCOMPASSES YOUR INCENTIVE PAY,
2 WHICH IS LARGELY DRIVEN BY YOUR STORE'S PROFITABILITY.
3 TAB 66 TO 69, FOUR STORE MANAGER SUPPLEMENTAL
4 DECLARATIONS THAT GIVE EXAMPLES OF THE THINGS FOR WHICH STORES
5 MAY, DEPENDING ON THE STORE, PAY EXTRA. AND THESE ARE
6 ILLUSTRATIONS OF WHY WE NEED STORE-SPECIFIC REGRESSIONS FOR ANY
7 TRIAL.
8 SOME MANAGERS PAY EXTRA FOR PARTICIPATION ON VARIOUS
9 STORE-SPECIFIC COMMITTEES. FOR EXAMPLE, SOME PAY EXTRA FOR
10 BEING ON THE SAFETY COMMITTEE, BUT OTHERS DON'T BECAUSE THEY
11 DON'T HAVE TROUBLE GET VOLUNTEERS FOR THEM.
12 ONE MANAGER GIVES AN EXAMPLE OF HAVING TO RAISE THE
13 DELI DEPARTMENT, WHEN THE NEIGHBORING WENDY'S AND MCDONALD'S
14 RAISING THEIR PAY. ANOTHER TALKS ABOUT PAYING MORE BECAUSE AN
15 INDIVIDUAL HAD SKILL AT FIXING A FORKLIFT. SO THE MANAGER
16 COULD SAVE THE COST OF NOT HAVING TO BRING IN SOMEBODY FROM THE
17 OUTSIDE TO FIX THE FORKLIFT. SO REGRESSIONS MUST BE BUILT FOR
18 EACH STORE INDIVIDUALLY.
19 TURNING NOW, YOUR HONOR, TO TAB 70 AND YOUR
20 QUESTIONS, 8, 8C, AND 12.
21 YOU ASKED WHETHER IT WOULD BE POSSIBLE FOR SPECIAL
22 MASTERS RELYING SOLELY ON CORPORATE OR OTHER STATISTICAL
23 RECORDS TO IDENTIFY WITHOUT THE NEED FOR A HEARING CLASS
24 MEMBERS ENTITLED TO BACK PAY. MR. GROSSMAN'S ADDRESSED THIS
25 ALREADY, BUT I WOULD LIKE TO MAKE ONE ADDITIONAL POINT.
189
ORAL ARGUMENT BY MS. ABELL
1 AS A MATTER OF LAW, AS WE'VE SEEN FROM THE BECK
2 DECISION, WAL-MART IS ENTITLED TO PUT ON ITS CASE STORE BY
3 STORE, BECAUSE IT IS ENTITLED TO PRESENT EVIDENCE, STATISTICAL
4 EVIDENCE, THAT MODELS THE WAY PAY DECISIONS ARE ACTUALLY MADE.
5 WHILE PLAINTIFFS WOULD PREFER THAT WAL-MART IGNORE
6 MARKET FACTORS IN SETTING PAY, THE SUPPLY AND DEMAND OF THE
7 MARKETPLACE IS DICTATING PAID DECISIONS. OUR STORE MANAGERS
8 MUST RESPOND TO THE REAL WORLD. NEITHER THE COURT NOR THE
9 INJURE CAN SIT AS A SUPER PERSONNEL DEPARTMENT AND SECOND-GUESS
10 THE NEED FOR THOSE FACTORS AND SAY THAT WAL-MART IS GOING TO
11 PAY HOURLY EMPLOYEES, MORE THAN A MILLION OF THEM, BASED UPON
12 FIVE OR EIGHT OR TEN FACTORS, OR, IN DR. DROGIN'S CASE, TWO OR
13 THREE.
14 WAL-MART MANAGERS IN EACH OF THESE DIFFERENT MARKETS
15 ALL OVER THE COUNTRY NEED TO HAVE THE ABILITY TO MAKE DECISIONS
16 THAT ATTRACT AND RETAIN PEOPLE WITH THE REQUISITE SKILLS, GIVEN
17 THEIR INDIVIDUAL MARKETS. AND THEY NEED TO MANAGE THEIR STORES
18 PROFITABLY. THERE IS A LOT AT STAKE FOR EVERY EMPLOYEE IN THE
19 STORE AS TO WHETHER THE STORE MANAGER MANAGES PROFITABLY.
20 LET'S JUST TAKE HOURLY EMPLOYEES; THEY'RE ELIGIBLE
21 FOR A BONUS. AT WAL-MART, IT CAN BE UP TO $3000 PER HOURLY
22 EMPLOYEE IN A YEAR IF THE STORE MEETS ITS PROFITABILITY GOAL.
23 SO ATTRACTING PEOPLE WITH THE ABILITY TO EFFECTIVELY SELL A
24 GIVEN COMMODITY AND HELP THE STORE MAKE THAT PROFIT NUMBER IS
25 IMPORTANT, JUST AS PEOPLE WHO CAN STOCK MORE QUICKLY OR DO
190
ORAL ARGUMENT BY MS. ABELL
1 SOMETHING THAT WILL ALLOW THAT STORE TO OPERATE PROFITABLY.
2 FOR ASSISTANT MANAGERS, YOU'RE TALKING ABOUT UP TO
3 $6,000 A YEAR IN THE STORE PROFITABILITY BONUS. AT SAM'S,
4 YOU'RE TALKING $2,000 FOR HOURLY, AND UP TO 4,000 FOR ASSISTANT
5 MANAGERS. SO HOURLY EMPLOYEES DEPEND UPON THEIR STORE MANAGERS
6 TO MANAGE PROFITABLY.
7 NOW, A BRIEF COMMENT ABOUT WHY THE GROCERY DIVISIONS
8 WERE ANALYZED SEPARATELY.
9 I MENTIONED THERE IS NO NEIGHBORHOOD MARKET, THERE
10 IS NO SUPER CENTER IN CALIFORNIA, SO WITHIN THE VENUE OF THE
11 THIS COURT, WE DON'T HAVE THESE GROCERY DIVISION PEOPLE.
12 WITH RESPECT TO -- AT WAL-MARTS.
13 WITH RESPECT TO DR. HAWORTH'S CHOW TEST, SHE
14 TESTIFIED, AND SHE WAS DEPOSED ON THIS IN HER DEPOSITION, THAT
15 GROCERY HAS TO BE ANALYZED SEPARATELY. AND THAT IS NO
16 SURPRISE, THAT IS COMMON SENSE, BECAUSE IT WASN'T UNTIL 1988
17 THAT WAL-MART STARTED TO BRING IN THESE GROCERY WORKERS. AND
18 SO IT'S HIRED TENS OF THOUSANDS OF PEOPLE WITH EXPERIENCE TO
19 STAFF 1,429 SUPER CENTER GROCERIES AND 56 NEIGHBORHOOD MARKETS.
20 SO, OBVIOUSLY, YOU'RE BRINGING IN PEOPLE WITH
21 EXPERIENCE. THEY HAVE TO KNOW HOW TO CUT THE MEAT, KNOW THE
22 PRODUCE, ETCETERA. IN REGRESSIONS, IF YOU'RE GOING TO COMBINE
23 THIS HUGE INFUSION OF EXPERIENCED PEOPLE IN ONE INDUSTRY WITH
24 WAL-MART'S EXISTING OPERATION, YOU'RE GOING TO COMPLETELY LOSE
25 THE EFFECT OF THAT PRIOR EXPERIENCE. IN OTHER WORDS, IN
191
ORAL ARGUMENT BY MS. ABELL
1 DR. DROGIN'S MODEL, SOMEBODY THAT CAME, YOU KNOW, A YEAR AGO
2 WITH 30 YEARS OF GROCERY EXPERIENCE WOULD BE TREATED AS A
3 PERSON WITH ONE YEAR OF SENIORITY, JUST AS AN 18 YEAR OLD WITH
4 NO EXPERIENCE AT ALL DOING ANYTHING. SO GROCERY IS A VERY
5 SEPARATE SITUATION FOR WAL-MART. AND THE CHOW TEST SHOWS THAT,
6 IN FACT, THE GROCERY CANNOT BE ANALYZED TOGETHER.
7 TAB 72: FROM WAL-MART'S TRAINING POSTING DATA IT
8 SHOWS THAT, IN FACT, MEN AT WAL-MART HAVE MORE PREVIOUS GROCERY
9 AND GROCERY MANAGEMENT EXPERIENCE THAN FEMALE EMPLOYEES.
10 TAB 73: ANOTHER PAY DETERMINATIVE FACTOR THAT
11 DR. DROGIN HAS OMITTED FROM HIS REGRESSIONS IS WHETHER SOMEONE
12 RECEIVING A PAY DIFFERENTIAL FOR WORKING A HARD-TO-FILL SHIFT,
13 SUCH AS GRAVEYARD IS IMPACTED. AND YOU HAVE A NUMBER OF
14 DECLARATIONS AT TAB 74 THAT SHOW FROM THE VARIOUS MANAGERS
15 ILLUSTRATIONS OF JUST WHAT AN ENORMOUS IMPACT THIS GRAVEYARD
16 DIFFERENTIAL HAS, WHICH IS GENERALLY OMITTED FROM DR. DROGIN'S
17 REGRESSION. IT'S $2 AN HOUR AT ONE STORE, $1 AN HOUR AT
18 ANOTHER. BUT IF YOU DO MAINTENANCE IN ADDITION, YOU GET $1.50
19 AN HOUR EXTRA. IN ANOTHER STORE IT'S 95 CENTS AN HOUR, BUT
20 AFTER 90 DAYS YOU GET 50 MORE CENTS, ETCETERA. ALL SORTS OF
21 DIFFERENCES STORE BY STORE. BUT DR. DROGIN DIDN'T PUT IN THE
22 SHIFT DIFFERENTIAL.
23 TAB 75: BOTTOM LINE, DR. DROGIN MISUSED
24 MULTIPLE-REGRESSION ANALYSIS. HE ADMITS HE NEVER RAN A CHOW
25 TEST, BUT HE SHOULD HAVE, OR CERTAINLY ANOTHER TEST TO TEST
192
ORAL ARGUMENT BY MS. ABELL
1 WHETHER IT WAS APPROPRIATE TO AGGREGATE SEPARATE UNITS.
2 THE APPARENT EXCUSE THAT HE GIVES IN HIS DECLARATION
3 IS THAT THE TEST WAS DESIGNED TO EXAMINE, HE SAYS, WHETHER
4 COMPANIES IN DIFFERENT INDUSTRIES COULD BE ANALYZED IN THE SAME
5 REGRESSION. BUT IF YOU LOOK AT THE ORIGINAL CHOW ARTICLE THAT
6 HE ATTACHES, ON THE VERY FIRST PAGE OF THE ARTICLE, IT ALSO
7 POINTS OUT THAT THE CHOW TEST CAN BE USED TO EXAMINE WHETHER
8 POPULATIONS BEHAVED THE SAME OVER MULTIPLE TIME PERIODS. SO HE
9 DOESN'T EVEN SHOW THAT -- DR. CHOW, WHO WROTE THE ARTICLE BACK
10 IN BACK IN 1960, CONTEMPLATED MULTIPLE USES.
11 SECONDLY, AS WE MENTIONED, THE CHOW TEST HAS BEEN
12 USED IN PATTERN AND PRACTICE DISCRIMINATION CASES, COATES. AND
13 NUMBER THREE, DR. DROGIN, IN FACT, AGGREGATED WAL-MART DATA,
14 COVERING THE MANY INDUSTRIES IN WHICH IT DOES BUSINESS. SO
15 EVEN LOOKING AT DR. CHOW'S ORIGINAL THOUGHT ABOUT CAN YOU
16 COMBINE MULTIPLE INDUSTRIES, WELL, THAT'S EXACTLY WHAT
17 DR. DROGIN DID. SO THAT SHOULD HAVE BEEN AN INDICATION TO HIM
18 THAT A CHOW TEST WAS IN ORDER.
19 TAB 76 THROUGH 80 I WILL SKIP, YOUR HONOR. THEY GO
20 THROUGH DR. HAWORTH'S REPORTS AND SOME OF THE DEPOSITION THAT
21 MR. SELIGMAN TOOK OF HER ABOUT HER CHOW TEST ANALYSES.
22 TURNING TO TAB 81, ASSUMING ARGUENDO THAT THERE IS A
23 CIRCUMSTANCE UNDER WHICH AGGREGATED DATA, RATHER THAN STORE BY
24 STORE, WOULD BE APPROPRIATE IN THIS RULE 23 ANALYSIS, DO WE
25 HAVE ANY AGGREGATED RESULT USING REASONABLE REGRESSION FACTORS,
193
ORAL ARGUMENT BY MS. ABELL
1 REGRESSION FACTORS THAT MEET THE NINTH CIRCUIT'S STANDARD, THAT
2 SHOWS A MEANINGFUL DIFFERENTIAL? AND THE ANSWER, YOUR HONOR,
3 IS NO. WHEN DR. DROGIN AGGREGATED ALL THE STORE EQUATIONS THAT
4 DON'T CONTROL FOR STARTING PAY, THE DIFFERENCE IS A MERE NINE
5 CENTS PER HOUR. AND SINCE THE AVERAGE FULL TIME WAL-MART
6 WORKER WORKS ABOUT 144 HOURS PER MONTH, THAT COMES OUT TO
7 $12.96 A MONTH. THAT'S LESS THAN 1 PERCENT DIFFERENTIAL
8 BETWEEN MALE AND FEMALE PAY.
9 THE COURT: HE SAYS THAT'S MEANINGFUL, DOESN'T HE?
10 MS. ABELL: HE SAYS IT'S STATISTICALLY MEANINGFUL.
11 BUT, YOUR HONOR --
12 THE COURT: IS THERE ANYTHING TO -- CONTRA TO THAT,
13 IN TERMS OF AN OPINION WITH RESPECT TO THE OVERALL REGRESSION
14 IN THAT WAY?
15 MS. ABELL: I BELIEVE SO, YOUR HONOR, IF WE COULD
16 LOOK AT TAB 82.
17 THE NINTH CIRCUIT IN THE RUDABUSH CASE CITES US TO
18 THE FEDERAL JUDICIAL CENTER'S MANUAL ON SCIENTIFIC EVIDENCE FOR
19 GUIDANCE ON MEASURING WHETHER SEX IS A SIGNIFICANT DETERMINANT
20 OF PAY.
21 AND AT PAGE 124 OF THE MANUAL, IT SAYS, "WHEN
22 PRACTICAL SIGNIFICANCE IS LACKING, WHEN THE SIZE OF THE
23 DISPARITY IS NEGLIGIBLE, THERE IS NO REASON TO WORRY ABOUT
24 STATISTICAL SIGNIFICANCE."
25 SO THEN THE QUESTION BECOMES, WHEN IS PRACTICAL
194
ORAL ARGUMENT BY MS. ABELL
1 SIGNIFICANCE LACKING? WELL, THE MANUAL'S REFERENCE GUIDE ON
2 MULTIPLE REGRESSION ANSWERS THAT, TOO. IT SAYS ON THE NEXT
3 PAGE IN THE BOOK HERE AT 191, IT SAYS, "IF THE AVERAGE WAGE
4 RATE IS $10 PER HOUR, A WAGE DIFFERENTIAL BETWEEN MEN AND WOMEN
5 OF 10 CENTS PER HOUR IS LIKELY TO BE TEEMED PRACTICALLY
6 INSIGNIFICANT BECAUSE THE DIFFERENTIAL REPRESENTS ONLY
7 1 PERCENT OF THE AVERAGE WAGE RATE."
8 SO ACCORDING TO THE MANUAL ENDORSED BY THE NINTH
9 CIRCUIT, WHERE THE NINTH CIRCUIT TELLS US TO GO FOR
10 INSTRUCTION, A WAGE RATE DIFFERENTIAL OF 1 PERCENT IS NOT
11 PRACTICALLY SIGNIFICANT. AND THE MANUAL TELLS US THAT WHERE
12 PRACTICAL SIGNIFICANCE IS LACKING, THERE IS NO REASON TO
13 WORRYING ABOUT STATISTICAL SIGNIFICANCE.
14 SO EVEN AGGREGATED, AND, YOUR HONOR, WE DON'T AGREE
15 THAT THE AGGREGATION SHOULD HAVE OCCURRED, BUT EVEN AGGREGATED,
16 THE ONLY REGRESSIONS MODELED THE WAY PAY DECISIONS ARE MADE
17 SHOWS NO PATTERN OF DISCRIMINATION ADVERSE TO WOMEN.
18 IF WE COULD TURN NOW, YOUR HONOR, TO TAB 84 OF THE
19 SALARY PAY PLANS, I WOULD LIKE TO TOUCH BRIEFLY ON THAT AND
20 WOULD ASK YOUR HONOR TO READ THE DECLARATIONS, IN PARTICULAR OF
21 MR. ARNOLD AND MS. CRAWFORD.
22 EVERY SALARY JOB CLASSIFICATION HAS A DIFFERENT SET
23 OF PAY PLANS. AND WITHIN THE SAME SALARIED JOB CLASSIFICATION,
24 DIFFERENT BUSINESS TYPES; SAM'S VERSUS WAL-MARTS VERSUS
25 NEIGHBORHOOD MARKETS HAS MANY VARIATIONS. THEY ARE DIFFERENT
195
ORAL ARGUMENT BY MS. ABELL
1 BASED UPON STORE SIZE. THEY'RE DIFFERENT BASED UPON LOCATION.
2 SOME ARE DIFFERENT BASED UPON WHETHER THE STORE IS IN A METRO
3 MARKET OR NOT. THEY ARE DIFFERENT BASED UPON WHETHER THE STORE
4 IS AT A POINT IN TIME DESIGNATED A NEW STORE. THEY ARE
5 DIFFERENT DEPENDING ON WHETHER A STORE AT A GIVEN POINT IN TIME
6 IS DESIGNATED AS A PROFIT IMPROVEMENT. SOME OF THE SALARIED
7 CLASSIFICATIONS ARE ELIGIBLE FOR MERIT INCREASES AND/OR COST OF
8 LIVING ADJUSTMENTS, OTHERS ARE NOT.
9 THESE FACTORS, OF COURSE, ALL GO TO MANAGEABILITY,
10 AS MR. GROSSMAN DESCRIBED. BUT THE CLASSES FAIL AT THE
11 THRESHOLD, UNDER RULE 23, BECAUSE THERE IS NO COMMONALITY,
12 THERE IS NO TYPICALITY, AND THERE IS NO ADEQUATE CLASS
13 REPRESENTATIVE FOR THIS MYRIAD OF VARIATIONS ALL OVER THE
14 UNITED STATES.
15 EVERY CLASSIFICATION AND EVERY PERMUTATION OF PAY
16 PLAN WOULD HAVE TO BE TRIED SEPARATELY. AND THE COURT WOULD
17 HAVE TO EXAMINE ALL OF THE EVIDENCE THAT GOES INTO SETTING THE
18 PAY, THE SPECIAL CHALLENGES A GIVEN STORE HAS THAT WOULD HAVE
19 ACCOUNTED FOR A SPECIAL PAY ARRANGEMENT.
20 YOUR HONOR, I WOULD LIKE TO MOVE NOW TO TAB 85.
21 THE COURT: YOU HAVE ABOUT FIVE MINUTES.
22 MS. ABELL: OKAY. THANK YOU, YOUR HONOR.
23 THE COURT: YOU ALREADY -- YOU'LL BE AT TWO AND A
24 HALF HOURS.
25 MS. ABELL: OKAY. THANK YOU.
196
ORAL ARGUMENT BY MS. ABELL
1 THE COURT: I THINK YOU SHOULD TRY TO MAKE AN
2 ASSESSMENT OF WHETHER THESE ARE THINGS THAT I CAN READ IN THE
3 BOOK YOU'VE GIVEN ME, OR IF YOU NEED TO WALK THROUGH THEM LIKE
4 THIS WITH THE FIVE MINUTES YOU HAVE LEFT.
5 MS. ABELL: OKAY.
6 THE COURT: OKAY.
7 MS. ABELL: THANK YOU.
8 DR. BENDICK SAYS, PLAINTIFF'S EXPERT, LABOR
9 ECONOMISTS FAVOR USING ACTUAL APPLICANTS TO DETERMINE WHO IS
10 INTERESTED IN A JOB.
11 THE COURT: ALL RIGHT.
12 MS. ABELL: HE DIDN'T DO THAT APPLICANT FLOW
13 ANALYSIS, BECAUSE HE THOUGHT THAT WAS THE JOB OF DR. DROGIN.
14 DR. DROGIN DID THE ANALYSIS, BUT HE DIDN'T REPORT IT TO THE
15 COURT. CAN THE COURT IGNORE ALL THIS APPLICANT FLOW? WE
16 SUBMIT NOT, YOUR HONOR.
17 AT TAB 87, THE PAGE DECISION LAST YEAR OF THE NINTH
18 CIRCUIT, AND AT TAB 88, THE STOUT DECISION LAST YEAR OF THE
19 NINTH CIRCUIT, SAY OVER AND OVER, THE POOL OF ALL OFFICERS WHO
20 APPLY FOR A PROMOTION CONSTITUTES THE APPROPRIATE COMPARATIVE
21 GROUP. THREE TIMES IN ONE PAGE IT SAYS "THE APPROPRIATE."
22 THE COURT: BUT YOU'RE NOT ARGUING THAT THE NINTH
23 CIRCUIT SAID THAT'S ETCHED IN STONE, RIGHT?
24 MS. ABELL: YOUR HONOR --
25 THE COURT: IS THAT YOUR ARGUMENT?
197
ORAL ARGUMENT BY MS. ABELL
1 MS. ABELL: OUR ARGUMENT IS THAT WHEN YOU HAVE THIS
2 ENORMOUS BANK OF APPLICANT DATA, THAT THE COURT ABSOLUTELY MUST
3 CONSIDER IT, BECAUSE THAT IS FAR MORE RELEVANT TO SHOWING --
4 THE COURT: TO THE EXCLUSION OF ANY OTHER
5 COMPARATIVE; IS THAT YOUR ARGUMENT?
6 MS. ABELL: IN THE CASE, YOUR HONOR, FOR THE JOBS
7 FOR WHICH WE HAVE THIS ENORMOUS POSTING DATA, THAT IS OUR
8 POSITION.
9 WITH RESPECT TO THE ASSISTANT MANAGER TRAINEE,
10 WHERE, IF WE TURN TO TAB 98, WHERE WE HAVE 55,000 PEOPLE NOW
11 HAVING APPLIED, 55,000 BIDS IN 2003, WE SUBMIT THAT THIS
12 SITUATION IS THE SAME AS THE COURT IN U.S. VERSUS COUNTY OF
13 FAIRFAX. THERE, YOU HAD FOUR YEARS OF APPLICANT FLOW DATA THAT
14 WAS DESTROYED IN THE FINAL YEAR IN EXISTENCE. AND THE COURT
15 SAID YOU CAN EXTRAPOLATE FROM THE MOST RECENT YEAR THE
16 INTERESTED APPLICANT FLOW FROM THE PRIOR YEARS. IT IS OUR
17 POSITION, YOUR HONOR, THAT THAT SHOULD OCCUR.
18 WITH RESPECT TO YOUR QUESTION ABOUT THE JOBS THAT
19 WERE POSTED, STORE MANAGER ALL BEING POSTED NOW. DR. DROGIN
20 CONCEDES ABOUT 95 PERCENT -- 96 PERCENT IN THE LAST COUPLE OF
21 YEARS, 91 TO 92 PERCENT A FEW YEARS BACK; OVERALL, AT LEAST 95
22 TO 96 PERCENT POSTED.
23 CO-MANAGER; ABOUT 8 PERCENT POSTED, ALL BEING POSTED
24 KNOW. AND, YOUR HONOR, WE DO BELIEVE THAT IS A REPRESENTATIVE
25 SAMPLE. THERE HAS BEEN NO EVIDENCE THAT SUGGESTS THAT THAT IS
198
ORAL ARGUMENT BY MS. ABELL
1 NOT REPRESENTATIVE OF THE PEOPLE WHO ARE ACTUALLY INTERESTED IN
2 ADVANCEMENT.
3 SUPPORT MANAGER; YOU'VE GOT --
4 THE COURT: IT'S NOT A CREDIBLE ARGUMENT TO ME. SO
5 I'VE HEARD IT, AND THAT IS NOT A CREDIBLE ARGUMENT TO ME.
6 MS. ABELL: BUT, YOUR HONOR --
7 THE COURT: AND IT DOESN'T READ CONSISTENTLY ON THE
8 PAGE CASE, THE NINTH CIRCUIT CASE, EITHER.
9 MS. ABELL: BUT YOUR HONOR, HERE WE BELIEVE THAT WE
10 HAVE NO EVIDENCE SHOWING THAT THIS IS NOT THE POOL THAT IS
11 MOVING UP.
12 THE COURT: WELL, I'VE TOLD YOU WHAT MY POSITION IS
13 ON THAT WITH RESPECT TO THOSE CLASSIFICATIONS.
14 MS. ABELL: WITH RESPECT TO CO-MANAGER?
15 THE COURT: I DON'T READ PAGE THE WAY THAT YOU DID
16 IN THE FIRST INSTANCE. I DON'T READ IT AS NARROWLY AS YOU DO.
17 I READ THE NINTH CIRCUIT SAYING THAT YOU CAN GO TO
18 AN EXTERNAL POOL IF THERE IS A CHARACTERISTIC OF THE CHALLENGED
19 SELECTED DEVICE THAT MAKES THE ACTUAL POOL INAPPROPRIATE; THAT
20 IS THE STANDARD. SO THAT WOULD BE THE QUESTION HERE.
21 MS. ABELL: OKAY.
22 AND, YOUR HONOR, GIVEN THE VAST AMOUNT OF POSTING
23 NOW WITH ASSISTANT MANAGER TRAINEE, NO REQUIREMENT TO GET
24 ANYBODY'S PERMISSION, NO RELOCATION REQUIREMENT, THE ENTIRE
25 NATION GIVEN THE OPPORTUNITY AT ONCE, WE BELIEVE THAT THAT IS
199
ORAL ARGUMENT BY MS. ABELL
1 REASONABLE.
2 THE COURT: YOU BETTER SUM UP.
3 MS. ABELL: OKAY. THANK YOU.
4 SUPPORT MANAGER, ABOUT 20 PERCENT POSTED.
5 WITH RESPECT TO CO-MANAGERS AT SAM'S, DR. DROGIN
6 ACKNOWLEDGES THAT THERE IS NO STATISTICALLY SIGNIFICANT
7 DIFFERENTIAL, SO THAT JOB AT SAM'S IS NOT AT ISSUE IN THE CASE.
8 WITH RESPECT TO SUPPORT MANAGER WITH THE 40,000
9 BIDS, AGAIN, WOMEN SELECTED AT A MUCH HIGHER RATE THAN THE RATE
10 AT WHICH THEY HAVE BID THROUGHOUT EACH OF THE YEARS. AND IN
11 EVERY CASE, YEAR BY YEAR, WOMEN ARE SELECTED AT A HIGHER RATE
12 IN ALL OF THESE JOBS THAN THAT RATE AT WHICH THEY BID.
13 SO, YOUR HONOR, WE SUBMIT THAT THERE IS NO
14 COMMONALITY ACROSS ALL ORGANIZATIONS. HERE, FOR THE CO-MANAGER
15 AND FOR THE, PARTICULARLY, THE ASSISTANT MANAGER TRAINEE, THOSE
16 DECISIONS WOULD BE MADE ON A DISTRICT-BY-DISTRICT BASIS. AND
17 WE BELIEVE THAT IF YOU'RE GOING TO BELIEVE THAT YOU DON'T LOOK
18 AT POSTING DATA, THEN YOU WILL HAVE TO LOOK AT THE RATIONALE
19 GIVEN BY EACH OF THE 434 DISTRICT MANAGERS AS TO HOW THEY DID
20 IT AND THE REASONS THAT THEY COME UP WITH AND WHAT WOMEN WERE
21 OR WERE NOT INTERESTED IN THE JOBS AT THAT TIME.
22 FINALLY, YOUR HONOR, I WOULD LIKE TO MENTION THAT
23 THERE ARE, IN FACT, PRIOR TO 2003, AND APPENDED TO THE VARIOUS
24 DESIGNATED CLASS MEMBER DECLARATIONS, MANY WRITTEN EXPRESSIONS
25 OF INTEREST. WAL-MART DID GIVE PEOPLE AN OPPORTUNITY TO
200
ORAL ARGUMENT BY MS. ABELL
1 INDICATE ANNUALLY, IN CONJUNCTION WITH THE PERFORMANCE REVIEW,
2 AND YOU SEE CASE AFTER CASE WHERE THIS WAS TAKEN UP WHERE
3 PEOPLE WOULD LIST WHAT JOB THEY WISHED TO BE CONSIDERED FOR IN
4 THE ENSUING YEAR. SO WE ARE NOT WITHOUT A RECORD. THESE WILL
5 BE PAPER RECORDS DONE STORE BY STORE.
6 THANK YOU VERY MUCH, YOUR HONOR.
7 MAY MR. GROSSMAN HAVE A MOMENT JUST TO CONCLUDE?
8 THE COURT: NO, NO; THAT'S YOUR TIME.
9 MS. ABELL: THANK YOU, YOUR HONOR.
10 THE COURT: OKAY.
11 REBUTTAL.
12 AND LET ME SUGGEST TO YOU THERE ARE A COUPLE OF
13 THINGS I WOULD LIKE YOU TO ADDRESS, MR. SELIGMAN --
14 MR. SELIGMAN: YES, YOUR HONOR.
15 THE COURT: -- THAT CAME OUT IN THIS MORNING'S
16 ARGUMENT, AND MOST OF THEM RELATE TO MANAGEABILITY ISSUES.
17 MR. SELIGMAN: YES.
18 THE COURT: OKAY.
19 ONE IS THAT I THOUGHT I HEARD MR. SELLERS SAY THAT
20 IN THE CONTEXT OF THE PROMOTIONS CLAIM, WHERE THE COURT WOULD
21 CERTIFY THE CLASS AND RESORT TO A FORMULA METHODOLOGY FOR
22 ASCERTAINING THE MONETARY LIMIT HERE, THAT THE COURT COULD
23 DISPENSE WITH FACTORING IN INTEREST LEVEL.
24 THE ARGUMENT WAS PREMISED ON THE FACT, AND, IN FACT,
25 IT DISTINGUISHED THE DOMINGO CASE, SAYING THERE THAT THERE WAS
201
ORAL ARGUMENT BY MS. ABELL
1 AN APPLICATION PROCESS, ALTHOUGH IT WAS NOT ONE THAT HAD A
2 CLEAR DEFINITION OR CONSTRUCT TO IT.
3 NOW, IT STRIKES ME -- ONE, I WANT TO KNOW IF THAT IS
4 YOUR POSITION, THAT THE COURT DOESN'T HAVE TO FACTOR FOR
5 INTEREST LEVEL IN TRYING TO ASCERTAIN WHAT WOULD BE THE
6 APPROPRIATE FACTORIZATION OF THE FORMULA.
7 TWO, I DON'T THINK I -- I PULLED THE DISTRICT
8 COURT'S OPINION IN DOMINGO, AND I DID NOT SEE ANY REFERENCE
9 THERE TO A -- ANY SORT OF APPLICATION PROCESS. WHAT I DID SEE
10 WAS THE COURT REFERENCED THAT THERE WAS RECRUITMENT, BUT THAT
11 IT WAS INFORMAL. AND SO I DON'T KNOW IF THAT'S WHAT HE WAS
12 REFERRING TO.
13 TWO, THE COURT REFERENCED THAT THERE WAS NO
14 INDICATION OF JOB OPENINGS OR POSTINGS FOR VACANCIES, THE KINDS
15 OF THINGS THAT YOU ARE ALLEGING IN THIS RECORD. SO IT STRIKES
16 ME THAT DOMINGO PROBABLY IS AN APPROPRIATE ANALOG FOR THE
17 RESOLUTION OF THIS INTEREST QUESTION. SO THAT IS ONE; I WOULD
18 LIKE TO KNOW IF THAT IS YOUR POSITION.
19 REALLY, IS THIS CASE SO UNIQUE IN TERMS OF THE
20 INABILITY TO BUILD IN OR FACTORIZE THE QUESTION OF INTEREST
21 THAT THE COURT SHOULD JUST DISPENSE WITH THAT IN THE CONTEXT OF
22 A FORMULA?
23 THEN, IF THAT IS TRUE, THAT THE COURT SHOULD
24 DISPENSE WITH THE ISSUE OF INTEREST LEVEL IN TRYING TO
25 ASCERTAIN POTENTIAL VICTIMS AND THE DISTINCTION BETWEEN THOSE
202
1 WHO HAVE ACTUALLY BEEN ABLE TO OBTAIN A JOB, BUT FOR
2 DISCRIMINATION, HOW IS IT THAT YOU CALCULATE IN YOUR MODEL FOR
3 THAT ISSUE THE NUMBER OF WOMEN THAT WOULD HAVE GOTTEN JOBS, BUT
4 FOR ACTIONABLE DISCRIMINATION. SO THAT IS THE SECOND QUESTION.
5 AND THEN THE THIRD IS A DISTRIBUTION ISSUE. ONCE
6 THERE IS AN AGGREGATION AND A DEVELOPMENT OF A LUMP SUM, I
7 THINK THE ARGUMENT THAT WAS MADE WAS THAT THAT WOULD BE
8 DISTRIBUTED PRO RATA, OR IN SOME OTHER UNIFORMED BASIS, EVEN TO
9 THOSE WHO ARE -- MIGHT NOT HAVE BEEN THE SUBJECT OF ACTIONABLE
10 DISCRIMINATION. AND I JUST WANT TO MAKE SURE THAT I -- IF THAT
11 IS YOUR POSITION WITH RESPECT TO THE DISTRIBUTION ASPECTS.
12 THEN JUST AS SORT OF A VARIANT OF SOME OF THESE SAME
13 INQUIRIES, I KNOW THAT WAS SOME ARGUMENT THIS MORNING ABOUT
14 FEEDER POOLS AND THE ANALYSIS THAT WAS DONE WITH RESPECT TO
15 THAT AND UTILIZING THAT AS A POSSIBLE PROXY IN SOME OF THIS
16 ANALYSIS, AND I WOULD LIKE TO -- YOU TO WORK THROUGH THAT STEP
17 BY STEP.
18 I MEAN, WE HAVE CASHIERS WHO MOVE RIGHT UP THE LINE.
19 AND CERTAINLY, THOSE ARE HEAVILY WEIGHTED IN TERMS OF WHO
20 OCCUPIES THOSE POSITIONS, AND AS ONE, WHETHER IT'S
21 STATISTICALLY SIGNIFICANT OR NOT, AND WHETHER OR NOT THE
22 CORRECT METHODOLOGY FOR AGGREGATION OR DISAGGREGATION IS
23 UTILIZED, THERE IS THIS INDICATION THAT AS YOU GO UP, THERE ARE
24 LESS AND LESS WOMEN WHO ARE EMPLOYED AT HIGHER-LEVEL MANAGEMENT
25 POSITIONS.
203
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 SO I'M INTERESTED IN WHAT THE EXTRAPOLATION WOULD
2 LOOK LIKE AS YOU GO UP, AND HOW, THEN, THAT WOULD READ ON THE
3 DEVELOPMENT OF A FORMULA, WHETHER IT'S A PROXY FOR INTEREST OR
4 NOT. I WOULD LIKE TO HAVE SOME SENSE OF HOW YOU WOULD WORK
5 THROUGH THAT ISSUE.
6 THOSE ARE THE QUESTIONS I WOULD LIKE YOU TO ANSWER.
7 IF YOU DON'T, I'LL COME BACK TO THEM. AND THEN I THINK IT
8 WOULD BE ONLY FAIR TO ALLOW THE DEFENSE TO BE HEARD ON THOSE
9 ISSUES, TRUE REBUTTAL, SHOULD THEY CHOOSE TO, AND THEN WE'LL
10 CLOSE IT UP.
11 MR. SELIGMAN: OKAY, YOUR HONOR.
12 REBUTTAL ARGUMENT BY MR. SELIGMAN
13 LET ME FIRST TURN TO YOUR QUESTIONS.
14 I MUST CONFESS, THOSE QUESTIONS RAISE ONE OF THE
15 REASONS WHY IT'S DIFFICULT AT CLASS CERT TO ADDRESS THINGS THAT
16 ARE SO INFUSED ON THE MERITS. I THINK THERE IS AN IMPORTANT
17 DISTINCTION BETWEEN THE DETERMINATION OF AGGREGATE DAMAGES AND
18 DISTRIBUTIONS.
19 AT THE FIRST STAGE, THE DETERMINATION OF AGGREGATE
20 DAMAGES, WE WILL HAVE A SPIRITED DEBATE IF WE GO TO TRIAL. THE
21 DEFENDANTS WILL ARGUE, AS THEY DID NOW, TO THE JURY, OR TO THE
22 COURT IN THE ADVERSE IMPACT, THAT THE DETERMINATION OF THE
23 APPROPRIATE POOL MUST REFLECT INTEREST.
24 THE COURT: RIGHT.
25 MR. SELIGMAN: AND THEY WILL BE PERMITTED TO MAKE
204
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 THOSE ARGUMENTS AT STAGE ONE. THEY CAN PUT ON THAT EVIDENCE,
2 HOWEVER THEY DEEM IT APPROPRIATE, IF IT'S ADMISSIBLE EVIDENCE.
3 AND THE JURY OR THE JUDGE IS GOING TO MAKE A DETERMINATION,
4 ULTIMATELY, OF WHOSE STORY IS BELIEVABLE.
5 IF OUR VIEW IS BELIEVED, INTEREST DOES NOT
6 SIGNIFICANTLY DEPRESS THAT AGGREGATE FIGURE, BECAUSE IT WASN'T
7 THAT KIND OF A SYSTEM. IF WAL-MART'S THEORY OF THE CASE IS
8 BELIEVED, WELL, WE'LL CLOSE UP SHOP. THE CASE IS OVER.
9 AT STAGE ONE, BOTH SIDES WILL HAVE PLENTY OF
10 OPPORTUNITY TO MAKE THOSE ARGUMENTS FOR DETERMINING THE
11 AGGREGATE DAMAGES. AND THE FINDER OF FACT WILL MAKE A
12 DETERMINATION.
13 SO WE DON'T CONTEND THAT WAL-MART IS FORECLOSED FROM
14 MAKING THE ARGUMENTS THEY MADE TODAY. THEY CAN GO IN AND TALK
15 ABOUT APPLICANT FLOW, IF THEY WANT TO, SHOWING A GREATER OR
16 DIFFERENT INTEREST IN WOMEN. THEY CAN GO IN AND MAKE THEIR
17 ARGUMENTS. THEY WILL BE FULLY ALLOWED TO MAKE THOSE ARGUMENTS.
18 AND THEY WILL BE EITHER BELIEVED OR NOT.
19 IF THEY ARE NOT BELIEVED, WE ARE IN A CONTEXT WHERE
20 A FINDER OF FACT HAS DETERMINED LIABILITY AND CAN SELL AN
21 AGGREGATE FIGURE THAT IS THERE, WHICH BRINGS US TO THE NEXT
22 PIECE, WHICH IS DISTRIBUTION. THAT IS A COMPLETELY DIFFERENT
23 ANALYSIS, I THINK, THAN THE AGGREGATE.
24 THE DISTRIBUTION QUESTION IS, HAVING FOUND
25 LIABILITY, HAVING FOUND A FIGURE WHICH INCORPORATES THE
205
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 ARGUMENTS OF BOTH SIDES ABOUT INTEREST OR LACK OF INTEREST, WHO
2 GETS THE MONEY? AND THERE THE CASES, I THINK, ARE QUITE CLEAR.
3 THE COURT IS PERFORMING AN EQUITABLE FUNCTION.
4 YOU'RE TRYING TO DO ROUGH JUSTICE. IT'S NOT GOING TO BE
5 PERFECT. IT CAN'T BECAUSE THIS VERY SYSTEM WE'RE CHALLENGING,
6 IF OUR VIEW OF THE CASE IS BOUGHT, THIS VERY SYSTEM WILL MAKE
7 IT IMPOSSIBLE TO FIND EVERYONE WHO IS INJURED. SO WE TRY TO DO
8 THE BEST WE CAN AND COME UP WITH A SYSTEM THAT IS AS FAIR AS
9 POSSIBLE.
10 WILL SOME PEOPLE GET MORE MONEY THAN THEY SHOULD?
11 PROBABLY. WILL SOME PEOPLE GET LESS? PROBABLY?
12 THE COURT: AND THERE WILL BE PEOPLE WHO, FOR
13 INSTANCE, IN THE PROMOTION CONTEXT, WOULDN'T HAVE EVEN APPLIED
14 FOR THE JOB.
15 MR. SELIGMAN: WELL, THAT -- I THINK THAT IS A VERY
16 IMPORTANT POINT, THOUGH, BECAUSE I AGREE THAT ANY MODEL HAS TO
17 TAKE INTO ACCOUNT NONDISCRIMINATORY QUALIFICATIONS. BUT AT
18 WAL-MART, AND THIS IS WHERE I THINK THERE IS A DISTINCTION AT
19 DOMINGO, THERE WAS NEVER A QUALIFICATION THAT SAID, "YOU HAVE
20 TO SEEK THIS JOB AND EXPRESS INTEREST."
21 AT WAL-MART WE KNOW THAT THE PROCESS NEVER REQUIRED
22 MEN OR WOMEN -- I'M NOT TALKING ABOUT APPLY. THEY DON'T EVEN
23 HAVE TO EXPRESS AN INTEREST. THE DISTRICT MANAGER WOULD REACH
24 DOWN AND SAY, "YOU'RE IT." SO IT'S A DIFFERENT SYSTEM.
25 NOW, DOMINGO, THERE IS MANY DECISIONS IN DOMINGO.
206
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 AND IT'S A VERY -- THE NINTH CIRCUIT OPINION IS NOT EXACTLY THE
2 MOST ELABORATELY WROUGHT OUT THING, BUT THE COURT DOES REFER TO
3 A CASUAL APPLICATION PROCESS AT 727 FEP AT PAGE 1445, I
4 BELIEVE. IT SAID APPLICATION PROCEDURES WERE INFORMAL. BUT
5 THERE WERE APPLICATION PROCEDURES. NOBODY GOT A JOB WHO DIDN'T
6 WANT A JOB. I DON'T THINK -- THERE WAS THAT KIND OF A
7 DISTINCTION THAT WAS THERE. I THINK THAT IS A FUNDAMENTAL
8 DIFFERENCE THAT WE HAVE HERE. THERE WAS NO APPLICATION
9 PROCESS.
10 THERE IS A SECOND DECISION, OF COURSE; THERE IS NO
11 EVIDENCE IN DOMINGO THAT THIS WAS A COMPANY-WIDE DETERRENCE.
12 THE ARGUMENT WAS THAT THERE WAS INTENTIONAL DISCRIMINATION, BUT
13 THERE WAS NO EVIDENCE THEY WERE SUPPRESSING OR STOPPING PEOPLE
14 FROM EVEN EXPRESSING AN INTEREST IN THE FIRST PLACE.
15 LET ME TURN TO THE FEEDER POOL QUESTION, BECAUSE I
16 THINK THAT IS A DIFFICULT QUESTION TO ANSWER IN THE ABSTRACT.
17 BUT LET ME GIVE YOU AN EXAMPLE THE WAY THESE MODELS WORK.
18 ULTIMATELY, WHAT A STATISTICAL MODEL DOES IS, IT
19 TAKES AN ACTUAL CLASS MEMBER AND LOOKS AT HER ACTUAL JOB
20 HISTORY AND EARNINGS AND COMPARES THAT EARNINGS HISTORY WITH
21 THOSE OF SIMILARLY-SITUATED MEN. AND WE'LL HAVE THE ARGUMENT,
22 "WHAT MAKES SOMEONE SIMILARLY SITUATED?" WE THINK THE STORE
23 YOU'RE IN, THE SENIORITY LEVEL YOU HAVE, THE JOB YOU'RE IN,
24 ETCETERA. AND WE'LL HAVE A BIG ARGUMENT AT TRIAL, SHOULD
25 DEPARTMENT BE IN THAT DETERMINATION OR NOT?
207
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 ONCE YOU DETERMINE WHAT THOSE SIMILAR SITUATIONS
2 ARE, YOU LOOK AT, AND I'M NOW TALKING ABOUT THE EQUAL PAY
3 PLANS, THE EARNINGS FLOWS, AND WHAT IS THE DIFFERENCE THAT
4 OCCURS BETWEEN THE TWO OF THEM?
5 FOR PROMOTION IT'S A SOMEWHAT SIMILAR ANALYSIS.
6 LET'S SAY YOU HAVE A WOMAN WHO WAS IN THE JOBS THAT WERE THE
7 FEEDER POOLS FOR MANAGEMENT TRAINING; WE KNOW WHERE MOST OF
8 THOSE MANAGEMENT TRAINING POSITIONS CAME FROM. MOST OF THEM
9 CAME FROM DEPARTMENT HEADS, SUPPORT MANAGERS AND SALES WORKERS.
10 AND THAT IS WHERE THEY CAME FROM. SHE WAS IN THE FEEDER POOL.
11 YOU LOOK AT MEN WITH COMPARATIVE ATTRIBUTES, SIMILAR
12 SENIORITY, ETCETERA, WHO GOT INTO MANAGEMENT, AND THEN COMPARE
13 THE DIFFERENCE IN EARNINGS BETWEEN THE TWO OF THEM. THE
14 ULTIMATE DISTINCTION HERE IS WE ARE TRYING TO COMPARE THE
15 ACTUAL EARNINGS OF THAT WOMAN TO THOSE OF PEOPLE WHO ARE
16 SIMILARLY SITUATED.
17 NOW, THAT IS SIMPLY STATED, AND THERE IS A LOT OF
18 COMPLEX STATISTICAL RIGMAROLE ABOUT IT. BUT FORTUNATELY, TODAY
19 YOU CAN DO THAT KIND OF COMPLEX ANALYSIS, SOMETHING YOU
20 COULDN'T DO IN SHIPES. AND, YES, MAYBE IT DID TAKE EIGHT
21 YEARS, I DON'T KNOW. BUT IN SHIPES YOU HAD TO DO IT BY HAND.
22 NOW YOU DON'T HAVE TO.
23 LET ME TURN TO JUST THE LAST THINGS THAT THE
24 DEFENDANT WAS ARGUING ABOUT, STATISTICS, JUST BRIEFLY, BECAUSE
25 I'M VERY AWARE OF TIME HERE.
208
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 FIRST OF ALL, THEY MAKE THEIR STATISTICAL CASE. THE
2 FIRST POINT THEY MAKE WAS DR. HAWORTH LOOKED AT FIVE OF THE
3 NAMED PLAINTIFFS, AND THOSE PLAINTIFFS EARNED MORE THAN THE
4 AVERAGE. WELL, DR. HAWORTH APPLIED HER FORMULA WITH 21
5 VARIABLES, INCLUDING DEPARTMENT. IT'S VERY IMPORTANT TO RUN
6 THROUGH WHAT "DEPARTMENT" MEANS IN THAT FORMULA, WHETHER YOU'RE
7 DEALING WITH WHOLE STORES OR SMALL STORES.
8 WHENEVER YOU HAVE A REGRESSION MODEL VARIABLE, THAT
9 VARIABLE SAYS, "WE'RE GOING TO COMPARE PEOPLE WITH THE SAME
10 VARIABLE." IT CREATES SMALLER AND SMALLER SALES. I GAVE THE
11 EXAMPLE EARLIER ABOUT JEWELRY.
12 SO IN THAT MODEL THAT DR. HAWORTH APPLIED TO THOSE
13 NAMED PLAINTIFFS, DIDN'T COMPARE THAT NAMED PLAINTIFF'S
14 EARNINGS TO THOSE OF ALL MEN AND WOMEN IN THE STORE. THEY
15 COMPARED THOSE PLAINTIFFS TO PEOPLE IN THE SAME DEPARTMENT,
16 WITH THE SAME SENIORITY, WITH ALL 21 OTHER VARIABLES. IT IS AN
17 ARTIFACT OF WHAT, EXACTLY, THEY'RE DOING HERE. THAT BRINGS ME
18 TO WHAT IS THE LAW AT TRIAL, NOT NOW, ABOUT REGRESSIONS?
19 DEFENDANTS CITES BECK; ACTUALLY, SINCE BECK, THE
20 SUPREME COURT HAS MODIFIED -- THE NINTH CIRCUIT HAS MODIFIED IT
21 IN HEMMINGS VERSUS TIDYMAN'S AND POINTED OUT THAT MULTIPLE
22 REGRESSION IS THE STANDARD, AS EXPLAINED BY THE SUPREME COURT
23 IN BAZEMORE. THE PLAINTIFFS NEED NOT HAVE A PERFECT SYSTEM OR
24 ACCOUNT FOR EVERYTHING. IT'S REASONABLE VARIABLES.
25 AND A DEFENDANT AT TRIAL, NOT A CLASS CERTIFICATION,
209
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 HAS TO DO MORE THAN SAY THERE IS A HYPOTHETICAL MISTAKE HERE,
2 THEY HAVE TO SHOW IT WOULD HAVE MADE A DIFFERENCE. THAT IS A
3 TRIAL DETERMINATION, YOUR HONOR.
4 A LOT OF ARGUMENT WE'VE HEARD FROM THE DEFENDANT
5 ABOUT WHAT IS WRONG WITH OUR MODEL WERE HYPOTHETICALS. SHE
6 DIDN'T SHOW, FOR EXAMPLE, USING PAY GRADE OR LEVEL WOULD HAVE
7 MADE ANY DIFFERENCE TO THE ANALYSIS. SHE JUST ASSERTED WE
8 SHOULD HAVE PUT IT IN THERE. I HAVE PLENTY OF ARGUMENTS, I'M
9 NOT GOING TO DO IT AT THIS HOUR OF THE DAY.
10 ONE LAST COMMENT ABOUT DEPARTMENTS, BECAUSE I THINK
11 IT'S VERY IMPORTANT.
12 DR. DROGIN DIDN'T USE DEPARTMENTS FOR BASICALLY
13 THREE REASONS. THE FIRST REASON IS NOWHERE IN DEFENDANT'S
14 WRITTEN POLICIES IS DEPARTMENT INDICATED AS A PAY FACTOR. AND
15 THAT IS ALSO TRUE IF YOU LOOK AT ALL THE DEFENDANT'S STORE
16 MANAGER DECLARATIONS. IT'S NOT A FACTOR.
17 NUMBER TWO, AS WE KNOW FROM DR. HAWORTH, PEOPLE
18 DON'T STAY IN THE SAME DEPARTMENT. THEY MOVE. IN FACT,
19 DR. HAWORTH, IN HER DECLARATION AT PAGE 48, IF YOU'RE LOOKING
20 AT DEPARTMENT HEAD JOBS, IT SAYS, "WE KNOW THAT 80 PERCENT OF
21 ALL JOBS POSTINGS APPLICATIONS ARE FOR JOBS OUTSIDE THE
22 APPLICANT'S CURRENT DEPARTMENT." THIS IS PAGE 48 OF
23 DR. HAWORTH'S DECLARATION. PEOPLE DON'T STAY THERE. USING
24 THAT VARIABLE AND ONLY COMPARING PEOPLE TO THE SAME DEPARTMENT
25 IGNORES WHAT GOES ON AT WAL-MART.
210
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 DEPARTMENT, WE HAVE PRESENTED EVIDENCE, COULD BE
2 ATTAINED AT VARIABLE MEANING, IT COULD SKEW THE RESULTS. NOW,
3 THE DEFENDANT ASSERTS THAT, WELL, DEPARTMENT IS NOT SKEWED.
4 BUT DR. DROGIN, IN HIS REBUTTAL REPORT WITH A REPLY DECLARATION
5 POINTED OUT, IF YOU TAKE THE DEPARTMENTS THAT ARE PREDOMINANTLY
6 MALE AND THE DEPARTMENTS THAT ARE PREDOMINANTLY FEMALE, AND YOU
7 USE DR. HAWORTH'S APPLICATION RATES, IT SHOWS THAT WOMEN ARE
8 OVERASSIGNED TO WOMEN'S DEPARTMENTS AND UNDERASSIGNED TO MEN'S
9 DEPARTMENTS. THAT SUGGESTS THESE DEPARTMENTS MAY NOT BE QUITE
10 AS SIMPLE AS THE DEFENDANT HAS SUGGESTED.
11 THERE WERE A NUMBER OF TECHNICAL DISCUSSIONS THAT
12 WERE MADE BY THE DEFENDANT, AND FRANKLY, SOME TESTIMONY ABOUT
13 WHAT THE GENERAL FREE MARKET DOES IN DIFFERENT INDUSTRIES. I
14 DON'T WANT TO GO THERE, EXCEPT THERE IS NO EVIDENCE IN THIS
15 CASE THAT GROCERY HAS A DIFFERENT PAY RATE, AND THAT IS THE
16 IMPORTANT CONSIDERATION THAT WE HAVE TO LOOK AT.
17 THERE WAS DISCUSSION ABOUT THE MANAGEMENT TRAINEE
18 APPLICANT FLOW, THIS VERY RECENT VINTAGE OF MANAGEMENT TRAINEE
19 APPLICANT FLOW, AND I'VE ALREADY MADE THE COMMENT THAT IT'S THE
20 END OF DISCOVERY.
21 I WOULD JUST ASK THE JUDGE TO LOOK AT ONE THING,
22 WHICH IS THAT APPLICANT FLOW IS ONLY AS GOOD AS THE POSTINGS.
23 IT IS AN ABSOLUTELY UNIQUE POSTING THEY HAVE OUT THERE. THE
24 POSTING, WHICH IS IN DEFENDANT'S -- IN OUR EXHIBIT 134, UNLIKE
25 ANY OTHER POSTING I'VE EVER SEEN, IT SAYS, "HERE IS THE
211
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 MANAGEMENT TRAINING JOB, AND IT'S TERRIBLE." IT SAYS, "THE
2 MANAGEMENT TRAINEES WORK 48 HOURS A WEEK." "THEY HAVE A VARIED
3 SCHEDULE TO INCLUDE ALL SHIFTS." "SCHEDULED DAYS OFF ARE
4 TYPICALLY NOT CONSECUTIVE." THEY GO TO ASSISTANT MANAGERS, ALL
5 THESE BAD THINGS ABOUT THIS JOB. THERE IS NOTHING GOOD ABOUT
6 THIS JOB.
7 NOW, WHY WOULD THEY SAY THAT? YOU HAVE TO COMPARE
8 THAT TO THEIR INTERROGATORY ANSWERS. EXHIBIT 135, DEFENDANT'S
9 SECOND SUPPLEMENTARY ANSWER TO PLAINTIFF'S FIRST SET OF
10 INTERROGATORIES. INTERROGATORY NUMBER 14, WE ASKED THEM, "WHAT
11 FACTORS DO YOU BELIEVE DISCOURAGE WOMEN FROM GOING INTO
12 MANAGEMENT?" THEY GAVE A LIST; DAILY SCHEDULE, DAYS OF WORK,
13 IRREGULAR SCHEDULING, LONGER HOURS. YOU COULDN'T HAVE DESIGNED
14 A JOB POSTING THAT MORE CAREFULLY TRACKS WHAT THEY BELIEVE WILL
15 DISCOURAGE WOMAN THAN THIS. SO I DON'T BELIEVE THAT THERE IS
16 ANY EVIDENCE THAT WHAT THEY HAVE IS, IN FACT, A NEUTRAL POLICY.
17 BUT THAT IS TRIAL DEBATE THAT WE'RE GOING TO HAVE DOWN THE
18 LINE.
19 WHAT I REALLY WANT TO TURN TO IS DEFENDANT'S
20 ARGUMENT HERE, BECAUSE I THINK DEFENDANT'S ULTIMATE ARGUMENT IN
21 THIS CASE IS ONE THAT ESSENTIALLY REFUTES THE WHOLE CONCEPT OF
22 A PATTERN AND PRACTICE CASE.
23 THE IDEA THAT 4,000 STORE MANAGERS HAVE TO COME IN
24 HERE AND TESTIFY IS, FRANKLY, FANCIFUL. THE TEAMSTERS VERSUS
25 UNITED STATES CASE THAT DESIGNED THE PATTERN AND PRACTICE CASE
212
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 WAS A NATIONWIDE, MULTI-FACILITY CASE. THERE IS NOTHING IN
2 THAT CASE THAT SUGGESTS THAT A TRIAL COURT HAS TO SIT HERE AND
3 LISTEN TO EVERY STORE MANAGER. BUT THE COURT SAID THAT IS WHAT
4 WE HAVE STATISTICS FOR. THEY CAN GET UP AND PUT ANECDOTAL
5 WITNESSES AND EXPLAIN THAT THE STATISTICS HAVE THE WRONG
6 VARIABLES IN IT. THEY HAVE EVERY ONE OF THOSE RIGHTS.
7 WHAT THEY DON'T HAVE THE RIGHT TO DO IS MAKE THIS
8 SYSTEM MEANINGLESS. NOW, THE DEFENDANTS CITED LOTS OF CASES,
9 THERE IS A WHOLE BUNCH OF CASES THEY CITED, SOME OF WHICH, YOUR
10 HONOR, ARE NOT IN THEIR BRIEFS, AND WE'VE NEVER RESPONDED TO.
11 BUT I DO WANT TO MAKE THE POINT HERE THAT NONE OF THE CASES
12 THEY'VE CITED, WITH THE EXCEPTION OF THE MICROSOFT CASE, ARE
13 EVEN IN THE NINTH CIRCUIT. MOST OF THEM ARE OTHER CIRCUITS.
14 MOST OF THOSE CASES ARE FACTUALLY DISTINGUISHABLE,
15 WHERE HIGHLY DECENTRALIZED, EMOTIONAL DISTRESS DAMAGES ARE
16 SOUGHT. THERE ARE SEPARATE UNIONS AND BARGAINING UNITS, LOTS
17 OF DIFFERENT JOBS. AND UNLIKE THIS CASE, WHERE THERE IS NO
18 EVIDENCE THAT DIFFERENT JOBS HAVE DIFFERENT REQUIREMENTS, NO
19 EVIDENCE AT ALL, OTHER THAN ASSERTIONS TODAY, THERE ARE JOBS IN
20 THOSE CASES THAT ARE TECHNICAL JOBS, PROFESSIONAL JOBS, AND THE
21 LIKE; THOSE CASES, ALSO, IN MANY CASES IGNORE PREVAILING CASE
22 LAW THAT SAYS YOU CAN CHALLENGE SUBJECTIVE CRITERIA UNDER THE
23 ADVERSE IMPACT THEORY.
24 THE DEFENDANT'S THEORY ULTIMATELY BOILS DOWN TO THE
25 CLAIM THAT WAL-MART -- YOU HEARD IT -- IS NOT WAL-MART. IT'S
213
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 HOME DEPOT, AND IT'S ALL THESE OTHER COMPANIES. IT'S 3,600
2 SEPARATE COMPANIES. THAT IS A CLAIM THAT THE EVIDENTIARY
3 RECORD HAS TO LOOK AT. YOU HAVE TO LOOK AT WHAT ACTUALLY IS
4 HERE.
5 I DIDN'T HEAR A SINGLE WORD HERE, YOUR HONOR, THAT
6 REFUTES THE CASE THAT WE'VE MADE SHOWING A RIGIDLY-MONITORED
7 TOP-DOWN COMPANY WITH COMMON TRAINING, STORE MANAGERS MOVING
8 BETWEEN THE DIFFERENT STORES, COMMON CULTURE. AND MOST
9 IMPORTANTLY OF ALL, WE ARE NOT CLAIMING, AS SOME OF THOSE CASES
10 DID, THAT WE HAVE AUTONOMOUS DECENTRALIZED MANAGERS THAT ARE
11 OFF ON A LARK AND A FANCY.
12 WHAT WE ARE CLAIMING IS THERE IS A CENTRALIZED
13 PRACTICE HERE. THE CENTRALIZED PRACTICE IS WAL-MART'S SENIOR
14 MANAGEMENT'S DECISION TO GIVE AN AREA OF SUBJECTIVE DISCRETION
15 TO LOWER MANAGERS, DESPITE ITS KNOWN CONSEQUENCES, DESPITE THE
16 FACT THAT THEY ARE MONITORING ON A DAILY BASIS, AND DESPITE THE
17 FACT THAT THEY RATIFY THOSE CONSEQUENCES.
18 WAL-MART WOULD LIKE THOSE 4,000 MANAGERS TO COME IN
19 HERE TODAY, THEY DON'T NEED TO, BECAUSE WAL-MART SENIOR
20 MANAGEMENT HAS ALREADY APPROVED WHAT THEY DID. AND THE ISSUE
21 IS, WAL-MART SENIOR MANAGEMENT, IN APPROVING THAT CONDUCT, IN
22 SETTING UP THAT SUBJECTIVE CRITERIA POLICY, THAT IS WHAT THE
23 PATTERN AND PRACTICE TRIAL IS GOING TO BE ABOUT. IT'S NOT
24 GOING TO BE ABOUT WHETHER ONE MANAGER SOMEWHERE CAN ASSERT OR
25 CLAIM SOMETHING HE DID OR DIDN'T DO.
214
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 NOW, THE DEFENDANTS HAVE ASSERTED THAT STORE
2 MANAGERS HAVE LOTS OF FACTORS THAT THEY FOLLOW, AND I THOUGHT
3 IT WAS INTERESTING THAT THEY CITED TAB 13, WHICH IS A LIST OF
4 FACTORS WHICH IS DRAWN FROM DR. HAWORTH'S REPORT. AND I THINK
5 IT'S WORTH LOOKING AT THAT FOR A SECOND. IT GOES FROM PAGE 93
6 TO PAGE 98. AND THIS COMES FROM THE STORE MANAGER'S SURVEY.
7 IT'S A LIST THAT DEFENSE COUNSEL DEVELOPED.
8 YOUR HONOR, I WOULD LIKE TO DIRECT YOUR ATTENTION TO
9 THE VERY LAST FACTOR LISTED ON PAGE 98, I'M SURE, QUITE
10 COINCIDENTALLY, THE VERY LAST ONE, THE MINIMUM PAY ESTABLISHED
11 FOR THE JOB CLASSIFICATION BY WAL-MART'S PAY.
12 NOW, WAL-MART WOULD SUGGEST HERE THAT ALL THESE
13 FACTORS HAVE EQUAL WEIGHT. IN FACT, WE KNOW THAT IS NOT TRUE.
14 DR. HAWORTH, HERSELF, IN ONE OF HER APPENDIXES, DID A CHART
15 WHICH SHOWS THE WEIGHT GIVEN TO EACH OF THE FACTORS GOING UP
16 THE LINE. AND I THINK IT'S VERY IMPORTANT THAT THIS CHART,
17 WHICH IS ATTACHED IN HER APPENDIX, AND I HAVE NOT GOTTEN THE
18 ACTUAL PAGE CITE, BUT IN THE BACK SHE HAS, "STORE MANAGER
19 SURVEY: PERCENTAGE OF DECISIONS IN WHICH FACTORS PLAY A ROLE
20 IN DETERMINING." AND THEY LIST A VARIETY OF FACTORS.
21 FOR EVERY ONE OF THE SURVEYS, FOR EVERY SINGLE CHART
22 THAT SHE HAS DOWN THERE, BY FAR AND AWAY THE SINGLE FACTOR THAT
23 STORE MANAGERS CITED MORE THAN ANYTHING ELSE WAS THAT THING WE
24 JUST POINTED TO, WHICH WAS THE MINIMUM PAY FOR THE PAY
25 CLASSIFICATIONS.
215
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 IF YOU LOOK DOWN THROUGH THOSE CHARTS, YOU WILL SEE
2 THAT THE MANY OTHER FACTORS, YOU KNOW, SPEAKING RUSSIAN,
3 BILINGUAL, ARE INSIGNIFICANT FACTORS PERCENTAGE-WISE. AND
4 THEY'RE ALMOST NEVER CITED.
5 I THINK THERE IS A LITTLE BIT OF A FAST MOVEMENT
6 GOING ON HERE. THE REALITY IS, THE STORE MANAGERS IN THIS
7 DEFENSE-MADE CHART MAY HAVE A LOT OF BOXES TO CHECK, BUT
8 ULTIMATELY, THAT IS NOT WHAT THE EVIDENCE SHOWS IN THIS CASE.
9 I WANT TO TURN TO MR. GROSSMAN'S ARGUMENT ABOUT DUE
10 PROCESS AND MIXED MOTIVE. AND, YOU KNOW, HE VERY QUICKLY MOVED
11 STATUTORY AND DUE PROCESS TOGETHER. TEAMSTERS IS NOT A DUE
12 PROCESS CASE. THE ONLY DUE PROCESS CASE HE MENTIONED WAS
13 STATE FARM, AND I WANT TO FOCUS ON THAT FOR A SECOND.
14 THERE IS NO DUE PROCESS CASE THAT SAYS A FORMULA
15 DISTRIBUTION IN TITLE 7 VIOLATES DUE PROCESS. THERE ARE NO
16 SUCH CASES. THE ONLY DUE PROCESS CASE IN THE NINTH CIRCUIT
17 THAT TALKS ABOUT ANYTHING RELEVANT TO THIS IS THE HILAO CASE.
18 AND WE KNOW FROM THE HILAO CASE THE COURT SAID, "WHILE THE
19 DEFENDANT HAS AN INTEREST IN HOW MUCH MONEY IT PAYS, IT DOES
20 NOT HAVE A DUE PROCESS RIGHT IN WHO GETS THE MONEY IN THE
21 AGGREGATE. IT ALSO DOESN'T HAVE A DUE PROCESS RIGHT TO HAVE
22 THAT PAY DETERMINATION DONE BEFORE THERE IS A DECISION ON
23 PUNITIVE DAMAGES."
24 WHAT ABOUT STATE FARM? THE DEFENDANT RAISED
25 STATE FARM INSURANCE SEVERAL TIMES, BUT I THINK IT'S WORTH
216
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 LOOKING AT WHAT THAT CASE IS, AND WHAT THAT LANGUAGE ACTUALLY
2 WAS.
3 STATE FARM WAS AN INDIVIDUAL STATE COURT CASE WHERE
4 THE PLAINTIFFS RELIED ON NATIONAL DATA FOR PUNITIVE DAMAGES.
5 THE SUPREME COURT POINTED OUT THAT THAT PUNITIVE DAMAGE
6 EVIDENCE INCLUDED EVIDENCE THAT WAS LEGAL IN OTHER STATES,
7 CONDUCT THAT WAS LEGAL IN OTHER STATES. AND VERY
8 INTERESTINGLY, THEY INCLUDED A NOTE THAT I THINK INDICATES A
9 CLASS ACTION WOULD BE DIFFERENT.
10 THE COURT NOTED THAT TO INCLUDE CONDUCT OUT OF STATE
11 WOULD REQUIRE THE INCLUSION OF OTHER PARTIES. AND THEY CITED A
12 CLASS ACTION CASE, PHILLIPS PETROLEUM VERSUS SCHUTZ. THIS IS
13 AT 123 SUPREME COURT 1513.
14 THE SUPREME COURT DID NOT SAY THAT YOU HAVE TO DO AN
15 INDIVIDUAL-BY-INDIVIDUAL DETERMINATION. WHAT IT DID SAY ON THE
16 SAME PAGE WAS THAT PUNITIVE DAMAGES CANNOT BE BASED ON
17 DISSIMILAR ACTS INDEPENDENT FROM THE ACTS UPON WHICH LIABILITY
18 WAS PREMISED. A DEFENDANT SHOULD BE PUNISHED FOR THE CONDUCT
19 THAT HARMED THE PLAINTIFF, NOT FOR BEING AN UNSAVORY BUSINESS.
20 THE RISK OF MULTIPLE PUNITIVE DAMAGE AWARDS FOR THE
21 SAME CONDUCT WAS WHAT THEY WERE CONCERNED ABOUT FOR, AS THEY
22 SAID, IN THE USUAL CASE NONPARTIES ARE NOT BOUND. SO THERE'S A
23 RISK OF MULTIPLE -- WE DON'T HAVE THOSE RISKS IN THE CLASS
24 CASE.
25 THE START CASE STAND ONLY FOR THE PROPOSITION THAT
217
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 IN AN INDIVIDUAL CASE YOU CAN'T BASE PUNITIVE DAMAGE ON
2 NONPARTY CONDUCT. BUT WE DON'T HAVE AN INDIVIDUAL CASE. WE
3 HAVE A CLASS ACTION. ALL AUTHORS PARTIES ARE GOING TO BE IN
4 FRONT OF THE COURT.
5 THE COURT: SEE, THE CONCERN REALLY IS THAT TO THE
6 EXTENT THAT THE EVIDENCE THAT GETS PRESENTED AT THE TRIAL LEVEL
7 THAT ESTABLISHES IN THE AGGREGATE FORM SOME EVIDENCE OF HARM,
8 WHICH IS THEN THE BACKDROP PURSUANT TO WHICH A PUNITIVE DAMAGES
9 AWARD CAN BE RENDERED, TO THE EXTENT THAT THAT FORMULA IS
10 OBTUSE IN THE WAY THAT IT TRIES TO FACTOR IN THE NUMBER OF
11 WOMEN WHO ARE ACTUALLY THE VICTIMS OF ACTIONABLE
12 DISCRIMINATION, THEN THAT ALSO READS ON, IN MY VIEW, THE
13 CONSTITUTIONALITY OF THE PUNITIVE DAMAGES AWARD.
14 MR. SELIGMAN: WELL, I THINK WHAT THE COURTS HAVE
15 SAID IS THE PUNITIVE DAMAGE AWARD IN A MANNER OF HINDSIGHT HAS
16 TO BEAR A REASONABLE RELATIONSHIP TO HARM. AND THE BECK CASE,
17 THAT CASE, WHICH THE DEFENDANT CLAIMS WE HAVE IGNORED, THE BECK
18 CASE REVERSED BECAUSE THE LOWER COURT HAD NO BACK PAY ANALYSIS
19 AT ALL. SO THERE WAS NO INDICATION OF HARM.
20 THE LOWER COURT RESERVED, ACTUALLY, ACCORDING TO ITS
21 OPINION, THE DETERMINATION OF NOT ONLY DELAYING IT FOR STATUTE
22 OF LIMITATIONS, BUT IT SAID IN THAT LATER OPINION ABOUT WHETHER
23 WE NEED TO HAVE THE BACK PAY ANALYSIS STILL OPEN. SO THE NINTH
24 CIRCUIT WAS CONCERNED THERE WAS NO MEASURE OF ANALYSIS AT ALL.
25 A BACK PAY ANALYSIS THAT THE COURT WILL DO BASED ON
218
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 REASONABLE FACTORS THAT ARE SUPPORTED BY THE EVIDENCE WILL
2 IDENTIFY THOSE WOMEN THAT COMPARED TO SIMILARLY SITUATED MEN
3 HAVE BEEN HARMED. AND THEN THERE WILL BE A FIGURE THERE. AND
4 WHATEVER THAT FIGURE IS --
5 THE COURT: BUT YOU CAN'T FURTHER ARTICULATE WHAT
6 THAT WOULD LOOK LIKE TODAY?
7 MR. SELIGMAN: WELL, YOUR HONOR, YOU KNOW, I CAN
8 TELL YOU WHAT MY VERSION OF THE CASE WILL BE. MY VERSION OF
9 THE CASE, I THINK THE EVIDENCE IN THIS CASE THAT DR. DROGIN PUT
10 IN HIS REGRESSION MODELS ARE THE FACTORS FOR PAY. FOR PAY,
11 DESPITE WHAT THE DEFENDANT HAS TESTIFIED HERE TODAY, THERE IS
12 NO OTHER EVIDENCE SUPPORTING OTHER FACTORS.
13 FOR PROMOTION, AGAIN, DR. DROGIN HAS LOOKED AT
14 REASONABLE FACTORS OF WHAT IS THE POOL, WHAT IS THE APPROPRIATE
15 TIME PERIOD, AND THE LIKE.
16 NOW, THE COURT MAY FIND AT TRIAL THAT WE'RE ONLY
17 PARTLY RIGHT AND -- OR WE'RE WRONG. IF WE'RE WRONG, WE LOSE.
18 IF WE'RE ONLY PARTLY RIGHT, THE COURT WILL SAY, "YOU NEED TO
19 PUT SOME OTHER FACTORS IN." OR THE COURT MAY THEN DECIDE, "YOU
20 KNOW WHAT, BASED ON THE EVIDENCE I NOW CONCLUDE IT'S
21 UNMANAGEABLE." RIGHT NOW, BASED ON THE EVIDENCE IN FRONT OF
22 THE COURT RIGHT NOW, THERE IS A PLAUSIBLE BASIS FOR DOING A
23 FORMULA.
24 LET ME CLOSE WITH JUST TWO QUICK COMMENTS, WHICH IS
25 THE DEFENDANT'S SUGGESTION THAT WE HAVE TO DO STORE BY STORE --
219
REBUTTAL ARGUMENT BY MR. SELIGMAN
1 ADOPT THEIR UNIT OF MEASUREMENT. AND I DON'T KNOW WHERE THERE
2 IS AN END POINT HERE. IF WE DO COME BACK WITH A STORE BY
3 STORE, THEY'LL PROBABLY SAY, "NO, YOU'VE GOT TO DO DEPARTMENT
4 BY DEPARTMENT," OR SOME OTHER THING. THAT IS NOT HOW YOU
5 DECIDE THE UNIT OF MEASUREMENT.
6 THE PATTERN AND PRACTICE PROOF DETERMINES THE UNIT
7 OF MEASUREMENT. WE'VE SHOWN A PATTERN AND PRACTICE, OR WE WILL
8 SHOW AT TRIAL, THAT COVERS THE ENTIRE COMPANY. IF YOU DON'T
9 ALLOW SOMEONE TO MAKE THAT CHARGE, YOU ESSENTIALLY EXEMPT ANY
10 LARGE COMPANY FROM HAVING ITS PRACTICES AS A WHOLE CHALLENGED.
11 AND I DON'T THINK THAT IS WHAT THE LAW IS. I DON'T THINK ANY
12 OF THOSE CASES THAT THE DEFENDANT CITES CAN POSSIBLY STAND FOR
13 THAT, IN LIGHT OF TEAMSTERS. TEAMSTERS SAYS IF YOU'VE GOT THE
14 PATTERN AND PRACTICE EVIDENCE, YOU CAN DO IT COMPANY-WIDE.
15 DEFENDANTS CERTAINLY CAN ARGUE THAT THERE MAY BE
16 EXCEPTIONS, THAT INDIVIDUAL AREAS ARE DIFFERENT, AND THE LIKE,
17 BUT THEY HAVEN'T MADE THAT SHOWING NOW. AND EVEN IF THEY MADE
18 THE ASSERTION TODAY, THE COURT IS NOT IN A POSITION WHERE IT
19 HAS TO WEIGH THOSE.
20 ALL IT SHOULD WEIGH IS, IS THERE A PLAUSIBLE BASIS?
21 IS THERE A COMMON QUESTION ABOUT THE STATISTICS? AND I THINK
22 AT THIS POINT IT CLEARLY IS.
23 VERY LAST POINT I WANT TO MAKE; WE'VE SENT THE COURT
24 THE MONUMENTAL LIFE CASE, WHICH POINTS OUT THAT EVEN VERY LARGE
25 CASES CAN BE DEALT WITH. MONUMENTAL LIFE HAD A CLASS OF OVER
220
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 5 MILLION PEOPLE, EVERYONE WAS DIFFERENTLY SITUATED. "MYRIAD
2 OF VARIABLES," WAS WHAT THE COURT SAID. THE COURT SAID, "YOU
3 CAN DEAL WITH THAT ON A FORMULA STATISTICAL BASIS, AND THERE IS
4 NO SWEAT OF THE BROW EXCEPTION THAT SAYS THAT PUSHES THAT INTO
5 B(3) AND MAKES IT IMPOSSIBLE TO RESOLVE." SO I WOULD DIRECT
6 THE COURT'S ATTENTION TO THAT.
7 FINALLY, ON THE MIXED-MOTIVE DEFENSE, THE DEFENDANTS
8 IN THEIR TAB DON'T QUOTE THE ACTUAL LANGUAGE. AND THE
9 IMPORTANT LANGUAGE ON IT IS, "EXCEPT AS OTHERWISE PROVIDED IN
10 THIS TITLE," THAT IS WHAT THAT SECTION SAYS, THIS IS HOW YOU DO
11 IT. THE "OTHERWISE PROVIDED" IN THE TITLE IS THE TRADITIONAL
12 METHODS OF PROOF.
13 ALL THE PRE-CIVIL RIGHTS ACT 1991 HOPKINS CASES
14 DON'T APPLY THAT STATUTE. THE SUPREME COURT IN THE COSTA CASE,
15 NOT THE NINTH CIRCUIT ON REVIEW THE SUPREME COURT SAYS IN TERMS
16 OF MIXED MOTIVE YOU START WITH THE LANGUAGE OF THE STATUTE, YOU
17 DON'T START WITH HOPKINS.
18 THE COURT: OKAY.
19 REBUTTAL ARGUMENT BY MR. GROSSMAN
20 MR. GROSSMAN: BEFORE I GET TO FEEDER POOLS, WOULD
21 YOU TURN BRIEFLY TO TAB 18, IF YOU WOULD BE SO KIND.
22 WOULD YOU TAKE A LOOK AT THE UNDERLINED IN RED
23 PORTION, IT TOTALLY REFUTES WHAT MR. SELIGMAN JUST SAID ABOUT
24 PUTATIVE DAMAGES BEING DONE BY FORMULA. YOU CAN'T DO PUNITIVES
25 TO ANYONE WHO WASN'T HARMED. THAT IS JUST CLEAR AS A BELL.
221
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 LET'S TALK ABOUT FEEDER POOLS FOR A SECOND. THEY
2 WANT TO SAY -- AND INTEREST, WHETHER SOMEONE IS INTERESTED IN
3 THE PROMOTION.
4 THEY WANT TO SAY FEEDER POOLS: SO THIS IS WHERE THE
5 PROMOTIONS TO ASSISTANT MANAGERS COME, 60 PERCENT FEMALE. AND
6 THEN WE GO TO ASSISTANT MANAGER, AND WE HAVE 41 PERCENT
7 SELECTED. AND THEY SAY, TAP ON THE SHOULDER.
8 WELL, LET'S TOTALLY IGNORE THE FACT THAT WE, AS I
9 INDICATED EARLIER, DID EXACTLY WHAT THEY SAID WE SHOULD DO, WE
10 POSTED NATIONALLY; MR. SELIGMAN IS TRYING TO ARGUE THAT THE
11 POOR WOMEN DIDN'T UNDERSTAND THE JOB, BUT THEY WORK WITH
12 ASSISTANT MANAGERS EVERY DAY. THE POSTING LITERATURE WAS
13 EXACTLY THE SAME FOR MEN AND WOMEN. IT DESCRIBED THE JOB IN
14 EXACTLY THE SAME WAY. THERE IS NO CREDIBLE ARGUMENT --
15 THE COURT: I DON'T KNOW THAT THE ARGUMENT WAS THAT
16 THEY DIDN'T UNDERSTAND IT, I THINK IT WAS THAT THEY WERE
17 DETERRED BASED ON THE DESCRIPTION.
18 MR. GROSSMAN: IT'S A TOUGH JOB. YOU'VE GOT TO WORK
19 48 HOURS A WEEK. THE POINT IS, EVERYBODY, MALE AND FEMALE,
20 WORKS WITH ASSISTANT MANAGERS EVERY DAY OF THEIR WORK LIFE.
21 THIS ISN'T A JOB IN THE ABSTRACT THAT SOMEBODY DOESN'T KNOW AND
22 UNDERSTAND. THE POSTING DATA IMPOSED NO RESTRICTIONS
23 WHATSOEVER.
24 LET'S IGNORE THIS, AND LET'S ASSUME ARGUENDO, THAT
25 SOMEONE COULD SAY, "WELL, GOLLY, MAYBE IN THE YEAR 2002 WOMEN
222
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 WERE MORE INTERESTED IN ASSISTANT MANAGER THAN 2003, SO WE'RE
2 GOING TO LOOK TO THE FEEDER POOLS." WHAT DOES THE LAW SAY IF
3 YOU'RE GOING TO LOOK TO FEEDER POOLS? THE LAW SAYS YOU HAVE TO
4 BE AN APPLICANT. AND, AS NANCY SAYS, THERE ARE WAYS TO APPLY.
5 IN YOUR EVALUATION FORM THERE WAS A QUESTION, "WHAT JOBS ARE
6 YOU INTERESTED IN ADVANCING TO?" YOU CAN GO TO YOUR STORE
7 MANAGER, THAT IS THE WAY IT WORKS IN THE REAL WORLD.
8 WHEN YOU WERE AT PACIFIC BELL, I STRONGLY SUSPECT
9 THAT PEOPLE WENT TO THEIR MANAGER AND SAID, "I'M INTERESTED IN
10 A PROMOTION." THAT IS THE WAY IT WORKS AT MY LAW FIRM. WHEN
11 PEOPLE ARE INTERESTED IN PROGRESSING, THEY SAY, "I'M INTERESTED
12 IN PROGRESSING." THAT'S THE WAY IT WORKED AT WAL-MART.
13 THERE'S INNUMERABLE TESTIMONY IN THE RECORD OF PEOPLE WHO SAY,
14 "I WENT TO MY STORE MANAGER AND TOLD HIM I WAS INTERESTED IN
15 BEING AN ASSISTANT MANAGER TRAINEE." WHEN YOU WORK WITH
16 PEOPLE, THAT IS THE WAY IT WORKS.
17 WHAT DOES THE LAW SAY? THE LAW SAYS YOU HAVE TO BE
18 AN ACTUAL APPLICANT. YOU HAVE TO HAVE EXPRESSED INTEREST IN
19 ORDER TO BE CONSIDERED FOR PROMOTIONAL BACK PAY OR A DETERRED
20 APPLICANT. THAT'S WHAT THEY'RE ARGUING, THEY'RE ARGUING
21 THERE'S SOME PEOPLE OUT THERE WHO WERE DETERRED.
22 DETERRED APPLICANT REQUIRES PROOF THAT YOU WERE A
23 DETERRED APPLICANT. I WOULD LIKE TO, SINCE THIS ISSUE HAS JUST
24 COME UP, LIKE TO REFER THE COURT TO A FASCINATING CASE CALLED
25 EEOC VERSUS JOE'S STONE CRABS.
223
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 I DON'T KNOW IF YOU'VE EVER BEEN TO MIAMI BEACH, THE
2 BEST STONE CRABS I'VE EVER TASTED, OUT OF THIS WORLD. THEY HAD
3 A UNIQUE PRACTICE, THEY DIDN'T BELIEVE IN HIRING WOMEN. THEIR
4 SCHTICK WAS THAT THEY HAD NASTY, OBNOXIOUS UNPLEASANT MEN WHO
5 SERVED THE STONE CRABS AND INSULTED THE CUSTOMERS. AND THEY
6 WOULDN'T HIRE WOMEN. AN ABSOLUTE RULE OF NOT HIRING WOMEN. NO
7 WOMEN NEED APPLY.
8 CLASS-TYPE CASE BROUGHT BY THE EEOC. FINDING?
9 THERE WERE TWO DECISIONS OUT OF THE ELEVENTH CIRCUIT. THE
10 FIRST ONE WAS LIABLE, AND THE SECOND ONE WAS THE INTERESTING
11 ONE, IT WAS "DETERRED APPLICANT." AND EACH INDIVIDUAL WHO
12 WANTED BACK PAY, THERE WAS A FINDING, A FLAT-OUT FINDING, OF
13 ABSOLUTE DISCRIMINATION AGAINST WOMEN. THEY HIRED ONLY MEN TO
14 BE FOOD SERVERS.
15 YOU HAD TO PRESENT FACTS TO THE COURT, INDIVIDUAL
16 FACTS TO THE COURT, SHOWING THAT YOU WERE A DETERRED APPLICANT,
17 EVEN THOUGH YOU DIDN'T SHOW UP, EVEN THOUGH YOU DIDN'T WRITE A
18 LETTER, EVEN THOUGH, IN OUR VERNACULAR YOU DIDN'T PUT ANYTHING
19 ON YOUR -- YOU'VE GOT TO SHOW FACTS SUFFICIENT TO CONVINCE THE
20 COURT THAT YOU WERE A BONA FIDE DETERRED APPLICANT, THAT YOU
21 REALLY WANTED TO BE AN ASSISTANT MANAGER, AND THAT YOU DIDN'T
22 GO TO YOUR MANAGER BECAUSE YOU THOUGHT YOUR MANAGER WAS A
23 BIGOT, OR SOMETHING LIKE THAT.
24 THEY FOUND THAT TWO SUBMITTED SUFFICIENT INDIVIDUAL
25 TESTIMONY, AND TWO DID NOT.
224
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 THE POINT IS, IF WE'RE GOING IN A PROMOTION CASE GO
2 FROM A NATIONWIDE POSTING THAT SHOWS THAT INTEREST EQUALS
3 SELECTION, AND WE'RE GOING TO GO TO FEEDER POOLS, WHICH INVOLVE
4 NO INTEREST SHOWING WHATSOEVER, THE LAW SAYS YOU HAVE TO PROVE
5 INTEREST BY EITHER SHOWING YOU ATTEMPTED TO APPLY, OR THAT YOU
6 HAVE INDIVIDUAL FACTS SHOWING YOU WERE A DETERRED APPLICANT.
7 NEXT, WITH RESPECT TO PAY, COUNSEL ARGUED, "WELL,
8 IT'S JUST A SUM OF MONEY"; AS WE DISCUSSED EARLIER, IF WE CAN
9 SHOW THAT JANE DOE, WHO DR. DROGIN SAYS WAS UNDERPAID AS A
10 DEPARTMENT MANAGER BY 20 CENTS AN HOUR, THAT IS PART OF HIS
11 AGGREGATE.
12 BUT IF WE CAN SHOW JANE TURNED DOWN TRANSFER TO LAWN
13 AND GARDEN FROM APPAREL WITH A 25-CENT-AN-HOUR RAISE, THAT
14 AFFECTS THE AGGREGATE. THAT IS WHAT MIXED MOTIVE SAYS WE HAVE
15 A RIGHT TO DO.
16 WE QUOTED THE WHOLE MIXED-MOTIVE STATUTE, AND THE
17 WHOLE MIXED-MOTIVE STATUTE. IT IS AT TAB 4. IT'S IN. IT
18 SAYS, EXCEPT AS OTHERWISE PROVIDED IN THE SUBCHAPTER, AN
19 UNLAWFUL EMPLOYMENT PRACTICE IS ESTABLISHED IF IT'S BOTH BAD
20 STUFF AND GOOD STUFF. BUT THERE IS NOTHING ELSE IN THE
21 SUBCHAPTER THAT AFFECTS IT WHATSOEVER. THERE'S NOTHING THAT
22 AFFECTS THE ANALYSIS.
23 COUNSEL SEEMS TO BE ARGUING THAT A CLASS ACTION IS
24 SOMETHING OTHER THAN A PROCEDURAL DEVICE, THAT IT ALTERS
25 SUBSTANTIVE RIGHTS, THAT WHILE WE HAVE THE ABSOLUTE RIGHT TO
225
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 PROVE THAT WE DIDN'T HARM SOMEBODY IF TEN PEOPLE ARE SUED
2 TOGETHER AND ARE JOINED, WE LOSE THAT RIGHT IN A CLASS ACTION.
3 BUT THE LAW IS CLEAR, A CLASS ACTION IS SIMPLY A PROCEDURAL
4 DEVICE THAT DOESN'T ALTER SUBSTANTIVE RIGHTS.
5 NEXT, VERY BRIEFLY, THAT NINE CENTS AN HOUR DIDN'T
6 CONSIDER PRE-WAL-MART EXPERIENCE. WE CONTEND IT'S ZERO CENTS
7 AN HOUR. THAT NINE CENTS PER HOUR, NOBODY'S CALCULATION
8 INCLUDED THE MOST IMPORTANT FACTOR.
9 NEXT, COUNSEL, AND I'M QUITE AN ADMIRER OF
10 MR. SELIGMAN, BUT THIS ONE WAS QUITE DISINGENUOUS.
11 IF YOU TURN TO TAB 13, YOUR HONOR, THE LAST PAGE,
12 TAB 13, THE LAST BULLET POINT JUST ABOVE 188, THE MINIMUM PAY
13 ESTABLISHED FOR JOB CLASSIFICATION BY WAL-MART'S PAY
14 GUIDELINES.
15 NOW, EVERY STORE MANAGER AT WAL-MART AGREES ON THE
16 MINIMUM PAY AT THE STORE. IN TYLER, TEXAS, IT MIGHT BE $6.00
17 AN HOUR. IN FREMONT, CALIFORNIA, IT MIGHT BE $8.00 AN HOUR.
18 THAT IS THE POINT WHERE PEOPLE SAID, "WELL, YEAH, THAT'S A
19 FACTOR I ALWAYS CONSIDER. I ALWAYS CONSIDER THE MINIMUM PAY."
20 NO ONE CONTENDS THE MINIMUM PAY IS DISCRIMINATORY.
21 THIS IS NO ALLEGATION THERE IS A PROBLEM WITH THE MINIMUM PAY,
22 THAT IS THE MINIMUM PAY FOR THE ENTIRE STORE APPLICABLE TO MEN
23 AND WOMEN.
24 WHAT THIS PAY CASE IS ABOUT, AND THIS IS WHY IT'S
25 DISINGENUOUS, IS STORE MANAGERS GOING ABOVE THE MINIMUM PAY,
226
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 AND DID THEY DO IT MORE FOR MEN OR MORE FOR WOMEN. BUT FOR
2 MR. SELIGMAN TO TELL YOU WITH ALL THESE FACTORS THE ONE THEY
3 RELIED ON THE MOST WAS THE MINIMUM PAY THAT THEY NEGOTIATED AT
4 HEADQUARTERS, THAT IS NOT AN ISSUE IN THIS CASE. NO ONE
5 CONTENDS THERE IS A PROBLEM WITH MINIMUM PAY.
6 THE MONUMENTAL LIFE CASE, IT ADOPTED ALLISON, AND WE
7 WOULD BE VERY HAPPY TO ADOPT ALLISON. ALLISON SAYS YOU CAN'T
8 HAVE A B(2) CERTIFICATION UNLESS THE DAMAGES FLOW AUTOMATICALLY
9 FROM A FINDING OF INJUNCTIVE RELIEF AND DISCRIMINATION. THAT
10 IS PRECISELY WHAT MONUMENTAL LIFE SAYS, AND THAT IS WHAT ALL
11 THE CIRCUITS EXCEPT THE SECOND AND THE NINTH SAY.
12 THAT MEANS IN THIS CASE SINCE IT DOESN'T FLOW
13 AUTOMATICALLY, IT'S NOT A PURE CALCULATION, IF THE JURY COMES
14 IN AND SAYS, "WE AGREE WITH DR. DROGIN, HE IS THE BETTER
15 ECONOMIST, AND WE THINK THERE IS A PATTERN AND PRACTICE OF
16 DISCRIMINATION," THAT DOESN'T AUTOMATICALLY MEAN THAT JANE DOE
17 IN TYLER, TEXAS, WAS UNDERPAID 20 CENTS AN HOUR. BUT IN
18 MONUMENTAL LIFE IT DID AUTOMATICALLY MEAN THAT. IT WAS
19 COMPLICATED, BUT IT FLOWED AUTOMATICALLY, IT WAS A PURE
20 CALCULATION, AND NOTHING ELSE.
21 I END AS I BEGAN; TEAMSTERS AND THE CIVIL RIGHTS ACT
22 OF 1991 BOTH MAKE IT CLEAR THAT WE HAVE AN ABSOLUTE RIGHT NOT
23 TO PAY MONEY TO PEOPLE WE DIDN'T HARM. AND THERE IS NO WAY
24 AROUND THAT. THIS IS A DEFENSE THAT IS AVAILABLE TO EVERY
25 EMPLOYER IN EVERY DISPARATE TREATMENT OR DISPARATE IMPACT CASE,
227
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 THAT EVEN IF WE'RE A BAD GUY, IT DIDN'T HARM JANE DOE, EVEN IF
2 WE'RE A BAD GUY, IT DIDN'T AFFECT THE BIMIDGEE (PHONETIC),
3 NORTH DAKOTA STORE, BECAUSE AT THAT STORE WOMEN DID BETTER THAN
4 MEN. THAT RENDERS -- THAT DESTROYS 23(B) MANAGEABILITY.
5 ON 23(A) THE CASES ARE LEGION THAT WHERE THE
6 PLAINTIFFS SAYS IN A SCHIZOID MANNER, AS HAS HAPPENED HERE,
7 "WELL, IT IS A TOTALLY CENTRALIZED EMPLOYER, BUT WHAT WE'RE
8 PROTESTING IS THE TOTALLY SUBJECTIVE SYSTEM OF THEIR PAY
9 SYSTEM." TOTALLY CENTRALIZED? TOTALLY SUBJECTIVE? CENTRAL
10 CONTROL? NO CENTRAL CONTROL? WHERE THE PLAINTIFF SAYS, "WE'RE
11 PROTESTING A CENTRALIZED POLICY OF DECENTRALIZED SUBJECTIVE
12 DECISION MAKING," THE CASES SAY THAT DESTROYS COMMONALITY AND
13 TYPICALITY, THAT IT MAY WELL BE THAT IN AN INDIVIDUAL STORE
14 FACILITY, SAY THE CASES REID VERSUS LOCKHEED AND ABRAM, THAT A
15 SUBJECTIVE POLICY WILL LET YOU -- AT THAT INDIVIDUAL STORE WILL
16 AID YOU IN PROVING DISCRIMINATION, BECAUSE THAT ONE DECISION
17 MAKER MIGHT BE BIASED.
18 WHEN YOU'RE SEEKING TO GO WITH A MULTIPLE-FACILITY
19 CLASS ACTION, IT CUTS AGAINST COMMONALITY AND TYPICALITY AND
20 DESTROYS 23(A).
21 SO 23(B) IS NOT MET, BECAUSE WE HAVE A RIGHT TO
22 PRESENT INDIVIDUAL EVIDENCE. AND THEY CONCEDE THAT IF THEY
23 CAN'T DO IT BY FORMULA, THAT DOESN'T WORK -- 23(A) ISN'T MET,
24 BECAUSE YOU CAN'T SAY A CENTRALIZED POLICY OF DECENTRALIZATION,
25 AND THAT ESTABLISHES THE COMMON THREAD. THE SUBJECTIVE
228
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 DECISION MAKING FACILITY BY FACILITY DESTROY COMMONALITY AND
2 TYPICALITY.
3 SO WHAT IS THE BOTTOM LINE? THE BOTTOM LINE IS THAT
4 WHEN YOU DENY CERTIFICATION, AS YOU MUST UNDER BOTH 23(A) AND
5 23(B) OF THIS UNPRECEDENTED CLASS, WHERE THEY'RE TRYING TO MELD
6 THE DEVICE TO AVOID ITS OBVIOUS UNMANAGEABILITY, WAIVE
7 COMPENSATORIES, WAIVE THE NORMAL RIGHT TO BE REINSTATED, GIVE
8 PAY TO PEOPLE FOR NOT GETTING PROMOTED WHEN THEY'RE NOT GOING
9 TO BE PROMOTED, AND THEY'RE GOING TO SIT THERE MAD AT WAL-MART
10 THINKING THEY SHOULD HAVE BEEN PROMOTED ON THE BASIS OF THESE
11 KIND OF STATISTICS, IT'S NEVER BEEN DONE BEFORE. THERE HAS
12 NEVER BEEN A REMOTE CERTIFICATION IN ANYTHING LIKE THIS IN
13 CASES IN NUMEROUS CASES FAR LESS GRAND IN SCOPE.
14 WHEN YOU DENY CERTIFICATION, THEY WILL DO WHAT THEY
15 SHOULD HAVE DONE IN THE FIRST PLACE; THEY WILL DO THE
16 INDIVIDUAL STORE AGGREGATIONS. THE INDIVIDUAL STORE
17 AGGREGATIONS WILL SHOW THAT IT LOOKS LIKE THERE IS A
18 STATISTICALLY SIGNIFICANT DISPARITY IN 7 PERCENT OF THE STORES.
19 THEN THEY WILL COME TO US AND SAY, "WE WANT TO
20 SETTLE THE 7 PERCENT." ONCE THE 7 PERCENT ARE REMOVED,
21 EVERYTHING LOOKS FINE. THEN WE'LL TAKE A LOOK AND WE'LL SEE IS
22 THE APPARENT PROBLEM A REAL PROBLEM? AND WE ARE ALREADY
23 LOOKING AT THAT. AND WE WILL HAVE, AT WORST, VERY MANAGEABLE
24 TRADITIONAL CLASS ACTIONS BROUGHT IN THE LOCALE WHERE THE STORE
25 EXISTS, WHERE THE WITNESS RESIDES, WHICH FIT TRADITIONAL TITLE
229
REBUTTAL ARGUMENT BY MR. GROSSMAN
1 7 NORMS, WHERE THEY'LL SAY THE STORE MANAGER OF THE TYLER,
2 TEXAS STORE UTILIZED SUBJECTIVE CRITERIA, AND HERE IS WHAT OUR
3 STATISTICAL ANALYSIS OF PEOPLE AT THIS STORE SHOWS.
4 IT WILL HAVE THE SIZE THAT IS TYPICAL IN CLASS
5 ACTIONS, SOMEWHERE BETWEEN 500 AND 1,500 CLASS MEMBERS. IT
6 WILL BE MANAGEABLE. AND FRANKLY, IT WILL BE SETTLED.
7 IT IS SIMPLY THE ENORMOUS SCOPE OF THIS CASE, THE
8 UNPRECEDENTED SCOPE AND THE UNPRECEDENTED ALLEGATIONS THAT YOU
9 CAN AGGREGATE THE LARGEST COMPANY IN AMERICA NATIONALLY, WHERE
10 ANYTHING WOULD BE STATISTICALLY SIGNIFICANT, AND GO AFTER THAT
11 COMPANY NATIONALLY THAT HAS CAUSED THE PROBLEMS.
12 THE CONTENTION THAT WOMEN WILL BE LEFT WITHOUT A
13 REMEDY IS SIMPLY FALSE. WITH RESPECT TO THE PROMOTION CASE,
14 THEY WILL EVALUATE OUR NATIONAL POSTING DATA ON THE CRITICAL
15 PROMOTION, AND THEY'LL DECIDE WHETHER THEY WANT TO PROCEED. MY
16 GUESS IS THEY WON'T. IT'S GOING TO BE 41 PERCENT TO 41
17 PERCENT.
18 WITH RESPECT TO STORE MANAGER, WE'RE NOW POSTING
19 EVERYTHING. DR. DROGIN ACKNOWLEDGED THAT 95 PERCENT OF STORE
20 MANAGERS HISTORICALLY WERE PROMOTED AND -- EXCUSE ME, WERE
21 POSTED. AND HE FURTHER ACKNOWLEDGED THAT THERE WAS NO
22 STATISTICAL DISPARITY UNLESS YOU LOOK TO FEEDER POOLS, WHICH
23 YOU CAN'T DO.
24 YOU KNOW, THE BOTTOM LINE, WHEN CLASS CERTIFICATION
25 IS DENIED, WHICH IT SHOULD BE, UNLESS YOU'RE GOING TO DO THINGS
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REBUTTAL ARGUMENT BY MR. GROSSMAN
1 UNPRECEDENTED AND DEPRIVE US OF OUR DUE PROCESS, TEAMSTERS, AND
2 CIVIL RIGHTS ACT OF 1991 RIGHTS, WE WILL HAVE A MANAGEABLE
3 NUMBER OF HOURLY PAY CLASS ACTIONS THAT WILL EITHER BE SETTLED
4 OR LITIGATED IN THE TRADITIONAL FASHION.
5 THANK YOU.
6 THE COURT: WHAT IS THE ELEVENTH CIRCUIT CASE YOU
7 CITED TO ME?
8 MR. GROSSMAN: EEOC VERSUS JOE'S STONE CRABS.
9 THE COURT: WHAT IS THE CITE?
10 MR. GROSSMAN: I DON'T HAVE THAT WITH ME. I WILL
11 GET THAT TO YOU.
12 THERE WERE TWO OF THEM. THE FIRST ONE IS KIND OF AN
13 INTERESTING STORY.
14 THE COURT: WELL, I DON'T LIKE CRAB, SO I'M NOT
15 INTERESTED.
16 (LAUGHTER.)
17 MR. GROSSMAN: THESE ARE AWFULLY GOOD STONE CRABS.
18 THE COURT: PROVIDE THAT CITE TO ME.
19 AND THEN, MR. SELIGMAN, I WILL GIVE YOU NO MORE THAN
20 TWO PAGES JUST TO GIVE ME WHAT YOUR VIEW OF THE CASE IS.
21 ONCE I RECEIVE THAT, THEN WE WILL CLOSE THE RECORD.
22 MR. SELIGMAN: ALL RIGHT.
23 THE COURT: LET ME INDICATE TO YOU THAT I DON'T
24 THINK I'VE EVER HAD A HEARING THAT STARTED AT 9:30 AND ENDED AT
25 5:15 WHERE JUST ABOUT EVERY MINUTE THAT WAS SPENT IN THE
231
1 CONTEXT OF THE HEARING WAS, IN MY VIEW, SIGNIFICANT AND
2 IMPORTANT IN THE RESOLUTION OF THE WEIGHTY ISSUES YOU'VE PUT
3 BEFORE US, BEFORE ME. AND SO I APPRECIATE THE LEVEL OF
4 PREPARATION AND THE THOROUGHNESS.
5 WE WILL GET YOU SOMETHING OUT IN SHORT ORDER.
6 MR. GROSSMAN: I WOULD LIKE TO THANK THE COURT FOR
7 THE INCREDIBLE EFFORT YOU PUT INTO THIS. THE ADVANCE QUESTIONS
8 WERE EXTREMELY VALUABLE. AND YOUR MASTERY OF THE RECORD IS
9 UNPRECEDENTED.
10 THE COURT: EVEN THOUGH I DON'T LIKE CRABS?
11 MR. GROSSMAN: YES, EVEN THOUGH YOU DON'T LIKE
12 CRABS.
13 THE COURT: OKAY.
14 ANYTHING FURTHER, MR. SELIGMAN?
15 MR. SELIGMAN: I HAVE NOTHING FURTHER.
16 THE COURT: OKAY.
17 THANK YOU VERY MUCH.
18 (PROCEEDINGS ADJOURNED AT 5:15 P.M.)
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3 CERTIFICATE OF REPORTER
4
5 I, SAHAR MCVICKAR, OFFICIAL REPORTER FOR THE UNITED
6 STATES COURT, NORTHERN DISTRICT OF CALIFORNIA, HEREBY CERTIFY
7 THAT THE FOREGOING PROCEEDINGS WERE REPORTED BY ME, A CERTIFIED
8 SHORTHAND REPORTER, AND WERE THEREAFTER TRANSCRIBED UNDER MY
9 DIRECTION INTO TYPEWRITING; THAT THE FOREGOING IS A FULL,
10 COMPLETE AND TRUE RECORD OF SAID PROCEEDINGS AS BOUND BY ME AT
11 THE TIME OF FILING. THE VALIDITY OF THE REPORTER'S
12 CERTIFICATION OF SAID TRANSCRIPT MAY BE VOID UPON DISASSEMBLY
13 AND/OR REMOVAL FROM THE COURT FILE.
14
15
16 ________________________________________
17 SAHAR MCVICKAR, RPR - OFFICIAL COURT REPORTER
18 SEPTEMBER 24, 2003
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