United States District Court, N.D. California
ORDER GRANTING MOTION TO SEVER, DENYING IN PART AND
GRANTING IN PART MOTION TO DISMISS, AND DENYING AS MOOT
MOTION TO STAY DISCOVERY
CHARLES R. BREYER, UNITED STATES DISTRICT JUDGE
case is the latest iteration of a Title VII suit alleging
that Wal-Mart Stores, Inc.'s (“Wal-Mart”)
promotion and pay policies discriminate against women.
Originally brought in 2001 as a class action, these claims
have now been heard by the Northern District of California
(on two previous occasions), an en banc panel of the Ninth
Circuit, and the Supreme Court. Eighteen members of the
original nationwide class (collectively,
“Plaintiffs”) have now filed suit as individuals,
alleging disparate treatment and impact. Wal-Mart has moved
to sever, dismiss the Complaint in part, and stay discovery.
case dates back to June 2001, when current and former female
Wal-Mart employees brought suit on behalf of a nationwide
class alleging widespread gender discrimination. Judge
Jenkins certified a nationwide class, which the Ninth
Circuit, sitting en banc, affirmed in large part.
The Supreme Court reversed on June 20, 2011. Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 347-48, 359-60
the Supreme Court's decision, the Dukes
Plaintiffs narrowed the scope of the proposed classes to
current and former female Wal-Mart employees who had been
subjected to gender discrimination within four regions
largely based in California. Dukes v. Wal-Mart Stores,
Inc., 964 F.Supp.2d 1115, 1117 (N.D. Cal. 2013). This
Court denied certification, finding that the narrowed scope
did not cure the problems that had foreclosed certification
of the nationwide class. Id. at 1118.
case followed. Plaintiffs are eighteen of the would-be class
members from Dukes. Compl. ¶ 5 (dkt. 1). On May
10, 2019, they filed suit in their individual capacities,
alleging pay and promotional discrimination on the basis of
gender. See generally id. The case was initially
before Judge Koh, but was transferred to this Court because
it was related to Dukes. See Order Relating
Cases (dkt. 32).
like the class in Dukes, allege Wal-Mart has
violated Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§§ 2000e, et seq., by discriminating
against them on the basis of gender. Compl. ¶ 1. All
eighteen plaintiffs are current or former female Wal-Mart
employees who have worked in Wal-Mart Regions 5, 16, or
Id. ¶¶ 11-28. They assert claims for pay
and promotional discrimination in all three regions, based on
both disparate treatment and disparate impact. Id.
first part of the Complaint alleges that generally applicable
pay and promotional policies “adverse[ly] impacted[ed]
female employees in all three regions.” Id.
¶¶ 98, 119. Plaintiffs allege that various elements
of Wal-Mart's pay policies had an adverse impact on
women, “including . . . failure to require managers to
base pay decisions for individual employees on job related
criteria[, ] . . . setting pay adjustments based on the
associate's prior pay, . . . and [the] 2004 pay class
restructuring.” Id. ¶¶ 98.
Plaintiffs also challenge a 2005 policy tying pay to
“credits” awarded on the basis of past
experience, and a 2006 policy implementing caps on the pay
permitted for different classes of jobs. Id.
¶¶ 62-63. The Complaint alleges, in some detail,
statistically significant differences in pay for men and
women in Regions 16 and 19 in 2001 and 2002. Id.
also allege numerous promotional policies with an adverse
impact on women, including the lack of formal application
processes or job postings for certain management positions,
and the failure to “require managers to base promotion
decisions . . . on job related criteria.” See,
e.g., id. ¶¶ 100, 101, 119.
Plaintiffs allege that in each relevant Region Wal-Mart
promoted men and women at significantly different rates, and
“had a lower percentage of female managers than its
largest competitors.” Id. ¶¶ 107-09.
second part of the complaint details allegations of
discriminatory treatment unique to each plaintiff. These
allegations describe specific incidents when plaintiffs were
passed over for promotions that went to less qualified men or
learned that similarly-situated male employees made more than
they did. See generally id. ¶¶ 132-312. In
some cases Plaintiffs were explicitly told that this
discriminatory treatment was motivated by gender. See,
e.g., id. ¶¶ 197 (when plaintiff Mavi
Alulquoy inquired about promotional opportunities, managers
told her women should “have babies instead of lifting
crates”), 271 (when Darla Harper complained about a pay
disparity, her manager told her “this is why you
can't be in management” and that “you females
are too emotional”).
Plaintiffs allege they “have exhausted their
administrative remedies and complied with the statutory
prerequisites of Title VII by timely filing charges of
discrimination.” Id. ¶ 7.
has moved to sever Plaintiffs' claims, Mot. to Sever
(dkt. 17), dismiss the Complaint in part, MTD (dkt. 19), and
for a stay of discovery pending resolution of the motion to
dismiss, Mot. for Stay (dkt 18).
Motion to Sever
is proper if (1) the plaintiffs asserted a right to relief
arising out of the same transaction and occurrence
and (2) some question of law or fact common to all
the plaintiffs will arise in the action.” Coleman
v. Quaker Oats Co., 232 F.3d 1271, 1296 (9th Cir. 2000)
(emphasis in original); see also Fed.R.Civ.P.
20(a)(1). The requirements for joinder are “construed
liberally in order to promote trial convenience and . . .
prevent multiple lawsuits.” League to Save Lake
Tahoe v. Tahoe Reg'l Planning Agency, 558 F.2d 914,
917 (9th Cir. 1977). Even if Rule 20's requirements are
satisfied, courts must also consider whether joinder
“would comport with fundamental principles of fairness
or would result in prejudice to either side.”
Coleman, 232 F.3d at 1296 (internal quotation marks
omitted). If plaintiffs have been misjoined, their claims may
be severed “as long as no substantial right will be
prejudiced.” Coughlin v. Rogers, 130 F.3d
1348, 1351 (9th Cir. 1997); see Fed.R.Civ.P. 21.
Motion to Dismiss in Part
complaint that fails to state a claim upon which relief may
be granted must be dismissed under Federal Rule of Civil
Procedure 12(b)(6). A complaint fails to state a claim when
it asserts no cognizable legal theory or fails to allege
sufficient facts to support a cognizable legal theory.
Conservation Force v. Salazar, 646 F.3d 1240, 1242
(9th Cir. 2011). In deciding the motion to dismiss, the Court
“must presume all factual allegations of the complaint
to be true and draw all reasonable inferences in favor of the
nonmoving party.” Usher v. City of Los
Angeles, 828 F.2d 556, 561 (9th Cir. 1987).
plaintiff's obligation to provide the grounds of his
entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do.” Bell Atlantic Corp.
v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation
marks omitted). A complaint must “state a claim to
relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 570). A claim is plausible
“when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Id. In
determining whether this standard is met, “courts must
consider the complaint in its entirety, as well as other
sources courts ordinarily examine when ruling on Rule
12(b)(6) motions to dismiss, in particular, documents
incorporated into the complaint by reference, and matters of
which a court may take judicial notice.” Tellabs,
Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308,
court does dismiss a complaint for failure to state a claim,
it should “freely give leave [to amend] when justice so
requires.” Fed.R.Civ.P. 15(a)(2). A court nevertheless
has discretion to deny leave to amend due to “undue
delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by
virtue of allowance of the amendment, [and] futility of
amendment.” Leadsinger, Inc. v. BMG Music
Pub., 512 F.3d 522, 532 (9th Cir. 2008) (citing
Foman v. Davis, 371 U.S. 178, 182 (1962)).
Motion to Stay Discovery
Rule of Civil Procedure 26(c) allows courts to stay discovery
“for good cause.” The Court has “wide
discretion in controlling discovery.” Little v.
City of Seattle, 863 F.2d 681, 685 (9th Cir. 2008).
Motion to Sever
is appropriate because Plaintiffs' claims do not arise
out of the same transaction or occurrence. Plaintiffs argue
that the doctrine of judicial estoppel bars Wal-Mart from
requesting severance, see Mot. to Sever Opp'n at
10-11 (dkt. 38), but this argument misreads Wal-Mart's
earlier representations. Plaintiffs also argue that,
“[a]t a minimum, ” this Court should postpone
deciding Wal-Mart's motion until after the parties
complete discovery. Id. at 6, 16-17. But the Court
is not obligated to postpone deciding Wal-Mart's motion,
and the parties can avoid duplicative discovery even after
argue that Wal-Mart is judicially estopped from moving to
sever their claims, because its motion to transfer this case
to this Court acknowledged that Plaintiffs' claims arose
from a common occurrence and share common questions of law
and fact. Opp'n to Severance at 10-11. But Wal-Mart is
correct that its motion to transfer made no such
representations. Mot. to Sever Reply at 1 (dkt. 44).
doctrine of judicial estoppel precludes a party from
asserting a claim and “later seeking an advantage by
taking a clearly inconsistent position.” Hamilton
v. State Farm Fire & Cas. Co., 270 F.3d 778, 782
(9th Cir. 2001). The doctrine “prevents a party from
prevailing in one phase of a case on an argument and then
relying on a contradictory argument to prevail in another
phase.” New Hampshire v. Maine, 532 U.S. 742,
749 (2001) (quoting Pegram v. Herdrich, 530 U.S.
211, 227 n.8 (2000)). Although courts do not use a single
test to decide whether the doctrine applies, relevant
considerations include whether a party's positions are
“clearly inconsistent” with one another, whether
a court has accepted a party's initial position, and
whether the party would “derive an unfair advantage . .
. if not estopped.” Id. at 750-51 (internal
quotation marks omitted).
estoppel is inapplicable here. Wal-Mart's motion to
transfer this case is not “clearly inconsistent”
with its present motion to sever Plantiffs' claims.
See Mot. to Transfer at 4- 7 (dkt. 16); Mot. to
Sever at 8-12. Wal-Mart sought to transfer this case because
it “is related to the previously-filed Dukes
class action, ” which this Court presided over. Mot. to
Transfer at 4. Wal-Mart argued that transferring the case
would prevent unnecessary labor and expense because this
Court “is intimately familiar with the factual
allegations made in Plaintiffs' complaint, many of
Defendant's defenses, as well as procedural rulings that
will impact the resolution of this case.” Id.
Although Wal-Mart argued in its motion to transfer that
Plaintiffs' claims were related to the Dukes
class action, Wal-Mart did not argue that Plaintiffs'
claims were related to each other. See id.
at 4-7; Mot. to Sever Reply at 1-2.
Wal-Mart's Motion to Sever Plaintiffs'
Same Transaction and Occurrence
argues that Plaintiffs' claims did not arise out of the
same transaction or occurrence. Mot. to Sever at 12. Rather,
Wal-Mart says, Plaintiffs' claims “are based on
compensation and promotional decisions made by different
supervisors, during different time periods, in different
locations, for different jobs.” Id. According
to Wal-Mart, the only connection among Plaintiffs' claims
is that they allege sex-based discrimination. Id. at
1. Plaintiffs contend that their discrimination claims stem
from Wal-Mart's widely-held policy of gender
discrimination-i.e., that managers “were permitted to
arbitrarily set workers' compensation, without any
required documentation for their decisions or any
accountability from their supervisors. . . .” Mot. to
Sever Opp'n at 13. ...