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Renati v. Wal-Mart Stores, Inc.

United States District Court, N.D. California

October 25, 2019

CLAUDIA RENATI, et al., Plaintiffs,
v.
WAL-MART STORES, INC., Defendant.

          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

         This 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.

         I. BACKGROUND

         A. Procedural History

         This 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 (2011).

         Following 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.

         This 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).

         B. Factual Allegations

         Plaintiffs, 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 19.[1] Id. ¶¶ 11-28. They assert claims for pay and promotional discrimination in all three regions, based on both disparate treatment and disparate impact. Id. ¶¶ 313-91.

         The 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. ¶ 75.

         Plaintiffs 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.

         The 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”).

         All 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.

         Wal-Mart 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).

         II. LEGAL STANDARDS

         A. Motion to Sever

         “[J]oinder 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.

         B. Motion to Dismiss in Part

         A 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).

         “A 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, 322 (2007).

         If a 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)).

         C. Motion to Stay Discovery

         Federal 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).

         III. DISCUSSION

         A. Motion to Sever

         Severance 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 severance.

         1. Judicial Estoppel

         Plaintiffs 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).

         The 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).

         Judicial 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.

         2. Wal-Mart's Motion to Sever Plaintiffs' Claims

         a. Same Transaction and Occurrence

         Wal-Mart 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. ...


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