When Franklin Delano Roosevelt tried to pack the Supreme Court in 1937, his vice-president, John Nance Garner, backed his boss but made his feelings clear by holding his nose and giving a “thumbs-down” gesture in the Senate chamber when the bill was introduced.
We imagine U.S. District Judge Leonard Sand in Manhattan felt the same way after he re-read the U.S. Supreme Court’s Wal-mart v. Dukes opinion in preparation for a ruling he issued on Tuesday in a high-profile discrimination case against Goldman, Sachs & Co. In a 19-page decision, Sand mostly denied Goldman’s motion to strike all class claims in the suit, allowing the case to proceed as a proposed class action. But the judge grudgingly ruled that Dukes barred the plaintiffs’ class claims for declaratory and injunctive relief.
The named plaintiffs, who hope to represent a class of all current and former female Goldman Sachs associates, vice presidents, and managing directors, are represented by Lieff Cabraser Heimann & Bernstein and Outten & Golden. Paul Hastings and Sullivan & Cromwell are defending Goldman in the case.
Noting that he was duty bound to follow Supreme Court precedent, even while questioning the logic behind it, Sand held that, under Dukes, the named plaintiffs couldn’t seek injunctive or declaratory relief against Goldman because they were no longer employees. He ruled that the plaintiffs lacked standing to seek reinstatement and monetary damages under Rule 23(b)2, as well as an injunction preventing Goldman from discriminating against female employees. Sand conceded that the Supreme Court was clear as to the standing issue. But he pointed out that plaintiffs would be forced to remain employed, even under hostile conditions, in order to fulfill the standing requirement, while employers would have an incentive to fire them. “Neither outcome is desirable,” wrote Sand.
As to the employees’ core class allegations of bias, Sand adopted a most of a January magistrate judge’s report and refused to dismiss them. Unlike Wal-Mart, Sand held that Goldman had uniform procedures in place, such as compensation policies, performance evaluations, and promotion policies, that made it possible for the former employees to show class commonality. Sand also distinguished Dukes based on the limited scope of the class against Goldman. “Plaintiffs do not number in the millions; Plaintiffs all worked at–and the allegations all center around–Goldman’s New York office; Plaintiffs were all members of a circumscribed category of Goldman employees; and Plaintiffs do not challenge literally millions of employment decisions,” Sand wrote.
The case has taken plenty of procedural twists and turns since the employees first filed their complaint in September 2010, alleging that Goldman paid men more and promoted men more frequently than women. In July 2011, Goldman unsuccessfully tried to force one plaintiff, former Goldman managing director Lisa Parisi, into mandatory arbitration by invoking the Supreme Court’s decision in AT&T Mobility v. Concepcion In January, Sand rejected Goldman’s attempts to bar another former employee, vice president of equities H. Cristina Chen-Oster, from bringing class claims on the ground that she hadn’t exhausted her administrative remedies before the Equal Employment Opportunity Commission.
Co-lead plaintiffs counsel Adam Klein of Outten & Golden and Kelly Dermody of Lieff Cabraser didn’t respond to requests for comment. Theodore Rogers of Sullivan & Cromwell and Barbara Brown of Paul Hastings, lawyers for Goldman, also weren’t immediately available.