Judge Certifies Class Suing Costco for Gender Bias

Cynthia Foster

The Recorder

2012-09-28 00:00:00.0

It's been a big week for the Impact Fund and two gender discrimination class actions the Berkeley nonprofit has brought against discount retail giants. U.S. District Judge Edward Chen on Monday certified what lawyers say is the first class of women alleging gender discrimination since the U.S. Supreme Court's blockbuster ruling in Wal-Mart v. Dukes.

In Ellis v. Costco, 04-3341, the plaintiffs allege, on behalf of a class of approximately 700 female class members, that Costco Wholesale Corp. consistently passes women over for promotions to assistant and general manager positions at retail locations. The suit brought by Jocelyn Larkin of the Impact Fund, the same shop behind Dukes, claims that Costco's corporate policy of identifying and grooming prospective management candidates disparately impacts female workers, and that Costco executives were aware of the deficiencies but did nothing to rectify them because of orders from Costco's chief executive officer.

Chen's ruling was the Impact Fund's second court victory in less than a week. Last Friday, U.S. District Judge Charles Breyer denied a motion to dismiss a retooled regional Dukes case in which a proposed class of women allege Wal-Mart executives discriminated against them based on their sex.

Larkin said Tuesday she was the happiest she'd been in years, calling Chen's ruling "excellent." She said the ruling is particularly notable for its thoroughness — it is 86 pages long.

"The U.S. Supreme Court has said at least twice now that district courts have to engage in a rigorous analysis of the evidence" in certifying gender class claims, she said. Chen "wanted to assure the Ninth Circuit that he had reviewed all the evidence carefully."

In his ruling, Chen noted that "although this case bears some superficial factual resemblance to the national Dukes case, it is in reality a much different case," citing three major reasons: the size of the class, the fact that class members were passed over for only two kinds of promotions, and the identification of specific evidence of a corporate policy of decision making.

David Lowe, a plaintiffs-side employment partner at Rudy, Exelrod, Zieff & Lowe in San Francisco, said that he and other plaintiffs lawyers have long thought that the national Dukes case was an outlier because of its size and that the Supreme Court's ruling in that case "shouldn't be a bar" to certification of cases like Ellis.

"A lot of us have thought ... that there would be a lot of cases that are distinguishable from Dukes," he said, "and Ellis sounds like it would be evidence of that."

Costco and its lawyer, David Kadue of Seyfarth Shaw, had argued that each of the named plaintiffs had been passed over for promotions because of personal circumstances, rather than because of a policy of corporate discrimination. Chen shot that reasoning down in his ruling, writing that those personal circumstances, such as concerns about having enough time for family, are "universal" rather than specific to each woman.

"Regardless of the merits of [Costco's] argument, the generality of this assertion in the record demonstrates that any defensive rationale based on family or personal circumstances is a common issue best resolved through class wide treatment, rather than one that undermines commonality," he wrote.

Kadue did not immediately respond to requests for comment.

This article originally appeared in The Recorder.