The Supreme Court today struck down a class action for 1.5 million women who claimed that Walmart Stores based employment decisions on gender. Wal-Mart Stores, Inc. v. Dukes, No. 10-277 (U.S. June 20, 2011).

The Court ruled 5-4 that no "common" questions existed under Rule 23(a)(2) because the plaintiffs didn't offer proof of a discriminatory company-wide policy. And it used a brand-new test: "[C]laims must depend upon a common contention . . . . That common contention, moreover, must be of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in a single stroke." Id., slip op. at 9.

But all the justices agreed that Rule 23(b)(2) didn't allow class certification on the theory that the plaintiffs sought "final injunctive relief or corresponding declaratory relief". The relief the plaintiffs wanted in Dukes — back-pay — struck the Court as hardly "incidental" to an injunction or declaration and therefore not kosher under Rule 23(b)(2). (That part of the opinion settled a split in the U.S. courts of appeals. See here.)

The decision makes clearer than before that an overlap between the merits of a case or claim and the requirements of Rule 23 for class certification doesn't excuse a court from dealing with the merits to the extent of the overlap:

Frequently that “rigorous analysis” [under Rule 23] will entail some overlap with the merits of the plaintiff’s underlying claim. That cannot be helped.

Id., slip op. at 10.

The majority's narrow view of Rule 23(a)(2)'s common questions hurdle imports into all federal class actions the tough test that many lower courts have applied to Rule 23(b)(3) cases.