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July 8 — One current and two former Wal-Mart employees in Tennessee who were part of the nationwide class of 1.5 million female workers alleging sex bias against the retailer, which the U.S. Supreme Court vacated in Dukes, can proceed with a class action on behalf of a more geographically limited class, the U.S. Court of Appeals for the Sixth Circuit ruled July 7 (Phipps v. Wal-Mart Stores, Inc., 6th Cir., No. 13-6194, 7/7/15).

The appeals court reversed the trial court's grant of Wal-Mart Stores Inc.'s motion to dismiss (35 DLR A-1, 2/21/13). It said the later class action brought by Cheryl Phipps, Bobbi Millner and Shawn Gibbons on behalf of employees in the company's Region 43—which includes portions of Tennessee, Alabama, Arkansas, Georgia and Mississippi—was not time-barred after the trial court questioned whether the higher court's precedent precluded American Pipe tolling in this case (115 DLR A-4, 6/14/13).

Under the Supreme Court's 1974 decision in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), initiating a class action tolls the statute of limitations for class members so they may later bring individual claims in the event the trial court decides the lawsuit is not appropriate for class action treatment.

Prior Decision Doesn't Control, Court Says

Wal-Mart argued the Sixth Circuit's decision in Andrews v. Orr, 851 F.2d 146, 48 FEP Cases 643 (6th Cir. 1988), established a bright-line rule that barred American Pipe tolling for any purported class action when certification had previously been denied, the court said.

Rejecting this argument, the court said it was the pendency of a motion to certify that tolled the statute of limitations.

After the Supreme Court vacated the nationwide class in Dukes Wal-Mart Stores Inc. v. Dukes, 2011 BL 161238, 131 S. Ct. 2541, 112 FEP Cases 769 (2011) (118 DLR AA-1, 6/20/11), the motion to certify was pending in the trial court until the lower court dismissed the motion without denying it, the Sixth Circuit said.

Consequently, the proposed nationwide Dukes class didn't bar the Region 43 class under the Andrews rule because the nationwide class hadn't been denied, the court said.

The key difference for Phipps and the other women in Region 43 was that their “present effort to certify [their class] for the first time” had not yet been approved or denied when Wal-Mart moved to dismiss on its contention that the class action was time-barred, the court said.

When they filed their lawsuit purporting to represent a class of current and former employees in Region 43, no court had denied certification to the Region 43 class, the court said.

Judge Jane Branstetter Stranch delivered the opinion of the court, in which Judge Gilbert S. Merritt joined and Judge Deborah L. Cook joined in part.

Cook wrote separately to say she agreed that Andrews didn't time-bar certifying the class action for monetary relief, but she disagreed about certifying it for declaratory and injunctive relief under a separate portion of the Federal Rule of Civil Procedure addressing class certification. The court was no more free than the trial court to depart from its Andrews decision, she said.

Cohen Milstein Sellers & Toll PLLC in Washington, Barrett Johnston LLC in Nashville, and the Impact Fund in Berkeley represented the workers. Attorneys from Gibson, Dunn & Crutcher in Los Angeles, San Francisco, Washington and Dallas represented Wal-Mart.

By Jon Steingart