Chen-Oster v. Goldman, Sachs & Co.

877 F. Supp. 2d 113, 83 Fed. R. Serv. 3d 64, 2012 WL 2912741, 2012 U.S. Dist. LEXIS 99270, 116 Fair Empl. Prac. Cas. (BNA) 755
CourtDistrict Court, S.D. New York
DecidedJuly 17, 2012
DocketNo. 10 Civ. 6950(LBS)(JCF)
StatusPublished
Cited by51 cases

This text of 877 F. Supp. 2d 113 (Chen-Oster v. Goldman, Sachs & Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chen-Oster v. Goldman, Sachs & Co., 877 F. Supp. 2d 113, 83 Fed. R. Serv. 3d 64, 2012 WL 2912741, 2012 U.S. Dist. LEXIS 99270, 116 Fair Empl. Prac. Cas. (BNA) 755 (S.D.N.Y. 2012).

Opinion

OPINION & ORDER

SAND, District Judge.

Defendants Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. (collectively, “Goldman”) object to Magistrate Judge James C. Francis’s January 19, 2012, 2012 WL 205875, Report and Recommendation (“R & R”) denying Defendants’ motion to strike all class allegations as well as their motion for partial summary judgment.

For the reasons that follow, Judge Francis’s R & R is affirmed in part and reversed in part.

I. BACKGROUND

The Court assumes familiarity with the facts of the case, which are laid out in detail in the R & R. See R & R (Dkt. No. 134) 2-8.

II. STANDARD OF REVIEW

A district court reviewing a magistrate judge’s report and recommendation “may accept, reject, or modify [it] in whole or in part.” 28 U.S.C. § 636(b)(1)(C). The court reviews de novo any portions of a report and recommendation to which a party has objected; all else is reviewed for clear error. Gary Friedrich Enters., LLC v. Marvel Enters., 713 F.Supp.2d 215, 219 (S.D.N.Y.2010).

III. DISCUSSION

a. Rule 23(a)(2) Commonality

Goldman moves the Court to strike Plaintiffs’ class allegations on the grounds that Plaintiffs cannot, as a matter of law, satisfy Federal Rule of Civil Procedure 23(a)(2), which requires that plaintiffs seeking class certification establish that “there are questions of law or fact common [117]*117to the class.” Defs.’ Objections (Dkt. No. 135) 6.

In Wal-Mart Stores, Inc. v. Dukes, the United States Supreme Court (“Supreme Court”) held that, in order to satisfy commonality, a plaintiffs claims “must depend on a common contention ... of such a nature that it is capable of class-wide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each of the claims in one stroke.” — U.S. —, 131 S.Ct. 2541, 2551, 180 L.Ed.2d 374 (2011). As Goldman construes them, Plaintiffs’ class allegations are based on the “assertion that Goldman Sachs permits individual managers unbridled freedom to make employment decisions regarding their subordinates.” Defs.’ Objections 2. Dukes, Defendants argue, foreclosed certification based on managerial discretion of this sort because such discretion is “just the opposite of a uniform employment practice that would provide the commonality needed for a class action.” Dukes, 131 S.Ct. at 2554.

This argument is unpersuasive for two reasons. First, Goldman’s motion is procedurally premature; second, Dukes is distinguishable on the facts. Pls.’ Resp. to Defs.’ Objections (Docket No. 140) 2-9. Judge Francis denied Goldman’s motion on both grounds.

1. Procedure

“Motions to strike are generally looked upon with disfavor [and] a motion to strike class allegations ... is even more disfavored because it requires a reviewing court to preemptively terminate the class aspects of ... litigation, solely on the basis of what is alleged in the complaint and before plaintiffs are permitted to complete the discovery to which they would otherwise be entitled on questions relevant to class certification.” Chenensky v. New York Life Ins. Co., No. 07 Civ. 11504, 2011 WL 1795305, at *1, 2011 U.S. Dist. LEXIS 48199, at *3-4 (S.D.N.Y. Apr. 27, 2011) (citations and internal quotation marks omitted). See also Barghout v. Bayer Healthcare Pharms., No. 11 Civ. 1576, 2012 WL 1113973, at *11, 2012 U.S. Dist. LEXIS 46197, at *30 (D.N.J. Mar. 30, 2012) (denying pre-discovery motion to strike class allegations). Generally speaking, then, motions of this kind are deemed procedurally premature.

There is an exception to this general rule, but it does not apply to this case. The exception is this: a motion to strike that addresses issues “separate and apart from the issues that will be decided on a class certification motion” is not procedurally premature. Rahman v. Smith & Wollensky Rest. Group, Inc., 06 Civ. 6198, 2008 WL 161230, at *3, 2008 U.S. Dist. LEXIS 2932, at *11 (S.D.N.Y. Jan. 16, 2008). As Judge Francis noted in the R & R, “all of the defendants’ arguments are indistinguishable from the issues that would be decided in the context of a motion for class certification.” R & R at 10. The Court agrees: Goldman’s objections address Rule 23(a)(2)’s commonality requirement, which is exactly the sort of issue that would be litigated and decided in the context of a motion for class certification.

This ought to settle the matter, at least for the time being, but Goldman is adamant that Plaintiffs’ class allegations fail as a matter of law. Goldman asserts, in essence, that no discoverable facts exist that might distinguish this case from Dukes. Defs.’ Objections 6; see also Mot. to Strike Hr’g Tr. 3, May 22, 2012. We are, therefore, obligated to address this issue because “when a claim cannot succeed as a matter of law, the Court should not certify a class on the issue.” McLaughlin v. Am. Tobacco Co., 522 F.3d [118]*118215, 228 (2d Cir.2008) (quoting Velez v. Novartis Pharms. Corp., 244 F.R.D. 243, 257 (S.D.N.Y.2007)).

2. Substance

In Dukes, the Supreme Court suggested at least two ways in which a plaintiff alleging employment discrimination on behalf of a putative class might satisfy commonality. It could (1) show that an “employer used a biased testing procedure” or (2) present “[significant proof that an employer operated under a general policy of discrimination [that] manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes.” Dukes, 131 S.Ct. at 2553 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 159 n. 15, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982)).

The Dukes plaintiffs were unable to show that Wal-Mart used a biased testing procedure because, quite simply, there was “no testing procedure or other company-wide evaluation.” Id. The Dukes plaintiffs were also unable to point to a specific companywide corporate policy apart from supervisors’ total discretion over employment decisions. But this discretion, the Supreme Court determined, was “just the opposite of a uniform employment practice that would provide commonality.” Id. at 2554.

Not so Plaintiffs in this case. As Judge Francis found — correctly, we believe — Plaintiffs have identified a number of specific, companywide “employment practices” and “testing procedure[s].” These include the “360-degree review” process, the forced-quartile ranking of employees, and the “tap on the shoulder” system for selecting employees for promotion. R & R at 13. As opposed to hiring and promotion at Wal-Mart, which was committed to “local managers’ broad discretion,” based on managers’ “own subjective criteria,” and “exercised in a largely subjective manner,” Dukes, 131 S.Ct.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
877 F. Supp. 2d 113, 83 Fed. R. Serv. 3d 64, 2012 WL 2912741, 2012 U.S. Dist. LEXIS 99270, 116 Fair Empl. Prac. Cas. (BNA) 755, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chen-oster-v-goldman-sachs-co-nysd-2012.