PAGES 1 - 232 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA BEFORE THE HONORABLE MARTIN J. JENKINS, JUDGE BETTY DUKES, ET AL., ) ) ) PLAINTIFF, ) ) VS. ) NO. C01-2252 MJJ ) WAL-MART STORES, ) INCORPORATED, ) ) ) DEFENDANT. ) ____________________________) SAN FRANCISCO, CALIFORNIA WEDNESDAY, SEPTEMBER 24, 2003 TRANSCRIPT OF PROCEEDINGS APPEARANCES: FOR PLAINTIFF: THE IMPACT FUND 125 UNIVERSITY AVENUE BERKELEY, CALIFORNIA 94710-1616 BY: BRAD SELIGMAN, ESQ. COHEN, MILSTEIN, HAUSFELD & TOLL 1100 NEW YORK AVENUE N.W. WEST TOWER, SUITE 500 WASHINGTON, D.C. 20005-3964 BY: JOSEPH M. SELLERS, ESQ. FOR DEFENDANT: PAUL, HASTINGS, JANOFSKY & WALKER 515 SOUTH FLOWER STREET, 25TH FLOOR LOS ANGELES, CALIFORNIA 92626-1924 BY: NANCY L. ABELL, ESQ. PAUL GROSSMAN, ESQ. REPORTED BY: SAHAR MCVICKAR, RPR - OFFICIAL REPORTER UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA (COMPUTERIZED TRANSCRIPTION BY ECLIPSE) I N D E X ORAL ARGUMENT: PAGE BY MR. SELIGMAN 6 BY MR. SELLERS 58 BY MR. GROSSMAN 104 BY MS. ABELL 149 REBUTTAL ARGUMENT: BY MR. SELIGMAN 203 BY MR. GROSSMAN 220 ---O0O--- 3 1 WEDNESDAY, SEPTEMBER 24, 2003 9:30 A.M. 2 P R O C E E D I N G S 3 THE COURT: GOOD MORNING, PLEASE BE SEATED. 4 THE CLERK: CALLING CIVIL MATTER NUMBER 01-2252, 5 BETTY DUKES, ET AL, VERSUS WAL-MART STORES, INC. 6 MR. SELIGMAN: BRAD SELIGMAN AND JOSEPH SELLERS FOR 7 PLAINTIFFS. 8 ALSO PRESENT IN THE COURTROOM ARE THREE OF THE 9 PLAINTIFFS, BETTY DUKES, PATRICIA SURGESON, CHRISTINE 10 KWAPNOSKI, AND ALSO STEPHANIE ODLE, WHO HAD THE EARLIEST 11 CHARGE, AS THE COURT MAY RECALL. 12 THE COURT: GOOD MORNING. 13 MS. ABELL: GOOD MORNING, YOUR HONOR. 14 NANCY ABELL AND PAUL GROSSMAN FOR DEFENDANT, 15 WAL-MART. WITH US AT COUNSEL TABLE IS CHARLYN JARRELLS PORTER, 16 SENIOR VICE-PRESIDENT OF WAL-MART. 17 THE COURT: OKAY. WELCOME. 18 I TRUST, AND THE RECORD SHOULD REFLECT THAT THIS 19 MATTER IS SET DOWN TODAY FOR THE PLAINTIFF'S MOTION FOR CLASS 20 CERTIFICATION, AND THAT THE COURT HAS READ AND CONSIDERED THE 21 BRIEFS. IT IS QUITE A LARGE AND ENORMOUS RECORD IN THE MATTER, 22 THE SUBJECT OF WHICH WILL BE DISCUSSED TODAY. 23 I HAVE READ AND CONSIDERED THE BRIEFS, AND I DID 24 SEND TO BOTH SIDES SOME PREFACE QUESTIONS THAT I WANTED YOU TO 25 FOCUS ON, FOR PURPOSES OF THE ARGUMENT. 4 1 THE RECORD SHOULD ALWAYS NOTE THAT THERE WAS A 2 REQUEST DURING THE PRECERTIFICATION DISCUSSIONS OF ABOUT A 3 TWO-HOUR TIMEFRAME FOR ARGUMENT, AND I AGREED TO THAT. I AM 4 INTERESTED IN WANTING TO KNOW WHETHER OR NOT THE PLAINTIFF -- 5 BECAUSE IT LOOKS TO ME LIKE WE'LL RUN INTO THE AFTERNOON, AND 6 IT WILL BE MY PREFERENCE THAT YOU RESERVE TIME NOW FOR REBUTTAL 7 AND TO INDICATE TO ME HOW MUCH TIME YOU ACTUALLY DO WANT TO 8 RESERVE. 9 MR. SELIGMAN: I WOULD EXPECT WE WOULD RESERVE ABOUT 10 A HALF AN HOUR. 11 THE COURT: OKAY. 12 AND SO IN THE COURSE OF THE MORNING, IT STRIKES ME 13 THAT I WOULD HEAR THE PLAINTIFF FIRST, AND WE WOULD PROBABLY 14 GET THROUGH HALF OF YOUR PRESENTATION BEFORE WE TAKE A LUNCH 15 BREAK OF SOMEWHERE AROUND NOON, COME BACK, AND THEN FINISH THE 16 DEFENDANT'S PRESENTATION, AND THEN YOUR HALF HOUR REBUTTAL; 17 THAT IS MY SENSE OF THE WAY THE MORNING AND THE AFTERNOON WILL 18 PROCEED. 19 THEN, SECONDLY, THERE IS THIS MINOR ISSUE OF A 20 NUMBER OF EVIDENTIARY MOTIONS THAT HAVE BEEN FILED. YOU WILL 21 NOTE THAT THE QUESTIONS I SENT TO YOU ACTUALLY ASSUME THE 22 ADMISSION OF SOME OF THAT EVIDENCE, NOTWITHSTANDING THE FACT 23 THAT YOU HAVE MADE THE MOTIONS. 24 NOW, IT IS NOT MY INCLINATION TO RULE ON THE MOTIONS 25 IN THE COURSE OF THIS HEARING. I THINK WE CAN SPEND, AT LEAST 5 1 FOR ME, BETTER TIME ACQUAINTING MYSELF WITH THE RECORD AND YOUR 2 VIEWS, BOTH OF THE RECORD AND THE QUESTIONS I HAVE SENT TO YOU. 3 AND SO THAT IS MY FOCUS THIS MORNING. I WILL RULE, THOUGH, ON 4 THE EVIDENTIARY MOTIONS IN THE CONTEXT OF THE ORDER THAT IS 5 SUBMITTED. 6 NOW, THAT DOES NOT MEAN THAT YOU, YOU KNOW -- AND 7 THERE IS A QUESTION OR TWO WITH RESPECT TO THE MOTIONS THAT ARE 8 PENDING BEFORE THE COURT, IN ANY RESPECT, BUT THAT IS NOT 9 NECESSARILY MY FOCUS THIS MORNING, AND I WANTED TO MAKE THAT 10 CLEAR. BUT YOU HAVE YOUR TIME, AND YOU CAN USE YOUR TIME AS 11 YOU SEE FIT, ALL RIGHT? 12 OKAY. NOW, WITH THAT SAID, LET'S DO THIS: I WANTED 13 TO ADD A QUESTION FOR THE PLAINTIFF THAT YOU CAN INCORPORATE IT 14 INTO YOUR PRESENTATION, AND IT ARISES OUT OF THE FOLLOWING: 15 WITH RESPECT TO THE EQUAL PAY CLAIM ON PAGE 25 OF 16 YOUR BRIEF REFERENCING DR. DROGIN, YOUR STATISTICIAN, AT ABOUT 17 LINES 15 THROUGH 19 YOU STATE THAT DR. DROGIN FOUND THAT "WOMEN 18 AT WAL-MART EARN LESS THAN MEN HOLDING THE SAME JOB FOR NEARLY 19 ALL JOBS IN EVERY YEAR SINCE 1996." SO THERE IS SOME AMBIGUITY 20 WITH RESPECT TO THE STATEMENT, "NEARLY ALL JOBS," AS TO WHAT 21 CLASSIFICATIONS YOU ARE ACTUALLY PUTTING IN PLAY WITH RESPECT 22 TO THE EQUAL PAY CLAIM. 23 AND THAT AMBIGUITY IS FURTHER REFLECTED WHEN I LOOK 24 AT THE TABLE ON THE NEXT PAGE, 26, AND THERE IS AN OMISSION IN 25 THE AVERAGE EARNINGS BY GENDER TABLE FOR 2001 FOR THE SUPPORT 6 ORAL ARGUMENT BY MR. SELIGMAN 1 MANAGER CATEGORY, WHICH IS IN PLAY HERE. 2 SO I THINK IT WOULD BE USEFUL FOR YOU TO PROVIDE 3 SOME EXPLANATION AS TO WHAT "NEARLY ALL JOBS" MEANS, RELATIVE 4 TO THE CLASSIFICATIONS IN PLAY WITH RESPECT TO THE EQUAL PAY 5 CLAIM AS A PART OF YOUR DISCUSSION THIS MORNING. 6 OKAY, WITH THAT SAID LET'S PROCEED. 7 OH, BY THE WAY, DID THE DEFENSE RECEIVE THE 8 PLAINTIFF'S SECOND STATEMENT OF RECENT DECISION IN THE ILLINOIS 9 CASE? 10 MR. GROSSMAN: YES, YOUR HONOR. WE DID. 11 ORAL ARGUMENT BY MR. SELIGMAN 12 MR. SELIGMAN: GOOD MORNING, YOUR HONOR. WE'RE 13 GOING TO DIVIDE, THE PLAINTIFFS ARE GOING TO DIVIDE PART OF THE 14 ARGUMENT. I'M GOING TO DO THE GENERAL RULE 23 CRITERIA AND THE 15 FIRST SERIES OF QUESTIONS THAT THE COURT ASKED. MY CO-COUNSEL, 16 JOE SELLERS, WILL ADDRESS THE MANAGEABILITY AND THE TRIAL 17 QUESTIONS THAT YOU RAISED ON QUESTIONS 8 THROUGH 13. 18 (COURT AND LAW CLERK CONFER.) 19 THE COURT: I'M GOING TO STEP OFF THE BENCH FOR JUST 20 A SECOND. 21 (BRIEF RECESS TAKEN.) 22 THE COURT: OKAY. YOU MAY PROCEED. 23 MR. SELIGMAN: YOUR HONOR, IT'S UNDISPUTED AT THIS 24 STAGE OF THE LITIGATION THAT WOMEN COMPRISE MORE THAN 25 TWO-THIRDS OF THE RETAIL HOURLY EMPLOYEES AT WAL-MART AND 7 ORAL ARGUMENT BY MR. SELIGMAN 1 78 PERCENT OF ALL THE DEPARTMENT MANAGERS AT WAL-MART. YET 2 DESPITE THIS, THEY HOLD APPROXIMATELY ONE-THIRD OF THE SALARIED 3 MANAGEMENT POSITIONS. 4 IT'S ALSO UNDISPUTED THAT THE VAST MAJORITY OF 5 REGIONAL MANAGERS, ALL OF THE DIVISIONAL MANAGERS AND SENIOR 6 VICE-PRESIDENTS OF WAL-MART, ARE MALE. IT IS UNDISPUTED BEFORE 7 THIS COURT THAT ON AVERAGE, EVEN THOSE WOMEN WHO MAKE IT INTO 8 MANAGEMENT TAKE LONGER TO GET PROMOTED INTO MANAGEMENT, DESPITE 9 THE FACT THAT IT IS ALSO UNDISPUTED THAT WOMEN HAVE GREATER 10 SENIORITY, BETTER PERFORMANCE RATINGS, AND LESS TURNOVER ON 11 AVERAGE THAN OTHER HOURLY EMPLOYEES. 12 IT'S ALSO UNDISPUTED ON THIS RECORD THAT FEMALE 13 RETAIL STORE EMPLOYEES, HOURLY AND SALARIED, SEPARATE OR 14 TOGETHER, ARE PAID LESS THAN MEN IN EVERY YEAR SINCE 1976 -- 15 EXCUSE ME, 1996, AND IN EVERY REGION OF WAL-MART, AND THAT 16 FEMALE EMPLOYEES, ON AVERAGE ARE PAID LESS THAN MALE EMPLOYEES 17 IN VIRTUALLY EVERY MAJOR JOB POSITION IN THE RETAIL STORES. 18 THE ISSUE IN THIS CASE FOR THE COURT AND THE JURY, 19 IF THE CASE WERE TO GO TO TRIAL, IS WHY THESE DISPARITIES 20 EXIST, WHETHER IT'S THE RESULT OF DISCRIMINATION, OR SOME MORE 21 BENIGN EXPLANATION. THAT IS NOT THE ISSUE FOR THE COURT TODAY. 22 THE ISSUE FOR THE COURT TODAY IS WHETHER THE RECORD, BOTH 23 UNDISPUTED AND DISPUTED BEFORE THE COURT, ESTABLISHES THAT THE 24 REQUIREMENTS OF RULE 23 HAVE BEEN ESTABLISHED. 25 NOW, THIS CASE IS NOT A CASE THAT ASKS THE COURT TO 8 ORAL ARGUMENT BY MR. SELIGMAN 1 GO TO SOME NEW FRONTIER OF LAW. IT IS NOT A NOVEL OR A 2 PARTICULARLY COMPLEX CASE. THE CLASS ISSUES IN THIS CASE ARE 3 LIMITED TO TWO ISSUES, PROMOTION TO MANAGEMENT TRACK JOBS AND 4 PAY IN THE RETAIL STORES. 5 THE CASE DOES NOT INVOLVE APPLICANTS, DOESN'T 6 INVOLVE ISSUES OF TERMINATION, HARASSMENT, DEMOTION, AND OTHER 7 ISSUES THAT ARE OFTEN PRESENT IN ATTEMPTS TO CERTIFY CLASSES. 8 IT IS ALSO VERY IMPORTANT THAT THE RECORD IN FRONT 9 OF THIS COURT MAKES ABUNDANTLY CLEAR THAT WAL-MART STORES, 10 ALTHOUGH THERE IS A LOT OF THEM, ARE VIRTUALLY IDENTICAL IN 11 STRUCTURE, MANAGEMENT, POLICIES, JOB DUTIES. 12 MOREOVER, AS IS UNDISPUTED ON THE RECORD BEFORE THIS 13 COURT, THERE IS AN EXTRAORDINARY HIGH RATE OF INTER-STORE 14 TRANSFERRING OF THE STORE MANAGER. THE AVERAGE STORE MANAGER 15 CHANGES STORES 3.6 TIMES. THE MAJORITY OF THOSE CHANGES ARE 16 INTO DIFFERENT REGIONS. 17 IT IS UNDISPUTED ON THIS RECORD THAT EVERY STORE IS 18 CLOSELY SUPERVISED BY HEADQUARTERS IN BENTONVILLE. THERE IS A 19 DEGREE OF CENTRALIZED CONTROL THAT IS PERHAPS UNPRECEDENTED. 20 EVERY STORE IS CONNECTED IN A REALTIME WAY ELECTRONICALLY. IT 21 IS FREQUENTLY VISITED. THERE IS A HIGH DEGREE OF COMMON 22 TRAINING ON A COMPUTER SYSTEM THAT EVERY EMPLOYEE IS SUBJECT 23 TO. ALL THE MANAGERS ARE TRAINED TOGETHER IN BENTONVILLE. 24 THIS IS A COMPANY WHERE THERE IS A HIGH EMPHASIS ON A COMMON 25 CULTURE, WHICH IS THE GLUE THAT HOLDS THE PLACE TOGETHER. 9 ORAL ARGUMENT BY MR. SELIGMAN 1 IN SHORT, WAL-MART IS A HIGHLY STRUCTURED, HEAVILY 2 MONITORED COMPANY WHERE MANAGEMENT WORKERS ARE BASICALLY 3 FUNGIBLE, THEY MOVE FREELY BETWEEN DIFFERENT FACILITIES. 4 NOW, AGAINST THIS BACKDROP WE CHALLENGE, 5 ESSENTIALLY, FOUR THINGS AT WAL-MART. THE FIRST IS, WE 6 CHALLENGE WAL-MART'S POLICY TO MAKE AN EXCEPTION TO THIS HIGHLY 7 STRUCTURED SYSTEM TO ALLOW SUBJECTIVE UNGUIDED DETERMINATIONS 8 DEALING WITH PAY AND PROMOTION, DESPITE THE CLEAR 9 DISCRIMINATORY IMPACT OF THOSE DECISIONS. 10 SECOND, WE CHALLENGE WAL-MART'S FAILURE TO 11 MEANINGFULLY POST AND ALLOW APPLICATION TO VIRTUALLY ALL THE 12 MANAGEMENT POSITIONS AT ISSUE IN THIS CASE. 13 THIRD, WE CHALLENGE WAL-MART'S RELOCATION POLICY 14 WHICH, ACCORDING TO THE RECENT DEPOSITION OF THE CEO OF 15 WAL-MART, MR. COUGHLIN, FOR THE LAST TEN YEARS HAS REQUIRED 16 RELOCATION AS A CONDITION OF ENTRY INTO MANAGEMENT. WE 17 CHALLENGE THAT, DESPITE THE FACT THAT WAL-MART HAS KNOWN ABOUT 18 THE CLEAR DETERRENT EFFECT OF THAT POLICY. 19 AND FINALLY, WE CHALLENGE WAL-MART SENIOR MANAGEMENT 20 AT THE HIGHEST LEVELS BECAUSE OF ITS KNOWLEDGE, ACQUIESCENCE 21 AND APPROVAL OF THESE POLICIES. 22 THIS IS A CASE, YOUR HONOR, NOT INVOLVING DISPARATE 23 AUTONOMOUS STORES WHERE THE SENIOR MANAGEMENT CAN CLAIM IT HAS 24 NO IDEA OF WHAT IS GOING ON. THIS IS A CASE FOR SENIOR 25 MANAGEMENT OF DISCRIMINATION IN PLAIN SIGHT. IT KNOWS THROUGH 10 ORAL ARGUMENT BY MR. SELIGMAN 1 ITS REALTIME MONITORING AND -- 2 THE COURT: ONE OF THE PROBLEMS THOUGH, ISN'T IT, 3 THAT I ACTUALLY FIND IN SOME OF THESE CASES I'VE READ, ABRAM 4 AND DONALDSON, TO A DEGREE, AND REID VERSUS LOCKHEED MARTIN IS 5 THAT IT STRIKES ME THAT A COMPANY, FROM AN ORGANIZATIONAL 6 STANDPOINT, HAS TO HAVE SOME INFRASTRUCTURE FOR HOW THEY MANAGE 7 EMPLOYEES, AND THAT EVEN A FOOTNOTE IN THE FALCON CASE IN THE 8 SUPREME COURT THAT AT LEAST INDICATES BY EXAMPLE THAT WHERE YOU 9 HAVE A CENTRALIZED OVERARCHING MANAGEMENT STRUCTURE THAT THAT 10 CAN, IN THE RIGHT SET OF CIRCUMSTANCES, GIVE RISE TO A FINDING 11 OF ACTUAL DISCRIMINATION. 12 IT STRIKES ME THAT HERE THE EMPHASIS ON THE USE OF 13 MANAGEMENT OVER SUPERSTRUCTURE IS ARGUED IN A WAY THAT IS -- AT 14 LEAST CREATES A PROBLEM FOR ME AS TO WHETHER OR NOT THAT 15 STRUCTURE, IN AND OF ITSELF, IS A PROPER PREDICATE FOR 16 ACTIONABLE DISCRIMINATION. 17 MR. SELIGMAN: OH, WE CERTAINLY DO NOT CLAIM THAT 18 HAVING A STRUCTURED MANAGEMENT EQUALS DISCRIMINATION. NOR DO 19 WE CLAIM -- 20 THE COURT: AND THE INHERENT TENSION BETWEEN 21 CENTRALIZATION AND DECENTRALIZATION AND HOW THAT READS ON 22 ACTIONABLE DISCRIMINATION, BECAUSE THAT SEEMS TO BE PRESENT 23 HERE, TOO. 24 THE ARGUMENT IS THAT THEY ARE VERY HIGHLY STRUCTURED 25 AND CONTROLLED. AT THE SAME TIME, THERE IS PRESENT MORE THAN A 11 ORAL ARGUMENT BY MR. SELIGMAN 1 MODICUM OF SUBJECTIVE DISCRETION THAT IS EXERCISED IN THE LOCAL 2 STORES. 3 MR. SELIGMAN: NO DOUBT, YOUR HONOR. BUT I THINK IN 4 TERMS OF THE QUESTION TODAY, THE COMMONALITY QUESTION, THE 5 HIGHLY STRUCTURED NATURE OF THIS COMPANY LEADS TO SEVERAL BASIC 6 COMMON ISSUES. FIRST OF ALL, THE HIGHLY STRUCTURED UNIFORM 7 SYSTEM INDICATES THAT INDIVIDUAL STORE DIFFERENCES ARE LESS 8 LIKELY TO BE SIGNIFICANT BECAUSE THE COMPANY HAS A TEMPLATE. 9 IT ALSO INDICATES THAT THE COMPANY HAS KNOWLEDGE -- 10 THAT IS THE POINT I WAS GETTING TO -- IT KNOWS EXACTLY WHAT 11 HAPPENS AS A RESULT OF SUBJECTIVITY. IT TRACKS THE PROMOTION 12 RATES OF WOMEN. IT TRACKS PAY DECISIONS. AT THE HIGHEST 13 SENIOR MANAGER LEVEL, THERE IS A QUESTION, ARE THEY AWARE OF 14 THE DISCRIMINATORY CONSEQUENCES OF THESE POLICIES? 15 NOW, THERE ARE MANY CASES, YOUR HONOR, THAT HOLD 16 SOLELY A DECENTRALIZED SUBJECTIVE PRACTICE CREATES A COMMON 17 QUESTION. YOU CAN GO TO THE METRO NORTH CASE AND OTHER CASES. 18 WHAT HAPPENED IN ABRAM AND SOME OF THOSE OTHER CASES, YOU CAN 19 FIND CASES THAT SAY THAT ALONE ISN'T SUFFICIENT. BUT IF YOU 20 LOOK AT THOSE CASES, THE FACTORS ARE NOT LIMITED MERELY TO THE 21 FACT THAT THEY ARE SUBJECTIVE CRITERIA. 22 ABRAM, FOR EXAMPLE, THE PARTIES AGREED THAT THE 23 COMPENSATION SYSTEM WAS INDIVIDUALIZED AND DECENTRALIZED. 24 THAT'S AT 200 FRD AT 426. THE COURT EXPLICITLY REJECTED THE 25 FOLLOWING CASES, INCLUDING A CASE FROM THE VERY SAME DISTRICT, 12 ORAL ARGUMENT BY MR. SELIGMAN 1 THE MORGAN CASE, THAT HELD THAT SUBJECTIVE IMPACT COULD BE A 2 BASIS FOR CLASS CERTIFICATION. 3 WHAT IS PROBABLY OF MOST IMPORTANCE IN MORGAN IS 4 THAT THERE WAS NO STATISTICAL CASE THERE. THE STATISTICS 5 OFFERED TO THE COURT, WHICH IS A COMMON QUESTION, IN THAT CASE 6 SHOWED THAT IN THE MAJORITY OF THE FACILITIES, THERE WAS NO 7 STATISTICAL SIGNIFICANCE. NOW, WE'RE GOING TO TALK LATER ABOUT 8 WHETHER ONE OR TWO EXCEPTIONS UNDERMINES COMMONALITY. BUT THIS 9 CASE IS NOTHING LIKE MORGAN. THERE IS A LOT MORE GLUE THAT 10 HOLDS THIS CASE TOGETHER. 11 NOW, IT IS TRUE, YOUR HONOR, THAT, AS I MENTIONED 12 BEFORE, WE'RE NOT SUPPOSED TO RESOLVE THE MERITS AT THIS STAGE. 13 WE'RE NOT ASKING THE COURT, OBVIOUSLY, TO IGNORE THE CLAIMS IN 14 THIS CASE. WE'RE NOT IN FRONT OF THE COURT WITH THE BARE BONES 15 OF THE COMPLAINT. BUT I THINK THE JOB FOR THE COURT AND THE 16 PARTIES TODAY IS TO IDENTIFY WHAT ARE THE COMMON QUESTIONS THAT 17 UNITE THIS SYSTEM? 18 NOW, WAL-MART SUGGESTS THAT EVERY STORE MANAGER HAS 19 DIFFERENT REASONS FOR WHAT THEY DO. AND THEY HAVE A STORE 20 MANAGE SURVEY WHICH, OF COURSE, IS THE BASIS FOR A MOTION, BUT 21 EVEN ACCEPTING THAT EVIDENCE, WHAT THE STORE MANAGER SURVEY 22 WHICH IS THE LYNCH PIN, I THINK, OF THEIR CLAIM OF AUTONOMY AND 23 DIFFERENT CRITERIA AND NO COMMONALITY, DOES NOT UNDERCUT CLASS 24 CERTIFICATION. ALL THOSE SURVEYS SHOW IS THAT THESE STORE 25 MANAGERS ASSERT WHEN THEY CHECK A BOX THAT THEY FOLLOWED 13 ORAL ARGUMENT BY MR. SELIGMAN 1 CERTAIN PRACTICES IN MAKING A PAY DECISION. 2 THOSE DECLARATIONS DO NOT UNDERMINE A CLAIM THAT 3 THERE IS A SUBJECTIVE SYSTEM IN PLACE. THERE IS NO MONITORING 4 OF WHAT GOES ON IN EACH STORE. 5 MOREOVER, EVEN IF THOSE STORE MANAGERS ASSERT 6 DIFFERENT LEGITIMATE REASONS, THE LIABILITY QUESTION IS WHETHER 7 THOSE ARE REALLY THE REAL REASONS, WHICH IS SOMETHING YOU CAN 8 LOOK AT STATISTICALLY. IF STORE MANAGERS CLAIM THEY RELY ON 9 EXPERIENCE, WE HAVE DATA WE CAN LOOK AT TO FIND OUT IF THAT IS 10 TRUE OR NOT. 11 SO THE MERE ASSERTION BY STORE MANAGERS IN SOME 12 BOILER PLATE DECLARATION THAT, YOU KNOW, "I CHECKED 23 BOXES 13 ABOUT WHAT I DO," THAT DOESN'T PROVE ANYTHING. ALL THAT RAISES 14 IS THE COMMON QUESTION OF WHAT REALLY IS THE BASIS FOR 15 DECISION-MAKING THAT IS OUT THERE? 16 ONE FUNDAMENTAL QUESTION IN FRONT OF THE COURT WHICH 17 I THINK THE COURT NEEDS TO CONSIDER IS IF THE DEFENDANTS' 18 ARGUMENT IS ACCEPTED, WHAT IS THE ALTERNATIVE FOR THE WOMEN OF 19 WAL-MART TO CLASS CERTIFICATION? FOR MOST MEMBERS OF THIS 20 CLASS, THE ALTERNATIVE IS NOTHING. INDIVIDUALLY, THE PAY 21 DIFFERENCES ARE NOT SUFFICIENT TO ATTRACT COUNSEL TO LITIGATE 22 THESE ARE CLASSIC NEGATIVE VALUE CASES IN MOST -- 23 THE COURT: CAN I OVERLOOK THE REQUIREMENTS OF RULE 24 23(A) IN LOOKING AT THE ALTERNATIVES AND CONSEQUENCES FOR THE 25 WOMEN THAT ARE A PART OF THIS CLASS? 14 ORAL ARGUMENT BY MR. SELIGMAN 1 MR. SELIGMAN: ABSOLUTELY NOT. AND WE'RE NOT 2 SUGGESTING THAT THIS IS A SUBSTITUTE FOR CLASS REQUISITES, BUT 3 I THINK IT'S IMPORTANT THAT WAL-MART'S SUGGESTION, WHICH IS 4 (B)(3) SUGGESTION THAT THERE IS A MEANINGFUL ALTERNATIVE OUT 5 THERE, IS LUDICROUS. WAL-MART COULD BE SUED BY ANY NUMBER OF 6 WOMEN, IT WILL NOT AFFECT THEIR POLICIES IN A NONCLASS BASIS. 7 AND THESE WOMEN, IN MOST CASES FOR PROMOTION AND PAY DECISIONS, 8 ARE NOT GOING TO GET COUNSEL. 9 WAL-MART'S OTHER ARGUMENT, WHICH I ULTIMATELY THINK 10 IS THEIR FUNDAMENTAL ARGUMENT, IS THAT THIS CASE IS SIMPLY TOO 11 BIG, IT IS TOO UNMANAGEABLE. WAL-MART ESSENTIALLY SAYS IN THIS 12 CASE, ALTHOUGH WE'RE CHALLENGING -- THE CLAIMS WE'RE MAKING ARE 13 MAINSTREAM CLAIMS OF DISCRIMINATION, THEY'RE JUST SAYING, "THIS 14 IS A NIGHTMARE, YOUR HONOR, DON'T GO THERE." 15 I THINK THAT WAL-MART'S CLAIM IGNORES THE BROAD 16 EQUITABLE AUTHORITY OF THIS COURT TO FASHION A REMEDY WHEN A 17 WRONG HAS BEEN ESTABLISHED. AND AS WE'LL TALK ABOUT LATER, 18 THERE ARE TOOLS FOR THIS COURT TO USE. THE COURT SHOULD REJECT 19 THE INVITATION THAT WAL-MART HAS MADE TO THROW UP ITS HANDS IN 20 FAILURE AND INABILITY TO DEAL WITH THIS PROBLEM. 21 WE HAVE COME UP WITH A MODEL WHICH WE'LL DISCUSS 22 LATER WHICH ALLOWS THE COURT TO LOOK AT LEGITIMATE OBJECTIVE 23 DATA THAT EXISTS IN ONE OF THE MOST EXTENSIVE DATA COLLECTION 24 SYSTEMS IN THE COUNTRY AT WAL-MART, WHERE THE COURT CAN MAKE 25 RATIONAL REASONABLE DETERMINATIONS ABOUT WHO IS ENTITLED AND 15 ORAL ARGUMENT BY MR. SELIGMAN 1 WHO SHOULD SHARE IN DAMAGES. 2 A VERY IMPORTANT DISTINCTION ABOUT THIS CASE WHICH 3 WAL-MART IGNORES WHICH IS TRUE IN ALMOST EVERY ONE OF THE CASES 4 THEY RELY ON IN ARGUING THERE IS TOO MANY INDIVIDUAL ISSUES, 5 THIS CASE ONLY SEEKS ECONOMIC DAMAGES AND PUNITIVE DAMAGES. 6 THERE IS NO CLAIM HERE FOR SUBJECTIVE EMOTIONAL DISTRESS 7 DAMAGES. 8 AND THE FINAL THING, WHICH I THINK WAL-MART DOES 9 IGNORE AND THE COURT HAS ASKED THE QUESTION ABOUT, IS IN THIS 10 CASE, DESPITE THE FACT WE'RE NOT SEEKING EMOTIONAL DISTRESS 11 DAMAGES, WE HAVE PROPOSED OPT-OUT RIGHTS FOR CLASS MEMBERS. SO 12 IF CLASS MEMBERS BELIEVE THEY ARE IN A CONFLICT SITUATION, IF 13 THEY BELIEVE THAT THEIR RIGHTS ARE NOT BEING FAIRLY 14 REPRESENTED, THEY HAVE THE RIGHT TO LEAVE THIS CASE. 15 YOUR HONOR, I'M GOING TO FOCUS IN MY DISCUSSION ON 16 THE BASIC CRITERIA FOR CLASS CERTIFICATION AND FOLLOW, 17 ESSENTIALLY, RULE 23. I TRUST I CAN SKIP THE NUMEROSITY 18 PROVISION. 19 (LAUGHTER.) 20 THE COURT: WELL, WE'RE ALL IN THE WRONG PLACE IF 21 YOU CAN'T SKIP THAT. 22 (LAUGHTER.) 23 MR. SELIGMAN: THAT WAS MY FIRST QUESTION WHEN THIS 24 CASE FIRST CAME TO ME, ARE THERE REALLY ENOUGH EMPLOYEES AT 25 WAL-MART TO JUSTIFY THIS CASE? 16 ORAL ARGUMENT BY MR. SELIGMAN 1 I'M GOING TO TURN TO COMMONALITY. I'M GOING TO TALK 2 ABOUT THE COMMON FEATURES, AND I'M GOING TO SEPARATELY DISCUSS 3 THE PROMOTION AND PAY CLAIMS, BECAUSE I THINK THERE IS SOME 4 DISTINCTIONS BETWEEN THEM, AND THEN TURN TO TYPICALITY 5 QUESTIONS AND REPRESENTATION AND CONFLICT QUESTIONS. AND ALONG 6 THE WAY, I'LL ANSWER THE COURT'S QUESTIONS 1 THROUGH 7 AND THE 7 ADDED QUESTION THAT YOU RAISED TODAY. 8 BEFORE TURNING TO COMMONALITY, THOUGH, I THINK IT'S 9 WORTH TAKING A SECOND TO DISCUSS WHY THE COURT IS NOT SUPPOSED 10 TO LOOK AT THE MERITS AT THIS STAGE AND THE IMPORTANCE OF THAT 11 RULE. THERE ARE REALLY TWO REASONS. 12 THE FIRST REASON, OF COURSE, IS TO THE EXTENT THAT 13 THIS IS A JURY CASE, WHICH THE PATTERN AND PRACTICE CLAIMS 14 CLEARLY ARE, IT'S A JURY ISSUE, AND THE JUDGE IS NOT SUPPOSED 15 TO MAKE A PRELIMINARY DETERMINATION. THE ULTIMATE QUESTION, IS 16 THERE A PATTERN AND PRACTICE OF INTENTIONAL DISCRIMINATION, IS 17 THERE A MERITS DECISION WHICH WILL BE DECIDED DOWN THE ROAD. 18 OUR BURDEN, CONTRARY TO THE DEFENDANT'S SUGGESTION, 19 IS NOT TO PROVE THAT THERE IS A PATTERN AND PRACTICE. WE DON'T 20 HAVE TO MEET THE TEAMSTERS LIABILITY STANDARD. WE JUST HAVE TO 21 SHOW THERE IS A COMMON QUESTION THAT HAS BEEN RAISED BY 22 PLAUSIBLE EVIDENCE AT THIS STAGE OF THE CASE. 23 THERE IS A SECOND REASON, THOUGH, WHICH I THINK IS 24 VERY IMPORTANT ON THIS RECORD WHY THE COURT SHOULDN'T GET TO 25 THE MERITS. DESPITE THE FACT THERE HAS BEEN A LOT OF DISCOVERY 17 ORAL ARGUMENT BY MR. SELIGMAN 1 IN THIS CASE, DISCOVERY HAS NOT BEEN COMPLETED. AND I WANT TO 2 POINT TO TWO THINGS THAT THE COURT SHOULD BEAR IN MIND. 3 UNDER THE CASE MANAGEMENT ORDER THAT WAS ISSUED IN 4 THIS CASE, PLAINTIFFS HAVE NOT BEEN ALLOWED DISCOVERY IN ANY 5 STORE, DISTRICT, REGION OR DIVISION THAT A NAMED PLAINTIFF 6 DIDN'T WORK IN. AND BECAUSE OF THE COURT'S VENUE ORDER WE WERE 7 LIMITED TO CALIFORNIA. WE GOT NATIONWIDE STATISTICS, BUT WE 8 WERE NOT ALLOWED TO EXPLORE THE MANY DIFFERENCES THAT WERE OUT 9 THERE. 10 THE SECOND THING WHICH I THINK IS VERY IMPORTANT, IN 11 TERMS OF THAT DISCOVERY ISSUE, WAL-MART TODAY, STANDING IN 12 FRONT OF THE COURT, IS LARGELY RELYING ON EVIDENCE THAT EITHER 13 WAS NOT IN EXISTENCE DURING THE DISCOVERY PERIOD, THE 237 STORE 14 MANAGER DECLARATIONS WHICH WE HAVE NO CHANCE TO REBUT, OR 15 CHANGES IN POLICIES THAT HAPPENED LITERALLY ON THE EVE OF THE 16 END OF DISCOVERY. 17 WAL-MART PURPORTED TO CHANGE, FOR THE FIRST TIME 18 EVER, THEIR NO-JOB-POSTING POLICY ON JANUARY OF 2003, THE SAME 19 MONTH OF THE DISCOVERY CUTOFF. WE HAVE NOT BEEN ALLOWED TO 20 EXPLORE, TO TAKE DEPOSITIONS ABOUT THE DECISION-MAKING PROCESS. 21 IN FACT, THE DEFENDANT HAS ERECTED AN ATTORNEY-CLIENT PRIVILEGE 22 ARGUMENT AGAINST THAT. SO DISCOVERY IS NOT HERE, AND SO WE'RE 23 NOT TO PROVE OUR CASE. 24 NOW, THE COURT HAS ASKED IN QUESTION NUMBER 5, I 25 THINK AN IMPORTANT QUESTION THAT RELATES TO THIS, WHICH IS 18 ORAL ARGUMENT BY MR. SELIGMAN 1 ABOUT THE DAUBERT STANDARD, WHICH IS SHOULD THE JUDGE REALLY, 2 IN LOOKING AT THE EXPERT TESTIMONY, APPLY THE FORMAL DAUBERT 3 RULE AND PRESUMABLY MOVING THE MOTIONS THAT HAVE BEEN MADE BY 4 EACH SIDE, STRIKE THE DECLARATIONS OF EXPERTS? 5 I THINK THAT THE DAUBERT QUESTION VERY MUCH 6 ILLUSTRATES THE STAGE-OF-THE-CASE PROBLEM I WAS RAISING RIGHT 7 NOW. 8 NORMALLY, DAUBERT IS A RULE WHERE THE JUDGE IS 9 ACTING GATEKEEPER TO KEEP THE JURY FROM HEARING ILLEGITIMATE 10 UNRELIABLE SCIENCE. THAT IS NOT THE STAGE WE'RE AT. THERE IS 11 NO JURY HERE. THE COURT GENERALLY -- 12 THE COURT: IS IT YOUR VIEW THAT DAUBERT WOULD NOT 13 APPLY TO A BENCH TRIAL? 14 MR. SELIGMAN: NO, DAUBERT WOULD APPLY TO A BENCH 15 TRIAL, BUT I THINK THERE ARE SOME DIFFERENT CONSIDERATIONS. 16 AT A BENCH TRIAL THE JUDGE HAS TO MAKE A RULING ON 17 THE MERITS. NOW, YOU DON'T. RIGHT NOW, THE BURDEN OF THE 18 COURT RIGHT NOW, IS TO IDENTIFY COMMON QUESTIONS. 19 THE COURT: BUT, HYPOTHETICALLY, IF I FOUND THAT THE 20 METHODOLOGY USED BY AN EXPERT WAS SO LACKING IN INDICIA OF 21 RELIABILITY, I COULD RULE AND EXCLUDE SUCH EVIDENCE, CORRECT? 22 MR. SELIGMAN: I DO AGREE, YOUR HONOR. 23 I THINK THAT THERE IS -- 24 THE COURT: AND THAT WOULD BE CONSISTENT WITH THE 25 COURT'S VIEW AND FOCUS WITH RESPECT TO CARRYING OUT ITS 19 ORAL ARGUMENT BY MR. SELIGMAN 1 OBLIGATION TO WEIGH THE PROVISION OF RULE 23(A). 2 MR. SELIGMAN: THAT IS CORRECT. AND I THINK THE 3 STANDARD, WHICH IS IDENTIFIED IN THE CASES THE COURT CITED, IS 4 REALLY, IS THE INFORMATION PLAUSIBLE, AND IT IS RELEVANT TO THE 5 CLAIMS BEFORE THE COURT? 6 THE FULL DAUBERT ANALYSIS, WHICH IS A HIGHER LEVEL 7 OF RELIABILITY, IS A MERITS DECISIONS. BUT WE DO AGREE THAT 8 THE COURT DOES NOT HAVE TO SIT HERE AND ACCEPT GARBAGE, DOES 9 NOT HAVE TO ACCEPT JUNK SCIENCE. AND I THINK THAT'S AN 10 IMPORTANT DISTINCTION BETWEEN THE MOTIONS IN FRONT OF YOU. 11 THE MOTION WE HAVE MADE TO STRIKE PORTIONS OF THE 12 HAWORTH DECLARATION, WHICH RELIES ON STORE MANAGER SURVEYS, WE 13 AREN'T ARGUING IN SOME ABSTRACT WAY ABOUT IT; SHE HAS TESTIFIED 14 IN HER DEPOSITION THAT THE MANNER OF COLLECTION OF THOSE 15 DECLARATIONS DO NOT COMPORT WITH SCIENTIFIC STANDARDS. SHE 16 ADMITTED THEY WERE COLLECTED BY LAWYERS. SHE ADMITTED SHE TOLD 17 WAL-MART THAT WAS A BAD IDEA. SHE ADMITTED SHE HAD NO IDEA HOW 18 THAT INFORMATION WAS COLLECTED. SHE ADMITTED IT VIOLATED THE 19 FEDERAL STANDARDS FOR SCIENTIFIC EVIDENCE. 20 THAT IS A PLAUSIBLE STANDARD THAT YOU CAN APPLY 21 THERE, THAT WHEN AN EXPERT ADMITS THAT LEVEL WHERE, 22 ESSENTIALLY, WHAT THE EXPERT IS SAYING IS, "I'M JUST RELYING ON 23 THIS, EVEN THOUGH I HAVE NO IDEA WHAT RELIABILITY IT HAS 24 WHATSOEVER," I THINK THE COURT IS EMPOWERED TO ACT AT THIS 25 POINT. 20 ORAL ARGUMENT BY MR. SELIGMAN 1 LET ME TURN TO WHAT IS PROBABLY THE CENTRAL QUESTION 2 IN ANY CLASS CASE, WHICH IS, ARE THERE COMMON QUESTIONS OF LAW, 3 IN FACT, SUFFICIENT TO BIND THIS CASE? 4 NOW, THE STATUTE -- THE RULE, RULE 23, TALKS ABOUT 5 LAW OR FACT. AND I WANTED TO JUST BRIEFLY MENTION WHAT IS 6 UNDISPUTED IN THIS CASE ABOUT LAW. THERE IS NO DISPUTE THAT WE 7 ARE SEEKING A COMMON LEGAL THEORY FOR THE CLASS. WE HAVE TWO 8 THEORIES, WHICH IS THE PATTERN AND PRACTICE AND THE ADVERSE 9 IMPACT THEORY. THERE IS NO DISPUTE THAT THE ISSUES ARISED 10 (SIC) ON THEM ARE COMMON TO THE CLASS. WE ESTABLISHED ADVERSE 11 IMPACT. THERE IS A BUSINESS NECESSITY DEFENSE. THERE IS NO 12 DISPUTE, ALSO, THAT WE ARE SEEKING COMMON REMEDIES FOR THE 13 CLASS, BACK PAY PUNITIVE DAMAGES, INJUNCTIVE RELIEF. 14 THE COURT: HOW ABOUT FRONT PAY? 15 MR. SELIGMAN: FRONT PAY WE ARE SEEKING ALSO, YOUR 16 HONOR, AS WE'LL TALK ABOUT. AND I THINK THERE IS A SIMPLE 17 EXPLANATION WHICH -- I DON'T WANT TO STEAL MR. SELLERS' 18 THUNDER, BUT THE STANDARDS FOR DETERMINING FRONT PAY AND THE 19 FACTORS ARE VIRTUALLY IDENTICAL TO BACK PAY. WE WILL DISCUSS 20 THAT WHEN WE GET TO IT, BUT WE ARE SEEKING THAT. 21 ECONOMIC DAMAGES IS WHAT WE'RE SEEKING FOR THIS 22 CLASS, AND PUNITIVE DAMAGES, WHICH TURN ON THE DEFENDANT'S 23 CONDUCTS. SO THERE IS NO DISPUTE THAT WE HAVE COMMON LEGAL 24 THEORIES FOR THE CLASS AND COMMON REMEDIAL THEORIES FOR THE 25 CLASS. 21 ORAL ARGUMENT BY MR. SELIGMAN 1 LET'S GO TO THE FACTUAL BASIS OF WHAT IS IN FRONT OF 2 THE COURT. 3 WE GO BEYOND MERELY SAYING THERE IS SOME COMMON 4 QUESTIONS, WHAT WE HAVE SHOWN IN OUR RECORD IS COMMON FACTUAL 5 BACKGROUND OF UNIFORMITY THROUGHOUT WAL-MART, COMMON POLICIES 6 THAT WE'RE CHALLENGING, AND COMMON STATISTICAL PATTERNS. 7 AS I MENTIONED BEFORE, THERE IS NO DISPUTE, REALLY, 8 THAT ANYONE CAN MAKE ON THIS RECORD THAT WAL-MART HAS COMMON 9 PERSONNEL POLICIES, UNIFORM OPERATIONS OF THE STORES, UNIFORM 10 TRAINING, UNIFORM CULTURE, ETCETERA. THERE IS NO POSSIBLE 11 DISPUTE ABOUT THAT. 12 THERE IS ALSO NO DISPUTE ON THE RECORD BEFORE THIS 13 COURT THAT THOSE POLICIES ARE VIRTUALLY IDENTICAL, WHETHER 14 YOU'RE LOOKING AT A REGULAR WAL-MART, A SUPER CENTER, OR A 15 SAM'S CLUB OR A NEIGHBORING MARKET. THERE IS NO DIFFERENCE. 16 IN FACT, THE TESTIMONY OF THE CEO OF WAL-MART, 17 MR. COUGHLIN, AS WELL AS THE TESTIMONY OF THE HEAD OF PERSONNEL 18 FOR SAM'S CLUB, WAS THAT THE PERSONNEL POLICIES AT SAM'S AND 19 WAL-MART ARE VIRTUALLY IDENTICAL, 99 PERCENT. IN FACT, THE 20 FORMER HEAD OF PERSONNEL FOR SAM'S CLUB SAID THE ONLY POLICY HE 21 COULD RECALL THAT WAS DIFFERENT WAS AN ATTENDANCE POLICY, WHICH 22 IS NOT AN ISSUE IN THIS CASE. 23 THIS EVIDENCE IS BUTTRESSED, I THINK, BY THE 24 DECLARATIONS OF THE 113 CLASS MEMBERS. AND I THINK WHAT'S 25 IMPORTANT TO NOTE, YOUR HONOR, IS THAT WE DIDN'T JUST PILE UP 22 ORAL ARGUMENT BY MR. SELIGMAN 1 BAY AREA CLASS MEMBERS. THE CLASS MEMBERS IN THIS CASE, AS THE 2 MAP ATTACHES -- EXHIBIT 125 SHOWS, COME FROM EVERY PART OF THIS 3 COUNTRY, THIRTY DIFFERENT STATES. WE HAVE TESTIMONY FROM THESE 4 DIFFERENT CLASS MEMBERS. 5 THAT TESTIMONY IS NOT ONLY THE TESTIMONY OF 6 INDIVIDUAL WOMEN WHO WORKED IN A SINGLE STORE, MANY OF THOSE 7 WOMEN WORKED AT MULTIPLE STORES. AND TEN OF THEM WERE AT THE 8 HIGHER MANAGEMENT LEVELS. 9 TO GIVE A COUPLE OF QUICK EXAMPLES, ANA STUMP, WHO 10 WAS A CO-MANAGER, AS WELL AS A DISTRICT MANAGER OF SHOES AND 11 JEWELRY, SAID IN HER DECLARATION THAT SUPER CENTER AND REGULAR 12 WAL-MART STORES HAD THE SAME MANAGEMENT TRAINING, THE SAME 13 CULTURE, THE SAME POLICIES, THE SAME PRACTICES; THERE WAS NO 14 DISTINCTION. 15 DIANE DURFIE, AN ASSISTANT MANAGER WHO WORKED IN 16 MANAGEMENT BOTH IN THE STATE OF WASHINGTON AND THE STATE OF 17 UTAH, TESTIFIED THAT PRACTICES ON PERSONNEL AND COMPANY 18 POLICIES WERE IDENTICAL. 19 SUE MCFARLAND, A CO-MANAGER, AS WELL AS A DISTRICT 20 ASSISTANT AND A DISTRICT MANAGER OF JEWELRY, WHERE SHE VISITED 21 MORE THAN 50 SEPARATE STORES THROUGHOUT THE COUNTRY, TESTIFIED 22 THE POLICIES WERE THE SAME. THE POLICIES WERE THE SAME, 23 WHETHER YOU LOOKED IN THE SPECIALTY DEPARTMENT, WHERE SHE WAS A 24 DISTRICT MANAGER, OR THE REGULAR DEPARTMENTS. 25 JOYCE MOODY, ANOTHER DISTRICT MANAGER OF JEWELRY, AS 23 ORAL ARGUMENT BY MR. SELIGMAN 1 WELL AS A "TLE," OR TIRE/LUBE EXPRESS MANAGER, THESE ARE TWO 2 SPECIALTY DEPARTMENTS, SAID THAT THE POLICIES WERE IDENTICAL 3 FOR REGULAR WAL-MART, FOR TLE AND FOR JEWELRY. 4 AND FINALLY, SUSAN SURVETIOUS, A FORMER DISTRICT 5 MANAGER, A REGULAR DISTRICT MANAGER OF WAL-MART, TESTIFIED WHAT 6 THE JOB OF A DISTRICT MANAGER IS, AND THE JOB IS TO ENSURE THE 7 STORES FOLLOW THE CENTRALIZED COMPANY POLICY. THEY MANAGE BY 8 EXCEPTION; THE STORES THAT DON'T FOLLOW THE POLICY ARE THE ONES 9 WHO GET VISITED. 10 BRIEFLY, THE EXPERT TESTIMONY NEEDS TO BE NOTED HERE 11 ALSO. 12 DR. BIELBY TESTIFIED, IN A SECTION WHICH WAL-MART 13 HAS LARGELY IGNORED IN THEIR MOTION TO DISMISS, THAT THERE IS 14 EXTENSIVE EVIDENCE OF CENTRALIZATION AND A COMMON CULTURE AT 15 WAL-MART, THE GLUE THAT HOLDS THIS COMPANY TOGETHER. 16 PROFESSOR BENDICK, AN ECONOMIST, TOOK A LOOK AT THE 17 PERCENTAGE OF WAL-MART MANAGEMENT THAT ARE IN THE HOME OFFICE 18 VERSUS OUT IN THE FIELD AND FOUND THAT COMPARED TO ITS 20 19 LARGEST COMPETITORS IT HAD TWICE AS MUCH PROPORTIONALLY -- 20 THE COURT: NOT QUITE TWICE. 21 MR. SELIGMAN: PRETTY CLOSE TO TWICE. 22 THE COURT: 15.4 TO 8.1. 23 MR. SELIGMAN: OKAY, WELL, YOUR HONOR, I'LL GIVE 24 THAT .8 PERCENT, BUT IT'S NEARLY TWICE. 25 I'LL MAKE ONE POINT IN TERMS OF THAT STRUCTURE, AND 24 ORAL ARGUMENT BY MR. SELIGMAN 1 I THINK THIS IS A DISTINCTION BETWEEN WAL-MART AND OTHER 2 COMPANIES; WAL-MART DIVIDES THE COMPANY INTO 41 SEPARATE 3 REGIONS, 35 REGULAR WAL-MARTS AND 6 SAM'S. UNLIKE, I BELIEVE, 4 MOST COMPANIES, THE REGIONAL VICE-PRESIDENTS DON'T WORK IN THE 5 FIELD, THEY WORK IN BENTONVILLE. THEY ARE BENTONVILLE BASED. 6 THEY GO OUT AND VISIT THE FIELD. 7 BUT EVERY WEEK EVERY REGIONAL VICE-PRESIDENT MEETS 8 WITH SENIOR MANAGEMENT AT WAL-MART. THEY ALSO HAVE REGIONAL 9 PERSONNEL MANAGERS, PEOPLE MANAGERS. AGAIN, BASED IN WAL-MART, 10 THEY GO OUT IN THE FIELD, AND EVERY WEEK, THEY COME BACK AND 11 MEET WITH THE HIGHEST LEVELS. 12 NOW, AGAINST THIS EVIDENCE, WAL-MART ASSERTS BEFORE 13 THIS COURT THAT THERE ARE EIGHT DIFFERENT BUSINESSES, THAT 14 THERE ARE SEPARATE SALARY STRUCTURES, THAT THE STORES ARE 15 AUTONOMOUS, THAT THE DEPARTMENTS ARE ESSENTIALLY AUTONOMOUS IN 16 TERMS OF PAY, ALSO. 17 YOUR HONOR, UP TILL NOW THERE HAVE BEEN 18 APPROXIMATELY 200 DEPOSITIONS TAKEN, INCLUDING 19 30(B)(6) 19 DEPOSITIONS WHERE WAL-MART HAS PRODUCED THE PERSON WHO IS 20 QUALIFIED TO TALK ABOUT ITS POLICIES, AND MORE THAN 1.25 21 MILLION DOCUMENTS HAVE BEEN PRODUCED. 22 THERE IS NOT A SINGLE DOCUMENT THAT WAL-MART HAS 23 IDENTIFIED DURING THE COURSE OF DISCOVERY IN THIS CASE THAT 24 SUPPORTS ITS CLAIMS THAT THE STORES ARE AUTONOMOUS, THAT THE 25 DEPARTMENTS ARE AUTONOMOUS, THAT THE SPECIALTY GROUPS ARE 25 ORAL ARGUMENT BY MR. SELIGMAN 1 AUTONOMOUS, OR THAT THERE ARE SEPARATE PAY STRUCTURES. IN 2 FACT, THE ONLY DOCUMENTS IN THIS CASE SHOW THAT THERE IS ONE 3 PAY POLICY AT WAL-MART, SHOW THAT THE STORES ARE RIGIDLY 4 MONITORED ALL THE WAY TO THE TOP. I THINK THAT'S A CRITICAL 5 FACTOR IN THIS CASE. 6 THE COURT: THERE IS ROOM FOR THE EXERCISE OF 7 DISCRETION. I KNOW THAT IN THE CONTEXT OF THE ARGUMENT, YOUR 8 POSITION IS THAT THERE ARE TOO MUCH SUBJECTIVITY. IT'S MUSHY 9 AND ALLOWS FOR THE INTERFACE OF STEREOTYPICAL NOTIONS TO 10 INFLUENCE THE DECISIONS THAT ARE MADE. 11 BUT THERE IS EVIDENCE IN THE RECORD, I THINK FROM 12 THE HAYWARD DECLARATION, THAT INDICATES BOTH WITH RESPECT TO, I 13 THINK, SAM'S CLUB AND THE SUPER CENTERS, THAT THERE ARE ISSUES 14 OF BASE PAY AND DIFFERENT INCENTIVE PACKAGES, THE KINDS OF 15 THINGS THAT ARE DETERMINED ON A LOCAL LEVEL, GIVEN THE DICTATES 16 OF THE LOCALITIES. 17 DOESN'T THAT CUT AGAINST THE ARGUMENT OF THE 18 CENTRALIZED STRUCTURE THAT YOU HAVE JUST MADE? IT STRIKES ME 19 THAT THERE MAY BE AN ARGUMENT ON THIS RECORD THAT THEY COEXIST. 20 TO THE EXTENT THAT THEY DO, THAT MAY GIVE RISE TO A LACK OF 21 COMMONALITY. 22 MR. SELIGMAN: LET ME ADDRESS THAT. AND LET ME JUMP 23 DIRECTLY TO THE PAY POLICIES. I THINK THERE ARE TWO DIFFERENT 24 POINTS THAT I THINK THE COURT IS NOTING. 25 WAL-MART DOES HAVE DIFFERENT PAY POLICIES FOR ITS 26 ORAL ARGUMENT BY MR. SELIGMAN 1 STORE MANAGERS AND CO-MANAGERS. THOSE ARE NATIONALLY DEVELOPED 2 POLICIES THOUGH, THEY ARE NOT LOCAL POLICIES AT ALL. AS I'LL 3 SHOW IN A MOMENT, EVEN THOUGH THEY HAVE SOME DIFFERENCES IN 4 DETAIL, ULTIMATELY THEY ARE IDENTICAL, BECAUSE THOSE PAY 5 POLICIES TURN ON EXACTLY TWO FACTORS, THE SIZE OF THE STORE 6 YOU'RE IN, AND THE PROFITABILITY OF THE STORE YOU'RE IN. 7 IN FACT, YOUR HONOR, ONE OF WAL-MART'S DECLARANTS 8 TESTIFIED PRECISELY TO THAT POINT, IF YOU LOOK AT THE 9 DECLARATION OF CRAIG ARNOLD, WHO WAL-MART CITES TO SHOW THAT 10 THERE IS MANY DIFFERENT PAY POLICIES FOR MANAGEMENT. 11 IN FACT, IT ALL BOILS DOWN, AS MR. ARNOLD POINTS OUT 12 IN HIS DECLARATION, "THE COMPENSATION STRUCTURE FOR FIELD 13 MANAGEMENT AT WAL-MART STORES, SUPER CENTERS AND NEIGHBORHOOD 14 MARKETS IS IN LARGE PART BASED ON THE SIZE AND LOCATION OF THE 15 INDIVIDUAL STORE WHERE THE MANAGER WORKS AND HIS OR HER 16 POSITION IN THE STORE." 17 SO, BASICALLY, THE QUESTION IS, WHAT STORE DO YOU 18 GET? IF YOU ARE ASSIGNED -- ESSENTIALLY A PROMOTION DECISION. 19 IF YOU ARE PROMOTED TO A LARGER STORE, YOU GET A HIGHER BASED 20 SALARY. IF YOU ARE PROMOTED TO A MORE PROFITABLE STORE, YOU 21 GET A LARGER INCENTIVE -- 22 THE COURT: AS OPPOSED TO WHAT IS DELINEATED IN THE 23 POLICIES, THEMSELVES. 24 MR. SELIGMAN: PARDON ME? 25 THE COURT: AS OPPOSED TO WHAT IS DELINEATED IN THE 27 ORAL ARGUMENT BY MR. SELIGMAN 1 POLICIES, THEMSELVES. 2 MR. SELIGMAN: NO, NO; THE POLICIES RECOGNIZE THIS. 3 THE POLICIES FOR STORE MANAGERS SAY, "YOUR BASE PAY IS GOING TO 4 BE TIED TO THE SIZE OF YOUR STORE AND THE PROFITABILITY OF YOUR 5 STORE." SO, ACTUALLY, FOR A STORE MANAGER THE ISSUE ABOUT PAY 6 IS REALLY A PROMOTION QUESTION, WHETHER YOU'RE GOING TO GET 7 PROMOTED TO A PROFITABLE STORE OR NOT. 8 THAT DECISION, WHICH STORE YOU GET, IS A COMPLETELY 9 SUBJECTIVE DECISION THAT SENIOR MANAGEMENT AT WAL-MART MAKES. 10 THERE IS NO OBJECTIVE FACTORS THAT TELL ME TO PICK JOE INSTEAD 11 OF MARY. JUST JOE TENDS TO GET PICKED. 12 THE OTHER PAY QUESTION WHICH I THINK IS IMPORTANT TO 13 FOCUS ON IS WHAT HAPPENS TO HOURLY EMPLOYEES. AND I THINK 14 THERE IS AN IMPORTANT SERIES OF DECISIONS THAT ARE THERE WHICH 15 I THINK THE EVIDENCE IS PRETTY CLEAR ON. 16 FIRST OF ALL, THERE IS NO QUESTION AT WAL-MART THAT 17 THERE IS A COMMON PAY POLICY THAT APPLIES TO ALL OF WAL-MART'S 18 STORES. AND THIS COMMON PAY POLICY IS ONE THAT HAS TREMENDOUS 19 PERFORMANCE TO WAL-MART. NOW, WAL-MART TODAY ARGUES TO THE 20 COURT THAT THE NATIONAL PAY POLICY IS VIRTUALLY INSIGNIFICANT, 21 IT'S REALLY ALL AUTONOMOUS. THE COURT MAY RECALL, THOUGH, THAT 22 WHEN WAL-MART SUBMITTED A COPY OF ITS NATIONAL PAY POLICY IT 23 MOVED TO SEAL THAT PAY POLICY. 24 IN FACT, ONCE AGAIN, MR. ARNOLD, IN HIS DECLARATION 25 IN SUPPORT OF WAL-MART'S MOTION TO SEAL CONFIDENTIAL 28 ORAL ARGUMENT BY MR. SELIGMAN 1 COMPENSATION DATA TESTIFIED THAT "WAL-MART'S COMPENSATION 2 STRUCTURE IS CONSIDERED TO BE A SIGNIFICANT COMPONENT IN 3 WAL-MART'S COMPETITIVE STRATEGIES AND PROVIDES A COMPETITIVE 4 BENEFIT TO WAL-MART. THE COMPANY HAS TAKEN AFFIRMATIVE STEPS 5 TO SAFEGUARD THE CONFIDENTIALITY OF THIS COMPENSATION 6 STRUCTURE." 7 NOW, WAL-MART CAN'T HAVE IT BOTH WAYS. IF THE 8 NATIONAL POLICY IS MEANINGLESS, WHY DID THEY ASK THE COURT TO 9 SEAL THIS AS SO SENSITIVE? IT CLEARLY HAS SOME IMPORTANCE TO 10 THE COURT, AND HERE IS HOW THE IMPORTANCE WORKS: 11 THE NATIONAL POLICY, AS THE UNDISPUTED EVIDENCE 12 SHOWS, ASSIGNS EACH JOB TO A PAY GROUP. THOSE PAY GROUPS ARE 13 IMPORTANT, BECAUSE THEY DETERMINE THE DIFFERENCE IN PAY BETWEEN 14 EACH PAY GROUP. THE LOWEST LEVEL JOB GOES INTO PAY GROUP 1. 15 THERE'S A RANGE FOR PAY IN THAT JOB. THE NEXT IS PAY GROUP 2, 16 AND PAY GROUP 2 HAS TO BE A CERTAIN DISTANCE APART FROM IT. 17 THAT POLICY IS EMBEDDED IN WAL-MART. IT IS EMBEDDED 18 SO MUCH IN WAL-MART THAT IF A STORE MANAGER PAYS SOMEBODY 19 OUTSIDE OF THOSE GUIDELINES -- I THINK THE TESTIMONY OF 20 WAL-MART'S DECLARANT, SANDRA ALLISON, WHO SUBMITTED TWO 21 DECLARATIONS, BUT THE SECOND DECLARATION SHE SUBMITTED, WHICH 22 WE ALSO ATTACHED IN EXHIBIT 128, SHOWS HOW EMBEDDED IT IS. 23 IF THAT PAY IS ABOVE 6 PERCENT OF WHAT THAT GROUP 24 IS, THERE IS A BOX THAT SHOWS UP ON THE COMPUTER THAT SAYS, 25 "YOU'RE VIOLATING PAY POLICIES." IT NEEDS TO BE MANUALLY 29 ORAL ARGUMENT BY MR. SELIGMAN 1 OVERRIDDEN. BUT THAT'S NOT ENOUGH. THE STORE MANAGER CAN 2 MANUALLY OVERRIDE IT, BUT AUTOMATICALLY AN EXCEPTION REPORT 3 SHOWING THE NAME, THE JOB AND THE PAY GOES UP THE MANAGEMENT 4 RANKS. 5 SO THIS IS A SITUATION WHERE, YES, THERE IS A 6 DISCRETION, BUT -- AND WE WOULD ARGUE THAT THERE IS NO 7 GUIDELINES AT ALL FOR STORE MANAGERS TO DECIDE WHEN TO DEPART 8 FROM THE GUIDELINES. BUT THIS ISN'T A CASE WHERE WAL-MART CAN 9 SAY, "THIS IS STRICTLY A LOCAL THING," BECAUSE UP THE LINE THEY 10 HAVE NOTICE OF EXACTLY WHAT IS HAPPENING. THEY KNOW WHAT'S 11 GOING ON. 12 THE COURT: NOW, IS THERE A FEATURE LIKE THAT 13 PRESENT IN ABRAM OR THE REID CASE? ANY OF THOSE CASES? 14 MR. SELIGMAN: THERE IS NO EVIDENCE IN THOSE 15 OPINIONS SUGGESTING THAT LEVEL OF DISCUSSION. IN FACT, ABRAM; 16 AGAIN, THE PARTIES VIRTUALLY STIPULATED THAT IT WAS 17 DECENTRALIZED LOCAL DECISION-MAKING. THERE WASN'T EVIDENCE 18 THAT NOT ONLY WAS SENIOR MANAGEMENT AWARE OF THE CONSEQUENCES, 19 BUT THEY SET UP A SYSTEM TO SET AN ALARM BELL OFF WHENEVER 20 ANYONE DEPARTED FROM THE PAY POLICIES. 21 THERE ARE SOME OTHER POLICIES AT EVERY STAGE; THERE 22 IS A NATIONAL POLICY PERFORMANCE EVALUATION THAT SAYS IF YOU 23 GOT A CERTAIN RANK, YOU SHOULD GET 4 PERCENT, ANOTHER RANK, YOU 24 GET 5 PERCENT. AGAIN, STORE MANAGERS CAN DEPART FROM THAT, BUT 25 WHEN THEY DO, AN EXCEPTION REPORT GOES UP THE LINE. 30 ORAL ARGUMENT BY MR. SELIGMAN 1 THERE'S A NATIONAL POLICY ALLOWING A STORE MANAGER 2 TO GIVE A SPECIAL MERIT ADJUSTMENT WITH NO GUIDANCE WHATSOEVER. 3 BUT WHEN THEY GIVE THOSE SPECIAL MERIT ADJUSTMENTS, THAT NOTICE 4 GOES UP THE LINE. SO WAL-MART HAS SET UP A SITUATION WHERE 5 THEY'VE GOT POLICIES, AND THEY TELL THE MANAGERS THAT, "IF YOU 6 DEPART FROM THEM, WE'RE GOING TO KNOW ABOUT IT." 7 NOW, THEY MAY HAVE CHOSEN TO DO NOTHING ABOUT THE 8 INFORMATION THEY GOT, BUT WE CERTAINLY HAVE RAISED A COMMON 9 QUESTION ABOUT THE EXISTENCE OF A NATIONAL POLICY AND 10 WAL-MART'S KNOWLEDGE OF EXACTLY WHAT HAPPENS ALL THE WAY UP. 11 WE KNOW, FOR EXAMPLE, ONE OF THE THINGS THAT HAPPENS 12 IS ALL THE WAY UP THE LINE THERE IS AN INCREASING DISPARITY. 13 WE KNOW THAT WOMEN AND MEN HIRED AT THE SAME TIME START WITH A 14 PAY GAP, AND THAT PAY GAP, AS DR. DROGIN SHOWED IN THIS TABLE 15 15, OVER TIME THAT PAY GAP JUST GETS BIGGER AND BIGGER, WHEN 16 PERFORMANCE ADJUSTMENTS ARE DONE, WHEN MERIT ADJUSTMENTS ARE 17 MADE, WHEN PROMOTION DECISIONS ARE MADE. THIS IS TABLE 15 OF 18 DR. DROGIN'S REPORT. 19 THAT BRINGS ME TO WHAT IS PERHAPS THE ULTIMATE 20 DUELING EXPERT BATTLE THAT WE HAVE HERE, WHICH IS THE BATTLING 21 REGRESSIONS. I KNOW THAT IT PROBABLY ISN'T AS FASCINATING TO 22 THE COURT AS IT MIGHT BE TO THE EXPERTS THEMSELVES AND THE 23 PARTIES THAT WENT THROUGH PILES AND PILES OF INFORMATION, BUT 24 THE GOOD NEWS IS THAT AT THIS STAGE OF THE CASE, THE JUDGE NEED 25 NOT RESOLVE THIS BATTLE OF THE EXPERTS. 31 ORAL ARGUMENT BY MR. SELIGMAN 1 IN FACT, WHAT THE EXPERT TESTIMONY ON PAY HAS SHOWN 2 IS THAT THERE IS SOME VERY CLEAR COMMON STATISTICAL QUESTIONS 3 THAT GO THROUGH THIS CASE. WHAT IS THE APPROPRIATE UNIT OF 4 ANALYSIS? WHAT VARIABLES SHOULD BE IN YOUR MODEL? HOW 5 AGGREGATED OR DISAGGREGATED SHOULD THE DATA BE? THOSE ARE 6 CLASSIC JURY QUESTIONS. 7 I'LL GIVE YOU TWO CITES THAT ARE IN OUR PAPERS, THE 8 HEMMINGS VERSUS TIDYMAN'S CASE, NINTH CIRCUIT, OR THE PAGE 9 CASE. I THOUGHT THE PAGE CASE WAS PROBABLY RIGHT ON POINT. 10 THERE'S AN ARGUMENT ABOUT HOW YOU AGGREGATE. DID THE 11 PLAINTIFFS AGGREGATE THE DATA RIGHT, OR SHOULD IT BE 12 DISAGGREGATED? 13 THE COURT SAID, QUOTE, "RIGHT OR WRONG," TO THE 14 PLAINTIFFS, "THEY'RE ENTITLED TO PROVE THEIR CASE." AND THAT 15 IS EXACTLY OUR POINT. WE HAVE A BATTLE OF EXPERTS HERE, AND 16 RIGHT OR WRONG, THE JUDGE, IF IT'S AN ADVERSE IMPACT CASE, AT 17 TRIAL OR THE JURY ON PATTERN AND PRACTICE WILL DECIDE WHO IS 18 RIGHT AND WHO IS WRONG. 19 THE COURT: IT STRIKES ME THAT PAGE, THOUGH, SAYS 20 THAT THE ISSUE OF AGGREGATION OR DISAGGREGATION IS IMPACTED BY 21 WHETHER OR NOT IT'S PROBATIVE -- 22 MR. SELIGMAN: UM-HMM. 23 THE COURT: -- ON THE ISSUE OF DISCRIMINATORY 24 CONDUCT. ARE THE -- DOES THE AGGREGATION RISE TO A LEVEL OF 25 SHOWING THAT THERE ARE PROBATIVE AND SUBSTANTIAL SIMILARITIES 32 ORAL ARGUMENT BY MR. SELIGMAN 1 WITH RESPECT TO THE PURPOSE IN THE FIRST PLACE FOR AGGREGATION? 2 THAT IS A QUESTION ON THIS RECORD, IT SEEMS, THAT IS 3 RAISED BY THE COMPETING EXPERTS AS TO WHETHER OR NOT -- YOU 4 KNOW, YOUR VIEW IS THIS IS A FACTUAL ISSUE -- WHETHER OR NOT -- 5 THE LENS I LOOK THROUGH IT IS TO TRY TO ASCERTAIN WHETHER OR 6 NOT, FROM A METHODOLOGICAL STANDPOINT, THE AGGREGATION AT THE 7 REGIONAL LEVEL IS PROBATIVE ON THE QUESTION OF WHETHER OR NOT 8 AT THAT LEVEL THERE IS A STATISTICAL SIGNIFICANT INDICATION OF 9 DISCRIMINATION, OR, LOOKING AT IT CONVERSELY, WHETHER OR NOT 10 YOU REALLY DO NEED TO LOOK AT IT FROM SPECIALTY TO SPECIALTY 11 BECAUSE THAT IS WHERE THE JOBS ARE SIMILARLY SITUATED, AND THAT 12 IS WHERE THE ANALYSIS WILL BE MORE PROBATIVE IN ESTABLISHING 13 WHETHER OR NOT THERE IS SOME DISPARITY. 14 MR. SELIGMAN: WELL, I AGREE THAT THOSE ARE 15 PROBATIVE QUESTIONS, BUT, YOUR HONOR, THE PAGE DECISION WAS ON 16 A LIABILITY QUESTION, NOT ON CLASS CERTIFICATION. 17 THOSE ARE QUESTIONS THAT WE'LL FIGHT, BUT WHAT IS 18 THE RECORD IN FRONT OF THE COURT RIGHT NOW? ALTHOUGH WAL-MART 19 ASSERTS AND THEIR EXPERT ASSERTS YOU HAVE SEPARATE PAY 20 STRUCTURES, THERE IS NOT A SCINTILLA OF EVIDENCE SHOWING THAT. 21 THERE IS A SINGLE PAY POLICY THAT APPLIES TO SPECIALTY AND 22 REGULAR JOBS, GROCERY AND NONGROCERY. THERE IS NOTHING, NOT A 23 SINGLE DOCUMENT OUT THERE THAT WAL-MART CAN POINT OUT THAT 24 SHOWS IT'S DIFFERENT. 25 THE SPECIALLY JOBS, THE GROCERY JOBS, THE NONGROCERY 33 ORAL ARGUMENT BY MR. SELIGMAN 1 JOBS ARE IN THOSE SAME FIVE JOB GROUPINGS. IN FACT, A SALES 2 WORKER, WHETHER YOU'RE IN GROCERY, IN SHOES, IN NONFOODS, IS IN 3 PAY GROUP 2. THIS IS NO DISTINCTION MADE IN THE RECORD IN 4 FRONT OF THE COURT RIGHT NOW. 5 IN FACT, WAL-MART RELIES FOR ITS CLAIM THAT THERE IS 6 THAT DISTINCTION ALMOST EXCLUSIVELY ON THIS STORE MANAGER 7 SURVEY AND ON THEIR SUPPLEMENTAL STORE MANAGER DECLARATIONS. 8 AND THEY MAKE A VERY BIG DEAL ABOUT THE ABOUT THE DIFFERENCE 9 BETWEEN GROCERY AND NONGROCERY. 10 YOUR HONOR, THEY SUBMITTED 16 STORE MANAGER 11 DECLARATIONS. I BELIEVE EIGHT OF THEM ARE FROM SUPER CENTERS, 12 WHICH HAVE GROCERY DEPARTMENTS. I INVITE THE COURT TO READ 13 THOSE EIGHT. NOT A SINGLE DECLARATION SAYS THERE IS A 14 DIFFERENT PAY STRUCTURE FOR GROCERY. NOT A SINGLE DECLARATION 15 SAYS THERE IS A DIFFERENT PAY RATE FOR GROCERY DEPARTMENTS. 16 WHAT THOSE DECLARATIONS TELL YOU IS THAT THE SAME STORE MANAGER 17 WHO MAKES PAY DECISIONS WITHIN A LIMITED DISCRETION IS IN 18 CHANGE OF GROCERY AND NONGROCERY. THAT IS WHAT THE TESTIMONY 19 SHOWS, NOT THAT THERE IS SOME DIFFERENT PAY STRUCTURE THAT IS 20 OUT THERE. 21 NOW, WAL-MART ARGUES -- THAT IS THEIR FACTUAL 22 ARGUMENT. AND THEY THEN MAKE A STATISTICAL ARGUMENT, ARGUING 23 THAT YOU HAVE TO SEPARATE THESE FACILITIES. AND IT'S THE 24 FAMOUS -- OR, ACTUALLY, NOT SO FAMOUS CHOW TEST. AND THE COURT 25 ASKED IN QUESTION NUMBER 4, ABOUT THE CHOW TEST, "ARE THESE 34 ORAL ARGUMENT BY MR. SELIGMAN 1 CLASS CERTIFICATION DECISIONS?" AND THE SHORT ANSWER IS NO. 2 IN FACT, YOUR HONOR, THE DEFENDANT, WHILE I'M SURE 3 THEY HAVE EVERY INCENTIVE TO LOOK, COULD ONLY FIND A SINGLE 4 CASE IN TITLE 7 LAW THAT CITES THE CHOW DECISION, AND THAT IS 5 THE COACH DECISION. THAT IS A POST-LIABILITY TRIAL CASE WHERE 6 THERE WAS A CERTIFIED CLASS. AND -- BUT THE COURT AT TRIAL 7 RULED AGAINST THE CLASS. 8 THE QUESTION THAT CHOW RAISED WAS WHETHER TO POOL 9 EVERY YEAR OR SEPARATELY, IT WAS AN AGGREGATION QUESTION. THE 10 COURT DECIDED TO BUY THE DEFENDANT'S ARGUMENT WHICH RAISED 11 CHOW. INTERESTINGLY, WHAT THE COURT OF APPEALS SAID WAS THERE 12 IS NO ONE TEST UNIVERSALLY FAVORED OVER THE OTHER. IN SHORT, 13 THE COURT SAID AT PAGE 542, "WE CONCLUDE THAT THE POOLING ISSUE 14 PRESENTS A CLOSE QUESTION, BUT ULTIMATELY NOT ONE THAT IS 15 CLEARLY ERRONEOUS." 16 I WENT BACK AND GOT ON MY WEST LAW, YOUR HONOR, AND 17 I ACTUALLY FOUND ONE OTHER TITLE 7 CASE THAT TALKS ABOUT THE 18 COACH DECISION. IT'S A FAMOUS CASE, VUYANICH VERSUS REPUBLIC 19 NATIONAL BANK OF DALLAS, WHICH IS 505 F. SUPP. 224. IT'S 20 FAMOUS BECAUSE IT PROBABLY IS THE LONGEST STATISTICAL OPINION 21 YOU WILL EVER READ, IT'S HUNDREDS OF PAGES LONG. IT'S A 22 PATTERN AND PRACTICE LIABILITY CASE. 23 IN THE COURSE OF ITS DISCUSSION, THE COURT NOTED 24 THAT THE DEFENDANT RAISED A CHOW TEST ARGUMENT -- THIS IS 25 POST-TRIAL -- ABOUT ARGUING -- PUTTING PROFESSIONAL AND 35 ORAL ARGUMENT BY MR. SELIGMAN 1 NONPROFESSIONAL EMPLOYEES IN THE SAME REGRESSION. THE COURT 2 REFUSED TO USE THAT AS A BASIS TO RULE ON LIABILITY AND SAID AT 3 PAGE 314, "BECAUSE THE CONTROVERSY HERE APPEARS TO CENTER ON AN 4 ISSUE ON THE FRONTIER OF ECONOMETRICS, THERE SEEMS TO BE A 5 GENUINE CONFLICT BETWEEN THE EXPERTS AS TO THE PROPER APPROACH. 6 WE DO NOT DECIDE THE ISSUE." SO THERE IS NO CHOW CLASS CERT 7 CASES. AND, IN FACT, THIS IS A RELATIVELY OBSCURE RULE THAT IS 8 OUT THERE. 9 WHAT DOES THAT MEAN? THE DEFENDANTS ASSERT THE CHOW 10 TEST UNDERMINES COMMONALITY, BUT THEY WAY OVERARGUED THE POINT. 11 IT'S UNDISPUTED THAT THE ONLY THING YOU CAN SAY WITH CERTAINTY 12 ABOUT CHOW IS THAT WHEN THEY COMPARED THEIR INDIVIDUAL STORE 13 MODELS, WHICH AREN'T REALLY INDIVIDUAL STORES, BUT WE'LL LEAVE 14 THAT ASIDE, TO A NATIONAL MODEL, THERE IS A POSITIVE CHOW TEST 15 RESULT. 16 THE ONLY THING YOU CAN SAY WITH CERTAINLY IS THAT 17 ONE OR MORE OF THE 3,600 STORES MIGHT PRESENT A DIFFERENT 18 PROFILE. IT DOESN'T TELL YOU HOW MANY STORES; IT DOESN'T TELL 19 YOU A MAJORITY; IT DOESN'T SAY THERE IS NO COMMON POLICY. 20 THE SECOND THING THAT IS IMPORTANT ABOUT THE CHOW 21 TEST IS DR. HAWORTH APPLIED THE CHOW TEST TO HER MODEL, WHICH 22 HAD 21 SEPARATE VARIABLES. HER CHOW TEST DOESN'T SAY WHICH 23 VARIABLE IT'S EVEN PRODUCING. THAT DIFFERENCE FROM THAT ONE OR 24 MORE STORE MAY BE, STRICTLY SPEAKING, AN ARTIFACT OF HER OWN 25 MODEL. 36 ORAL ARGUMENT BY MR. SELIGMAN 1 NOW, THEY'VE ARGUED, AND WE HAVE HAD SOME DISCOVERY 2 CLAIMS ABOUT THIS, THEY CLAIM THAT SHE APPLIED THE TEST TO 3 DR. DROGIN, AND WE'VE ASSERTED WE NEVER GOT THAT DISCOVERY, BUT 4 NEVERTHELESS, THE POINT IS THERE. CHOW DOES NOT DESTROY THE 5 COMMONALITY. IT MIGHT HAVE SOME RELEVANCE AT THE MERITS, BUT 6 AT MOST, IT'S AN INVITATION FOR FURTHER ANALYSIS. 7 THE COURT: SO IT'S JUST A DIFFERENT METHODOLOGY 8 THAT SHE USES IN HER DISAGGREGATION MODEL -- 9 MR. SELIGMAN: WELL, SHE TRIES TO JUSTIFY BREAKING 10 WAL-MART INTO THOUSANDS OF PIECES BASED ON A CHOW TEST, WHICH 11 DOESN'T TELL YOU THERE IS THOUSANDS OF SEPARATE STRUCTURES, IT 12 TELLS YOU THERE MIGHT BE ONE OR MORE OF THOSE SEPARATE 13 STRUCTURES. SHE NEVER EXPLORED HOW MANY ACTUALLY HAVE A 14 SEPARATE STRUCTURE. 15 LET ME JUST MENTION BRIEFLY, DEFENDANT HAS SAID 16 REPEATEDLY TO THIS COURT THAT THEY'VE DONE A STORE-BY-STORE 17 ANALYSIS. THEY HAVE NOT. SHE HAS NEVER DONE A STORE-BY-STORE 18 ANALYSIS. SHE BROKE THE STORES UP INTO SEPARATE PIECES, 7,700 19 OF THEM. 20 THE COURT: SPECIALTY BY SPECIALTY. 21 MR. SELIGMAN: YES, SPECIALTY BY SPECIALTY, GROCERY 22 VERSUS NONGROCERY. AND I THINK THE ULTIMATE EVIDENCE OF WHAT 23 THEY HAVE DONE IS TO TAKE THE JEWELRY DEPARTMENT, WHICH I 24 MENTIONED, A SPECIALTY DEPARTMENT; THE JEWELRY DEPARTMENT IS 25 97 PERCENT FEMALE, AND THAT IS NOT WHERE THIS CASE IS, WHEN YOU 37 ORAL ARGUMENT BY MR. SELIGMAN 1 COMPARE JEWELRY WORKERS TO JEWELRY WORKERS. 2 DR. HAWORTH'S MODEL, BY HAVING A SEPARATE REGRESSION 3 FOR JEWELRY, AS WELL AS A SEPARATE DEPARTMENT VARIABLE, ONLY 4 COMPARES THOSE WOMEN TO THEMSELVES. IT DOESN'T COMPARE WOMEN 5 TO THE WOMEN OR MEN IN ANY OTHER DEPARTMENT. 6 NOT SURPRISINGLY, DR. HAWORTH SAYS, "WELL, WHEN I 7 LOOK AT JEWELRY, I DON'T FIND A BIG PATTERN." WELL, OF COURSE 8 NOT, THAT IS NOT WHERE THE MEN ARE. THE MEN ARE SOMEWHERE 9 ELSE. 10 I THINK IT'S ALSO INTERESTING THAT DR. HAWORTH NEVER 11 DID THE MOST COMMON STATISTICAL PRACTICE THAT SHE, HERSELF, 12 ADVISED TO DO, YOU BREAK A COMPANY DOWN TO LITTLE PIECES, YOU 13 THEN AGGREGATE IT TOGETHER TO SEE IF THERE IS AN OVERALL 14 PATTERN. SHE DIDN'T DO THAT, EVEN THOUGH SHE'S DONE IT IN 15 OTHER CASES. 16 IF YOU PUT IT ALL TOGETHER, EVEN WITH HER INCREDIBLY 17 DISAGGREGATED MODEL, WITH HER 21 DIFFERENT VARIABLES, MANY OF 18 WHICH WE THINK ARE TAINTED, THERE IS A STATISTICALLY 19 SIGNIFICANT PATTERN OF UNDERPAYMENT TO WOMEN. 20 NOW, THE DEFENDANT SAYS, "WELL, IT'S NINE CENTS AN 21 HOUR, AND THAT IS MEANINGLESS"; WELL, IT'S EASY FOR HIGHLY PAID 22 LAWYERS TO TALK ABOUT NINE CENTS AN HOUR BEING MEANINGLESS. 23 THIS IS THE DEFENDANTS' CASE, AND A JURY IS THE ONE THAT WILL 24 DECIDE WHAT IS MEANINGLESS AND WHAT IS NOT. EVEN THEIR MODEL, 25 AS SKEWED AS IT IS, SHOWS THAT. 38 ORAL ARGUMENT BY MR. SELIGMAN 1 LET ME TURN TO THE OTHER ISSUE, WHICH IS THE 2 PROMOTION CLAIMS IN THIS CASE, BECAUSE I THINK THERE ARE SOME 3 DIFFERENCES HERE IN TERMS OF THE ANALYSIS. 4 FOR PROMOTION, UNLIKE PAY, WAL-MART DOES NOT CLAIM 5 THERE IS DIFFERENT SEPARATE PROMOTION POLICIES STORE BY STORE. 6 THERE IS NO ASSERTION OF THAT IN THIS CASE. THEIR WHOLE 7 DEFENSE ON PROMOTION IS ONE WHICH I THINK VIRTUALLY CONCEDES 8 THERE IS A COMMON POLICY. WE KNOW THERE IS A COMMON POLICY AT 9 WAL-MART BECAUSE THIS IS A WRITTEN COMMON POLICY. 10 IF YOU LOOK AT EXHIBIT 98, WHICH IS THE NATIONWIDE 11 MANAGEMENT PROMOTION POLICY, GOES OUT TO EVERY STORE, EVERY 12 DISTRICT MANAGER, AND IT SAYS, "THE FOLLOWING OUTLINES THE 13 MANAGING SELECTION PROCESS FOR PROMOTION. THE CRITERIA HAS 14 BEEN SET TO HELP CLEARLY STATE THE EXPECTATION THAT MUST BE 15 FILLED IN ORDER TO BE PROMOTED." 16 ALL THE WAY UP THE LINE THAT POLICY IS WRITTEN DOWN. 17 IT SETS WHAT WAL-MART CLAIMS IS THE MINIMUM CRITERIA. THERE IS 18 ALSO A NATIONAL POLICY ABOUT WHO DECIDES AT EACH LEVEL. THERE 19 IS NO QUESTION ABOUT THAT, EITHER. 20 OUR CLAIM IS THIS NATIONAL POLICY, BEYOND SETTING A 21 MINIMUM, DOES NOT GIVE ANY INSTRUCTION TO LARGELY SENIOR 22 MANAGEMENT ABOUT WHO GETS PROMOTED. 23 THE COURT: SO HOW DOES THAT COMPARE TO WHAT THE 24 COURT HAD IN DONALDSON? 25 MR. SELIGMAN: WELL, IN DONALDSON, WHICH I THINK IS 39 ORAL ARGUMENT BY MR. SELIGMAN 1 AN INTERESTING CASE ALL ON ITS OWN, IF I CAN FIND MY NOTES -- 2 DONALDSON, WHICH IS MICROSOFT, THAT IS A CASE WHICH 3 IS WILDLY MORE COMPLICATED THAN THIS ONE. 4 THE COURT: YOU KEEP TELLING ME THAT THIS CASE ISN'T 5 COMPLICATED, AND ALL I'VE BEEN DOING FOR THE LAST MONTH IS 6 READING. 7 MR. SELIGMAN: WELL, NO, I DIDN'T SAY THERE WAS NO 8 INFORMATION, THERE IS A LOT OF INFORMATION. BUT WHAT WE'RE 9 DOING IS SOMETHING RELATIVELY SIMPLE. 10 IN DONALDSON, THE COURT LOOKED AT A REPORT THAT HAD 11 VIRTUALLY NO STATISTICAL ANALYSIS AT ALL. THERE WAS NO SHOWING 12 OF ANY COMMON POLICY. IN FACT, PLAINTIFF'S EXPERT, IF HE 13 INCLUDED ALL THE DATA, WOULD HAVE SHOWN NO STATISTICAL 14 SIGNIFICANCE ACROSS THE BOARD. THERE WAS NO EVIDENCE 15 WHATSOEVER SWORE THAT THE COURT HAD IN FRONT OF ITSELF. 16 THE OTHER THING IN THAT CASE IS I THINK THAT CASE 17 DID NOT FOLLOW OTHER CASES THAT HAVE HELD THAT SUBJECTIVE 18 CRITERIA COULD BE A GLUE. THE COURT WAS CLEARLY MOTIVATED BY 19 THE FACT THERE WAS NO STATISTICAL CASE. I'M GOING TO TURN TO 20 THE STATISTICAL CASE IN ONE SECOND. 21 SO YOU HAVE A SUBJECTIVE PROCESS; AN EQUALLY 22 IMPORTANT FACTOR IN THIS CASE IS THIS SUBJECTIVE PROCESS IS ONE 23 THAT FOR VIRTUALLY ALL JOB POSITIONS THERE HAS NEVER BEEN AN 24 APPLICATION PROCESS OF ANY SIGNIFICANCE. I THINK THE KEY JOB 25 IN THIS CASE IS THE MANAGEMENT TRAINEE JOB. IT IS UNDISPUTED 40 ORAL ARGUMENT BY MR. SELIGMAN 1 IN THIS CASE THAT UNTIL JANUARY 15, 2003, THERE WAS NEVER AN 2 APPLICATION PROCESS. IT WAS THE CLASSIC PAT ON THE SHOULDER, 3 REACH OUT AND TOUCH SOMEBODY PROMOTION SYSTEM. 4 NOW, A YEAR AFTER THIS LAWSUIT WAS FILED, A YEAR 5 AFTER, SOMEBODY AT WAL-MART BEGAN TO REALIZE THERE WAS A 6 PROBLEM. AND, IN FACT, THE SENIOR VICE-PRESIDENT, WHO IS 7 SITTING HERE AT THE TABLE TODAY, CHARLYN JARELLS PORTER, SENT 8 AN E-MAIL, WHICH IS EXHIBIT 100, AN E-MAIL THAT WAS SENT TO THE 9 PEOPLE MANAGERS AT WAL-MART. THAT E-MAIL SAID, "AS OF 10 JUNE 27TH, 2002, I NEED TO GET SOMEONE WORKING IMMEDIATELY ON A 11 PROJECT OF HOW DOES AN HOURLY ASSOCIATE KNOW HOW TO GET 12 PROMOTED TO A MANAGER TRAINING PROGRAM. WE DO NOT HAVE A 13 POSTER, BROCHURE, NOTHING THAT I'M AWARE OF. WE DO NOT 14 EVEN" -- 15 (LAUGHTER.) 16 THE COURT: LET ME JUST -- HANG ON FOR A SECOND. 17 IT'S REALLY INAPPROPRIATE TO REACT IN THAT FASHION 18 TO A PROCEEDING THAT IS AS SERIOUS AS THIS ONE. AND I DON'T 19 WANT YOU TO TAKE AT TIMES SOME OF THE REFERENCES THAT I MAKE AS 20 HUMOROUS TO DETRACT FROM THE SERIOUSNESS OF THE PROCEEDING. 21 OKAY. 22 MR. SELIGMAN: I APOLOGIZE, YOUR HONOR. 23 THEY KNEW THEY HAD NO POLICY. WE ALSO KNOW THE DATA 24 IN THIS CASE IS QUITE CLEAR AND UNDISPUTED. 80 PERCENT OF THE 25 SUPPORT MANAGER JOBS WERE NOT POSTED. ZERO PERCENT OF THE JOBS 41 ORAL ARGUMENT BY MR. SELIGMAN 1 PRIOR TO 2003 WERE NEVER POSTED. WE KNOW FROM DR. HAWORTH'S 2 TESTIMONY THAT VIRTUALLY NONE OF THE ASSISTANT MANAGER AND 3 CO-MANAGER JOBS WERE EVER POSTED. SO YOU HAVE A SYSTEM WHICH 4 IS SUBJECTIVE, AND NO PROCESS, OR MEANINGFUL APPLICATION 5 PROCESS IS OUT THERE, WHICH LEADS TO THE OTHER PROBLEM WITH THE 6 PROCESS. 7 WE HAVE MADE THE ARGUMENT IN THIS CASE THAT 8 RELOCATION FOR MANAGEMENT HAS BEEN APPLIED IN A WAY THAT HAS AN 9 ADVERSE IMPACT FOR WOMEN. THIS IS NOT A NEW PROBLEM, YOUR 10 HONOR. WE PUT IN THE RECORD AS EXHIBIT 87 AN EXCERPT FROM 11 SAM WALTON'S BOOK, WHICH IS REQUIRED READING FOR EVERY TRAINEE 12 AT WAL-MART, THIS IS PART OF THE CULTURE AT WAL-MART. 13 BACK IN 1993, MR. WALTON WROTE ON PAGE 217, 14 "TRADITIONALLY, WE'VE HAD THIS ATTITUDE THAT IF YOU WANT TO BE 15 A MANAGER AT WAL-MART, YOU BASICALLY HAD TO BE WILLING TO MOVE 16 ON A MOMENT'S NOTICE." AND THEN HE TALKS ABOUT AN EXAMPLE OF 17 THAT. "MAYBE THAT WAS NECESSARY BACK IN THE OLD DAYS, MAYBE IT 18 WAS MORE RIGID THAN IT NEEDED TO BE, NOW IT'S NOT REALLY 19 APPROPRIATE ANYMORE. AND WHY?" AND HE GIVES A SPECIFIC 20 EXAMPLE ABOUT THE IMPACT ON WOMEN. 21 "THE OLD WAYS REALLY PUT GOOD SMART WOMEN AT A 22 DISADVANTAGE IN OUR COMPANY, BECAUSE AT THE TIME THEY WEREN'T 23 AS FREE TO PICK UP AND MOVE AS MANY MEN WERE. NOW I'VE SEEN 24 THE LIGHT ON THE OPPORTUNITIES WE MISSED WITH THOSE WOMEN." 25 WELL, THAT WAS SAM WALTON IN 1993. I'M GOING TO 42 ORAL ARGUMENT BY MR. SELIGMAN 1 RETURN THE COURT TO THE COMPANY NATIONAL POLICY. AND IF YOU 2 NOTE, YOUR HONOR, FOR EACH LEVEL, WILLINGNESS TO RELOCATE IS AN 3 EXPLICIT CRITERIA. BUT YOU DON'T HAVE TO TAKE WAL-MART'S 4 WRITTEN TESTIMONY ON THIS, THEIR CEO TESTIFIED THIS YEAR IN HIS 5 DEPOSITION ATTACHED TO EXHIBIT 15 THAT RELOCATING A RESIDENCE 6 HAS BEEN A REQUIREMENT FOR AT LEAST THE LAST TEN YEARS, AND IT 7 CONTINUES TO BE A REQUIREMENT. 8 NOW, IF THERE IS ANY DOUBT IN THE RECORD ABOUT 9 WHETHER THAT HAS AN ADVERSE IMPACT ON WOMEN, WAL-MART'S OWN 10 EXPERT, DR. HAWORTH, DEMONSTRATED HOW IT HAS AN ADVERSE IMPACT. 11 SHE LOOKED AT THE APPLICATION DATA FOR STORE MANAGERS, WHICH WE 12 THINK IS FLAWED, BECAUSE YOU HAVE TO GET PERMISSION TO APPLY, 13 BUT NEVERTHELESS, SHE LOOKED AT IT AND COMPARED THOSE WOMEN AND 14 MEN WHO SOUGHT A JOB OUTSIDE OF THEIR OWN REGION, AND SHE 15 CONCLUDED IN HER DECLARATION AT PAGE 62 THE DIFFERENCE IN 16 REGION MOBILITY RATES BETWEEN WOMEN AND MEN IS STATISTICALLY 17 DIFFERENT. MEN SHOW A GREATER WILLINGNESS AND INTEREST IN 18 RELOCATION. 19 ESSENTIALLY, WHAT THAT EVIDENCE SHOWS, YOUR HONOR, 20 IS THE UNDISPUTED RECORD TODAY SHOWS THE EXISTENCE OF A 21 NATIONAL POLICY, DESPITE ITS KNOWN DETERRENT IMPACT, AND 22 EVIDENCE DEMONSTRATING THAT DETERRENT IMPACT. 23 FOR MOST OF THE PROMOTION ISSUES IN THIS CASE, 24 WAL-MART RAISES A SINGLE ARGUMENT, WHICH IS A MERITS ARGUMENT, 25 AND ONE THAT I DON'T THINK IS SUPPORTED BY THE RECORD. THEY 43 ORAL ARGUMENT BY MR. SELIGMAN 1 ASSERT WE'RE LOOKING AT THE WRONG BASE, YOU SHOULD LOOK AT 2 APPLICANT FLOW, THAT'S WHAT YOU SHOULD LOOK AT. AND THE CHOICE 3 OF THAT PROXY, OR THAT MODEL, IS THE CLASSIC MERITS QUESTION, 4 WHICH IS ONLY SOMETHING THE COURT SHOULD CONSIDER IF, AS A 5 MATTER OF LAW, THE COURT CAN SAY, "THAT'S THE ONLY WAY TO GO." 6 WHAT IS THE EVIDENCE? FOR MOST OF THE CLASS PERIOD, 7 IN FACT, FOR THE ENTIRE CLASS PERIOD UNTIL THE CLOSE OF 8 DISCOVERY, THERE WAS NOT APPLICANT FLOW FOR THE POSITIONS THAT 9 WE ARE ADDRESSING HERE. NOW, IT'S TRUE THERE IS A LOT OF 10 APPLICANT FLOW AT LOWER-LEVEL JOBS; WE'RE NOT CONTENDING AT 11 THOSE LOWER-LEVEL JOBS THAT WOMEN -- 12 THE COURT: IS THERE APPLICANT FLOW DATA FOR THE 13 STORE MANAGER POSITION? 14 MR. SELIGMAN: YES, THERE IS. AND IN STORE MANAGER, 15 THERE IS SOME APPLICANT FLOW DATA, AND I THINK IT'S IMPORTANT 16 TO DISTINGUISH WHAT IT IS. 17 THERE IS NO APPLICANT FLOW DATA FOR SAM'S CLUB. FOR 18 REGULAR WAL-MART STORE MANAGER, THERE IS APPLICANT FLOW DATA 19 FOR A SIGNIFICANT PERCENTAGE; HOWEVER, IT'S NOT TRUE APPLICANT 20 FLOW DATA. UNLIKE A NORMAL SYSTEM, WHERE YOU SEE A POSTING AND 21 YOU CAN APPLY, THEY HAVE A GATEKEEPER. WOMEN ARE NOT ALLOWED 22 TO APPLY FOR A SPECIFIC STORE MANAGER JOB WITHOUT THE 23 PERMISSION OF THEIR DISTRICT MANAGER. SO IT'S NOT A TRUE 24 APPLICANT FLOW SYSTEM AT ALL. 25 THE COURT: WELL, IT MAY BE UNDERINCLUSIVE, IT 44 ORAL ARGUMENT BY MR. SELIGMAN 1 SOUNDS LIKE. 2 MR. SELIGMAN: WELL, I THINK IT'S WAY 3 UNDERINCLUSIVE, YOUR HONOR, IF THE SYSTEM SETS UP A BARRIER AND 4 THE SYSTEM IS ADMINISTERED BY MEN WITH NO OBJECTIVE CRITERIA, 5 AND THE RESULT IS THAT WOMEN GET NOT ONLY FEWER PROMOTIONS, BUT 6 THEY GET PROMOTIONS TO SMALLER STORES. I THINK THAT RAISES A 7 CLASSIC QUESTION. 8 AGAIN, WHAT POOL IS -- WHETHER YOU SHOULD LOOK AT 9 APPLICANT FLOW OR NOT, THAT IS ULTIMATELY A MERIT QUESTION. 10 THE ONLY JOB THAT DOESN'T HAVE A GATEKEEPER SYSTEM THAT 11 WAL-MART CITES IS THE SUPPORT MANAGER, WHICH THEY SAY IS A 12 POSTING SYSTEM. 13 I THINK IT'S VERY IMPORTANT TO NOTE THAT DESPITE THE 14 FACT THAT IT IS A, QUOTE, "POSTED JOB," WAL-MART BASICALLY 15 DOESN'T USE IT. IT IS UNDISPUTED ON THE RECORD THAT 80 PERCENT 16 OF THE SUPPORT MANAGERS WHO ARE HIRED ARE PROMOTED IN THAT 17 POSITION DID NOT GO THROUGH A JOB POSTING SYSTEM. 18 NOW HOW SIGNIFICANT IS THAT? TWENTY YEARS AGO, 19 TWENTY-FIVE YEARS AGO, THE FIFTH CIRCUIT, IN A CASE CALLED 20 JAMES VERSUS STOCKHAM VALVES, WHICH WE CITED IN OUR PAPERS, 21 LOOKED AT A CASE WHERE THE MAJORITY, NOT 80 PERCENT, BUT THE 22 MAJORITY OF ASSIGNMENTS TO A PARTICULAR POSITION WERE MADE 23 WITHOUT THE REQUIREMENT OF AN APPLICATION, AND THE COURT SAID, 24 "THE STATISTICS TO SHOW THAT A COMPARABLE NUMBER OF TIMELY 25 APPLICATIONS TO THE APPRENTICESHIP PROGRAM WERE GRANTED FOR 45 ORAL ARGUMENT BY MR. SELIGMAN 1 BLACK AND WHITE EMPLOYEES IS LARGELY IRRELEVANT." WHY? 2 BECAUSE THAT WAS THE EXCEPTION, THAT'S NOT THE NORMAL PROCESS 3 THAT IS THERE. 4 THE COURT ASKED THE DEFENDANT IN QUESTION 3, "THE 5 COURT NOTED THAT MOST OF THE JOB POSTINGS WERE AT LOWER LEVELS 6 THAT ARE NOT AT ISSUE. SHOULD WE USE THESE JOBS TO EXTRAPOLATE 7 AVAILABILITY FOR HIGHER-LEVEL JOBS? AND IF SO, CAN YOU 8 ESTIMATE THE NUMBER OF HIGHER-LEVEL JOBS THAT WERE ACTUALLY 9 POSTED?" 10 WELL, FIRST OF ALL, YOUR HONOR, IF YOU USED THE 11 BIDDING OF WOMEN AT LOWER-LEVEL JOBS TO EXTRAPOLATE INTEREST, 12 THAT SHOWS THAT WAL-MART IS WAY OUT OF SYNC, BECAUSE THE DATA, 13 ACCORDING TO DR. HAWORTH, IS THAT WOMEN BID PRETTY CLOSE TO 14 THEIR AVAILABILITY IN THE LOWER LEVELS. IF YOU LOOK AT HER 15 DECLARATION AT PAGE 41, SHE HAS A CHART IN WHICH SHE ADDED UP 16 ALL THE LOWER-LEVEL BIDDING AND LOOKED AT THE PERCENTAGE BID 17 RATE OF WOMEN, AND THAT SHOWED THAT WOMEN WERE 68 PERCENT OF 18 ALL THE BIDS. 19 NOW, COMPARE THAT TO ONE-THIRD IN MANAGER, COMPARE 20 THAT TO THE FALL-OFF, COMPARE THAT TO EVEN DR. DROGIN'S MODEL; 21 DR. DROGIN USED A POOL OF 60 PERCENT. SO IF YOU WERE TO LOOK 22 AT THAT DATA, IT CERTAINLY DOES NOT UNDERCUT OUR CASE, IT 23 OVERWHELMS THE CASE THAT IS THERE. 24 DR. HAWORTH CONCEDED IN HER DEPOSITION THAT SHE DOES 25 NOT KNOW WHAT PERCENTAGE OF THE HOURLY MANAGEMENT JOBS WERE 46 ORAL ARGUMENT BY MR. SELIGMAN 1 FILLED OUTSIDE OF THE POSTING. AND SHE DID NOT DISPUTE THE 2 80 PERCENT FOR SUPPORT MANAGER. 3 NOW, THE COURT ASKED WHAT DOES SHE KNOW ABOUT THE OTHER JOBS, 4 AND WE KNOW WHAT SHE KNOWS, BECAUSE AT HER REPORT ON PAGE 66, 5 SHOWS EXACTLY HOW MANY PEOPLE APPLIED FOR ASSISTANT MANAGER AND 6 CO-MANAGER. 7 FOR ASSISTANT MANAGER, THE DATA SHOWS EXACTLY 135 8 APPLICATIONS. HOW MANY OPENINGS WERE FILLED, THOUGH? 32,585. 9 NOW, I DON'T CARE WHAT KIND OF STATISTICAL ANALYSIS YOU WANT, 10 YOU CAN'T DERIVE ANYTHING FROM THAT 135 FIGURE. 11 CO-MANAGER: 151 APPLICATIONS IN THEIR SYSTEM FOR 12 5,884 POSITIONS. THAT IS DR. HAWORTH'S DATA. WE DON'T DISPUTE 13 THOSE NUMBERS. THOSE NUMBERS SHOW THERE WAS NO MEANINGFUL 14 APPLICATION PROCESS THAT IS THERE. 15 THE COURT ASKED THE QUESTION ABOUT IN QUESTION 1 16 ABOUT DR. DROGIN'S ANALYSIS, SAYING THERE IS NO STATISTICAL 17 SIGNIFICANCE IN A FEW REGIONS, AND WHETHER THAT SHOULD AFFECT 18 THE CLASS -- 19 THE COURT: I'M INTERESTED, TOO, IF THERE IS ANY 20 CASE CITATION, ANYTHING THAT WOULD REFLECT HOW THE COURT IS TO 21 RESOLVE THE QUESTION IF THERE IS NOT EVIDENCE OF STATISTICAL 22 DISPARITY ACROSS ALL REGIONS, HOW THAT -- HOW THE COURT 23 RESOLVES THAT IN THE CALCULUS OF THE CERTIFICATION MOTION 24 BEFORE IT. 25 MR. SELIGMAN: OKAY, I THINK THAT'S A LEGITIMATE 47 ORAL ARGUMENT BY MR. SELIGMAN 1 QUESTION. YOU WILL NOT FIND A CASE THAT SAYS THE ABSENCE OF A 2 COUPLE OF REGIONS UNDERCUTS CLASS CERT. WHAT YOU WILL FIND IS 3 WHERE THE MAJORITY OF REGIONS THERE IS NO STATISTICAL 4 SIGNIFICANCE. THAT'S NOT THE CASE WE HAVE HERE. 5 THE REASON FOR THAT IS THE ULTIMATE LIABILITY 6 QUESTION, YOUR HONOR, IS NOT GOING TO TURN ON DR. DROGIN ALONE, 7 IT TURNS ON THE CUMULATIVE EVIDENCE. AND THAT EVIDENCE IS 8 DR. DROGIN'S EVIDENCE. AND IT'S ALSO DR. BENDICK'S EVIDENCE. 9 AND DR. BENDICK, BY THE WAY, FOUND A PATTERN IN 49 OR 50 STATES 10 AND FOUND IN URBAN AND RURAL AREAS A CONSISTENT PATTERN ACROSS 11 THE COUNTRY. 12 THE COURT: SO THE RULE IS IF YOU HAVE DIFFERENT 13 FACILITIES, IF YOU FIND MORE THAN 50 PERCENT, YOU CERTIFY THE 14 CLASS WITH RESPECT TO ALL THE REGIONS? 15 MR. SELIGMAN: NO, THAT'S NOT WHAT I THINK THE RULE 16 IS, YOUR HONOR. THE RULE IS WHETHER A COMMON QUESTION HAS BEEN 17 PRESENTED. AND WE HAVE SHOWN THE COURT A COMMON POLICY THAT 18 CUTS ACROSS EVERY SINGLE FACILITY. WE HAVE A COMBINATION OF 19 STATISTICAL AND ANECDOTAL EVIDENCE THAT CUTS ACROSS VIRTUALLY 20 ALL -- 21 THE COURT: YOU ARE MAKING, THOUGH, SOME ASSUMPTIONS 22 ABOUT REGIONS THAT ARE NOT -- WHERE THERE HAS NOT BEEN 23 REFLECTED ANY STATISTICAL EVIDENCE THAT WOULD INDICATE THAT 24 THERE WAS DISCRIMINATION ONGOING. 25 MR. SELIGMAN: AND LET ME ADDRESS THIS, YOUR HONOR. 48 ORAL ARGUMENT BY MR. SELIGMAN 1 YOU POINTED OUT IN DR. DROGIN'S DECLARATION, WHICH 2 IS ON PAGE 37, HIS CHART WHICH SHOWS THE REGIONAL AMOUNTS, AND 3 YOU POINTED TO THE SUPPORT MANAGER THAT SHOWED THAT THERE 4 WAS -- WOMEN WHO WERE FAVORED IN PROMOTIONS IN TWO REGIONS. 5 AND THAT CAUSED US TO GO BACK AND LOOK AND FIND OUT WHAT THOSE 6 NUMBERS REALLY WERE. 7 I'LL REPRESENT TO THE COURT, AND I WOULD BE HAPPY TO 8 OFFER A DECLARATION, THOSE TWO REGIONS ACTUALLY WERE TWO SAM'S 9 REGIONS, WHERE THERE WERE A TOTAL OF TWO JOBS FOR SUPPORT 10 MANAGER. IT'S NOT USUALLY USED AT SAM'S. THOSE NUMBERS IN NO 11 WAY SHOW THERE'S A DIFFERENCE. MANAGEMENT TRAINEE, YOU HAVE 12 CONSISTENT PRACTICE ACROSS THE BOARD. 13 FURTHER UP THE LINE THERE ARE A FEW EXCEPTIONS, AND 14 I THINK THE COURT NEEDS TO PUT THAT IN SOME REFERENCE HERE. 15 FIRST OF ALL, FOR THE FURTHER UP LINE, EVEN THOUGH 16 THERE MAY BE A COUPLE OF EXCEPTIONS, MOST STORE MANAGERS CROSS 17 REGIONS. YOU CAN'T SEPARATE OUT -- THE DATA IN THE CASE SHOWS 18 THAT A THIRD OF THE POSITIONS FILLED FOR STORE MANAGER ARE 19 CROSS-REGION FILLS. AND WE KNOW THAT THE MAJORITY OF STORE 20 MANAGERS GO PAST REGIONS. THERE IS NO CLEAR WAY TO SEPARATE 21 THAT OUT. AND THAT IS WHAT DR. DROGIN FOUND ON PAGE 23 OF HIS 22 REPORT. 23 THERE IS ANOTHER IMPORTANT POINT, AND THAT IS WHEN 24 YOU GET TO CO-MANAGER AND STORE MANAGER, A LOT OF WOMEN ARE 25 ALREADY CUT OUT ON THE DEAL. THEY ARE FURTHER UP ON THE 49 ORAL ARGUMENT BY MR. SELIGMAN 1 PIPELINE. THIS IS EXACTLY THE SITUATION THAT JUDGE PATEL FACED 2 IN THE STANDARD VERSUS LUCKY STORES CASE. WE HAD NO 3 STATISTICAL SIGNIFICANCE, ZERO FOR STORE MANAGER AND FOR 4 ASSISTANT MANAGER, BECAUSE BY THE TIME YOU GOT UP THERE, THERE 5 WERE NOT ENOUGH WOMEN IN THE POOL. 6 WHAT JUDGE PATEL SAID IS THAT LIABILITY COULD STILL 7 BE FOUND FOR THE UPPER LEVELS, FOR THE UPPER LEVELS BECAUSE IT 8 WAS A RESULT OF WOMEN BEING BLOCKED AT THE LOWER RUNGS OF THE 9 PROMOTIONAL LADDER. SHE SAID YOU LOOK AT THE CUMULATIVE 10 EVIDENCE. AND SHE CONCLUDED THAT THERE WAS DISCRIMINATION IN 11 THE PROMOTIONAL PROCESS, AS A WHOLE. 12 YOUR HONOR, I WANT TO MAKE SURE I DON'T MISS ANY OF 13 THE QUESTIONS THAT ARE THERE, SO I WANT TO TURN TO THE 14 TYPICALITY AND ADEQUACY, UNLESS THE COURT HAS OTHER QUESTIONS 15 ON COMMONALITY AT THIS STAGE. 16 RULE 23 REQUIRES THE NAMED PLAINTIFF TO HAVE CLAIMS 17 THAT ARE TYPICAL OF THOSE IN THE CLASS. IN THIS CIRCUIT, WHAT 18 THAT REQUIRES IS THAT THE NAMED PLAINTIFF'S CLAIMS BE 19 REASONABLY COEXTENSIVE WITH CLASS MEMBERS. IT DOES NOT REQUIRE 20 THAT THEY BE IDENTICAL. FACTUAL VARIATIONS ARE NOT THE 21 CRITICAL QUESTION. THE CRITICAL QUESTION IS WHETHER THE CLAIMS 22 ASSERTED AND THE RELIEF SOUGHT ARE COMMON TO THE CLASS. HERE 23 EVERY CLASS MEMBER FROM THE BOTTOM TO THE TOP MAKES THE SAME 24 CLAIM THAT THE PLAINTIFFS MAKE, THAT YOU HAD A SUBJECTIVE 25 CLOSED PROCESS. 50 ORAL ARGUMENT BY MR. SELIGMAN 1 NOW, THE COURT ASKED IN QUESTION NUMBER 2, WHY DO WE 2 NOT HAVE A CLASS REPRESENTATIVE WHO HAS HELD A HIGH-LEVEL 3 POSITION IN THE STORE? I FIRST WANT TO MAKE AN IMPORTANT 4 POINT, YOUR HONOR, WHICH IS WHAT WE'RE TALKING ABOUT HERE. WE 5 ARE NOT TALKING ABOUT HIGH-LEVEL POSITIONS, ALTHOUGH WAL-MART 6 WANTS TO CLAIM THE STORE MANAGERS HAVE VIRTUAL FIEFDOMS, THESE 7 ARE NOT POLICY-MAKING POSITIONS. THEY DON'T HAVE ANY AUTHORITY 8 AT ALL TO MAKE SALARIED MANAGEMENT DECISIONS. 9 IN FACT, THE EVIDENCE IN THIS CASE IS THAT AT THE 10 SALARIED LEVEL, THOSE DECISIONS ARE MADE AT BENTONVILLE. THE 11 PROMOTION INTO MANAGEMENT AND THEIR PAY LEVELS, THESE ARE 12 PEOPLE THAT ARE CONSTANTLY MONITORED EVERY STAGE OF THE WAY. 13 SO WE TAKE ISSUE, I THINK, WITH THE SUGGESTION THAT STORE 14 MANAGERS ARE AT SOME HIGHLY ELEVATED LEVEL. 15 NEVERTHELESS, THE SHORT ANSWER TO THE COURT'S 16 QUESTION OF WHY DON'T WE HAVE A STORE MANAGER IS UNDER THE 17 PERMISSIVE TYPICALITY RULES, PARTICULARLY APPROVED BY HANLON 18 AND BY THE STATON CASES. YOU DON'T NEED TO HAVE SOMEBODY AT 19 EVERY LEVEL. IF YOU DO STORE MANAGER, WHICH HAS 3,600 20 POSITIONS, WHY NOT CO-MANAGER? WHY NOT A SMALLER AND SMALLER 21 POSITION, CHOPPING IT SMALLER AND SMALLER? 22 WHAT WE DO HAVE IS WE HAVE HOURLY AND SALARIED 23 PLAINTIFFS IN THIS CASE. PLAINTIFF KWAPNOSKI HAS HELD THREE 24 SEPARATE MANAGEMENT POSITIONS. SHE'S BEEN A MANAGEMENT 25 TRAINEE, AN AREA MANAGER AND ASSISTANT MANAGER. SHE HAS RAISED 51 ORAL ARGUMENT BY MR. SELIGMAN 1 CLAIMS THAT ARE TYPICAL OF THOSE THAT ARE THE CLASS. 2 THE COURT ALSO ASKS THE QUESTION OF, IN TERMS OF 3 ACTUAL JOB FUNCTIONS AND RESPONSIBILITIES, HOW SIMILAR OR 4 DISTINCT ARE THE MANAGEMENT POSITIONS THAT MS. KWAPNOSKI HAS 5 HELD TO THE HIGHER IN-STORE MANAGEMENT POSITIONS? I THINK THE 6 SHORT ANSWER IS, IT'S A QUESTION OF SCOPE. SHE HAS BEEN AN 7 HOURLY SUPERVISOR, AN ENTRY-LEVELED SALARIED EMPLOYEE, A 8 MANAGEMENT TRAINEE, AND AN ASSISTANT MANAGER. AND THERE'S NO 9 QUESTION THAT EACH JOB HAS MORE RESPONSIBILITY. IN FACT, 10 WAL-MART HAS A VERY CLEAR PROMOTIONAL PROGRESSION. 11 (REFERRING TO CHART.) 12 MR. SELIGMAN: THIS IS THEIR PROMOTIONAL 13 PROGRESSION. THIS IS WHAT THEY TELL EMPLOYEES NOW. AND THIS 14 IS EXHIBIT 103. 15 YOU GO FROM SUPPORT MANAGER TO MANAGEMENT TRAINEE, 16 ASSISTANT MANAGER, CO-MANAGER, STORE MANAGER. IT'S THE SAME 17 PROGRESSION THAT YOU MOVE UP THE LINE. AND AS YOU GO UP THAT 18 LINE, THERE IS INCREASING RESPONSIBILITY. IT'S ALSO CLEAR IN 19 THE RECORD THAT IN THE ABSENCE OF THE STORE MANAGER, THE 20 CO-MANAGER ACTS. IN THE ABSENCE OF THE CO-MANAGER, THE 21 ASSISTANT MANAGER ACTS. AND IN THE ABSENCE OF THE ASSISTANT 22 MANAGER, THE SUPPORT MANAGER ACTS. SO IT'S A QUESTION OF 23 DEGREE, GOING UP THE LINE. 24 THERE IS NO QUESTION THAT A STORE MANAGER HAS MORE 25 AUTHORITY THAN LOWER-LEVEL EMPLOYEES. BUT I TURN YOUR HONOR TO 52 ORAL ARGUMENT BY MR. SELIGMAN 1 DEFENDANT'S OWN CASE, WAGNER VERSUS TAYLOR WHERE THE QUESTION 2 IS NOT WHERE YOU ARE ON THAT PYRAMID. IN THAT CASE THEY DID 3 THE OPPOSITE OF WHAT WE DID. IN THAT CASE THEY HAD ONLY ONE 4 REP AT THE VERY TOP OF THAT PYRAMID. 5 THE ISSUE WAS NOT, AS THE COURT SAID, WHETHER HIS 6 DUTIES WERE DIFFERENT THAN LOWER-LEVEL PEOPLE, THE QUESTION IS 7 WHETHER HIS CLAIMS WERE TYPICAL. AND CHRIS KWAPNOSKI'S CLAIMS 8 ARE TYPICAL OF THE CLASS OF SALARIED AS WELL AS OF HOURLY 9 EMPLOYEES. 10 THAT BRINGS ME TO WAL-MART'S LAST MAJOR ARGUMENT, 11 AND I THINK ONE THE COURT HAD SOME CONCERNS ABOUT, WHICH IS 12 THEY CLAIM THAT THERE IS A CONFLICT OF INTEREST BETWEEN ITS 13 FEMALE STORE MANAGERS AND THE PLAINTIFFS. I THINK IT'S 14 IMPORTANT TO GO BACK TO RULE 23. 15 RULE 23 ASKS THE QUESTION OF WHETHER THE CLASS 16 REPRESENTATIVE IS AN ADEQUATE REPRESENTATIVE OF THE CLASS. IT 17 DOESN'T ASK THE QUESTION OF WHETHER CLASS MEMBERS ARE AN 18 ADEQUATE REPRESENTATIVE, IT REQUIRES A CLASS REPRESENTATIVE 19 WITH COMMON INTEREST WITH THE CLASS. 20 NOW, THERE IS NO EVIDENCE IN THIS CASE THAT THE 21 CLASS REPRESENTATIVES IN THIS CASE HAVE ANY CONFLICT WITH 22 ANYBODY. WAL-MART'S ARGUMENT IS THAT SOME OF THE CLASS MEMBERS 23 MAY BE ITS FEMALE MANAGERS, AND THOSE FEMALE MANAGERS MAY HAVE 24 A CONFLICT. NOW, I'M NOT SAYING THE COURT SHOULDN'T CONSIDER 25 THAT, BUT I THINK IT'S IMPORTANT TO LOOK AT WHAT THE RULE 23 53 ORAL ARGUMENT BY MR. SELIGMAN 1 QUESTION ULTIMATELY IS. 2 SO THE DEFENDANT MAKES THAT ARGUMENT. NOW, WE KNOW 3 FROM THE STATON CASE THERE IS NOT A PER-SE RULE THAT SAYS THERE 4 IS AN AUTOMATIC CONFLICT, YOU HAVE THE LOOK AT THE FACTS. 5 AGAIN, WE TURN TO WAGNER VERSUS TAYLOR. THE STATON COURT 6 LOOKED AT THAT AND MADE THE POINT THAT IN THAT CASE YOU HAVE 7 ONLY ONE CLASS REPRESENTATIVE, AND IT WAS ONLY A SENIOR 8 MANAGER. 9 THAT PRESENTED -- NOT ONLY DID THAT NOT ESTABLISH 10 THE CONFLICT ALONE, IN ADDITION, THERE WAS SOME PROBLEMS ABOUT 11 THAT PERSON ACTING IN PRO PER AND THE CASE LAW SAYING PRO PERS 12 CAN'T BE -- 13 THE COURT: SO DONALDSON IS CONSISTENT WITH THE RULE 14 THAT IS SET FORTH IN THE NINTH CIRCUIT WITH RESPECT TO THE 15 ADEQUACY ISSUE. HOW DO YOU READ DONALDSON IN TERMS OF THE 16 DEFENDANT'S ASSERTION HERE THAT THERE IS A CONFLICT THAT SHOULD 17 DEFEAT CERTIFICATION? 18 MR. SELIGMAN: I THINK DONALDSON IS NOT THE LAW OF 19 THE NINTH CIRCUIT, VERY SIMPLE. DONALDSON APPLIES A PER SE 20 RULE. THERE IS NO PER SAY RULE THAT SAYS YOU CAN NEVER HAVE A 21 MANAGER IN THE CLASS. IF YOU BOUGHT THAT RULE, YOUR HONOR -- 22 OKAY, LET'S GET RID OF THE CONFIDENT. 23 LET'S SAY THIS CASE WAS SOLELY A STORE MANAGER CASE, 24 AND I HAD A STORE MANAGER SUING WAL-MART; UNDER WAL-MART'S 25 THEORY, THERE WOULD BE AN INEVITABLE CONFLICT BECAUSE SOME OF 54 ORAL ARGUMENT BY MR. SELIGMAN 1 THOSE CLASS MEMBERS MIGHT HAVE TO TESTIFY. THEIRS IS A THEORY 2 THAT MAKES IT IMPOSSIBLE TO EVER LITIGATE ONE OF THOSE CASES. 3 THE COURT: HOW ABOUT PRACTICALLY? PRACTICALLY, HOW 4 DOES THIS WORK OUT? 5 MR. SELIGMAN: WELL, I THINK THAT IS REALLY THE 6 CRITICAL QUESTION. WHAT DOES THE LIABILITY TRIAL LOOK LIKE IN 7 THIS CASE? 8 FIRST OF ALL, LIABILITY DOES NOT TURN ON WHETHER 9 STORE MANAGERS INDIVIDUALLY DISCRIMINATE. IN FACT, WE KNOW 10 FROM NINTH CIRCUIT CASE LAW THAT STORE MANAGERS CAN'T BE 11 DEFENDANTS. THAT'S THE MILLER VERSUS MAXWELL INTERNATIONAL 12 CASE, 991 F.2D 583. SO THE ARGUMENT THAT THEY'RE EACH LIABLE, 13 THAT IS NONSENSE, ONLY WAL-MART CAN BE LIABLE. 14 AND THE LIABILITY AGAINST WAL-MART IS ABOUT WHAT 15 WAL-MART HAS DONE, WHAT WAL-MART KNOWS, AND WHAT THE EVIDENCE 16 SHOWS. AND THAT IS PATTERN AND PRACTICE EVIDENCE. THE CASE 17 LAW IS ABUNDANTLY CLEAR THAT IT DOES NOT TURN ON SELF-SERVING 18 STATEMENTS BY INDIVIDUAL MANAGERS, AND IT ISN'T GOING TO HAVE 19 3,600 MANAGERS COME FORWARD. WHAT IS IT GOING TO TURN ON IS 20 WHETHER THE PLAINTIFFS SHOW THERE IS A COMMON PRACTICE AT 21 WAL-MART, NOT THE EXCEPTION, BUT THE RULE. CONVERSELY, 22 EXCEPTIONS DON'T NEGATE THE COMMON PRACTICE. 23 SO WHAT IS GOING TO HAPPEN AT TRIAL, EACH SIDE WILL 24 HAVE SOME ANECDOTAL TESTIMONY, BUT AS A PRACTICAL MATTER THE 25 COURT IS GOING TO SET SOME REASONABLE LIMITATIONS OF THE LENGTH 55 ORAL ARGUMENT BY MR. SELIGMAN 1 OF THIS TRIAL AND WILL MAKE SOME JUDGMENTS. 2 EVEN GIVEN THAT, IT IS IMPORTANT TO DETERMINE WHERE 3 THIS CONFLICT, WHICH IS REALLY ONLY THEORETICAL, WHERE IT 4 APPLIES. IT DOESN'T APPLY TO ALL THE ISSUES IN THIS CASE. THE 5 CONFLICT APPLIES ONLY WHERE YOU HAVE FEMALE STORE MANAGERS WHO 6 CHOOSE NOT TO OPT OUT. IF THEY FEEL THEY HAVE A CONFLICT, THEY 7 HAVE THE RIGHT TO OPT OUT. AND IF THEY OPT OUT, THERE IS NO 8 CONFLICT FOR THOSE STORE MANAGERS. 9 THE SECOND QUESTION IS ANY CONFLICT WOULD APPLY 10 SOLELY TO THE HOURLY PAY ISSUE, BECAUSE THOSE STORE MANAGERS DO 11 NOT HAVE THE AUTHORITY TO MAKE PROMOTION DECISIONS INTO 12 MANAGEMENT AND THEY DON'T HAVE AUTHORITY TO MAKE DECISIONS 13 ABOUT PAY AT THE MANAGEMENT LEVEL. 14 THAT CONFLICT, EVEN IF IT THEORETICALLY APPLIES, 15 DOES NOT APPLY TO THE ADVERSE IMPACT THEORY IN THIS CASE, 16 BECAUSE INTENT IS IRRELEVANT FOR ADVERSE IMPACT. WAL-MART 17 WANTS THESE WOMEN TO GET UP AND SAY, "I DON'T DISCRIMINATE"; 18 THAT IS NOT EVEN ADMISSIBLE EVIDENCE ON AN ADVERSE IMPACT CASE. 19 THAT TURNS ON WHAT THE STATISTICAL RECORD SHOWS. 20 SO I THINK AS A PRACTICAL MATTER, YOUR HONOR, THERE 21 IS NOT A SIGNIFICANT PATTERN THAT IS OUT THERE FOR -- EXCUSE 22 ME, A SIGNIFICANT CONFLICT THAT HAS BEEN SHOWN. IT IS AT BEST 23 A THEORETICAL CONFLICT. 24 NOW, I REALIZE I WENT BY AND I HAVE NOT ANSWERED THE 25 ONE QUESTION THAT YOUR HONOR ASKED THIS -- 56 ORAL ARGUMENT BY MR. SELIGMAN 1 THE COURT: HOLD ON. LET ME ASK: 2 MADAM REPORTER, HOW ARE YOU DOING? 3 THE COURT REPORTER: COULD WE TAKE A QUICK BREAK? 4 THE COURT: ALL RIGHT. 5 WE'LL TAKE ABOUT A TEN-MINUTE RECESS. 6 (RECESS TAKEN AT 10:57 A.M.) 7 (PROCEEDINGS RESUMED AT 11:12 A.M.) 8 THE COURT: OKAY, AGAIN, THE RECORD SHOULD REFLECT 9 THAT ALL PARTIES ARE PRESENT, COUNSEL ARE PRESENT. THE COURT 10 IS HEARING ARGUMENT IN THE CONTEXT OF A RULE 23 MOTION. 11 BEFORE WE TOOK OUR RECESS, MR. SELIGMAN, YOU WERE 12 DISCUSSING THE ISSUE OF CONFLICT, AND WE'RE NOW MOVING TO, I 13 THINK, THE FINAL QUESTION I ASKED EARLIER THIS MORNING. 14 MR. SELIGMAN: THAT'S CORRECT, YOUR HONOR. 15 IT MAY BE A LITTLE ANTICLIMACTIC, BUT WE'LL GO BACK 16 TO THAT. 17 YOU ASKED THE QUESTION ABOUT STORE MANAGER, AND 18 WHETHER THERE WAS A PAY DIFFERENCE IN THAT, AND -- 19 THE COURT: ACTUALLY, IT'S BROADER THAN THAT. I 20 JUST WANT TO MAKE SURE THAT I HAVE ON THE RADAR SCOPE THE 21 CLASSIFICATIONS THAT ARE IN PLAY WITH RESPECT TO YOUR REQUEST 22 FOR CERTIFICATIONS. 23 MR. SELIGMAN: CERTAINLY. 24 I THINK THE ANSWER IS, ALL CLASSIFICATIONS AND THE 25 REASON WE DO THAT IS BECAUSE OUR ULTIMATE ANALYSIS -- WE GIVE 57 ORAL ARGUMENT BY MR. SELIGMAN 1 AVERAGE PAY DIFFERENCES, AND DR. DROGIN SAID IN ALMOST ALL JOBS 2 THERE IS AN AVERAGE. BUT HE ALSO DOES A REGRESSION MODEL WHICH 3 COVERS ALL JOBS WITH ONE EXCEPTION, WHICH IS A PHARMACY 4 MANAGER, WHICH WOULD BE EXCLUDED FROM THE CLASS BECAUSE THOSE 5 ARE PROFESSIONAL JOBS. 6 IF THE COURT WANTS THE SPECIFIC DATA, LOOK AT 7 DR. DROGIN'S REPORT, APPENDIX 8 GIVES THE HOURLY RATE FOR ALL 8 HOURLY JOBS. AND IT SHOWS -- IT DOES SHOW IS THAT AS OF 2001 9 WOMEN MADE SLIGHTLY MORE THAN MEN AS SUPPORT MANAGERS ON 10 AVERAGE. WOMEN MADE $10.99 AN HOUR, MEN MADE $10.69. 11 WHAT DOES THAT MEAN? IF YOU LOOK AT APPENDIX 12A, 12 WHAT IS THE REQUISITE SENIORITY? HOW LONG HAVE THEY BEEN 13 THERE? WHAT 12A SHOWS, AND THE JOB POSITION FOR BOTH TO LOOK 14 AT IS JOB CODE 1050, CALLED TEAM LARGER, THAT'S THE SUPPORT 15 MANAGER JOB, IF 050. 16 IF YOU LOOK AT EXHIBIT 12-A, ON THE AVERAGE LEVEL OF 17 SENIORITY FOR THOSE JOBS, WHAT IT SHOWS IS AS OF 2001, THE 18 FIRST COLUMN HERE IS MEN, THE SECOND COLUMN IS WOMEN, THAT 19 WOMEN HAVE AN AVERAGE OF 6.86 YEARS, WHILE MEN HAVE AN AVERAGE 20 OF 4.44. SO THE AVERAGE EARNINGS -- IT'S TRUE THEY MAKE 21 SOMEWHAT MORE, BUT THAT IS PROBABLY MOSTLY BECAUSE THOSE WOMEN 22 HAVE BEEN THERE TWO AND A HALF YEARS LONGER THAN MEN, WHICH IS 23 WHY, IN DR. DROGIN'S REGRESSIONS HE USES SENIORITY. AND THOSE 24 REGRESSIONS WHICH HE DID FOR ALL HOURLY EMPLOYEES SHOW A 25 STATISTICAL PATTERN. 58 ORAL ARGUMENT BY MR. SELIGMAN 1 THE COURT: OKAY. 2 ORAL ARGUMENT BY MR. SELLERS 3 MR. SELLERS: GOOD MORNING, YOUR HONOR. 4 THE COURT: GOOD MORNING. 5 MR. SELLERS: I WOULD LIKE TO ADDRESS THE ISSUE OF 6 PLAINTIFF'S OVERALL TRIAL PLAN AND HOW TO FORMULATE THE 7 MONETARY REMEDIES. 8 APPRECIATE THE COURT'S QUESTIONS ON THIS. THE 9 LIMITS ON THE NUMBER OF PAGES WE COULD USE IN BRIEFING REALLY 10 LIMITED OUR ABILITY TO ADDRESS THIS, AND WE APPRECIATE THE 11 OPPORTUNITY TO ADDRESS IT MORE FULLY HERE. 12 I BEGIN WITH A VERY SIMPLE PROPOSITION, WHICH WE'LL 13 DISCUSS MORE FULLY AS WE GET INTO SOME OF THESE CASES, BUT THE 14 PRINCIPLES THAT WE PROPOSE WOULD GOVERN THE TRIAL OF THIS CASE, 15 THE FORMULATION AND THE REMEDIES ARE NOT NOVEL PRINCIPLES. 16 THERE IS NO SPECIAL EXCEPTION TO THE CIVIL RIGHTS LAWS FOR 17 LARGE COMPANIES THAT WOULD MAKE THE CLASS INHERENTLY 18 UNCERTIFIABLE BECAUSE WAL-MART IS A VERY LARGE COMPANY. AND I 19 THINK THE PRINCIPLES THAT GOVERN THE FORMULATION OF REMEDIES 20 AND THE TRIAL OF THESE CASES IN THE PAST ARE SUFFICIENTLY 21 ELASTIC TO PERMIT THE KIND OF TRIAL THAT WE HAVE IN MIND HERE, 22 AS I'LL DESCRIBE. 23 WE BEGIN, OF COURSE, WITH THE PATTERN AND PRACTICE 24 DETERMINATION OF JUST THE LIABILITY, THAT WOULD BE DETERMINED 25 BY THE JURY. THE ADVERSE IMPACT CLAIM, OF COURSE, WOULD BE 59 ORAL ARGUMENT BY MR. SELLERS 1 TRIED BY THE COURT. IF THE PLAINTIFFS PREVAILED ON LIABILITY, 2 THE RIGHT TO CLASS-WIDE INJUNCTIVE RELIEF WOULD, OF COURSE, BE 3 DETERMINED BY THE COURT AS WELL. 4 THE AWARD, AN AWARD OF PUNITIVE DAMAGES, IF THE 5 PLAINTIFFS WERE PERMITTED TO PRESENT A REQUEST FOR PUNITIVE 6 DAMAGES, WOULD BE DECIDED BY THE JURY. WE BELIEVE, AND THE 7 CASE LAW SUPPORTS IT, THAT WE CAN MAKE A REQUEST FOR PUNITIVE 8 DAMAGES TO THE SAME JURY THAT WOULD HAVE DETERMINED LIABILITY. 9 WE WOULD ASK THE JURY TO AWARD A CLASS-WIDE AWARD OF PUNITIVE 10 DAMAGES THAT COULD THEN BE DISTRIBUTED BY THE COURT IN A NUMBER 11 OF WAYS THAT I WILL GET TO IN A MOMENT. 12 BUT THE COURT ASKED AN IMPORTANT QUESTION THAT I 13 WANT TO GET TO, AND THAT IS ABOUT PUNITIVE DAMAGES, 14 SPECIFICALLY. THAT IS, HOW CAN THE JURY DETERMINE PUNITIVE 15 DAMAGES WITHOUT HAVING HAD AN AWARD OF BACK PAY IN ADVANCE? 16 THE CRITICAL ANSWER IS THAT WHAT THE JURY OUGHT TO 17 HAVE IN FRONT OF IT, AND WHAT THE SUPREME COURT'S JURISPRUDENCE 18 SUGGESTS IT SHOULD HAVE IN FRONT OF IT, IS SOME EVIDENCE OF 19 HARM. AND HARM IS DISTINGUISHED FROM MEASURE OF BACK PAY. 20 THE TXO VERSUS ALLIANCE RESOURCES CASE, WHICH IS 21 FOUND AT 509 U.S. -- THE PARTICULAR PAGE IS 458, NOTE 37, TALKS 22 ABOUT THE -- THAT THE -- AS THE COURT LOOKS BACKWARD, THE 23 SUPREME COURT LOOKS BACKWARD AFTER THE JURY HAS RETURNED AN 24 AWARD OF PUNITIVE DAMAGES TO SEE WHETHER IT'S REASONABLE, IT 25 LOOKS TO SEE WHETHER THERE IS A RELATIONSHIP TO THE HARM 60 ORAL ARGUMENT BY MR. SELLERS 1 SUFFERED. 2 INDEED, WE SEE SOME COURTS AROUND THE COUNTRY, 3 INCLUDING AN OPINION IN THE SEVENTH CIRCUIT BY 4 JUDGE EASTERBROOK, IN THE TIMM CASE WE CITED IN OUR BRIEF, THAT 5 PUNITIVE DAMAGES MAY BE ALLOWED, EVEN WHERE THERE HAS BEEN NO 6 AWARD OF COMPENSATORY DAMAGES OR BACK PAY. 7 THE KEY, AS THE COURT IN THE SEVENTH CIRCUIT SAID, 8 IS WAS THERE EVIDENCE OF HARM PRESENTED TO THE JURY? AND WE 9 BELIEVE THAT THE ECONOMIC MODELS THAT WE WILL USE TO SUPPORT A 10 CLAIM OF LIABILITY, BOTH AS TO THE REGRESSION THAT WOULD 11 SUPPORT THE LIABILITY FOR UNEQUAL PAY AND THE COMPARISON OF THE 12 POOLS, THE POOLS ANALYSES WE USED TO SUPPORT OUR CLAIM FOR 13 DISCRIMINATION IN PROMOTIONS, WILL ALSO GIVE THE JURY A SENSE 14 OF THE SCOPE OF THE HARM THAT HAS BEEN SUFFERED BY THE CLASS, 15 EVEN THOUGH THE COURT MAY PREFER TO DECIDE THE BACK PAY AND 16 FRONT PAY ISSUES AT A LATER DATE. 17 SO THE JURY WILL BE ADEQUATELY INFORMED ABOUT THE 18 SCOPE OF THE HARM, AND I THINK THAT'S ALL THAT IS NECESSARY IN 19 ORDER FOR IT TO MAKE AN INFORMED AND APPROPRIATE -- 20 THE COURT: SO YOU WOULD ENVISION TESTIMONY BY WAY 21 OF EXPERTS OF A FORMULAIC NATURE THAT, IF I UNDERSTAND YOUR 22 ARGUMENT CORRECTLY, WOULD ALSO PRESENT EVIDENCE OF HARM, AS 23 YOU'VE DESCRIBED IT, FROM WHICH THERE COULD BE AN ASSESSMENT OF 24 PUNITIVE DAMAGES? 25 MR. SELLERS: THAT IS CORRECT. 61 ORAL ARGUMENT BY MR. SELLERS 1 WE ENVISION THAT WE WOULD HAVE A TRIAL ON LIABILITY; 2 IF THE JURY WERE TO RETURN A LIABILITY FINDING FOR THE CLASS, 3 WE MIGHT HAVE A BRIEF SUBSEQUENT PORTION OF THE TRIAL WITH THE 4 SAME JURY AS TO THAT EVIDENCE, THAT PORTION OF THE EVIDENCE 5 THAT MIGHT BE UNIQUE TO THE QUESTION OF PUNITIVE DAMAGES. NET 6 WORTH, FOR INSTANCE, IS ONE EXAMPLE. 7 BUT THE JURY WOULD HAVE ALREADY HAD BEFORE IT THE 8 KIND OF ECONOMIC MODELS THAT WE THINK WOULD APPRISE IT 9 SUFFICIENTLY OF THE EXTENT OF THE HARM AT THE TIME THAT IT WAS 10 DETERMINING LIABILITY. 11 SO WE THINK IT WILL HAVE SOME MEASURE OF THAT. AND 12 YOU'LL RECALL, YOUR HONOR, THAT THIS IS NOT A CASE, AS 13 MR. SELIGMAN SAID, WHERE WE WERE SEEKING COMPENSATORY DAMAGES. 14 SO THE REAL MEASURE OF HARM HERE IS THE ECONOMIC MEASURE OF 15 LOST EARNINGS. AND THAT MEASURE WILL BE BEFORE THE JURY, 16 REGARDLESS OF WHAT THE COURT ULTIMATELY DOES, IN TERMS OF HOW 17 IT ALLOCATES AND AWARDS BACK PAY. 18 THE COURT: IT MAY BE A QUESTION FOR A DIFFERENT 19 TIME, BUT THE NOTION OF STATISTICAL PROJECTION IN A FORMULAIC 20 CONTEXT AND EXTRAPOLATING FROM THAT SOMETHING THAT WOULD 21 COMPORT WITH DUE PROCESS ABOUT PUNITIVE DAMAGES IS OF CONCERN 22 TO ME. 23 MR. SELLERS: WELL, YOUR HONOR, I THINK -- AS I'LL 24 GET INTO IN A MOMENT, I THINK THAT THE ECONOMIC MODELS THAT 25 BOTH PARTIES HAVE USED, WHETHER WE AGREE OR DISAGREE WITH EACH 62 ORAL ARGUMENT BY MR. SELLERS 1 OTHER ON AGGREGATION OR DISAGGREGATION INCLUDE AN ENORMOUS BODY 2 OF MATERIAL OF RECORDS ABOUT THE ATTRIBUTES OF THESE EMPLOYEES. 3 SO THESE ARE NOT STATISTICAL MODELS THAT YOU HAVE TO PROJECT A 4 LONG TIME INTO THE FUTURE OF ABOUT WHAT MIGHT HAPPEN, THESE ARE 5 MODELS THAT -- 6 THE COURT: AND THAT SUFFICES FOR THE KIND OF 7 INDIVIDUALIZATION THAT IS REALLY INCUMBENT, IT SEEMS TO ME, IN 8 DISCERNING WITH SOME DEGREE OF ACCURACY THE RELATIONSHIP OF 9 THAT HARM TO THE ASSESSMENT OF PUNITIVE DAMAGES CLASS-WIDE? 10 MR. SELLERS: WELL, YOUR HONOR, LET ME START WITH 11 THE PROPOSITION THAT I THINK IS CLEAR. 12 IF WE MAKE THE APPROPRIATE SHOWING, WE CAN ASK THE 13 JURY TO AWARD A CLASS-WIDE AWARD OF PUNITIVE DAMAGES. WE DO 14 NOT HAVE TO HAVE INDIVIDUAL-BY-INDIVIDUAL AWARDS OF PUNITIVE 15 DAMAGES. 16 I WOULD BE SHOCKED IF WAL-MART ULTIMATELY, OTHER 17 THAN HOPING THAT PERHAPS IT COULD SCUTTLE OUR EFFORTS, WOULD 18 REALLY WANT TO HAVE THOUSANDS AND THOUSANDS OF PUNITIVE DAMAGES 19 TRIALS WHICH WOULD LEAD TO INCONSISTENT VERDICTS, LEAD TO THEM 20 FAILING TO BE ABLE TO APPRECIATE THEIR ULTIMATE EXPOSURE. 21 THE COURT, OBVIOUSLY, HAS AVAILABLE TO IT, 22 ULTIMATELY, A REMITTITUR, IF IT CONCLUDES AFTER DETERMINING 23 BACK PAY THAT THERE IS SOME REASON TO THINK THAT THERE IS NOT 24 AN APPROPRIATE RELATIONSHIP BETWEEN THE PUNITIVE DAMAGES AWARD, 25 IF THEY ARE AWARDED, AND THE BACK PAY THAT IT AWARDS. 63 ORAL ARGUMENT BY MR. SELLERS 1 WE THINK THAT THE MODEL IS QUITE SOPHISTICATED AND 2 WILL PERMIT THE JURY THE OPPORTUNITY TO ASSESS THE REAL EXTENT 3 OF THE HARM. 4 OF COURSE, WAL-MART HAS MADE MUCH OF THE NINTH 5 CIRCUIT'S UNPUBLISHED DECISION, BECK VERSUS BOEING. AND I 6 BRING IT UP HERE NOT AS PRECEDENT, BUT, RATHER, JUST TO ASSURE 7 THE COURT THAT WE ARE AWARE THAT WE WOULD BE ASKING THE COURT, 8 IF THE JURY WERE TO AWARD PUNITIVE DAMAGE TO THE CLASS, THAT 9 THE DAMAGES ONLY BE ALLOCATED TO THOSE MEMBERS OF THE CLASS WHO 10 ULTIMATELY RECEIVED BACK PAY, THAT IS, WHO ARE -- SOME EVIDENCE 11 THAT THEY WERE HARMED. 12 THE COURT: OKAY. 13 MR. SELLERS: THERE ARE A VARIETY OF WAYS THAT THE 14 COURT MIGHT ALLOCATE PUNITIVE DAMAGES, AND WE DON'T THINK THAT 15 THIS ISSUE HAS TO BE DECIDED NOW. IT WOULD BE BETTER TO BE 16 DECIDED ON A COMPLETE RECORD. I'LL JUST POINT OUT THAT THIS 17 COURT -- THE COURT'S DECISION IN BAREFIELD AGAINST CHEVRON 18 RECOGNIZED THAT THE CLASS-WIDE PUNITIVE DAMAGE AWARD, WHICH WAS 19 ALLOWED BY JUDGE HENDERSON IN THAT CASE, COULD BE ALLOCATED 20 PROPORTIONATE TO THE AMOUNT OF BACK PAY THAT IS AWARDED TO THE 21 INDIVIDUAL CLASS MEMBERS. AND THOSE WHO HAVE LARGER ECONOMIC 22 HARM MIGHT BE ENTITLED TO A LARGER SHARE OF PUNITIVE DAMAGE 23 AWARD. 24 WE SUBMITTED A CASE YESTERDAY, THE PALMER AGAINST 25 COMBINED INSURANCE COMPANY CASE, WHICH ALSO ALLOWED FOR 64 ORAL ARGUMENT BY MR. SELLERS 1 CERTIFICATION OF A CLASS THAT HAD A CLASS-WIDE PUNITIVE DAMAGE 2 AWARD BEING SOUGHT. AND THERE THE COURT SEEMED TO CONTEMPLATE 3 THE POSSIBILITY OF DISTRIBUTING THE PUNITIVE DAMAGES PRO RATA. 4 AGAIN, I DON'T THINK THIS HAS TO BE DECIDED NOW. 5 THE KEY IS THAT THESE ARE BOTH READILY MANAGEABLE WAYS OF 6 DISTRIBUTING PUNITIVE DAMAGES. AND WHEN THE RECORD IS MORE 7 FULLY DEVELOPED AND WE HAVE A CHANCE TO BRIEF AND ARGUE THIS 8 MORE COMPLETELY, I THINK THE COURT MAY BE IN A BETTER POSITION 9 TO DECIDE WHETHER EITHER OF THESE METHODS WORK, OR A THIRD OR 10 FOURTH METHOD MIGHT BE BETTER. 11 LET ME TURN TO THE QUESTION THAT THE COURT ALSO 12 ASKED ABOUT WHETHER OR NOT BACK PAY -- AND, YES, WE ARE SEEKING 13 FRONT PAY -- ARE TO BE TRIED TO THE COURT OR TO A JURY. 14 OUR BRIEF SUGGESTS THAT THE BACK PAY AND FRONT PAY 15 ISSUES WOULD BE DECIDED BY A JURY. WE HAVE TAKEN THE 16 OPPORTUNITY, AS A RESULT OF THE COURT'S QUESTIONS, TO LOOK AT 17 THIS A LOT MORE CAREFULLY, AND WE THINK THAT THE BETTER 18 AUTHORITY, AND THERE IS A SPLIT IN THE CIRCUITS ABOUT THIS, BUT 19 WE THINK A MUCH BETTER AUTHORITY, AND THE AUTHORITY THAT 20 ULTIMATELY THE SUPREME COURT WOULD EMBRACE, IS THAT THE COURT 21 WOULD DETERMINE BACK PAY AND FRONT PAY. AND I TAKE A MOMENT TO 22 EXPLAIN WHY I SAY THAT. 23 THE COURT IS UNDOUBTEDLY AWARE OF THE DECISION A 24 COUPLE OF YEARS AGO IN POLLARD AGAINST DUPONT, WHERE THE 25 QUESTION PRESENTED WAS WHETHER OR NOT FRONT PAY WAS SUBJECT TO 65 ORAL ARGUMENT BY MR. SELLERS 1 THE CAPS THAT ARE SET IN THE CIVIL RIGHTS ACT OF 1991, OR 2 WHETHER IT IS MORE IN THE NATURE OF EQUITABLE RELIEF THAT WOULD 3 BE EXEMPT FROM THOSE CAPS. 4 THE COURT CONCLUDED THAT IN LARGE PART, BECAUSE 5 HISTORICALLY, FRONT PAY WAS THE NATURAL OUTGROWTH OF BACK PAY, 6 AND BACK PAY AND FRONT PAY, BEFORE 1991 AND UNDER TITLE 7, WAS 7 ALWAYS TRIED TO THE COURT, THAT THERE WAS NO REASON THAT 8 CHANGED, THAT, INDEED, THE CIVIL RIGHTS ACT OF 1991 DID NOT 9 CHANGE THE CENTRAL CHARACTER OF BACK PAY OR FRONT PAY. IN THAT 10 CASE, FRONT PAY WAS AT ISSUE. 11 WE THINK THAT IF GIVEN THE OCCASION TO DECIDE NOW 12 WHETHER BACK PAY IS AN EQUITABLE REMEDY THAT WOULD BE TRIED TO 13 THE COURT, IT WOULD CLEARLY CONCLUDE THAT IT IS. AND WE THINK 14 THAT IS THE BETTER AUTHORITY TO SUPPORT THE PROPOSITION. 15 THE COURT: OKAY. 16 MR. SELLERS: THE STATUTE, AS WELL, THE CIVIL RIGHTS 17 STATUTE OF 1991, CERTAINLY TREATS BACK PAY AND FRONT PAY IN A 18 DIFFERENT CATEGORY THAN DAMAGES, AND, I THINK, REINFORCES -- 19 INDICATES THAT CONGRESS CONTINUES TO BELIEVE THAT BACK PAY AND 20 FRONT PAY ARE EQUITABLE IN NATURE AND WOULD BE TRIED TO THE 21 COURT. 22 THE CASE LAW ALSO MAKES CLEAR THAT THE FRONT PAY -- 23 THE MANNER IN WHICH THE COURT WERE TO COMPUTE FRONT PAY IS TO 24 MIRROR THE FORMULATION OF THE BACK PAY. FRONT PAY IS SIMPLY, 25 AS YOU KNOW, A CONTINUATION OF BACK PAY LIABILITY PAST THE 66 ORAL ARGUMENT BY MR. SELLERS 1 POINT OF THE JUDGMENT -- 2 THE COURT: RIGHT. 3 MR. SELLERS: -- UNTIL THE INCIDENTS THAT GAVE RISE 4 TO THE HARM THAT ENDED. 5 SO WE DON'T THINK THERE IS AN UNUSUAL OR NEW KIND OF 6 INQUIRY TO BE UNDERTAKEN FOR THE COURT TO DETERMINE FRONT PAY. 7 I WILL GET INTO THE FRONT PAY IN A MOMENT WITH RESPECT TO BOTH 8 OUR PROMOTION AND UNEQUAL PAY CLAIMS, BUT AS A GENERAL 9 PROPOSITION, I DON'T THINK THE TWO ARE DIFFERENT IN ANY 10 SIGNIFICANT RESPECT. 11 BEFORE I GET TO THE SPECIFICS OF OUR PROPOSALS ON 12 BACK PAY AND FRONT PAY FORMULATIONS FOR THE PROMOTION AND 13 COMPENSATION CLAIMS, I WOULD LIKE TO START WITH A BRIEF REVIEW 14 OF SOME OF THE BASIC PRINCIPLES THAT I THINK OUR JURISPRUDENCE 15 SUGGESTS ABOUT THE FORMULATION OF BACK PAY, BECAUSE THEY WOULD 16 UNDOUBTEDLY INFORM THE WAY THE COURT WOULD GO ABOUT DOING THIS. 17 AND IT WOULD HELP THE COURT. I APPRECIATE THAT. THIS IS A 18 MANAGEABLE PROCESS, AND A FAIR ONE THAT WE HAVE IN MIND. 19 FIRST OF ALL, THE RELIEF IS DESIGNED TO MAKE VICTIMS 20 WHOLE, AND BECAUSE OF THE REMEDIAL NATURE OF BACK PAY AND FRONT 21 PAY AND THE DIFFICULTY OF RECONSTRUCTING EMPLOYEES' CAREER 22 PATHS IN THE ABSENCE OF DISCRIMINATION, THE COURTS HAVE LONG 23 SAID THAT UNREALISTIC EXACTITUDE IN THE COMPUTATIONS IS NOT TO 24 BE EXPECTED, AND THAT DOUBTS ABOUT THE AMOUNTS OF BACK OR FRONT 25 PAY TO BE AWARDED ARE TO BE RESOLVED AGAINST THE THEN-PROVEN 67 ORAL ARGUMENT BY MR. SELLERS 1 DISCRIMINATOR. 2 I THINK WE OUGHT TO DISCUSS FOR A MOMENT THE 3 QUESTION WHICH I KNOW IS ON THE COURT'S MIND ABOUT WHETHER IT 4 IS NECESSARY, AS A GENERAL PROPOSITION, TO HAVE INDIVIDUAL 5 PROCEEDINGS IN ORDER TO DETERMINE BACK PAY. 6 THE COURT: AND WHEN YOU SAY, "BACK PAY," I MEAN, I 7 DISTINGUISH BETWEEN THE EQUAL PAY CLAIM AND THE PROMOTION 8 CLAIM -- 9 MR. SELLERS: YES. 10 THE COURT: -- SO THAT I KNOW WHAT YOU'RE TALKING 11 ABOUT. 12 MR. SELLERS: AT THIS POINT, I'M GOING TO TREAT EACH 13 OF THOSE SEPARATELY, YOUR HONOR. I'M NOW TALKING ABOUT -- 14 THE COURT: GENERALLY. 15 MR. SELLERS: JUST GENERALLY ABOUT THE PROPOSITION 16 OF -- I RECOGNIZE THAT THERE ARE, I THINK, SUBSTANTIALLY LESS 17 POWERFUL FACTORS THAT WOULD COMPEL INDIVIDUAL DETERMINATIONS 18 FOR BACK PAY IN THE UNEQUAL PAY CLAIMS THAN THERE WOULD BE FOR 19 PROMOTIONS, BUT I WANTED TO JUST GENERALLY ADDRESS THE 20 PROPOSITION, TWO PROPOSITIONS, ONE IS ABOUT WHAT THE TEAMSTERS 21 DECISION WAS ABOUT, BECAUSE IT OBVIOUSLY INFORMS ALL THAT WE'RE 22 DOING HERE ON THIS SUBJECT. 23 THE OTHER IS TO TALK FOR A MOMENT ABOUT THE SHIPES 24 CASE, WHICH THE COURT, I THINK, ASTUTELY RAISED AS A MODEL THAT 25 WE MAY WANT TO LOOK AT CLOSELY. 68 ORAL ARGUMENT BY MR. SELLERS 1 FIRST, I WANT TO TALK ABOUT TEAMSTERS, BECAUSE I 2 THINK IT'S IMPORTANT TO RECOGNIZE THAT WHILE THE TEAMSTERS CASE 3 OF THE SUPREME COURT SPOKE IN TERMS OF DISTRICT COURTS USUALLY 4 CONDUCTING ADDITIONAL PROCEEDINGS AFTER LIABILITY IS 5 DETERMINED, WE NOW RECOGNIZE THE DOMINGO CASE AMONG OTHERS AS 6 AN EXAMPLE. THAT IS NOT A UNIVERSAL REQUIREMENT. THE QUESTION 7 IS, WHEN WOULD WE DEPART FROM THAT AND HOW? 8 I THINK IN ORDER TO APPRECIATE WHAT THE SUPREME 9 COURT HAD IN MIND IN TEAMSTERS, WE NEED TO RECOGNIZE THAT THE 10 CLAIMS THAT WERE AT ISSUE IN TEAMSTERS THAT GAVE RISE FOR THE 11 COURT TO BELIEVE THAT INDIVIDUAL PROCEEDINGS WERE NECESSARY 12 WAS, IN THAT CASE, A CHALLENGE TO THE SENIORITY SYSTEM. 13 THE REMEDY WOULD HAVE INCLUDED RESTORING PEOPLE TO 14 POSITIONS THEY WOULD HAVE HELD IN THE ABSENCE OF THE 15 DISCRIMINATORY SENIORITY SYSTEM, IF IT WERE PROVED TO BE 16 DISCRIMINATORY. 17 THE COURT: IS THE ARGUMENT THAT IT IS DISTINGUISHED 18 FROM AN EQUAL PAY CLAIM? 19 MR. SELLERS: CERTAINLY DISTINGUISHES IT FROM EQUAL 20 PAY CLAIMS. 21 THE COURT: RIGHT. 22 MR. SELLERS: I THINK IT DISTINGUISHES IT FROM THE 23 NATURE OF THE REMEDIES THAT ARE MONETARY IN NATURE. I KNOW -- 24 DISTINGUISH IS TOO STRONG A WORD, BUT HERE IS WHAT I MEAN BY 25 THAT: 69 ORAL ARGUMENT BY MR. SELLERS 1 WE HAVE HERE -- THE SUPREME COURT WAS QUITE CLEAR, 2 AND ITS CONCERNS ARE EXPRESSED AT 431 U.S. AT 371 THROUGH 372, 3 ABOUT BALANCING THE REMEDIAL INTERESTS OF THE CLASS MEMBERS 4 WITH WHAT IT, QUOTE, DESCRIBES AS, "THE LEGITIMATE EXPECTATIONS 5 OF OTHER EMPLOYEES INNOCENT OF ANY WRONGDOING." 6 IT WAS CONCERNED THAT IT NOT GIVE PEOPLE RETROACTIVE 7 RIGHTFUL PLACEMENT INTO POSITIONS THAT WERE GOING TO INTERFERE 8 WITH THE LEGITIMATE EXPECTATIONS OF EMPLOYEES WHO WERE INNOCENT 9 OF ANY OF THE DISCRIMINATION. 10 MUCH LIKE THE ANALYSIS THAT IS DONE IN THE 11 AFFIRMATIVE ACTION AREA, WHERE YOU WORRY ABOUT WHETHER OR NOT 12 YOU'RE TRAMPLING ON THE INTERESTS OF INNOCENT PEOPLE, HERE WE 13 HAVE THE SITUATION WHERE IN TEAMSTERS THE COURT WAS 14 LEGITIMATELY QUITE CONCERNED ABOUT MAKING SURE THAT THE 15 REMEDIES BE TAILORED TO EACH PERSON'S INDIVIDUAL CIRCUMSTANCES, 16 BECAUSE THE SEQUENCES WERE THAT THEY WERE GOING TO BE MOVING 17 PEOPLE AROUND IN THE WORKPLACE AND DISRUPTING THE EXPECTATIONS 18 OF OTHERS WHO HAD NOT CONTRIBUTED TO THE DISCRIMINATION. 19 HERE WHAT WE HAVE AT ISSUE IS BACK PAY AND FRONT 20 PAY, MONETARY REMEDIES, NOT TO SAY THAT WAL-MART HAS NO 21 INTEREST IN THE AGGREGATE EXPOSURE OF THE BACK PAY, INTEREST IN 22 BACK PAY, BUT AS A FAR DIFFERENT MATTER THAN IF WE WERE SEEKING 23 HERE TO RETROACTIVELY OBTAIN RETROACTIVE PROMOTIONS TO -- FOR 24 VARIOUS EMPLOYEES ON ITS WORK FORCE ON A CONTINUUM, IF YOU 25 WILL, BETWEEN THE PRESSURE TO HAVE INDIVIDUALIZED PROCEEDINGS. 70 ORAL ARGUMENT BY MR. SELLERS 1 ON THE ONE EXTREME, YOU HAVE PEOPLE WHO ARE 2 REINSTATED OR WHO ARE GIVEN RIGHTFUL PLACE POSITIONS IN THE 3 WORK FORCE. AND I THINK I SUBMIT ON THE OTHER DIRECTION YOU 4 HAVE AWARDS OF BACK PAY, OF MONETARY RELIEF, WHICH IS OF A FAR 5 DIFFERENT MATTER, AND CERTAINLY LESS DISRUPTIVE TO THE 6 EMPLOYER'S WORKPLACE. 7 HAVING SAID, HOWEVER, THAT EVEN IF WE PROCEED WITH A 8 FORMULAIC APPROACH, AND AGAIN, I'M TALKING GENERALLY AT THE 9 MOMENT, I THINK IT'S IMPORTANT TO RECOGNIZE THAT JUST BECAUSE 10 YOU USE A FORMULA DOESN'T MEAN THAT YOU DON'T CONSIDER THE 11 INDIVIDUAL CHARACTERISTICS OF EMPLOYEES. 12 THE SHIPES CASE, I THINK, IS QUITE INSTRUCTIVE. WE 13 ARE FULLY SUPPORTIVE OF THE APPROACH THAT THE SHIPES COURT, THE 14 FIFTH CIRCUIT AND THE DISTRICT COURT ENDORSED, WHICH IS ONE IN 15 WHICH THE INDIVIDUAL CIRCUMSTANCES, THE EXPERIENCE, THE 16 COMPARABLE POSITIONS THAT PEOPLE HELD, ARE TAKEN INTO ACCOUNT 17 IN AN ECONOMIC MODEL IN MAKING COMPARISONS THAT WOULD LEAD TO 18 BACK PAY DETERMINATIONS RATHER THAN THE APPROACH THAT THE 19 EMPLOYER RECOMMENDED, WHICH THE COURT REJECTED, WHICH WAS 20 SIMPLY A PRO RATA APPROACH. 21 SO IT'S IMPORTANT TO RECOGNIZE THE USE OF A FORMULA 22 DOES NOT MEAN THAT WE ARE ADVOCATING IN ANY RESPECT THAT THE 23 BACK PAY COMPUTATIONS WILL NOT TAKE INTO ACCOUNT INDIVIDUAL 24 CHARACTERISTICS. INDEED, WE THINK THAT THERE IS AN ABUNDANCE 25 OF EVIDENCE ALREADY IN THE RECORD IN THE COMPUTERIZED -- 71 ORAL ARGUMENT BY MR. SELLERS 1 COMPUTER-READABLE DATA THAT ARE IN THESE ECONOMIC MODELS THAT 2 DOES TAKE INTO ACCOUNT INDIVIDUAL CHARACTERISTICS OF THESE 3 EMPLOYEES, AS I'LL DESCRIBE IN A MOMENT, BUT -- 4 THE COURT: I GUESS IT'S A QUESTION OF DEGREE. 5 YOU ARGUE THAT TEAMSTERS CAN AND SHOULD BE READ AS 6 REFLECTIVE OF THE PROPOSITION THAT THE -- WHERE THE COURT IS 7 CONSIDERING A MONETARY REMEDY THAT THE TEAMSTERS FRAMEWORK 8 MIGHT NOT HAVE TO BE WHOLESALE IMPORTED INTO THE PROVE-UP. 9 MR. SELLERS: THAT'S CORRECT. 10 THE COURT: AND IS THERE ANY CASE THAT SUPPORTS THAT 11 VIEW? 12 MR. SELLERS: WELL, I THINK -- 13 THE COURT: OTHER THAN THE LOGIC THAT YOU ARGUE? 14 MR. SELLERS: YOUR HONOR, I THINK IF YOU LOOK AT 15 DOMINGO, IF YOU LOOK AT SHIPES, IF YOU LOOK AT SEEGER, THESE 16 ARE ALL CASES THAT ARE FORMULA CASES WHERE THE COURTS WERE 17 CONCERNED THAT THE SYSTEM THERE, AS HERE, IS SO SUBJECTIVE THAT 18 IT WOULD BE VIRTUALLY IMPOSSIBLE TO RECONSTRUCT THE PAY THAT 19 PEOPLE WOULD HAVE RECEIVED IN A NONDISCRIMINATORY -- 20 THE COURT: SEE, THIS GETS US INTO, IT SEEMS TO ME, 21 THE DISTINCTION THAT YOU HAVE ALREADY ACCEPTED AND ADOPTED THAT 22 WITH RESPECT TO THE EQUAL PAY CLAIM THE PRONG ESTABLISHING 23 LIABILITY -- IT STRIKES ME THAT YOUR USE OF FORMULA MAY BE 24 OVERBROAD, BECAUSE IF THE COURT WERE TO CERTIFY THE CLASS, IT 25 WOULD BE ABLE TO DISCERN, IT SEEMS TO ME, FROM CORPORATE 72 ORAL ARGUMENT BY MR. SELLERS 1 RECORDS, AND THINGS OF THAT NATURE, THE DISPARITY AND PAY. AND 2 IT WOULD BE AN INDIVIDUALIZED ASSESSMENT -- 3 MR. SELLERS: CORRECT. 4 THE COURT: -- AS OPPOSED TO THE SAME ARGUMENT YOU 5 MAKE WITH RESPECT TO THE PROMOTIONS CONTEXT, WHICH IS WHERE 6 THERE IS THE INTERFACE BETWEEN THE CASE LAW YOU CITE TO ME 7 ABOUT HYPOTHETICAL ASSESSMENTS BEING MADE, THE NECESSITY FOR 8 IT, AND THE TRUE USE OF A FORMULA IN THAT REGARD. 9 MR. SELLERS: UM-HMM. 10 THE COURT: AND WHETHER IN ONE SCENARIO, PROMOTION 11 VERSUS THE EQUAL PAY SCENARIO, THERE IS HOW THE TEAMSTERS 12 FRAMEWORK INNERVATES EACH OF THOSE. 13 MR. SELLERS: WELL, LET ME SAY, FIRST OF ALL, WITH 14 RESPECT TO THE EQUAL PAY CLAIM -- THE UNEQUAL PAY CLAIM, I 15 THINK THAT THE MODEL THAT WE PROPOSE IS ONE THAT WOULD DEPEND 16 ON THE ECONOMIC -- THE REGRESSION MODELS THAT THE PARTIES CAN 17 EACH PRESENT TO THE COURT ULTIMATELY. 18 THOSE MODELS WOULD TAKE INTO ACCOUNT THINGS LIKE 19 WHICH STORE SOMEBODY WORKED AT, THE JOB THEY HELD, TO MAKE SURE 20 THE PEOPLE WORKING IN THE NEW YORK AREA ARE GOING TO BE 21 COMPARED WITH PEOPLE IN NEW YORK, WHERE THEY MAY HAVE DIFFERENT 22 PAY RATES THAN PEOPLE IN OKLAHOMA OR IN TEXAS. WE WILL BE ABLE 23 TO MAKE SUCH REFINEMENTS, AND HAVE MADE SUCH REFINEMENTS IN OUR 24 ANALYSIS ALREADY, USING WAL-MART'S OWN RECORDS. 25 WHAT WE HAVE IS A 21ST CENTURY VERSION OF SOME OF 73 ORAL ARGUMENT BY MR. SELLERS 1 THESE CASES THAT HAVE HAPPENED BEFORE, BECAUSE WE HAVE A 2 COMPANY THAT IS MORE TECHNOLOGICALLY ADVANCED THAN A FISH 3 CANNERY THAT WAS IN DOMINGO, OR SOME OF THESE OTHER COMPANIES 4 THAT WE WERE DEALING BEFORE, WHERE THE QUESTION WAS, "ARE WE 5 GOING TO PULL ALL THESE RECORDS, HARD COPY OUT OF SOME CLERK'S 6 OFFICE TO ANALYZE THEM?" 7 WE HAVE THE SAME KIND OF OPPORTUNITY HERE THAT WAS 8 ENDORSED IN SHIPES, THAT YOU CAN HAVE AN AGGREGATE AMOUNT 9 DETERMINED, AND THEN WE'LL DEAL WITH ALLOCATION AFTERWARDS, 10 WHICH I WILL GET TO. 11 SO I THINK WITH RESPECT TO THE UNEQUAL PAY CLAIM, 12 OUR POSITION IS THERE IS NO NEED FOR, AND, INDEED, IT WOULD BE 13 INAPPROPRIATE, TO REQUIRE INDIVIDUAL HEARINGS TO DETERMINE WHAT 14 PEOPLE WOULD HAVE EARNED IN THE ABSENCE OF DISCRIMINATION. 15 INDEED, THE EXHIBIT THAT YOU SAW EARLIER ABOUT PAY 16 PLAN THAT LISTED -- REFERRED TO VARIOUS ATTRIBUTES OF THE PAY 17 PLAN, MAKES ALLOWANCE FOR A NUMBER OF WAYS IN WHICH MANAGERS 18 CAN DISREGARD THE GUIDELINES, THE GUIDELINES THAT ARE SET IN 19 THE PAY PLAN. 20 SO THOSE ARE THE KIND OF SUBJECTIVE FACTORS THAT WE 21 BELIEVE OPERATE IN A DISCRIMINATORY FASHION THAT CAN'T BE 22 RECONSTRUCTED IN THE ABSENCE OF THE DISCRIMINATION TO DETERMINE 23 TO WHAT EXTENT THE BACK PAY OR THE EARNINGS WOULD HAVE BEEN 24 COMPARABLE OR DIFFERENT IN THE ABSENCE OF DISCRIMINATION. 25 THE COURT: EVEN WITH RESPECT TO THE EQUAL PAY 74 ORAL ARGUMENT BY MR. SELLERS 1 CLAIM? 2 MR. SELLERS: CORRECT. CORRECT. THERE IS A 3 SIGNIFICANT AMOUNT OF EVIDENCE IN THE RECORD OF MANAGERS 4 SAYING, QUITE PROUDLY, AS WELL AS TESTIMONY FROM MR. ARNOLD, 5 WHO IS THE 30(B)(6) WITNESS OF WAL-MART ON COMPENSATION, WHO 6 TESTIFIED ABOUT HOW FREELY MANAGERS COULD DEPART FROM THE GOALS 7 AND THE GUIDELINES THAT ARE SET -- THE NUMBERS THAT ARE SET IN 8 THE GUIDELINES. 9 THEY -- WAL-MART HAS NOT GIVEN THESE MANAGERS 10 GUIDANCE AS TO WHEN THEY CAN DEPART, HOW MUCH THEY CAN DEPART; 11 THOSE ARE THE KINDS OF THE SUBJECTIVE FACTORS THAT WOULD BE 12 IMPOSSIBLE TO RECREATE BUT WHICH ARE ULTIMATELY AT WORK HERE, 13 WE BELIEVE, THAT GIVE RISE TO SOME OF THE DISPARITIES. 14 IT'S THAT KIND OF FAILURE TO RECORD THE INFORMATION, 15 FAILURE TO GUIDE THE MANAGERS IN THE EXERCISE OF DISCRETION 16 THERE WHICH WOULD EMBROIL THE COURT IN THE PROVERBIAL QUAGMIRE 17 OF HYPOTHETICAL JUDGMENTS THAT DOMINGO AND HEADWAY AND SEEGER 18 AND OTHER COURTS HAVE SAID LEAD US TO CONCLUDE THAT WE OUGHT 19 NOT TO BE ENGAGED IN INDIVIDUAL-BY-INDIVIDUAL PROCEEDINGS. 20 THE COURT: AND IF I DISAGREED WITH YOU AND FOUND 21 THAT THERE WASN'T A NEED TO RESORT TO THE USE OF A FORMULA YOU 22 DESCRIBE HERE, WHAT WOULD THE PROVE-UP ON THE EQUAL PAY LOOK 23 LIKE? 24 MR. SELLERS: I AM SORRY? 25 THE COURT: WHAT WOULD THE PROVE-UP LOOK LIKE. 75 ORAL ARGUMENT BY MR. SELLERS 1 MR. SELLERS: IF THE COURT BELIEVED YOU HAD TO HAVE 2 INDIVIDUAL-BY-INDIVIDUAL PROCEEDINGS? 3 THE COURT: RIGHT. 4 MR. SELLERS: I THINK -- LET ME JUST -- I WILL 5 ANSWER THAT. I THINK THAT WE WILL HAVE INDIVIDUAL INFORMATION. 6 THE COURT: THAT'S WHAT I AM TRYING TO TEASE OUT. 7 MR. SELLERS: I'M SORRY. 8 TO BE CLEAR ABOUT IT, THERE IS GOING TO BE, AND 9 THERE ALREADY IS IN THE MODEL, EVIDENCE OF THE JOB PEOPLE HELD, 10 THE PERFORMANCE AT THE LEVEL THEY ACHIEVED, THE STORE AT WHICH 11 THEY WORKED, THE SENIORITY THEY HAD, THE CHARACTERISTICS THAT 12 ARE ALL RELEVANT, ULTIMATELY, TO WHETHER OR NOT ONE EMPLOYEE IS 13 PAID MORE THAN ANOTHER. 14 AND BY COMPARING PEOPLE WHO WORK AT THE SAME 15 FACILITIES IN THE SAME TIME PERIOD HOLDING THE SAME JOBS, WE 16 ARE REALLY COMPARING APPLES AND APPLES. WE ARE NOT COMPARING 17 PEOPLE WHO WORK IN MONTANA WITH PEOPLE WHO WORK IN NEW YORK. 18 THEY INEVITABLY HAVE DIFFERENT BASE PAY BECAUSE THE COST OF 19 LIVING IS DIFFERENT. 20 THOSE COMPARISONS THAT I'VE JUST DESCRIBED ARE IN 21 THE MODEL ALREADY. 22 THE COURT: UM-HMM. 23 MR. SELLERS: THE POINT I WAS TRYING TO MAKE BEFORE 24 IS THE FACT THAT WE RECOMMEND THE USE OF A FORMULA DOES NOT BY 25 ANY MEANS MEAN THAT WE ARE ABANDONING THE INDIVIDUAL 76 ORAL ARGUMENT BY MR. SELLERS 1 CHARACTERISTICS OF THE EMPLOYEES. THERE WOULD BE NO OTHER KIND 2 OF INFORMATION, OTHER THAN SUBJECTIVE INFORMATION, THAT 3 WAL-MART MANAGERS COULD CONJURE UP THAT ANY PARTY WOULD BRING 4 TO THE COURT, IF THE COURT WERE INCLINED TO HAVE 5 INDIVIDUAL-BY-INDIVIDUAL HEARINGS. 6 INSTEAD, IT WOULD INVITE THE PARTIES TO EACH TRY TO 7 RECONSTRUCT -- THE MANAGER WOULD HAVE COME IN AND SAID, "I 8 WOULD HAVE PAID MS. 'X' THAT AMOUNT ANYWAY," EVEN IN THE 9 ABSENCE OF DISCRIMINATION, AND RELY ON SOME UNRECORDED, 10 UNDOCUMENTED VARIABLE OR FACTOR TO JUSTIFY. AND WE HAVE NO WAY 11 OF KNOWING WHETHER THAT'S TRUE OR NOT, BECAUSE THEY DIDN'T 12 GUIDE THEM IN THE EXERCISE OF DISCRETION AND DIDN'T RECORD THE 13 BASIS FOR WHICH THEY MADE THESE DEPARTURES. 14 TURNING TO THE PROMOTION ISSUE, WHICH I KNOW IS ALSO 15 ON THE COURT'S MIND, I THINK THE COURT ASKED THE QUESTION, ONE 16 OF THE WRITTEN QUESTIONS WAS ABOUT WHETHER OR NOT MEMBERS OF 17 THE CLASS HAVE TO SHOW INTEREST AS A CRITERION FOR BEING 18 ELIGIBLE FOR BACK PAY ATTRIBUTED TO DISCRIMINATION AND 19 PROMOTION. 20 THE COURT: RIGHT. AND YOU UNDERSTAND, THE CONTEXT 21 OF THAT QUESTION WAS TO TRY TO DISTINGUISH BETWEEN THOSE WHO 22 MAY BE QUALIFIED FOR A PROMOTION AND THOSE WHO WOULD HAVE 23 APPLIED FOR THE PROMOTION, BUT THEN TO GET TO THE NUMBERS WITH 24 RESPECT TO INJURY. 25 MR. SELLERS: I UNDERSTAND. 77 ORAL ARGUMENT BY MR. SELLERS 1 I THINK, ONCE AGAIN, WE BELIEVE THAT THERE ARE TWO 2 DISTINCTIONS BETWEEN THIS CASE AND DOMINGO THAT COUNSEL AGAINST 3 REQUIRING INDIVIDUAL SHOWINGS OF INTEREST. ONE IS THAT DOMINGO 4 HAD WHAT THE COURT OF APPEALS DESCRIBED AS AN "INFORMAL 5 APPLICATION PROCESS." 6 HERE, AS YOU HEARD FROM MR. SELIGMAN, WAL-MART HAD 7 NO APPLICATION PROCESS FOR ENTRY INTO THE MANAGEMENT TRAINING 8 PROGRAM. EVEN THE SUPPORT MANAGER POSITION, FOR WHICH THEY 9 CLAIMED THEY HAD AN APPLICATION PROCESS, 80 PERCENT OF THE 10 POSITIONS FILLED WERE FILLED WITHOUT POSTING. THEY DECLINED TO 11 POST THE ASSISTANT MANAGER POSITION, THE CO-MANAGER POSITION. 12 THERE WAS NO ORGANIZED WAY ANYBODY COULD COME FORWARD AND SHOW 13 AN INTEREST IN THOSE POSITIONS. 14 AND VERY IMPORTANTLY, THERE WAS NO RECORD THAT WE 15 KNOW OF THAT WAS MADE OF SOMEBODY'S INTEREST. IF I CAME TO YOU 16 AS MY SUPERVISOR AND SAID, "I WOULD LIKE ONE OF THOSE JOBS," 17 IF I KNEW WHO TO GO TO TO BEGIN WITH, YOU HAD NO OBLIGATION TO 18 RECORD IT, YOU HAD NO OBLIGATION TO DO ANYTHING ABOUT IT. THE 19 MANAGER COULD GO TO ANYBODY HE OR SHE WISHED TO MAKE A 20 SELECTION. 21 SO THERE WAS A WORD-OF-MOUTH PROCESS FOR ANNOUNCING 22 VACANCIES IN DOMINGO, BUT THE COURT OF APPEALS MADE CLEAR THAT 23 THIS WAS AN INFORMAL APPLICATION PROCESS THERE. THERE IS NONE 24 HERE. AND IT'S HARD TO IMAGINE HOW THE COURT WOULD EXPECT 25 PEOPLE TO COME FORWARD AND RECONSTRUCT WHETHER THEY HAD AN 78 ORAL ARGUMENT BY MR. SELLERS 1 INTEREST IN PROMOTION FOR A JOB WHERE THERE WAS NO PROCESS TO 2 APPLY, NO RECORD MADE OF ANY EXPRESSION OF INTEREST. 3 THE COURT: AND SORT OF A NAKED DECLARATION THAT 4 INDICATES THAT OVER AND ABOVE QUALIFICATION THAT THERE WAS 5 INTEREST -- 6 MR. SELLERS: WELL -- 7 THE COURT: -- WOULD NOT ILLUMINATE THAT ISSUE AND 8 BE A PART OF A PROCESS THAT YOU WOULD THINK WOULD BE 9 APPROPRIATE. 10 MR. SELLERS: I DON'T THINK IT WOULD ADD MUCH TO 11 THIS FOR THE FOLLOWING REASON: YOU ASK THE WOMEN GOING BACK 12 TWO, THREE, FOUR YEARS GOING FORWARD AND SAY INDIVIDUALLY, "I 13 WOULD HAVE BEEN INTERESTED IN SUCH AND SUCH PROMOTIONS," AND 14 YOU WOULD THEN EXPECT, I ASSUME, INDIVIDUAL MANAGERS TO COME 15 FORWARD AND SAY, "OH, MS. JONES WAS NOT INTERESTED IN THE 16 PROMOTION, I HAPPEN TO KNOW." 17 FRANKLY, EACH SIDE IS RECOLLECTING FROM YEARS OF 18 MEMORY OF WHETHER ONE WAS INTERESTED AND WHETHER ONE SAYS THE 19 OTHER WAS NOT INTERESTED. I DON'T SEE HOW THAT REALLY PROVIDES 20 AN INFORMED RELIABLE PROCESS FOR DETERMINING HOW TO ALLOCATE -- 21 DETERMINING WHO SHOULD BE ELIGIBLE FOR -- AT LEAST FOR THE 22 AGGREGATE AMOUNT OF BACK PAY FOR PROMOTIONS. 23 HAVING SAID THAT, I WANT TO ADD THAT IF THE COURT 24 WOULD DRAW THE DISTINCTION BETWEEN COMPUTING THE AGGREGATE 25 AMOUNT OF BACK PAY ATTRIBUTABLE TO DISCRIMINATION PROMOTIONS, 79 ORAL ARGUMENT BY MR. SELLERS 1 AND HOW THE COURT MIGHT ALLOCATE THE BACK PAY AMONGST THE 2 ELIGIBLE CLASS MEMBERS, THERE, ALTHOUGH WE SUBMIT THAT THERE IS 3 A SECOND REASON WHY INTEREST IS NOT A RELIABLE INDICATOR OF 4 SOMEBODY'S ELIGIBILITY, AND THAT IS THAT THE RECORD IS QUITE 5 EXTENSIVE HERE THAT MANAGERS ENGAGED IN CONDUCT THAT 6 DISCOURAGED WOMEN FROM BEING INTERESTED IN MANAGEMENT. 7 WE HAVE ON THE RECORD EVIDENCE OF MANAGERS TELLING 8 WOMEN, "WOMEN DON'T BELONG IN MANAGEMENT," "IF YOU HAVE A 9 FAMILY, YOU SHOULDN'T BE IN MANAGEMENT," VARIATIONS OF THAT. 10 WE HAVE A REFERENCE IN THE RECORD TO TOP MANAGEMENT, THE 11 HIGHEST-LEVEL MANAGEMENT IN THE COMPANY REFERRING TO WOMEN IN 12 THE STORES AS "LITTLE JANIE Q'S" AND "GIRLS"; THOSE ARE KINDS 13 OF THINGS THAT HAPPEN IN THE WORKPLACE THAT HARDLY ENCOURAGE 14 WOMEN TO FEEL THAT THEY BELONG IN MANAGEMENT. 15 SO EVEN IF THE COURT WERE INCLINED TO ASK WOMEN, 16 "WERE YOU INTERESTED BACK IN 1999 IN MANAGEMENT," IT'S NOT 17 ENTIRELY CLEAR THAT A WOMAN MIGHT COME IN AND SAY, "YOU KNOW, I 18 REALLY WASN'T, BECAUSE WHEN I SAW THE WAY THEY TREATED WOMEN, I 19 DIDN'T WANT TO BE IN MANAGEMENT." AND THAT IS -- FOR THAT 20 REASON THEY ENGAGED IN CONDUCT THAT DISCOURAGED WOMEN FROM 21 SERVING IN MANAGEMENT. 22 THAT DOESN'T MEAN THEY SUCCEEDED ENTIRELY, BECAUSE 23 THERE OBVIOUSLY ARE SOME WOMEN IN MANAGEMENT. BUT THAT 24 CERTAINLY DOES NOT -- THAT DISTINGUISHES DOMINGO AS WELL. 25 THERE IS NO EVIDENCE IN THE RECORD OF THAT KIND OF CONDUCT THAT 80 ORAL ARGUMENT BY MR. SELLERS 1 AFFIRMATIVELY DISCOURAGES EMPLOYEES FROM SEEKING POSITIONS. 2