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Fourth Circuit Flouts Appellate, Evidence, and Class-Action Rules in Brown v. Nucor Corp.

In the past, businesses have been happy to put new factories in states like South Carolina and Virginia, due to their right-to-work laws and relatively reasonable employment laws. But they should think twice about doing so in the future, thanks to some recent, very unreasonable court rulings against employers in those states by the U.S. Fourth Circuit Court of Appeals. Those decisions illustrate a contempt for binding Supreme Court precedent, and basic rules of logic, evidence, civil procedure, and appellate procedure

A classic example is the Fourth Circuit’s 2-to-1 decision on May 11 in Brown v. Nucor Corp., which violated fundamental rules of appellate review and class-action procedure. Essentially, the court allowed a class action lawsuit alleging racial discrimination in promotions to be brought based on statistics that other courts (like the Eighth Circuit) have correctly rejected as unreliable junk science, in rejecting class actions lawsuits against the very same company. Compare Bennett v. Nucor Corp., 656 F.3d 802 (8th Cir. 2011).

It also permitted the plaintiff to make internally contradictory arguments to get that junk science into evidence, improperly put the burden of proof on defendant to disprove the admissibility of evidence, and allowed the plaintiff to make arguments it had waived by not including them in its opening brief, but rather putting them into its reply, where the company never even had a chance to rebut them.

The decision also flouted the Supreme Court’s 2011 decision in Wal-Mart v. Dukes. That Supreme Court decision overturned a finding of “commonality” among Wal-Mart’s female employees in a class action lawsuit alleging discriminatory promotions, saying they didn’t have enough in common to sue together in a class action. That principle applies to the lawsuit against Nucor with added force, since it was brought under Rule 23(b)(3), the rule under which class actions for damages are brought. This rule requires not just commonality but also an additional, heightened showing of predominance of such common issues: “a Rule 23(b)(3) certification . . requires proof that common issues not only exist but also predominate over individual issues and that class treatment is superior to handling the absent class members’ claims individually.”

But the Fourth Circuit effectively held that rather than following the Supreme Court’s decision in Wal-Mart, the trial court should have followed an earlier prior Fourth Circuit decision involving Nucor that was abrogated by the Supreme Court’s Wal-Mart decision, Brown v. Nucor Corp., 576 F.3d 149 (4th Cir.2009) (“ Brown I ”). Or rather, it held that the trial court should have certified a class action based on invisible ink in that decision, namely a non-existent finding in it that common issues predominated over individual issues. Even if it had made such a finding, it would be abrogated by Wal-Mart, since if commonality is absent, predominance will even more clearly be absent in almost all cases. (As the Fourth Circuit observed, the Wal-Mart decision “provided a sufficiently significant change in the governing legal standard to permit a limited reexamination of whether the class satisfied the commonality requirement of Rule 23(a)(2)”).

The Fourth Circuit’s abrogated 2009 decision had addressed commonality, not predominance, It found mere commonality based on statistical evidence of “relatively weak probative value,” even though problems in that evidence—the statistical evidence seen here—might “very well discredit” it at some later stage. Id. at 156 & n. 10. This very low, almost non-existent level of proof was later ruled insufficient in the Supreme Court’s Wal-Mart decision. See Wal–Mart, 131 S.Ct. at 2553 (distinguishing between an “otherwise unsupported allegation” and the “significant proof” required to establish a common policy).

That decision had addressed “Rule 23(a) factors” (e.g..,commonality) and found them “satisfied.” Brown v. Nucor Corp., 576 F.3d 149, 160 (4th Cir.2009). But it ultimately declined to decide the predominance issue. Originally, it went on to hold, in a single sentence at the end of the opinion, that “the requirements of [Rule] 23(b)(3) [e.g., predominance] ha[d] also been satisfied for these claims.” See Brown v. Nucor Corp., No. 08–1247, slip op. at 19 (4th Cir. Aug. 7, 2009). Nucor then petitioned for rehearing en banc, arguing, among other things, that neither the lower court nor the parties had previously analyzed the Rule 23(b) issue. See Nucor Pet. for Reh'g at 9, Brown I, 576 F.3d 149 (No. 08–1247), ECF No. 53. In response, the Brown I panel quite correctly amended its opinion and excised any mention of Rule 23(b)(3). See Order, Brown v. Nucor Corp., No. 08–1247 (4th Cir. Oct. 8, 2009). That is no doubt because the court could not properly decide a fact-intensive issue—that is, the predominance issue under Rule 23(b)(3)—when the parties had not even argued it.

Therefore, the trial judge was free to determine in the first instance whether Plaintiffs' class met that provision's requirements, and accordingly decertify the class based on failure to comply. Based on the Wal-Mart decision, the trial court found insufficient commonality. But it also ruled that even if “plaintiffs have identified a common issue that satisfies Rule 23(a)(2), . . . ‘common issues,’ . . . do not predominate over individual issues with regard to the plaintiffs' promotions claims.”

By arguing that predominance was mandated even if commonality was absent under the Supreme Court’s Wal-Mart decision, the Fourth Circuit’s recent Brown v. Nucor decision not only divests the “predominance” requirement of Rule 23(b)(3) of any real independent meaning, but turns the relationship of “commonality” and “predominance” upside down.

As the Maryland Appellate Blog notes, the Fourth Circuit’s recent decision in Brown v. Nucor Corp. “throws federal employment law into some disarray by creating a sharp circuit split. It also muddies an area of class action law that the Supreme Court had recently clarified in Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011) (“Dukes”). The case calls out for review – and reversal – by either the en banc Fourth Circuit or the Supreme Court.”