Scott v. Family Dollar Stores, Inc., No. 12-1610 (4th Cir. 2013)

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A putative class of female former and current managers of Family Dollar stores filed suit alleging violations under Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e, and Section 216(b) of the Equal Pay Act of 1963, 29 U.S.C. 206(d). The court found that the district court's denial of leave to amend the complaint was based on an erroneous interpretation of Wal-Mart Stores, Inc. v. Dukes, and the denial was thus an abuse of discretion. Without resolving the class certification issue, the court reversed and remanded for the district court to consider whether, based on the court's interpretation of Wal-Mart, the proposed amended complaint satisfied the class certification requirements of Federal Rule of Civil Procedure 23.

The court issued a subsequent related opinion or order on November 14, 2013.

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PUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-1610 LUANNA SCOTT; SHUNDERIA GARLINGTON; RUTH BETH; WENDY BEVIS; KATHERINE BRACEY; RUBY BRADY; MARIE ALICE BROCKWAY; VICKIE CLUTTER; DIANE CONAWAY; JUDY CORROW; TRACI DAVIS; CAROL DINOLFO; REBECCA DIXON; PAMELA EWALT; NANCY FEHLING; TERESA FLEMING; IRENE GRACE; DOROTHY HARSON; CHARLENE HAZELTON; SHELLY HUGHES; CHRISTAL J. JOSLYN; ADA L. KENNEDY; NEITA LAFRENIERE; MARGIE A. LITTLE; CAROL MARTIN; LEANNE MAXWELL; WANDA MAYFIELD; DORIS MOODY; VANESSA L. PEEPLES; VERONICA PERRY-PREDDIE; RUTH ELLEN PHELPS; SHEILA PIPPIN; LANA RADOSH; MICHELLE RODGERS; VADA ROSE; VICKEY JO SCRIVWER; LINDA R. SILVA; SHARON SIPES; NANCY SMITH; MARIE E. SPELLISSY; SYLVIA C. TENORIO; JUDY TIDRICK; BEVERLY L. TRIPLETT; CAROL SUE VANFLEET; DEBBIE VASQUEZ; CLAIRE WHITE; BONNIE WILLIAMS; CINDY MARIE ZIMBRICH, Plaintiffs - Appellants, and LINDA L. FULMER; JEAN MACQUARRIE; HELEN ZIMMERMAN, Plaintiffs, v. FAMILY DOLLAR STORES, INC., Defendant - Appellee. Appeal from the United States District Court for the Western District of North Carolina, at Charlotte. Max O. Cogburn, Jr., District Judge. (3:08-cv-00540-MOC-DSC) Argued: May 14, 2013 Decided: October 16, 2013 Before WILKINSON, GREGORY, and KEENAN, Circuit Judges. Affirmed in part, reversed in part, and remanded by published opinion. Judge Gregory wrote the majority opinion, in which Judge Keenan joined. Judge Keenan wrote a concurring opinion. Judge Wilkinson wrote a dissenting opinion. ARGUED: Robert L. Wiggins, Jr., WIGGINS, CHILDS, QUINN & PANTAZIS PC, Birmingham, Alabama, for Appellants. John Robbins Wester, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee. ON BRIEF: Gerald L. Maatman, Jr., David Bennet Ross, Rebecca S. Bjork, SEYFARTH SHAW LLP, New York, New York; David C. Wright, III, Adam K. Doerr, ROBINSON, BRADSHAW & HINSON, P.A., Charlotte, North Carolina, for Appellee. 2 GREGORY, Circuit Judge: In this sex discrimination and equal pay action filed pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, and Section 216(b) of the Equal Pay Act of 1963, 29 U.S.C. § 206(d), Appellants appeal the district court s grant of Family Dollar Stores, Inc. s ( Family Dollar ) motion to dismiss and/or strike Procedure court s class 12(c), denial complaint. claims 12(f), of under and Federal 23(d)(1)(D), Appellants first Rules and motion to the of Civil district amend their We find that the district court s denial of leave to amend the complaint was based on an erroneous interpretation of Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and the denial was thus an abuse of discretion. Without resolving the class and certification issue, we reverse remand for the district court to consider whether, based on our interpretation of Wal-Mart, the proposed amended complaint satisfies the class certification requirements of Federal Rule of Civil Procedure 23. I. Family Dollar operates a chain of over 7,000 stores in more than forty states. Its operations are divided into 95 regions, each run by a vice president, and then into districts, each run by a district manager. A district, which can vary in size from 3 a single city to an area within multiple States, includes 10 to 30 retail stores, each run by a salaried store manager. v. Family 2011). Dollar Stores, Inc., 637 F.3d 508, 510 Grace (4th Cir. Family Dollar has approximately 400 district managers. Appellants are fifty-one named plaintiffs and a putative class consisting of females who managers of Family Dollar stores. are, or have been, store Appellants primarily allege they are paid less than male store managers who perform the same job, requiring the same skill, responsibility and effort, under similar working conditions. In relevant part, Count I of their complaint asserts a disparate impact claim predicated on the following assertions: Defendant engages in centralized control of compensation for store managers at the corporate level of its operations. . . . Defendant s pay decisions and/or system includes subjectivity and gender stereotyping that causes disparate impact to compensation paid to female store managers. Plaintiffs are aware, at this time, of no other criteria which causes such disparate impact other than gender bias, subjectivity and stereotyping. Plaintiffs are unaware, at this time, of any other specific criteria that are capable of separation and job relatedness. Count II alleges a pattern-or-practice of disparate treatment in violation engages managers, of in Title VII, centralized willfully and asserts control violated 4 that over Title Family Dollar, compensation VII by of paying who store the plaintiffs and other similarly situated females [unequal] to . . . similarly situated males. a violation of the Equal Pay Act. [] wages Count IV asserts Appellants seek injunctive and equitable relief, back pay, attorneys fees and costs, and punitive damages. In 2008, Appellants filed their complaint in the District Court for the Northern District of Alabama. U.S. Upon a grant of Family Dollar s motion to dismiss or transfer, the case was transferred to the U.S. District of North Carolina. District Court for the Western In opposing the motion to dismiss but consenting to transfer, Appellants cited Dukes v. Wal-Mart, Inc., 509 F.3d 1168 (9th Cir. 2007) on reh g en banc sub nom. 603 F.3d 571 (9th Cir. 2010), pointing out that [t]he Ninth Circuit has now affirmed certification of such a nationwide class having virtually identical claims of sex discrimination in pay to those brought in this case. As is relevant here, the Ninth Circuit s Dukes decision was subsequently reversed by the Supreme Court in Wal-Mart, 131 S. Ct. 2541. Following the transfer, Family Dollar filed a motion for partial judgment on the pleadings, arguing that Appellants would be unable 23(b). to satisfy the class action requirements in Rule The filing of this motion had the effect of staying discovery. The district court denied Family Dollar s motion without prejudice, holding that the class allegations in the 5 complaint Bell satisfied Atlantic the Corp. v. pleading standards Twombly, 550 Ashcroft v. Iqbal, 556 U.S. 662 (2007). U.S. as established 544 (2007), in and The court further found that a fully developed evidentiary record was necessary to make findings as to class certification. In July 2010, Family Dollar moved for summary judgment, but the court stayed the motion pending the completion of discovery. In August 2010, Family Dollar moved for a protective order with respect to class certification discovery, which the court denied. From January to July 2011, the parties unsuccessfully tried to resolve their dispute through mediation. Following re-assignment of the case to a different judge, in September 2011, Family Dollar filed a motion to dismiss and/or strike the class allegations pursuant to Rules 12(c), 12(f), and Rule 23(d)(1)(D). Mart, which was issued by Family Dollar argued that Walthe Supreme Court in June 2011, foreclosed Appellants class allegations and the monetary relief sought in the complaint. Appellants opposed the motion to dismiss and moved the court for leave to file their first amended complaint, 1 arguing that the proposed amended complaint 1 elaborate[s] on the Family Dollar s motion to dismiss and Appellants motion for leave to amend the complaint were filed before the deadlines to end class certification discovery and to file a motion to certify the class. 6 original complaint s allegation of centralized control compensation for store managers at the corporate level. of In the proposed amended complaint, Appellants allege and challenge at least four company-wide policies. First, Appellants assert the existence of a mandatory salary range for Store Managers set annually by the corporate headquarters, which locks in prior disparities between male Only corporate compensation. exceptions above exceptions disproportionally Appellants allege percentage performance set by the and Vice salary the range, in ratings. of and they of an headquarters Regional Store Managers Presidents favor existence corporate female Managers can grant grant these men. annual that and Second, pay raise corresponds Divisional to Vice Presidents grant exceptions above the pay raise percentage, and significantly greater exceptions are granted to men. Appellants claim a built-in headwinds Third, corporate-imposed compensation criteria for Store Managers that takes into account prior specific experience, criteria prior which pay, have a quartile disparate rankings impact. and other Finally, Appellants allege the existence of a dual-system of compensation structured to pay less to persons promoted to store managers than to persons hired (from outside the company) to the same position, where women are disproportionately promoted to Store 7 Manager [positions,] while men are disproportionately hired into such jobs. The motion to dismiss, but denied Appellants motion for leave to amend. In granting district Family court granted Dollar s Family request and Dollar s dismissing the class allegations, the district court first relied on Appellants preWal-Mart admission that their claims were virtually identical to those court asserted reasoned by that the as Wal-Mart a plaintiffs. matter of law Further, under the Wal-Mart, Appellants cannot satisfy the Rule 23(a) commonality requirement because they allege they were discriminated against on the basis of their gender as a result of subjective decisions made at the local store levels. class claims on court held the that The court dismissed the Equal Pay Act same basis. Appellants Additionally, claims fail to the district satisfy the predominance requirement in Rule 23(b)(3). In denying Appellants motion for leave to amend, the court first held that amendment was futile because the only source of alleged discrimination in the proposed complaint is the discretionary pay of managers, which are foreclosed under Wal-Mart. Second, the court found that amendment would be prejudicial to Family Dollar because the original complaint was filed over three years prior, and the new complaint alleges a new theory only in an attempt to avoid Wal-Mart. 8 Appellants timely petitioned this Court under Federal Rule of Civil Procedure 23(f) for interlocutory appeal of the class certification decision. II. We granted authorizes granting Appellants courts of class-action petition appeals to under review Rule 23(f), decisions certification. 2 which denying Appellants did or not petition us directly for interlocutory review of the decision denying leave to amend the complaint. Appellate jurisdiction pursuant to Rule 23(f) s interlocutory provision lies only where the subject matter of the appeal is the grant or denial of class certification. Corp., 576 F.3d Fed. R. Civ. Pro. 23(f); see Brown v. Nucor 149, 155 n.8 (4th 2 Cir. 2009) ( [A]ppellants Class certification is typically pursued under Rule 23(c), which provides that [a]t an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action. Id. 23(c). Family Dollar filed its motion to dismiss pursuant to Rule 12(c), 12(f), and 23(d)(1)(D)--rules not expressly within Rule 23(f) s jurisdictional purview. See Fed. R. Civ. Pro. 23(f) advisory comm. note (1998). Nonetheless, we have jurisdiction to review the district court s grant of Family Dollar s motion to dismiss or strike the class allegations because the district court s ruling is the functional equivalent of denying a motion to certify the case as a class action. See In re Bemis Co., Inc., 279 F.3d 419, 421 (7th Cir. 2002) (holding that the rejection of the position taken in the answer that the case could not proceed as a class action is the functional equivalent of denying a motion to certify a case as a class action ). Family Dollar does not dispute the basis for asserting jurisdiction over the class certification decision. 9 cannot appeal a discovery order under [Rule] 23(f). ). Family Dollar contends we lack jurisdiction to Thus, review the district court s denial of Appellants motion for leave to amend their complaint. We find that under our pendent appellate jurisdiction jurisprudence, we have jurisdiction and exercise our discretion to review the denial of the motion for leave to amend. See Rux v. Republic of Sudan, 461 F.3d 461, 475 (4th Cir. 2006) (stating that pendent exception to Pendent a the appellate scenarios: with appellate final jurisdiction, judgment jurisdiction a judicially rule, is is created discretionary). available only in two (1) when an issue is inextricably intertwined question that is the proper subject of an immediate appeal; or (2) when review of a jurisdictionally insufficient issue is necessary to ensure immediately appealable issue. meaningful review of an Id. (quoting Swint v. Chambers Cnty. Comm n, 514 U.S. 35, 50 51 (1995)). We may inextricably review the intertwined leave-to-amend methodology. decision Two under separate the rulings are inextricably intertwined if the same specific question will underlie both the appealable and the non-appealable order, such that resolution of the question will necessarily resolve the appeals from both orders at once. Ealy v. Pinkerton Gov t Servs., Inc., No. 12-1252, 2013 WL 980035, at *8 10 (4th Cir. Mar. 14, Myers v. Hertz 2013) Corp., 624 (alterations omitted)). certification based (per curiam, F.3d 537, unpublished) 553 (2d (quoting Cir. 2010) Here, the crux of the denial of class on the allegations of the original complaint, and the denial of leave to amend the complaint turns on the district court s interpretation of Wal-Mart. interpretation certification of Wal-Mart decision and underlies the both Because the the non-appealable appealable leave-to-amend decision, and resolution of the interpretation of Wal-Mart will necessarily resolve both appeals, we find that our exercise of pendent appellate jurisdiction is proper. We may also review the leave-to-amend decision under the necessary to ensure meaningful review methodology. An issue is necessary to ensure meaningful review if resolution of the appealable issue necessarily resolves the nonappealable issue or where review of the nonappealable issue is necessary to ensure meaningful review of the appealable one. Berrey v. Asarco, Inc., 439 F.3d 636, 647 (10th Cir. 2006). Here, as detailed below, the proposed amended complaint includes specific companywide policies that allegedly cause a disparate impact--polices not specified in the original complaint that would meaningful review of the class certification decision. ensure Thus, we exercise pendent appellate jurisdiction to review the denial of leave to amend the complaint. 11 III. Appellants raise three primary arguments on appeal. First, Appellants contend that the district court erred in holding that pursuant to Wal-Mart, the proposed class claims in the original complaint fail to satisfy Rule 23(a) s commonality requirement. Second, Appellants conduct a urge rigorous that analysis the of district the failed to consider the evidence. court certification failed to issue and Finally, Appellants argue that the district court abused its discretion by failing to grant leave to amend the complaint. amended complaint centralized Because we find that the proposed contains control, which substantial are allegations necessary to satisfy of the commonality requirement for class certification as set forth in Wal-Mart, we focus our review in this appeal on the district court s denial of leave to amend the complaint. We review a district court s decision to deny leave to amend a complaint for abuse of discretion, and it is our policy to liberally allow amendment in keeping Federal Rule of Civil Procedure 15(a). F.3d 724, 729 (4th Cir. 2010). discretion by resting its with the spirit of Galustian v. Peter, 591 A district court abuses its decision on a clearly erroneous finding of a material fact, or by misapprehending the law with respect to underlying issues in litigation. 12 Quince Orchard Valley Citizens Ass n, Inc. v. Hodel, 872 F.2d 75, 78 (4th Cir. 1989) (internal quotation marks omitted). The district court denied Appellants request for leave to amend their district complaint court foreclosed by complaint, the for determined Wal-Mart, two that primary the reasoning proposed complaint reasons. proposed that First, the amendment was like pointed the to original subjective, individualized decisions and failed to satisfy the commonality requirement of Rule 23(a). 3 Second, the district court found that amendment would be prejudicial to Family Dollar because the proposed complaint was filed three years after the filing of the original complaint and alleges a new legal theory in order to avoid Wal-Mart. We address each rationale in turn. A. The district court s denial of leave to amend the complaint on grounds that it was foreclosed by Wal-Mart is erroneous and based on a misapprehension of the applicable law. A review of Wal-Mart and its principles reveal the district court s error. 3 Under Rule 23, a class may be certified if (1) the class is so numerous that joinder of all members is impracticable (numerosity); (2) there are one or more questions of law or fact common to the class (commonality); (3) the named parties claims or defenses are typical of the claims or defense of the class (typicality); and (4) the class representatives will fairly and adequately protect the interests the class (adequacy of representation). Fed. R. Civ. P. 23(a). Commonality is the only factor at issue in this appeal. We make no findings or conclusions as to the other requirements. 13 i. In Wal-Mart, commonality the Supreme requirement under Court Rule considered 23 for whether class the actions was satisfied in a sex discrimination suit alleging violations of Title VII. The plaintiffs filed suit on behalf of 1.5 million current and former female employees of Wal-Mart Stores, Inc. ( Wal-Mart ), asserting that Wal-Mart s local managers exercised discretion over employees pay and promotions in a manner that disproportionally disparate favored impact plaintiffs on alleged male the that employees female Wal-Mart s and had employees. failure an unlawful Further, the curtail its to managers discretion essentially amounted to unlawful disparate treatment. In holding that the allegations were insufficient to satisfy the commonality requirement for class actions, the Court found that the plaintiffs could not demonstrate that the class members suffered the same injury, i.e., their claims did not depend upon resolution. a common contention capable Wal-Mart, 131 S. Ct. at 2551. of classwide The Court reasoned that in the Title VII context, one individual s claim turns on the reason for the particular employment decision. Id. at 2552 (quoting Cooper v. Fed. Reserve Bank of Richmond, 467 U.S. 867, 876 (1984)). And, in the class action context, [w]ithout some glue holding the reasons for all those decisions together, 14 it will be impossible to say that examination of all class members claims for relief will produce a common answer to the crucial question why was I disfavored. Id. The Court explained that such glue might exist if: (1) the employer uses a biased testing procedure that produces a common result; or (2) there is [s]ignificant proof that an employer operated under a general policy of discrimination. Id. at 2253 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 159 n.15 (1982)). The latter form was more applicable in Wal-Mart, yet the Court found that a general policy of discrimination was entirely absent. (1) Wal-Mart s Id. express Specifically, the Court pointed to: policy forbidding sex discrimination; (2) expert testimony of a strong corporate culture that made it vulnerable to gender bias but which lacked a nexus to employment decisions; and (3) a corporate policy of allowing discretion by local supervisors over employment matters, which to the Court was just the opposite of a uniform employment practice that would provide the commonality needed for a class action because it employment practices. was a policy against having uniform Id. at 2553-54. The Court acknowledged that it previously recognized that giving discretion to lower-level employees may form the basis of Title VII liability under a disparate impact theory, but to do so, the plaintiffs must first identify the specific employment 15 practice that is challenged. Id. at 2555 (citing Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988)). the case before it, the Court noted [o]ther However, in than the bare existence of delegated discretion, respondents have identified no specific employment practice --much less one that ties all their 1.5 million claims together. Id. Thus, the Court concluded that the commonality requirement was not satisfied. Two principles readily derived from Wal-Mart are applicable to this case. First, Wal-Mart did not set out a per se rule against class certification where subjective decision-making or discretion is alleged. involved, managers Wal-Mart [] directs exercise common direction. Rather, where subjective discretion is courts discretion to in Id. at 2554. a examine common whether all with[] some way Thus, to satisfy commonality, a plaintiff must demonstrate that the exercise of discretion is tied to a specific employment practice, and that the subjective practice at issue affected the class in a Elizabeth Tippett, Robbing a Barren Vault: uniform manner. the Implications of Dukes v. Wal-Mart for Cases Challenging Subjective Employment Practices, 29 Hofstra Lab. & Emp. L. J. 433, 446 (2012). As a corollary, decision-making discrimination or even discretion context, where is Wal-Mart company-wide alleged indicates in the that subjective employment if another company-wide policy is also alleged, courts must also consider 16 it. See Wal-Mart, 131 S. Ct. at 2553 (considering evidence of a company-wide strong decision-makers corporate susceptible culture that makes gender bias, but to Wal-Mart s finding it unsatisfactory because the adduced expert testimony failed to demonstrate that the corporate culture or stereotyped thinking affected employment decisions). Thus, even in cases where the complaint alleges discretion, if there is also an allegation of a company-wide policy of discrimination, the putative class may still satisfy the commonality requirement for certification. Second, Wal-Mart is limited to the exercise of discretion by lower-level employees, management personnel. because typically, as opposed to upper-level, top- This qualitative distinction is critical in exercising discretion, lower-level employees do not set policies for the entire company; whereas, when high-level personnel exercise discretion, resulting decisions affect a much larger group, and depending on their rank in company. the corporate hierarchy, Consequently, all discretionary the employees authority in exercised the by high-level corporate decision-makers, which is applicable to a broad segment of the corporation s employees, is more likely to satisfy the commonality requirement than exercised by low-level managers in Wal-Mart. 17 the discretion ii. Courts rulings on class certification since Wal-Mart bear out the principles announced herein. See McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 489 (7th Cir. 2012) cert. denied, 133 S. Ct. 338 (U.S. 2012) (allowing Title VII class certification where the plaintiffs pointed to two company-wide policies); see also, Tabor v. Hilti, Inc., 703 F.3d 1206, 1229 (10th Cir. 2013) (denying class certification where challenged policy was highly discretional, and the only other alleged company-wide policy was not maintained in a uniform manner); Bolden v. Walsh Constr. Co., 688 F.3d 893, 898 (7th Cir. 2012) where the (denying only class certification company-wide policy in alleged a Title was a VII case policy of giving discretion to lower-level managers and there was a lack of evidence that discretion was exercised in a common way at some common direction). A comparison of McReynolds and Bolden, both decisions from the Seventh Circuit, highlight the parameters of Wal-Mart. In McReynolds, the plaintiff contested two national, company-wide policies--a teaming policy and an account distribution policy. 672 F.3d at 488. distribute The teaming policy allowed brokers to form and commissions with teams; brokers could decide for themselves whether to form teams; and, once the team was formed, brokers decide which other brokers 18 to admit. Id. The plaintiffs argued that this national policy had a disparate impact because some successful teams refused to admit blacks. Under the account distribution policy, the customers accounts of a broker that had left the company were transferred within a branch office; brokers in that office competed for the accounts, and the broker who ultimately won the accounts was determined by company-wide criteria that included the competing brokers past records of revenue clients retained. The Seventh branch-office generated, and number of investments and Directors and Id. at 488-89. Circuit managers noted have that a Complex measure of discretion with regard to teaming and account distribution [because] they can veto teams or supplement criteria for distributions. 489. Id. at The court explained: [T]o the extent that these regional and local managers exercise discretion regarding the compensation of the brokers whom they supervise, the case is indeed like Wal-Mart. But the exercise of discretion is influenced by the two company-wide policies at issue: authorization to brokers, rather than to managers to form and staff teams; and basing account distribution on the past success of the brokers who are competing for transfers. . . . [P]ermitting brokers to form their own teams and prescribing criteria for account distributions that favor the already successful--those who may owe their success to having been invited to join a successful or promising team--are practices of Merrill Lynch, rather than practices that local managers can choose or not at their whim. Therefore challenging those policies 19 in a class action is not forbidden by the Wal-Mart decision. Id. at 489-90. The court noted that in the absence of the teaming or account distribution policies, if instead the case involved delegation to local management the decision to allow teaming and the criteria for account distribution, McReynolds would be more like Wal-Mart. Id. at 490. Satisfied with the distinction between McReynolds and Wal-Mart, the court reversed the district court s denial of class certification. In court s Bolden, grant the of Seventh class Circuit reversed certification. the There, district twelve black construction workers alleged that the supervisors practiced or tolerated racial discrimination in assigning overtime work and in working portable sheds). conditions toilets and (for example, hangman s 688 F.3d at 895. derogatory nooses in graffiti toilets or break The plaintiffs attempted to certify a class covering the employer s 262 project sites in Chicago. The Seventh Circuit in noted that [t]he sites had Id. different superintendents, with different policies . . . and many of the allegedly discriminatory practices depended on the foremen, who made most overtime offers, [and] chastised (or failed chastise) workers who used racially inflammatory language. at 896. to Id. Additionally, the court pointed out the plaintiffs concessions that [d]ifferent sites 20 had materially different working conditions[;] . . . most superintendents the[] [plaintiffs] had worked with did not discriminate; [and] their objections foremen. that concerned Id. when only a handful of superintendents and The court likened the case to Wal-Mart and held multiple [local] managers exercise independent discretion, conditions at different stores (or sites) do not present a common question. Id. It then distinguished the case before it from McReynolds: [In McReynolds,] we held that a national class could be certified to contest the polic[ies], which [were] adopted by top management and applied to all of Merrill Lynch s offices throughout the nation. This single national policy was the missing ingredient in Wal-Mart. . . . [Here,] Walsh had no relevant company-wide (or Chicago SMSA-wide) policy other than (a) its rule against discrimination, and (b) its grant of discretion to superintendents assigning work and coping with offensive or bigoted conduct. The first of these policies presents no problem . . . and the second--the policy of on-site operational discretion is the precise policy that Wal-Mart says cannot be addressed in a company-wide class action. Id. at 898. Thus, the court reversed the grant of class certification. As evident from our application of the two principles in our discussion below, we believe the allegations in the proposed amended complaint bear a closer resemblance to McReynolds. iii. As a preliminary matter, we note that the class allegations in the original complaint were 21 insufficient to satisfy the commonality complaint standard fails stereotyping managers set to allege regarding were forth in Wal-Mart, that compensation exercised in a the subjectivity the because and paid common to way female with store some common direction, and conclusorily alleges that Family Dollar engaged in centralized control of compensation for store managers at the corporate level of its operations. allegation, the original complaint Aside from this bare does not identify decision-makers responsible for pay and promotion. the Thus, we affirm the district court s dismissal of the original complaint. We view the proposed amended complaint differently. Applying the above principles, we find that the district court erred in denying leave to amend the complaint because it failed to consider whether: (1) in light of the discretion alleged, the discretion was exercised in a common way under some common direction, or despite the discretion alleged, another company-wide policy of discrimination is also alleged; and (2) the discretionary authority at issue was exercised by high-level managers, as distinct from the low-level type managers in WalMart. In dismissing the proposed amended complaint, the district court held that Wal-Mart precludes Appellants class allegations of sex discrimination in pay because it believed that Appellants claims rest only on a theory that Family Dollar s 22 use of subjective decision-making created disparities between male and female employees. concluded that proposed amended individualized the Additionally, the district court company-wide complaint employment were decision-making--a simply foreclosed by Wal-Mart. policies limited theory which to it in the subjective, stated was The district court s reasoning is based on a misapprehension of both the applicable law and policies alleged by Appellants. The proposed amended complaint following company-wide practices: clearly specifies the (1) a salary range policy; (2) a pay raise percentage policy; (3) a built-in headwinds policy; and (4) dual pay system for hirees and promotees. expound, the salary range policy maximum pay for Store Managers. result of this company-wide sets mandatory minimum To and According to Appellants, as a salary range policy, there are significant disparities in the number of women in the upper pay levels of that range, and exceptions above the range--granted by the corporate Vice Presidents--are often granted more in favor of men. Further, under the pay raise percentage policy, an increase to a store manager s compensation is determined by the manager s prior performance ratings. The Regional Manager and Divisional Vice President grant exceptions above that pay raise percentage, and do so significantly greater in favor of men. Additionally, the built-in headwinds policy is a method for 23 evaluating and experience, prior criteria determining that because pay, have they compensation quartile disparate a rankings impact incorporate discrimination. and based and on on prior other specific women s salaries perpetuate such past Essentially, this is a testing or evaluation method that Appellants allege is biased. Finally, the dual pay system for hirees and promotees caps the compensation paid to individuals who are promoted below what lateral hires can make. Statistics proffered by Appellants show more women promoted, and more men hired laterally, influencing the disparity in pay. We do not now rule on the sufficiency of the allegations of the proposed amended complaint concerning the company-wide policies or on whether certification of the putative class will ultimately be warranted. However, in considering whether amendment of the complaint would be futile, we observe that the proposed amended policies and complaint s of allegations high-level corporate of uniform corporate decision-making are substantively different from those that the Supreme Court held sufficient in Wal-Mart. For instance, the dual pay policy referenced in the proposed amended complaint is a company-wide policy that is in place in all Family Dollar Stores. The amended complaint alleges that women suffer disparate impact as a direct result of this corporate-imposed pay preference for lateral hires. In contrast, if decisions regarding the pay of 24 hirees and promotees were left to the discretion of low-level managers, then the alleged discrimination would be akin to the discrimination alleged in Wal-Mart. See McReynolds, 672 F.3d at 490. Moreover, proposed the amended discretionary complaint decisions are made by set forth high-level in the corporate decision-makers with authority over a broad segment of Family Dollar s employees, not on an individual store level as in WalMart. Contrary to the dissent s unsupported characterization of the decision-makers in the present case as middle management, the amended complaint explains that exceptions to centrally determined salary ranges can only be made by the corporate Vice President at corporate headquarters. Similarly, exceptions to corporate-imposed were managers and raise senior headquarters. percentages vice presidents, made again by at regional corporate These allegations of high-level decision-making authority exercised by officials at corporate headquarters are thus different which local in kind supervisors from the were allegations vested with discretion over pay and promotion decisions. in Wal-Mart, almost in absolute Wal-Mart, 131 S. Ct. at 2547. Given these substantial distinctions, Wal-Mart does not preclude as a matter of law a class certification based on the amplified allegations of the proposed amended complaint. 25 In light of our policy favoring liberal amendment of complaints, we hold that the district court erred in concluding that amendment would be futile and in denying leave to amend the complaint. The district court therefore should revisit the certification question when the record underlying the allegations in the amended complaint has been more fully developed. B. The district court next denied leave to amend on grounds that amendment would be prejudicial to Family Dollar. In support of its prejudice conclusion, the district court stated that the original complaint was filed over three years prior, and Appellants did not seek to amend until briefing on Family Dollar s motion for summary judgment was almost complete. Further, the court stated that the proposed complaint alleges a new theory in an attempt to avoid Wal-Mart. For the reasons stated below, we find that the district court s determinations as to prejudice are clearly erroneous. First, as to the delayed filing of the proposed complaint, review of the record indicates that the cited delay, for the most part, is attributable to Family Dollar. On numerous occasions, Family Dollar moved to dismiss the complaint and this had the effect litigation. delay. of staying Appellants discovery, ought not to thereby be prolonging penalized for the this Further, the typical briefing schedule for motions to 26 dismiss or summary judgment involves the initial filing of a dismissal motion by the defendant, then the plaintiff files an opposition to the motion and if necessary, a motion to amend the complaint, and then the defendant files a reply brief. That Appellants filed the motion for leave to amend simultaneously with their opposition to Family Dollar s motion for summary judgment does not appear out of turn and cannot be grounds for finding prejudice to Family Dollar. With respect to the alleged new theory, review of the two complaints indicates that Appellants do not allege an entirely new theory in the amended complaint, but rather elaborate on one of two allegations that were previously pled in a conclusory fashion. In their original complaint, Appellants alleged both subjectivity and gender stereotyping, as well as centralized control of compensation for store managers level of [Family Dollar s] operations. at the corporate They originally failed to support either theory with substantial factual allegations, including though the the nature district of court the claimed initially complaint survived Rule 12(b)(6). centralized held that the control, original Following Wal-Mart, it became clear that Appellants needed to allege more control over pay determinations commonality by upper-level requirement. The decision-makers Appellants to filed meet a the proposed amended complaint accordingly and included numerous additional 27 facts supporting their previous assertion of centralized much the that Appellants corporate control. Family Dollar makes of fact previously stated their claims were virtually identical to those dismissed in Wal-Mart, seemingly alleging an estoppel argument. Even assuming that Appellants seek to pursue a completely new legal theory from the one asserted previously, such an approach is not cause for judicial estoppel. See Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir. 1996) (For judicial estoppel to apply, the party sought to be estopped must be seeking to adopt a position that litigation. of fact is inconsistent with a stance taken in prior And the position sought to be estopped must be one rather than (citation omitted)). law or legal theory. (emphasis added) Appellants present factual position in the proposed amended complaint is consistent with the original complaint. As Appellants contend, the proposed amended complaint merely elaborates on the allegation in the original complaint that Family Dollar engages in centralized control of compensation for store managers at the corporate level. The legal theory remains the same, thus, judicial estoppel is not cognizable in this action. Further, we have held that the filing of a supplemental pleading is an appropriate mechanism possible defects in a complaint. 28 for curing numerous Franks v. Ross, 313 F.3d 184, 198 (4th Cir. 2002) (also noting that [u]nder Rule 15(d), a party may supplement its complaint even though the original pleading is defective in its statement of a claim for relief or defense. ). Hence, as Family Dollar believed that the original complaint was defective in light of Wal-Mart, Appellants should have been granted leave to amend to cure the defect, more especially because this was the first time they sought to amend their complaint. Besides, although prejudice can result where a new legal theory is alleged if it would entail additional discovery and evidentiary burdens on the part of the opposing party, this basis for a finding of prejudice essentially applies where the amendment is offered shortly before or during trial. v. Oroweat Because the removed from Foods Co., parties trial, Dollar is overstated. 785 were the F.2d still in purported 503, 510 (4th discovery, undue Johnson Cir. and prejudice 1986). many steps to Family We emphasize that our holding does not condone an automatic three-year period for plaintiffs to seek leave to amend a complaint. Rather, we conclude that Family Dollar would not be unduly prejudiced by the amendment under all the particular circumstances presented in this case. 29 IV. The district Appellants court request for abused leave its to discretion amend their in denying complaint by primarily basing the denial on its erroneous interpretation of Wal-Mart. We reverse the district court s decision in part and remand for the court to consider, consistent with this opinion, whether the proposed amended complaint satisfies the class certification requirements of Rule 23. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED 30 BARBARA MILANO KEENAN, Circuit Judge, concurring: I join Judge Gregory s fine majority opinion in full. I write briefly to emphasize that despite the dissent s dystopian view, the majority has rendered a straightforward and limited decision: that the plaintiffs should be permitted to amend their original complaint after a dramatic shift in the law regarding class action certification. Meaningful access to the courts requires that plaintiffs have a fair opportunity to plead their case in accordance with the prevailing legal standard. be penalized for failing The plaintiffs here should not to amend their complaint in anticipation of Wal-Mart, but should be permitted this first attempt to amend following that decision. plaintiffs obtained new information Additionally, the about the corporate structure of Family Dollar during mediation occurring after the original complaint was filed, which facts they reasonably chose to include in the proposed amended complaint. Despite the dissent s apparent assumption that the class will be certified by the district court, if the allegations included in the amended complaint ultimately are not substantiated, the class simply will not be certified, and the plaintiffs case will fail. The convinced dissent that the nevertheless class sweeps action 31 broadly mechanism is and being bleakly, used to punish the business community for nothing more than being companies. simply Dissent allows a at 35. putative However, class to the majority re-plead its opinion class allegations, in accordance with Federal Rules of Civil Procedure 15 and 23. Under the majority s holding, the ability of litigants to seek access to our courts will be restricted solely by the strength of their case. 32 WILKINSON, Circuit Judge, dissenting: I cannot join the majority s decision, because it fails to respect the two other levels of the federal judiciary, namely the Supreme Court and the district courts. Supreme Court. First as to the The decision is Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and the majority opinion has drained it of meaning. The defendant here, as in Wal-Mart, relies on what plaintiffs admit are multitudinous, discretionary decisions by middle and lower management, which would seem to render class action treatment under Wal-Mart impermissible and ineffectual. Notwithstanding this, the majority has unloaded on the district court the prospect of a massive, nationwide class action whose administrability would in all likelihood prove impossible. In the decisions are majority s left to view, the Wal-Mart complete applies discretion only of where low-level managers, maj. op. at 25, and are implemented on an individual store level. Id. discretion 95 to The fact that a company delegates extensive vice presidents and 400 district managers, Appellee s Br. at 3 (citing Grace v. Family Dollar Stores, Inc. (In re Family Dollar FLSA Litig.), 637 F.3d 508, 510 (4th Cir. 2011)), does not, in the majority s view, bring this case within the ambit of Wal-Mart and still permits nationwide class action treatment. The majority assumes that nearly 500 middle managers somehow all exercise their discretion in lockstep. 33 That cannot be. The fact that some middle managers would promote from within, and others recruit from without, as they are given the discretion to do, does not, in the majority s view, preclude nationwide class action treatment. The fact that many managers would elevate women from either inside or outside the company, as they are perfectly free to do, would hardly seem discriminatory, but it would be contrary to the commonality WalMart requires for a nationwide class action to proceed. The majority responds to this point by citing the fact that exceptions to corporate salary corporate vice president. ranges may Maj. op. at 25. be granted by a But this fact only confirms the assertion that placements within the ranges are determined by middle managers. The fact that exceptions to corporate limits on raises are made by regional managers and senior vice presidents is similarly unavailing to the majority s position -- regional managers, decisions on a national level. by definition, do not make In the majority s view, middle managers at Family Dollar are purely robotic with respect to those they supervise, but no American company operates in such a way. The majority plainly believes Wal-Mart does not apply to middle managers exercising delegated discretion under guidelines such as these because if it believed Wal-Mart applied, the district court s denial of nationwide class certification would 34 be promptly affirmed. The majority s insistence that Wal-Mart does not apply to middle management (but only to lower-level store managers) suggests not so subtly that it wants this class to be certified. But the commonality Wal-Mart insists is necessary for class action certification is plainly absent here, though the policy. majority purports to find it in some centralized The fact that a company sets pay ranges or values prior experience or performance as factors in compensation sinister. Vast numbers of companies do just that. is not A policy with an obvious business justification may occasionally produce some statistical disparity nationwide. But Wal-Mart makes clear that the fact that a policy may have some statistical disparity nationwide does nothing to dispel the fact that in many districts, the policy will not have a statistical imbalance, but indeed may work to the decided advantage of the putative class. 131 S. Ct. at 2555. The policies cited by plaintiffs are not built-in headwinds, maj. op. at 23 (internal quotation marks omitted), but rather common management techniques that make common sense. If centralized delegations of discretion such as these are enough for a nationwide class action to get rolling, then few companies will be exempt. The law is punishing companies for nothing more than being companies, which is apparently the new status offense. 35 In reaching its decision, the majority faults the district court for denying plaintiffs leave to amend their complaint. But if this is an abuse of discretion, and these findings are clearly erroneous, never end. then class action litigation will almost Not content with finding the district court abused its discretion, maj. op. at 30, the majority holds its factual findings clearly erroneous as well. Id. at 26. judge should be commended, not condemned. The district The amended complaint severely prejudiced the defendants by forcing them to defend a wholly different suit three years after the original complaint was filed. The amended complaint contradicted assertions in the original complaint to such an extent as to do violence to the values of forthrightness and fair dealing that the district court had every right to expect from the litigants before it. It was also every bit as irreconcilable with the Supreme Court s decision in Wal-Mart as the original, making denial of leave fully justifiable on futility grounds. In sum, the district court has been brought up short and found to have abused its discretion for doing nothing more than faithfully following a Supreme Court decision and for attempting to ensure a small measure filings of that court. Supreme Court s of candor and consistency in the It is our obligation to respect the preeminent place in a hierarchical judicial system, as well as the trial court s discretion and experience 36 in matters explicitly entrusted by both logic and precedent to its competence. This decision does neither. I. Federal Rule of Civil Procedure 15(a)(2), which governs pretrial requests for leave to amend, advises that [t]he court should freely give leave when justice so requires. The Supreme Court reason has accordingly required some justifying support of the rejection of a party s request to amend. in Foman v. Davis, 371 U.S. 178, 182 (1962). Nevertheless, the Supreme Court has repeatedly recognized that the grant or denial of an opportunity to amend is within the discretion of the District Court. Id.; see also Krupski v. Costa Crociere S. p. A., 130 S. Ct. 2485, 2496 (2010). leave to amend is appropriate when at least one Denying of three circumstances exists: (1) the amendment would be prejudicial to the opposing party; (2) there has been bad faith on the part of the moving party; or (3) the amendment would have been futile. Laber v. Harvey, 438 F.3d 404, 426-27 (4th Cir. 2006) (internal follow, it quotation is marks abundantly omitted). clear that For the the reasons district court that was justified in denying plaintiffs motion for leave on all three grounds -- prejudice, bad faith, and futility. 37 II. A. As to the first ground, prejudicial will often be amendment and its timing. (4th Cir. 2006). [w]hether determined by an the amendment nature of is the Laber v. Harvey, 438 F.3d 404, 427 With respect to the amendment s nature, [a] common example of a prejudicial amendment is one that raises a new legal theory that would require the gathering and analysis of facts not already considered by the defendant. Id. (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 510 (4th Cir. 1986)) (alterations omitted). By contrast, [a]n amendment is not prejudicial . . . if it merely adds an additional theory of recovery to the facts already pled. The majority complaint, original glossing and overstated. two acts over casually as a its cheerleader gross dismissing Maj. op. at 29. complaints makes Id. the for the incompatibility threat of amended with prejudice the as A comparative analysis of the recognition differences between them unavoidable. of the night-and-day The majority s statement that appellants do not allege a new theory, id. at 27, finds support neither in the record nor in the law. The text of the two complaints speaks -- nay, screams -- this conclusion for itself. 38 1. At its core, the original complaint attacks Family Dollar for maintaining decision-making compensation, a supposedly structure which subjective for and determining plaintiffs alleged discrepancies between male and female pay. decentralized store manager produced illegal A crucial paragraph, in particular, levels the following accusation with great force: Defendant s pay decisions and/or system includes subjectivity and gender stereotyping that causes disparate impact to compensation paid to female store managers. Plaintiffs are aware, at this time, of no other criteria which causes such disparate impact other than gender bias, subjectivity and stereotyping. Plaintiffs are unaware, at this time, of any other specific criteria that are capable of separation and analyses. Compl. ¶ 22 (emphases added). The import of that paragraph is crystal clear: according to plaintiffs themselves, any actionable discrimination derived solely from subjectivity and gender stereotyping -- nothing less, nothing more. 1 Where subjectivity and gender stereotyping translate directly into discriminatory employment outcomes for a nationwide group of employees (as alleged here), the contested decisions must necessarily have 1 occurred outside the As discussed in Part III, plaintiffs also repeatedly represented to the district court the extreme similarity of their claims to those brought in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), which were founded on allegedly discriminatory exercises of discretion. 39 corporation s core. if rooted officer in or unfavorable Any centralized employment policy -- even the group prejudicial of predilections officers consequences for -- could plaintiffs of a in result only particular generally if implemented through objective standards, such that the lower-level decisionmakers who determine individual store managers salaries have little personal power to deviate from the commands dictated by corporate headquarters. But plaintiffs complaint was that lower-level managers had too much discretion to deviate, not too little. Nor does the original complaint specify any other aspect of Family Dollar s compensation policies as a source of plaintiffs injury. In light of prior litigation involving Family Dollar, it should come as no surprise that the original complaint is rooted exclusively and gender in allegations stereotyping. plaintiffs counsel In against of a permissive previous Family subjectivity suit Dollar, brought for by instance, plaintiffs (some of whom are also parties to the instant action, Appellee s Br. disparities in at pay, 4) alleged Family that Dollar] [d]espite continues [gender-based to allow its District Managers to subjectively decide what a Store Manager should earn. Opponent s Responsive Submission in Resp. to Ex. B of the Ct. s Order at 12, Collins v. Family Dollar Stores, 40 Inc., No. 7:04-cv-00553-VEH (N.D. Ala. Nov. 17, 2006), ECF No. 235. Plaintiffs complaint by seek to clinging avoid to a the thrust single of sentence their original repeated (with immaterial variations) several times in their original complaint -- that [d]efendant engages in centralized control of compensation for store managers at the corporate level of its operations. Compl. ¶¶ 18, 37, 46, 53. This uninformative bit of boilerplate seeks to subject corporations to nationwide class actions by virtue of their mere existence. Plaintiffs reasoning in this respect would penalize a company for little more than operating on a national scale under the same corporate name. Even if taken as true, the fact that some centralized directive comes unremarkable. from Surely some corporate corporations headquarters of national is entirely scope cannot flourish in the modern economy without some centralized control of compensation for their many thousands of employees. At the very least, corporate headquarters must allocate resources and articulate certain general policies to guide regional or other mid-level managers in setting individual salaries and wages. The alternative would operate to inhibit the most basic tools of management and question, therefore, is compensation the result how original in budgetary much centralized complaint actually 41 chaos. control alleges The of with respect to the challenged employment decisions. clearly, not much. The answer is, If this bare, conclusory statement in the complaint is given weight, then nationwide class action suits are off and running, notwithstanding Wal-Mart and the pleading standards laid down in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). 2. The amended complaint, in stark contrast to the original, pivots 180 degrees to assert that Family Dollar s compensation scheme actually operates in an objective and centralized manner. The amended complaint is not, as the mere[] elaborat[ion] on the original. majority contends, Maj. op. at 28. a It is what the district court says it is: a bald attempt to assert a completely new theory. It backtracks on the earlier assertion that the flaw in Family Dollar s compensation scheme was too much decentralized, subjective decision-making, by alleging that the system criteria. requires pay to be Am. Compl. ¶ 29. set by uniform, company-wide The complaint now decides to challenge the purported lack of subjectivity inherent in the company s supposedly centralized compensation scheme -- the very subjectivity that plaintiffs had earlier insisted hallmark of Family Dollar s corporate structure. 42 was the As for implementation plaintiffs of Family allegations Dollar s concerning compensation the criteria, the following passage is typical: Store Managers compensation is not set by managers who have unfettered discretion to use their own judgment without regard to any corporate-imposed criteria or standards. All Store Managers salaries . . . are subject to the same corporate-administered pay system and policy established by corporate headquarters; all Store Manager s salaries are subject to store payroll budgets established at corporate headquarters; and all Store Managers have the same job description which sets forth a common set of duties and responsibilities regardless of location. There is no policy against having uniform employment practices at Family Dollar. Id. ¶ 32. We are now explicitly told, moreover, in a complete about-face from the original complaint, that Family Dollar is not operated in a decentralized, subjective manner. Nor is the pay-setting process for Store Managers based on decentralized, subjective in the original complaint were those runaway lower-level managers. The demon in decisionmaking. the headquarters. amended Id. complaint ¶ is 34. a The demons controlling corporate Id. ¶ 35. 3. Given all of the foregoing, it should be plain that the amended complaint is not some mere modification of the original, as the majority contends. Instead, substantively different from the original. irreconcilable. They describe two 43 it is manifestly, The two are utterly different companies. By transforming excessively into an their claims subjective intricate and attack from a frontal decentralized on a assault compensation purportedly on an system objective and centralized scheme, plaintiffs have done far more than raise[] a new legal theory. Laber, 438 F.3d at 427 (internal quotation marks omitted). The majority breezily dismisses these concerns, asserting in conclusory terms that [t]he legal theory remains the same. Maj. op. at 28. heed to the My colleagues would be wise to pay some modest opinion of the district judge, who was better situated to evaluate the actual implications of the transfigured complaint. The new complaint, by virtue of its novel allegations, would require significant gathering and analysis of facts not already considered by the defendant. Laber, 438 F.3d at 427 (internal quotation marks and alterations omitted). As the district judge emphasized: Plaintiffs wish to pursue extensive discovery to support and clarify their new theories, which will require the parties to re-open and conduct new expert discovery based on plaintiffs changed version of the facts. J.A. 418. Thus, the district court was correct to conclude that granting leave to amend would be prejudicial to Family Dollar. Id. at 417-18. The proof required to defend against this new claim would be of an entirely different character than the proof 44 which the defendant [was] led to believe would be necessary. Belated claims which change the character of litigation are not favored. district Deasy v. Hill, 833 F.2d 38, 42 (4th Cir. 1987). court acted well within its discretion by The denying plaintiffs motion for leave to amend. B. The timing of a proposed pleading amendment also bears on whether the change would prejudice the opposing party. 438 F.3d at 427. before any Laber, In particular, whereas an amendment offered discovery has occurred is unlikely to be prejudicial, the further [a] case [has] progressed . . . , the more likely it defendant. is Id.; that see the also amendment United will States ex prejudice rel. the Nathan v. Takeda Pharm. N. Am., Inc., 707 F.3d 451, 461 (4th Cir. 2013) (affirming denial of motion for leave to amend in light, inter alia, of a two-year gap between filing of complaint and dismissal); Mayfield v. Nat l Ass n for Stock Car Auto Racing, Inc., 674 F.3d 369, 379 (4th Cir. 2012) (affirming denial of motion for leave to amend where a significant amount of discovery had already been conducted ). Here, plaintiffs attempt to amend their complaint came three years after the case was initially filed -- and only when Family dismiss Dollar appeared and/or strike poised the to succeed original 45 on its motion complaint s to class allegations. Moreover, the district judge observed that plaintiffs had been given adequate time to conduct discovery, that they had in fact conducted significant discovery, and that plaintiffs own counsel had even admitted that discovery is mostly completed. concluded that any J.A. 414-15. additional prejudicial to defendant. Hence, the district court discovery Id. at 415. would be . . . The court proceeded to hold that: [A]llowing plaintiffs to amend the complaint would prejudice defendant. Since the filing of the complaint three years ago, the parties have pursued discovery . . . and have attempted to mediate claims under the original complaint. Here, plaintiffs chose not to file their proposed amended complaint until the briefing on defendant s motion to dismiss was nearly complete . . . . Plaintiffs wish to pursue extensive discovery to support and clarify their new theories, which will require the parties to re-open and conduct new expert discovery based on plaintiffs changed version of the facts. Id. at 417-18. Plaintiffs attempt to blame the three-year delay in filing for leave to amend on the various motions and objections that were exchanged discovery. between the parties during the course of Such tit for tat, however, is not peculiar to this litigation; every complex class action of this variety will have just this sort of pretrial motion exchange. The majority s adoption of plaintiffs reasoning in this respect, maj. op. at 26, thus comes close to establishing a per se three-year grace 46 period for motions for leave to amend. Such a protracted interval is excessive and susceptible to manipulative conduct. The new rule established by today s opinion endorses filing delays that patently prejudice opposing parties. Moreover, the delay in this particular case is especially unjustifiable. Plaintiffs counsel with defendant s corporate structure: have extensive experience by their own admission, they have sued Family Dollar over labor and employment matters approximately 15 times since 2001. See Pls. Reply to Def. s Resp. to Pls. Opp n to Terry Price Serving as Local Counsel and Req. for Emergency Hr g at 3 n.2, Scott v. Family Dollar Stores, Inc., No. 3:08-cv-00540-MOC-DSC (W.D. N.C. Nov. 4, 2008), ECF No. 15. As the district court noted, plaintiffs were plenty familiar through their multiple prior lawsuits with defendant s corporate organization. J.A. 417. Although plaintiffs assert in a conclusory footnote that defendant s compensation policies have changed since the time of these many prior suits, Appellants Br. at 53 n.7, they provide no substantiation for this claim nor do they identify any specific ways in which the policies have been altered. The majority inexplicably focuses on the fact that plaintiffs motion for leave to amend was made prior to trial. Maj. op. at 29. certification. The crux of this dispute, however, is class That issue is routinely decided pretrial. 47 See Fed. R. Civ. P. 23(c)(1)(A) ( At an early practicable time after a person sues or is sued as a class representative, the court must determine by order whether to certify the action as a class action. ). Any potential source of prejudice, therefore, lies not in inconveniences at trial but rather in the superfluous or additional discovery costs imposed on defendant as a result of plaintiffs fluctuating class action theories. If the majority s misplaced emphasis on trial represents a new standard for identifying prejudice in class certification proceedings, prejudice will almost never be found. I see no reason whatsoever to usurp the district court s essential case management functions or to question the accuracy of its characterizations. It was entirely proper for the district court to conclude that permitting plaintiffs to amend their complaint so substantially and at such a late stage of the game would impermissibly prejudice Family Dollar. It was altogether sound for the trial court to hold that Family Dollar should not be forced to defend a new suit three years after the original complaint was filed. See Newport News Holdings Corp. v. Virtual City Vision, Inc., 650 F.3d 423, 439-41 (4th Cir. 2011) (affirming on prejudice grounds denial of motion for leave where amendment was filed at the eleventh hour, would probably have necessitated additional discovery, and would have substantially change[d] the nature and scope of litigation) 48 (internal quotation marks omitted); Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597, 603-04 (4th Cir. 2010) (same). III. As to why plaintiffs wanted to undertake such an extensive overhaul of their complaint in the first place, the majority opinion points to the Supreme Court s decision in Wal-Mart, 131 S. Ct. 2541. Wal-Mart The majority, however, misapprehends the import of with respect to the final two grounds on which a district court may deny a motion for leave to amend a pleading - the lack of good faith, to which I now turn, and futility, discussed in Part IV. See Laber v. Harvey, 438 F.3d 404, 426-27 (4th Cir. 2006). A district court s refusal to permit a pleading amendment on bad faith grounds is justified where the plaintiff s first theory of recovery is based on his own reading of . . . cases and it turns out that he misinterpreted how that theory would apply to the facts of his case. That situation is precisely Id. at 428 (emphasis omitted). what occurred here. Plaintiffs misinterpreted how certain class action precedents would apply to their case and then sought to construct an entirely new set of facts to overcome their error. Their willingness to adopt contradictory factual positions in order to match their evolving legal theories evidences a degree of bad faith sufficient to 49 warrant denial of leave to amend. that prior representations to a To the old-fashioned view court actually count for something, the majority answers: Not much. Plaintiffs were wholly content to ride the coattails of the proposed class in Wal-Mart while that class was enjoying success in the lower federal courts. In consenting to a transfer of venue in 2008, plaintiffs explicitly stated that, with respect to a then-recent round of the Wal-Mart litigation, [t]he Ninth Circuit . . . affirmed certification of . . . a nationwide class having virtually identical claims of sex discrimination in pay to those brought in this case. J.A. 221 (citing Dukes v. Wal- Mart, Inc., 509 F.3d 1168 (9th Cir. 2007)) (emphasis added). Later in the litigation, plaintiffs argued that [t]he evidence is expected to show that this case is more like . . . the Ninth Circuit s decision defendant. Then after in Wal-Mart the cases cited by S.A. 527. plaintiffs the Supreme adopted Court a before this court, dramatically reversed certification decision in 2011. briefing than the different Ninth Circuit s See 131 S. Ct. 2541. for instance, stance plaintiffs In their contend that Family Dollar s salary system is the opposite of that in Wal-Mart, Appellants Br. at 5; that [t]he current case has never alleged any store-level decisionmaking similar to that in Wal-Mart, id. at 16, 21-22 (emphasis omitted); that [t]he Wal50 Mart decision was limited to localized decisionmaking within each store that was not subject to any centralized policies or control similar to those alleged here, id. at 20-21; and that Wal-Mart simply does not apply to [the] Complaint [here], id. at 52 (emphasis omitted). Statements made at oral argument help to illustrate the gross incompatibility between the factual allegations made by plaintiffs original and amended complaints. The court inquired: Don t we have a big difference . . . between your complaint and your amended complaint . . . in terms of the substantive allegations? do not believe so. Plaintiffs counsel responded: No, I He later elaborated: We say that this case involves centralized criteria . . . and that we can show that that centralized criteria is what s causing the disparity, not . . . anything localized. . . . That s our complaint from Day 1. If you read our original complaint, it says that we are attacking a centralized system. It says nothing but that. (emphasis added). Despite these protestations to the contrary, the original complaint actually says precisely the opposite. It states explicitly that Plaintiffs are aware, at this time, of no other criteria which causes such disparate impact other than gender bias, subjectivity and stereotyping. Compl. ¶ 22 (emphasis added). To be sure, counsel must enjoy latitude in amending complaints to address intervening developments in the law and to 51 incorporate filing. factual material uncovered since the original Some evolution of a plaintiff s approach to a case is to be expected, for good advocacy is adaptive in some measure. It is a matter of degree, however, and the district court was right to spot in plaintiffs new attack a bridge too far. For the instant plaintiffs do not merely present a new legal argument predicated on their original factual allegations, or some modification based upon new revelations. Instead, they seek to invent an entirely new set of facts tailored to their revised theory of recovery. The corporate defendant described in bears the amended complaint no more than relationship to that described in the original. amendment is not merely clerical or a nominal The proposed corrective. It [establishes] an entirely new factual basis for the plaintiffs' claims. Little v. Liquid Air Corp., 952 F.2d 841, 846 (5th Cir. 1992), reinstated in relevant part, 37 F.3d 1069, 1073 & n.8 (5th Cir. 1994) (en banc); see also Cornell & Co., Inc. v. OSHRC, 573 F.2d 820, 824-25 (3rd Cir. 1978) (denying leave to amend where plaintiff changed the factual basis for the charge as well as his legal theory ) (internal quotation marks omitted). This is more than some commonplace doctrinal point. Complaints must bear some relationship to the external reality which they purport to describe. 52 When a corporation is reinvented from decision-making one to employing one with decentralized, rigid, entirely subjective centralized policies, law s relationship to reality is stretched too thin. See Bradley v. Chiron Corp., 136 F.3d 1317, 1324-26 (Fed. Cir. 1998) (disregarding sham facts in an amended complaint that contradicted the factual allegations pled in the original and represented a transparent attempt to conform the facts to the requirements of the cause of action ). Law is not a mere set of expressions to be manipulated toward a given end. It is a system designed to ascertain truth as far as possible in order to produce justice, to the extent possible. must maintain exist. some concrete relationship To do this, law with facts as they Plaintiffs contradictory pleadings, which treat reality as a plastic entity to be molded to their purposes, run directly counter to this principle. See Reddy v. Litton Indus., Inc., 912 F.2d 291, 296-97 (9th Cir. 1990) ( Although leave to amend should be liberally granted, the amended complaint may only allege other facts consistent with the challenged pleading. ) (internal quotation marks omitted). Were plaintiffs permitted to substitute contradictory factual narratives every time an intervening opinion cast doubt upon their claims, they could hold indefinitely postponing final judgment. original complaint deficient because 53 defendants hostage by The majority finds the it alleged only a subjective decision-making structure. Maj op. at 21-22. But when plaintiffs sought to run from their prior representations and assert a highly controlled decision-making apparatus, the majority says no problem. I regret that the majority encourages litigants to approach courts in such a manner. IV. Finally, motion for futility. 2006). fails the district leave to amend court s was rejection warranted on of a plaintiffs third ground: See Laber v. Harvey, 438 F.3d 404, 426-27 (4th Cir. Futility is apparent if the proposed amended complaint to state a claim under the applicable rules and accompanying standards -- that is, if it fails to satisfy the requirements Gaming, of Inc., quotation the 637 marks federal F.3d 462, omitted). rules. 471 (4th Wal-Mart Katyle v. Cir. 2011) itself Penn Nat l (internal expounded the requirements of the federal rules -- specifically, Federal Rule of Civil Procedure 23 s commands concerning the certification of class actions. It is plain that the amended complaint fails to state a claim by virtue of that decision. A. As in Wal-Mart, [t]he crux of this case is commonality -the rule requiring a plaintiff to show that there are questions of law or fact common to the class. 54 131 S. Ct. at 2550-51 (quoting Fed. R. Civ. P. 23(a)(2)). Wal-Mart s central teaching is that the claims of each class member must depend upon a common contention. Id. at 2551. That common contention, in turn, must be of such a nature that it is capable of classwide resolution -- which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke. Id. Thus, [w]hat matters to class certification . . . is not the raising of common questions -- even in droves -- but, rather the capacity of a classwide drive the proceeding resolution to of generate the common answers apt to litigation. Id. (internal to discrimination quotation marks omitted). Applying these principles employment claims, the Wal-Mart Court made clear that [w]ithout some glue holding the decisions alleged together, reasons it for will [each be of the impossible challenged] to say that examination of all the class members claims for relief will produce a common disfavored. answer to Id. at 2552. the crucial question why was I As relevant here, plaintiffs must show [s]ignificant proof that an employer operated under a general policy of discrimination in order to demonstrate the existence of the requisite glue. Tel. Co. of (alteration Sw. in v. Falcon, original). 457 For 55 Id. at 2553 (quoting Gen. U.S. two 147, reasons, 159 n.15 (1982)) plaintiffs have failed to amended satisfy complaint this fail standard. on their First, face. the claims Second, even in the if the claims were not facially deficient, the proffered evidence would still be incapable of supporting such claims on a classwide basis. 1. In light of the stunning similarities between this case and Wal-Mart, the allegations in the amended complaint -- just as in the original outset. In complaint both -- cases, are legally defendants insufficient are large from the corporations operating nationwide chains of consumer-goods stores. From Wal- Mart: Petitioner Wal Mart is the Nation s largest private employer. It operates four types of retail stores throughout the country . . . . Those stores are divided into seven nationwide divisions, which in turn comprise 41 regions of 80 to 85 stores apiece. Each store has between 40 and 53 separate departments and 80 to 500 staff positions. In all, Wal Mart operates approximately 3,400 stores and employs more than one million people. 131 S. Ct. at 2547. And from the briefing here: Family Dollar operates a chain of over 7,000 stores in more than 40 states and has divided its operations into 95 regions, each run by a vice president, and then into districts, each run by a district manager. Appellee s Br. at 3 (quoting Grace v. Family Dollar Stores, Inc. (In re Family Dollar FLSA Litig.), 637 F.3d 508, 510 (4th Cir. 2011)). There are 56 approximately four hundred districts, each of which includes between ten and thirty stores. Id. In both cases, the proposed employees. In both cases, plaintiffs challenged various pay and procedures as employees improperly and many of decision female encompassed thousands promotion retail-level, class former gender-related. Compare Wal-Mart, 131 S. Ct. at 2547 ( The named plaintiffs in this lawsuit, representing the 1.5 million members of the certified class, are three current or former Wal Mart employees who allege that the company discriminated against them on the basis of their sex by denying them equal pay or promotions, in violation of Title VII of the Civil Rights Act of 1964 . . . . ), with Am. Compl. ¶ 5 ( The plaintiffs bring this action on behalf of themselves and all female Store Managers pursuant to Title VII of the 1964 Civil Rights Act . . . and § 216(b) of the Equal Pay Act of 1963 widespread and pervasive . . . gender to redress the discrimination defendant s in employment opportunities. ). And most significantly, in both cases, all of the contested employment actions derived from the same type of decision-making structure. In Wal-Mart, the Supreme Court stated that mid-level managers were allowed to exercise discretion within limits imposed oversight and enforced including by corporate preestablished 57 oversight, ranges and with such certain objective criteria for pay and promotions. 131 S. Ct. at 2547. The district court in Wal-Mart provided even greater detail, explaining policies that the that company provide maintains some centralized constraint on corporate the degree managerial discretion over in-store personnel decisions. v. Wal-Mart 2004). that Stores, Inc., 222 F.R.D. 137, 152-53 of Dukes (N.D. Cal. For instance, there is a basic compensation structure applies positions similarly across all to all types of in-store Wal Mart salaried stores, management in that the computation begins with a base salary within a range set by the corporation . . . , with adjustments incentives and/or merit increases. allowed for profit Id. at 148. As discussed in Part II, the factual and legal allegations contained in the amended complaint in this case were so novel as to warrant a finding of prejudice. The fact that certain allegations are new, however, does not indicate that they are viable. Here, despite plaintiffs efforts to allege extensive centralized control, the amended complaint reveals the existence of a corporate decision-making described in Wal-Mart. structure parallel to that As the district court here explained, Although plaintiffs [now] purport to deny that class members pay is set through a discretionary, subjective process, . . . the discretionary pay of managers, within uniformly established parameters, remain[s] the only 58 source of discrimination alleged. J.A. 417. That pattern of dispersed managerial discretion within centralized parameters is precisely that of Wal-Mart. While plaintiffs fail to so much as identify the source of many of the supposed nefarious corporate parameters, see, e.g., Am. Compl. ¶ 51, even if we were to accept these dubious assertions at face value, plaintiffs proffered amendment would still be futile. employment In practice an effort to responsible identify for a the specific alleged pay discrepancies, Wal-Mart, 131 S. Ct. at 2555 (internal quotation marks omitted), plaintiffs corporate policies. (and the majority) point First, plaintiffs challenge the corporate-imposed salary ranges for store managers. at 13-14; intrinsically Am. Compl. imparts administering it. four With respect to each claim, plaintiffs own brief gives away the ballgame. Br. to ¶ 35. discretion A salary to those Appellants range, however, charged with As the district judge noted, a large number of decision-makers, . . . located around the country, exercise individual discretion in established pay ranges. placing J.A. 419. Store Managers within the Discretion cabined by broad corporate policies -- including salary ranges -- is precisely the structure that Wal-Mart found not to be susceptible to class action treatment. 131 S. Ct. at 2547 (denying certification despite defendant s use of salary ranges). 59 class If the existence of such discretion defeated class action commonality in Wal-Mart, it must do so here. Second, plaintiffs decry the alleged corporate-imposed cap on pay raises and contend that exceptions to this cap, which may only be granted Presidents, are by Regional Managers granted and Divisional disproportionately Appellants Br. at 13; Am. Compl. ¶ 36. to Vice males. Regional Managers and Divisional Vice Presidents, however, as their respective titles indicate, are middle managers. See J.A. 419. By definition, they are incapable of dictating corporate-wide policies. As the district judge noted, plaintiffs allegations in this respect again converge with the facts in Wal-Mart: both cases involve dispersed decision-makers exercising discretion (e.g., granting exceptions) free of direct corporate control and oversight. Id. at 417, 419. Third, determining experience women. plaintiffs argue compensation and performance that -- defendant s criteria evaluations which -- criteria for include prior disparately impact Appellants Br. at 32; Am. Compl. ¶¶ 40, 51. The use of such criteria is hardly remarkable; the only thing that would be remarkable is if Family Dollar failed to find prior experience and prior performance relevant. this practice is obvious. 60 The business justification for Plaintiffs do not allege, moreover, that these criteria constitute a rigid formula; instead, the criteria appear to be simple guideposts listing multiple factors designed to channel the discretionary with setting equivalent decisions store of a of manager judicial those middle salaries. It managers is the charged business totality-of-the-circumstances test, with the weight and relevance of the factor or circumstance to be determined individually. set rigid salaries headquarters, both for Indeed, it would be senseless to every because store would it manager strip at the corporate system of incentives and because the performance of each manager simply is not identical. constraint As noted above, this type of broad corporate on what determination does Wal-Mart, S. 131 defendant s use is not Ct. of fundamentally satisfy at 2547 objective the a commonality (denying criteria discretionary requirement. certification in making despite promotion decisions). Fourth, plaintiffs complain that corporate policies require that store managers promoted from within be paid less than those who are hired laterally. 54. as This policy allegedly produces a disparate impact insofar female house. not Appellants Br. at 9; Am. Compl. ¶ 52, store managers are disproportionately Appellants Br. at 10; Am. Compl. ¶ 55. allege, however, that either 61 method of promoted in- Plaintiffs do selection is centrally mandated, nor do they allege that any central policy is even responsible for the supposed tendency of females to be promoted from within rather than hired laterally. Given that the alleged policy does not dictate the internal or external impact route that of store will arises manager selection, necessarily be decentralized choices by middle managers. any the disparate result of Whether women are disproportionately hired from within will vary from region to region. In short, [i]n a company of [Family Dollar s] size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Wal-Mart, 131 S. Ct. at 2555. the any existence of disparate impact Consequently, resulting from this particular policy will be resistant to coherent analysis at the national level. The business justification for allotting a slight premium to lateral hires is hardly obscure. allowance to persuade an It may well take such an employee to switch companies. Furthermore, the Supreme Court has noted that the mere fact that a business practice produces some statistical disparity is, standing alone, insufficient to conclude that a class action will be viable. Id. at 2555-56. Under the lateral hire policy at issue here, for example, some middle managers will hire women from outside, or promote men from within. 62 In other cases, the hiring party may herself be female. The alleged policy could very well work to the benefit of women in certain districts. short, the results will vary by district and by In region; nationwide patterns are inadequate to justify an inference of discrimination at the subnational level. The variable results produced by this particular practice -- which is neutral on its face and supported by an obvious business justification -- are precisely what Wal-Mart envisioned as inimical to class action commonality. The fact that each of plaintiffs key claims ultimately reduces to an unsurprising. delegated Family cabined discretion should be Companies must rely on delegated It would be virtually impossible, as a matter of practicality, Dollar to for corporate a company micromanage centralized policies. Dollar s of There is nothing inherently discriminatory about discretion. discretion. sheer allegation store as extensive manager in scope compensation as via It is simply unfathomable that Family headquarters could afford to dictate the compensation paid to managers in each of its 7,000 stores. Some discretion is intrinsic to this type of national business. See id. at 2554 (noting that an employment policy of decentralized decision-making is a very common and presumptively reasonable way of doing business ). 63 The inference is therefore inescapable that Family Dollar relies on middle managers -- who have greater and more intimate knowledge of management facts -- to on the attend ground to the than the details members of store of top manager compensation within the broad constraints imposed by corporate headquarters. Family Dollar expects its intermediate executives to be more than mere automatons. & Trust, 487 U.S. customary and 977, quite 990 See Watson v. Fort Worth Bank (1988) reasonable (noting simply to that it delegate may be employment decisions to those employees who are most familiar with the jobs to be filled Plaintiffs and with inventive economic and national the candidates pleadings managerial corporation. simply realities [L]ocal for those cannot associated discretion jobs ). disguise the with running a cannot support a company-wide class no matter how cleverly lawyers may try to repackage local variability as uniformity. Constr. Co., 688 F.3d 893, 898 (7th Cir. 2012). Bolden v. Walsh The presence of such variability makes it difficult to establish the commonality necessary for class action treatment because, among other things, business managers in many regions and districts will exercise delegated discretion in favor of the plaintiff class. Plaintiffs argument, therefore, continues to boil down to the contention that an exercise disparities in pay based on gender. 64 of discretion J.A. 419. results in Wal-Mart, of course, found challenges based on such a decision-making structure largely resistant to class action treatment. Ct. at aspect 2555-56. of the The district futility court analysis when nicely it 131 S. summarized concluded this that the proposed amended complaint appears to be an attempt to recast plaintiffs class claims simply to avoid dismissal under [WalMart], but even the allegations in the amended complaint ultimately point to subjective, individualized decisions rather than pointing to any uniform company-wide discriminates against [female] Store Managers. policy that J.A. 417. 2. Plaintiffs amended complaint is deficient for an additional reason: the evidence plaintiffs have offered fails to satisfy the standards suggested by Wal-Mart. that case made clear, pleading standard. Rule 23 does not 131 S. Ct. at 2551. As the Court in set forth a mere Rather, [a] party seeking class certification must affirmatively demonstrate his compliance with the Rule -- that is, he must be prepared to prove that there are in fact . . . common questions of law or fact, etc. Id. (emphasis omitted); see also Comcast Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013). In light of the fact that plaintiffs have already conducted significant discovery in this and other similar cases against defendant in other jurisdictions, J.A. 415, the data that they have gathered is 65 inadequate to satisfy the evidentiary standard imposed by WalMart. Wal-Mart emphasized that left to their own devices most managers in any corporation . . . would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. 131 S. Ct. at 2554. Furthermore, with respect to a large national corporation like Wal-Mart or Family Dollar, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Id. at 2555. And while Wal-Mart did not foreclose the theoretical possibility that such coordinated, discriminatory, discretionary activity might one day be demonstrated, it concluded that the statistical and anecdotal evidence in that case fell well short. Id. Here, the only real evidence that plaintiffs have provided is numerical in nature, and it fails for the same reason as that in Wal-Mart. The amended complaint supplies figures purporting to show statistically significant disparities in what Family Dollar pays men and women for the same job of Store Managers. Am. Compl. ¶ 24. amounting 2010, to which deviations Plaintiffs point to an alleged salary gap approximately they above peg what at $2,500 per twenty-two would be to year between twenty-three expected in the 2008 and standard absence of gender-based discrimination when controll[ing] for non-gender 66 factors that may affect pay such as store, district, region, store type, store size, store location, store volume, education and prior work history, and length of service. But this lengthy enumeration of controlled Id. ¶¶ 24-27. elements itself belies plaintiffs claim that any alleged discrepancy in store manager pay is the product of a rigid collection of centralized corporate policies. Plaintiffs statistical evidence is insufficient under WalMart on two counts, both stemming from the fact that it is national in scope. First and fundamentally, the Supreme Court specifically underscored the failure of inference inherent in attempting to draw statistical data. particularized conclusions 131 S. Ct. at 2555. from national That is, [i]nformation about disparities at the regional and national level[s] does not establish the existence of disparities at individual stores, or within individual districts, let alone raise the inference that a company-wide policy of discrimination is implemented discretionary decisions at the store and district level. by Id. (internal quotation marks omitted); see also Bolden, 688 F.3d at 896 ( If [the defendant employed] 25 superintendents, 5 of whom discriminated in awarding overtime, aggregate data would show that black workers did worse than white workers -- but that result would not imply that all 25 superintendents behaved similarly, so it would not demonstrate commonality. ); Bennett 67 v. Nucor Corp., bottom-line demonstrate 656 F.3d 802, [statistical] that any 815-16 (8th is analysis disparate Cir. insufficient treatment or 2011) ( [A] disparate to impact present in one department was also common to all the others. ). Second, nationwide nondiscriminatory data conditions fails that to may results from one area to another. account have for produced various divergent For instance, as Wal-Mart tells us, [s]ome managers will claim that the availability of women, or qualified women, or interested women, in their stores area does not mirror the national or regional statistics. S. Ct. at 2555. 131 The controls that plaintiffs claim to have factored into their statistical conclusions here do not account for those factors, nor could their crude statistics possibly comprehend the myriad other conceivable circumstances that may affect comparative compensation levels in specific locales. B. Plaintiffs have thus failed to provide convincing proof of any policy that discriminates in a companywide manner; as a result, they have not established the existence of any common question. complaint Wal-Mart, suffers from 131 S. the Ct. same at 2556-57. fatal flaw as The the amended original, rendering plaintiffs attempt to reboot the litigation futile, and rendering amendment on the that district ground an court s entirely 68 decision proper to refuse exercise of the its discretion. Even without reaching the patent inadequacies of the amended complaint under Rule 23(b) -- including the obvious further difficulties raised by plaintiffs request for backpay in light of the Court s remedial holding in Wal-Mart, 131 S. Ct. at 2557 -- the entire class action fails for a lack of commonality under Rule 23(a)(2). It bears structure certain at reemphasis issue here centralized that -- the in policies employment which but also a decision-making business imparts articulates to mid-level managers some discretion to implement them -- is not only common to Wal-Mart and Family Dollar. corporations. It is typical of most national See McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 488 (7th Cir. 2012) (noting that large corporations may grant discretion to local managers as a matter of necessity ). The result is a substantial variety of outcomes attributable to the disparate management philosophies, priorities, and circumstances of each decentralized decision- maker -- exactly what one would expect in a company staffed by human beings. The policies majority might be fails even legally to suggest suspect. why Indeed, the the challenged corporate guidelines targeted by plaintiffs -- such as the use of salary ranges, the purported bonuses for lateral hires, and the inclusion of prior experience and performance as factors in pay 69 decisions -- are among the most anodyne in the corporate world. Permitting a class action suit to proceed on such a slender basis exposes a large swath of companies to class-action liability simply for adopting perfectly ordinary, plain vanilla policies. These policies do, however, share one relevant feature: they delegate discretion. Wal-Mart recognized regional discrepancies through the gravamen of the and blunderbuss that difficulty individual of decision class is that that under the action of for discretion litigation. nationwide circumstances accounting exercises steep climb to certification under Rule 23. (holding of classes The face a 131 S. Ct. at 2554 discussed, [a] party seeking to certify a nationwide class will be unable to show that all the employees Title VII claims will in fact depend on the answers nightmares unwieldy to common encountered pieces of questions ). by district litigation, no Given judges other the managerial assigned conclusion these would be possible. 2 2 The concurring opinion of my good colleague, which ignores this reality, is notable chiefly for its silences. It advances an analysis even more cursory than that of the majority on the theory that some vague, soothing assurance about ordinary Rule 15 motions will obscure the extraordinary steps that have been taken. Granted, it is in the nature of a concurrence to be brief in relative terms, but surely some revelatory engagement with appellee s claims should be forthcoming. The concurrence neglects to address which of the district court s factual (Continued) 70 It is also important to note that denial of nationwide class certification here would not leave plaintiffs without a path forward. Each could continue to pursue a personal claim of discrimination, as the district court made clear. J.A. 420. Or, should plaintiffs choose to take a different tack on remand, class certification could perhaps be suitable for more modest -and thus more manageable -- groups, such as district-level findings were clearly erroneous, or which of its discretionary judgments ran afoul of the abuse-of-discretion standard of review. It declines to say exactly what new information was supposedly discovered during mediation, or why that information was not known to plaintiffs counsel as a result of their fifteen previous suits against Family Dollar. It fails to justify the irreconcilability of the various pleadings or the changed thrust of the factual allegations contained therein. It neglects to address the district court s finding that this entirely new case severely prejudiced defendant three years after the filing of the original complaint. It refuses to explain why Wal-Mart s commonality holding, by its plain language, does not apply to middle managers. It further refuses to explain why 500 vice presidents and district managers who concededly made discretionary decisions within delegated ranges are anything other than middle management, or why a system in which discretion is channeled by broad corporate guidelines does not fall within Wal-Mart s literal terms. It does not state why it is justifiable to rope regions and districts with progressive hiring practices into nationwide litigation, or how this national class action, with all its disparate and moving parts, is supposed to be administered, or what the district court is even supposed to do upon remand. It fails, finally, to illuminate for courts and litigants why this decision does not subject every company in America with similarly unremarkable policies to the prospect of class-action liability (and the reality of interminable class certification disputes) merely for existing. Perhaps my fine colleagues will some day provide some answers to some of these questions, but for now they are doing what football teams usually do on fourth down. 71 clusters, where the differences in the circumstances faced by each member may be less pronounced. (denying class certification See Bolden, 688 F.3d at 899 but subclasses might be certifiable). suggesting that smaller While plaintiffs have chosen to bite off more than they can chew thus far, smaller morsels may prove more palatable in the end. V. In holding discretionary Wal-Mart decisions hollowed out that case. of inapplicable middle to managers, the the manifold majority has Moreover, the district court engaged in a sound exercise of discretion on any one of the three grounds commonly recognized as reasons for denying leave to amend. The majority s decision is unjustifiable under the straightforward application of governing precedent. In a larger sense, though, the majority s ruling is more damaging even than the disregard of precedent. judicial process in three significant ways. disputes far past the point of reason. It impairs the First, it prolongs It requires companies to defend completely different cases no less than three years after the filing of the complaint. No other court has gone this far. In so doing, the majority fails to address even the rudimentary managerial realities of modern 72 national corporations. The more s the pity, because in many places and under many managers, the chief beneficiary would have been the plaintiff class. Second, the majority pulls up curbside and dumps on the district court litigation. an utterly unwieldy, unmanageable piece of It is a truism that unpleasant tasks roll downhill, and it is also worth the observation that the majority will not have to deal with the many problems it has wrought. We use an abuse of discretion standard in this context for a reason. district judge is best situated to determinations at issue on this appeal. make the The type of See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 630 (1997) (Breyer, J., concurring in part and dissenting in part) (noting in the class action context that a district court is far more familiar with the issues and litigants than is a court of appeals ). Given the standard, this is a rude reversal, as it would be even for a trial court opinion less well reasoned than the one reversed. Third, the majority has subverted a Supreme Court decision that, whether congenial or dispute such as this one. faithfully apply our not, was written precisely for a We count upon district courts to decisions and precedents. The Supreme Court should be able to count upon us to do the same. I yield to no one in my respect for the truly fine judges in the majority. But let this much be clear. Even the above unfortunate consequences pale in comparison to the incentives 73 today s ruling creates for future parties. this case played fast and loose with the The plaintiffs in district court, offering not an amended complaint, but rather a completely contradictory one. They assumed that the allegations in a complaint need bear no discernible relationship to any external reality but reflect only the limitless malleability of lawyers verbal skills. The district court recognized that the system was being gamed and moved to instill respect for the integrity of the process over which it had the duty to preside. That we should not only reverse the trial court, but do so as clearly erroneous and an abuse of discretion, is simply wrong. The abuse was committed on appeal. 74

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