Chen-Oster v. Goldman, Sachs & Co.
| Decision Date | 17 March 2022 |
| Docket Number | 10 Civ. 6950 (AT) (RWL) |
| Parties | H. CRISTINA CHEN-OSTER, LISA PARISI, SHANNA ORLICH, ALLISON GAMBA, and MARY DE LUIS, Plaintiffs, v. GOLDMAN, SACHS & CO. and THE GOLDMAN SACHS GROUP, INC., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Plaintiffs H. Cristina Chen-Oster, Shanna Orlich, Allison Gamba, and Mary De Luis, [1] representing a class of female employees of Goldman, Sachs & Co. and The Goldman Sachs Group, Inc. (collectively, “Goldman Sachs” or “Defendants”), filed this class action alleging gender discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e et seq., and the New York City Human Rights Law (the “NYCHRL”), N.Y.C. Admin. Code § 8-101 et seq.
Before the Court are the parties' motions to exclude expert testimony, ECF Nos. 1184, 1187, Defendants' motion for decertification of the class, ECF No. 1194, Defendants' motion for summary judgment, ECF No. 1239, and Plaintiffs' motion for partial summary judgment, ECF No 1247. For the reasons stated below, the parties' motions to exclude expert testimony are GRANTED in part, and DENIED in part; Defendants' motion to decertify the class is DENIED; Plaintiffs' motion for summary judgment is DENIED; and Defendants' motion for summary judgment is GRANTED in part, and DENIED in part.
BACKGROUND[2]
Goldman Sachs is a leading financial services company that has four revenue-generating divisions-Investment Banking, Investment Management, Securities, and Merchant Banking. Defs. 56.1 ¶¶ 1-6, ECF No. 1241. These divisions are split into numerous specialized business units. See, e.g., ECF No. 265-1. Plaintiffs worked in three of the revenue generating divisions. See Class Cert. Order at 2-4, ECF No. 578. In these three divisions, Goldman Sachs employed two systems for evaluating employees, known as “360 review” and “quartiling.” Pls. 56.1 ¶ 1, ECF No. 1257. For promotions from Vice President to Managing Director, Goldman Sachs used a process called “cross-ruffing.” Class Cert. Order at 8-10.
Goldman Sachs employees in the Investment Banking, Investment Management, and Securities Divisions underwent the 360 review process. Pls. 56.1 ¶ 1. First, each employee performed a self-evaluation and named 8 to 12 evaluators-subordinates, bosses, peers, and internal clients-with whom he or she had recently worked to provide reviews of his or her performance. Id. ¶ 2; Defs. 56.1 ¶ 13. Evaluators assessed employees on criteria that were the same across the three divisions in any given year. Pls. 56.1 ¶ 3. Finally, the employee's manager received the reviews, added their own evaluations, created a narrative summary of all of the reviews, and discussed the overall review with the employee. Defs. 56.1 ¶¶ 18-19. In 2016, the 360 review process shifted to being primarily used as a development tool rather than a compensation determination tool. Landman Decl. ¶¶ 6, 20, ECF No. 1250-5; Landman Dep. at 82, 88, ECF No. 1289-8.
Goldman Sachs also utilized “quartiling, ” in which managers assigned each employee to one of five “quartiles” until 2016 and to one of four “quartiles” from 2016 to 2018. Landman Decl. ¶ 26; Farber Report ¶ 35, ECF No. 1188-3. Managers took into account a number of criteria, including the 360 reviews and quality of performance. ECF Nos. 1258-18 at 1, 1258-19 at 3. The purpose of quartiling was to identify the top, middle, and bottom performers relative to their peers. Defs. 56.1 ¶ 22. These quartiles, along with other data points, were used to determine compensation. Pls. 56.1 ¶ 12; ECF No. 1258-18 at 1.
At Goldman Sachs, promotion from Vice President to Managing Director did not involve an application process. Rather, throughout the class period, business unit heads and other managers develop lists of candidates for promotion in each of the relevant divisions. Defs. 56.1 ¶¶ 24-25, 31; Pls. 56.1 ¶ 14. Cross-ruffers, the name given to the evaluators, interview roughly a dozen people familiar with the candidates' work, including managers, peers, and internal clients, then develop a ranked list of candidates based on the interviews. Id. ¶¶ 28-30. The cross-ruffers then submit this list to division heads and Goldman Sachs' management committee. Pls. 56.1 ¶¶ 21-22.
The parties contest whether the “cross-ruffing” refers to the entire promotion process or only the second step in the process. Compare Pls. Summ. J. Opp'n at 26-28, ECF No. 1310, with Defs. Summ. J. Mem. at 12, 22, ECF No. 1240. In certifying the class, the Court considered the term “cross-ruffing” to include the full promotion process-both selecting the candidates and vetting them. See Class Cert. Order at 8-10, 27, 30-31.
On September 16, 2010, Plaintiffs Chen-Oster, Parisi, and Orlich filed a class action alleging intentional discrimination, disparate impact discrimination, retaliation, and pregnancy discrimination claims under Title VII and the NYCHRL.[3] See Compl. The Honorable Leonard B. Sand originally presided over this case before it was reassigned to the undersigned on May 24, 2013. ECF No. 181.
On March 30, 2018, the Court certified a class consisting of female Associates and Vice Presidents employed in the United States by Goldman Sachs and its predecessors in three of the revenue-generating divisions-Investment Banking, Investment Management, and Securities- who were subject to 360 review, quartiling, or cross-ruffing, pursuant to Federal Rule of Civil Procedure 23(b)(3) (the “Class Certification Order”). See Class Cert. Order at 22-49. The class includes (1) female Associates and Vice Presidents in the three divisions who were subject to either 360 review, quartiling, or both 360 review and quartiling from July 7, 2002 for those based in New York City and from September 10, 2004 for all other U.S.-based individuals through the resolution of this action, and (2) female Vice Presidents from the three divisions who were subject to the cross-ruffing process during the same time periods. See Id. The Court concluded that certification was warranted because Plaintiffs had demonstrated that Defendants had employed a “common mode of exercising discretion, ” through the three processes, to support a disparate impact class. Class Cert. Order at 24-28, 41 (citation omitted). The Court found that class resolution was also appropriate for Plaintiffs' disparate treatment claim, which relied on the same statistical evidence.[4] Id. at 41, 45-47. On July 12, 2021, the parties' filed motions to exclude expert testimony. ECF Nos. 1184, 1187. On July 22, 2021, Defendants filed their motion for decertification of the class. ECF No. 1194. Finally, on August 9, 2021, the parties filed cross-motions for summary judgment. ECF Nos. 1239, 1247. The Court addresses each in turn.
DISCUSSION[5]
The parties cross-move to exclude the opinions, reports, and testimony of certain experts under Federal Rule of Evidence 702. ECF Nos. 1184, 1187.
The admissibility of expert testimony is governed by Federal Rule of Evidence 702. The rule provides, in relevant part, that “[a] witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion” if:
District courts are the gatekeepers of expert testimony, responsible for “ensuring that an expert's testimony both rests on a reliable foundation and is relevant to the task at hand.” Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993). “[T]he proponent of expert testimony has the burden of establishing by a preponderance of the evidence that the admissibility requirements of Rule 702 are satisfied.” United States v. Williams, 506 F.3d 151, 160 (2d Cir. 2007).
Courts first address “the threshold question of whether a witness is ‘qualified as an expert by knowledge, skill, experience, training, or education' to render his or her opinions.” Nimely v. City of New York, 414 F.3d 381, 396 n.11 (2d Cir. 2005) (quoting Fed.R.Evid. 702). After considering the expert's qualifications, courts determine whether the expert testimony is reliable. In determining reliability, the court considers “the theory's testability, the extent to which it ‘has been subjected to peer review and publication,' the extent to which a technique is subject to ‘standards controlling the technique's operation,' the ‘known or potential rate of error,' and the ‘degree of acceptance' within the ‘relevant scientific community.'” United States v. Romano, 794 F.3d 317, 330 (2d Cir. 2015) (quoting Daubert, 509 U.S. at 593-94). “A minor flaw in an expert's reasoning or a slight modification of an otherwise reliable method will not render an expert's opinion per se inadmissible.” Amorgianos v. Nat'l R.R. Passenger Corp., 303 F.3d 256, 267 (2d Cir. 2002). Rather, “[t]he judge should only exclude the evidence if the flaw is large enough that the expert lacks good grounds for his or her conclusions.” Id. (quotation marks and citation omitted). “The mere fact that an expert's testimony conflicts with the testimony of another expert or scientific study does not control admissibility.” In re Zyprexa Prods. Liab. Litig., 489 F.Supp.2d 230, 285 (E.D.N.Y. 2007).
Even after qualifying a...
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