Ellis v. Costco Wholesale Corp.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

SHIRLEY “RAE” ELLIS; LEAH 
HORSTMAN; ELAINE SASAKI, on
behalf of themselves and all others No. 07-15838
similarly situated,
Plaintiffs-Appellees,  D.C. No.
CV-04-03341-MHP
v. OPINION
COSTCO WHOLESALE CORPORATION,
Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of California
Marilyn H. Patel, District Judge, Presiding

Argued on April 14, 2008 and
Resubmitted on September 9, 2011
San Francisco, California

Filed September 16, 2011

Before: Ronald M. Gould, Richard R. Clifton, and
N. Randy Smith, Circuit Judges.

Opinion by Judge N.R. Smith

17693
 ELLIS v. COSTCO WHOLESALE CORP. 17697
COUNSEL

Kenwood C. Youmans, David D. Kadue, David B. Ross, Ger-
lad L. Maatman, & Thomas J. Wybenga, Seyfarth Shaw LLP,
New York, New York, for defendant-appellant Costco
Wholesale Corporation.

Brad Seligman & Jocelyn D. Larkin, The Impact Fund,
Berkeley, California; Steve Stemerman, Elizabeth A. Law-
rence, & Sarah Varela, Davis, Cowell & Bowe, San Fran-
cisco, California; Bill Lann Lee, Lindsay Nako, & Julia
Campins, Lewis, Feinberg, Lee, Renaker & Jackson, P.C.,
Oakland, California, for plaintiffs-appellees Shirley “Rae”
Ellis, Leah Horstman, & Elaine Sasaki.

OPINION

N.R. Smith, Circuit Judge:

Costco Wholesale Corporation appeals the district court’s
order granting class certification in a class action brought by
Shirley “Rae” Ellis, Leah Horstman, and Elaine Sasaki (col-
lectively Plaintiffs). In the class action, Plaintiffs allege that
Costco’s promotional practices discriminate based on gender.
Because we granted Costco permission to file an interlocutory
appeal, our jurisdiction arises under 28 U.S.C. § 1292(e). We
affirm in part, vacate in part, and remand.

This complicated case requires us to consider a number of
issues relating to class certification. Several of these issues
have recently been clarified by the Supreme Court’s decision
in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551
(2011). Given this new precedent altering existing case law,
we must remand to the district court. See Associated Builders
& Contractors, Inc. v. Curry, 68 F.3d 342, 343 (9th Cir.
1995). Specifically, we take the following actions: (1)
17698 ELLIS v. COSTCO WHOLESALE CORP.
Because at least one named Plaintiff (Sasaki) alleges a con-
crete injury that is both directly traceable to Costco’s alleg-
edly discriminatory practices and is redressable by both
injunctive relief and monetary damages, see Bates v. United
Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007) (en
banc), we affirm the district court’s ruling on standing. (2) We
vacate and remand the district court’s ruling as to “common-
ality” under Rule 23(a) of the Federal Rules of Civil Proce-
dure. The district court failed to conduct the required
“rigorous analysis” to determine whether there were common
questions of law or fact among the class members’ claims.
Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 161 (1982).
Instead it relied on the admissibility of Plaintiffs’ evidence to
reach its conclusion on commonality. (3) We vacate the dis-
trict court’s ruling as to “typicality” under Rule 23(a), because
the district court failed to consider the effect that defenses
unique to the named Plaintiffs’ claims have on that question.
Hanon v. Dataproducts Corp., 976 F.2d 497, 508 (9th Cir.
1992). (4) We affirm the district court’s ruling that Sasaki is
an adequate class representative under Rule 23(a). As a cur-
rent employee who continues to be denied promotion, Sasaki
has incentive to vigorously pursue injunctive relief as well as
monetary damages on behalf of all the class members. Hanlon
v. Chrysler Corp., 150 F.3d 1011, 1020 (9th Cir. 1998). How-
ever, we vacate the district court’s finding that Ellis and
Horstman could adequately represent the class, because they
were former employees and had no incentive to pursue
injunctive relief. (5) In light of Wal-Mart’s rejection of the
“predominance” test, 131 S. Ct. at 2557-59, the district court
must consider whether the claims for various forms of mone-
tary relief will require individual determinations and are
therefore only appropriate for a Rule 23(b)(3) class. Thus, we
vacate the district court’s certification of the class under Rule
23(b)(2).
 ELLIS v. COSTCO WHOLESALE CORP. 17699
FACTUAL BACKGROUND

I. The Parties

A. Costco

Costco is a corporation headquartered in Issaquah, Wash-
ington. Costco operates over 350 warehouse-style retail estab-
lishments (warehouses). These warehouses sell items ranging
from groceries to electronics. Within each Costco warehouse,
the management structure consists of a General Manager
(GM), two to three Assistant General Managers (AGM), and
three to four Senior Staff Managers. A Costco GM is respon-
sible for the entire operation of his or her respective ware-
house and earns an average salary of approximately $116,000,
plus stock and bonuses. Costco AGMs are second in com-
mand within each warehouse and earn an average salary of
approximately $73,000, plus stock and bonuses. Costco’s
Senior Staff Managers are divided into four categories: Front
End Managers, Administration Managers, Receiving Manag-
ers, and Merchandise Managers.1 Front End Managers over-
see cashiers, membership/marketing personnel, cart staff, and
other employees who deal directly with Costco members.
Administration Managers manage administrative functions
such as payroll and human resources. Receiving Managers
oversee stocking of all incoming items from the receiving
dock to the shelves. Merchandising Managers oversee lower
level managers and are responsible for planning floor displays
to maximize sales.

Costco promotes almost entirely from within its organiza-
tion. Only current Costco AGMs are eligible for GM posi-
tions. Costco does not have any written policy explaining to
employees the criteria to be considered for promotion to GM
1
Most warehouses employ four Senior Staff Managers—one for each of
the four Senior Staff Manager positions. However, in some larger ware-
houses, one of the AGMs assumes the role of Administration Manager.
17700 ELLIS v. COSTCO WHOLESALE CORP.
or AGM, though candidates are promoted from a list of pro-
motable candidates. Costco does not have written guidelines
explaining how candidates should be selected for the promot-
able lists and does not regularly inform employees about the
existence of such lists. Costco does not require that more than
one candidate be considered for any particular opening or that
a performance evaluation or any other documents be reviewed
before a recommended candidate is approved. Costco also
lacks a consistent practice for interviewing potential candi-
dates for GM and AGM openings. Costco does not keep
records regarding the selection process.

Costco employs a different promotion procedure for Senior
Staff Managers. Costco fills the majority of Senior Staff open-
ings by rotating managers among the four Senior Staff posi-
tions. This rotation is part of Costco’s philosophy and, in
Costco’s opinion, trains and develops managers for future
advancement by exposing them to different aspects of Cost-
co’s operations. Like the GM and AGM promotion proce-
dures, Costco has no written guidelines regarding rotation of
Senior Staff Managers.

B. Ellis

Costco hired Shirley Ellis as an AGM in 1998. Prior to
joining Costco, Ellis worked for nearly 20 years in retail man-
agement, including five years as a general manager for Sam’s
Club (Costco’s chief competitor). According to Ellis, she left
Sam’s Club, because she was actively recruited by Costco and
promised promotion to GM within a year. On the other hand,
Costco claims that it recruited Ellis because she misrepre-
sented herself as a star at Sam’s Club, when she had, in fact,
lost her job for poor performance.

In Ellis’s first year with Costco, she transferred locations
twice in order to further her goal of promotion to GM. During
this time, several GM positions became available, but she did
not learn of the openings until after they were filled. In 2000,
 ELLIS v. COSTCO WHOLESALE CORP. 17701
Ellis transferred to Colorado to assist her sick mother.
According to Ellis, a supervisor told her that it would not hurt
her chances for promotion. After six months, Ellis notified
Costco that she was again able to relocate anywhere as a GM.
In 2002, Ellis sent a letter to her supervisors expressing a
“burning desire” to help Costco be successful and advance
within the company, asking how the GM selection process
worked, where she stood as a candidate for promotion, and
what she needed to do to become a GM.

In October 2002, Ellis, while still employed with Costco as
an AGM, filed a gender discrimination charge with the Equal
Employment Opportunity Commission (EEOC), alleging that
she had been passed over for promotion to GM because she
was female. Ellis left Costco in November 2004.

C. Horstman

Leah Horstman worked for Costco for more than 23 years
beginning in 1981. In 1996, after 15 years with Costco, Horst-
man was promoted to be a Senior Staff Manager. By 2000,
Horstman had rotated through the Administrative Manager,
Merchandise Manager, and Receiving Manager positions. She
had earlier worked as an Assistant Front End Manager, but
did not rotate to the Front End Manager position because of
scheduling conflicts and her duties as a single mother with
two young daughters.

Throughout her career with Costco, Horstman repeatedly
expressed her interest in advancing to AGM and GM and
questioned supervisors about the requirements for both posi-
tions. Heeding the advice of a supervisor, Horstman also
transferred to a high-volume store and expressed a willingness
to move from California to Texas in order to become an
AGM. However, in her final three annual self-performance
reviews, Horstman indicated that her goal was to stay in a
position similar to that which she held at the time for three to
five years so that she could balance her family life and then
17702 ELLIS v. COSTCO WHOLESALE CORP.
to continue her advancement to AGM and GM. Horstman
filed a discrimination charge with the EEOC in October 2003
and resigned in June 2004.

D. Sasaki

Elaine Sasaki began working for Costco in 1985. Sasaki
advanced to become a Senior Staff Manager within four
years. She received consistently high performance reviews,
and her GM first indicated that she was ready to be promoted
to AGM in 1993. Although Sasaki offered to transfer to
places as far away as Hong Kong, she was not promoted to
AGM until 1996. Sasaki is currently an AGM in Visalia, Cali-
fornia.

Since Sasaki was promoted to AGM in 1996, she has not
been selected for at least eight GM positions. She claims she
was not aware of any of these openings until after they were
filled. Sasaki has relocated four times to improve her chances
of promotion to GM. In September 2003, Sasaki wrote to
Costco’s director of human resources expressing her concern
that she had not been promoted because of her gender. At
least some of her concern stems from an incident in which she
claimed to rebuff the advances of her regional Senior Vice
President in a hotel elevator and was later told by him that he
holds her to higher standards than other AGMs. According to
Costco, Sasaki has not been promoted because both her per-
formance appraisals and her self-evaluations identify areas for
improvement. Further, she has never ranked high on Costco’s
GM promotable list. Sasaki filed a gender discrimination
charge with the EEOC on March 1, 2005. She remains
employed as an AGM at Costco.

II. Procedural History

The EEOC dismissed Ellis’s charge of gender discrimina-
tion, after which Ellis filed suit in federal district court “on
behalf of a Title VII class of all women employed by Costco
 ELLIS v. COSTCO WHOLESALE CORP. 17703
in the United States denied promotion to [AGM] and/or [GM]
positions.” Ellis’s complaint sought class-wide injunctive
relief, lost pay, and compensatory and punitive damages. Her
second amended complaint included Horstman and Sasaki as
named Plaintiffs. In August 2006, Plaintiffs filed a motion for
class certification under Rule 23(b)(2) and (b)(3) of the Fed-
eral Rules of Civil Procedure supported by numerous declara-
tions, deposition transcripts, and Costco company documents.
Plaintiffs also submitted the declarations of three experts in
support of their class certification motion: statistician Dr.
Richard Drogin; labor economist Dr. Marc Bendick; and soci-
ologist Dr. Barbara Reskin. Dr. Drogin concluded that female
employees are promoted at a slower rate and are under-
represented at the AGM and GM levels relative to their male
peers. Dr. Bendick concluded that female Costco employees
are under-represented in the Senior Staff Manager, AGM, and
GM positions relative to female employees in similar posi-
tions at comparable companies. Dr. Reskin concluded that
Costco has a pervasive culture of gender stereotyping and
paternalism.

Costco opposed class certification and filed 200 employee
declarations in support. Costco additionally submitted decla-
rations of its own experts, most notably, Dr. Ali Saad, a statis-
tician and labor economist. Dr. Saad concluded that women
are not under-represented at Costco and that any gender dis-
parities, if they exist, are confined to two regions. Costco
offered additional expert declarations concluding that gender
disparities, if they exist, are based upon factors such as
women’s lack of interest in jobs requiring early morning
hours. Costco also filed three separate motions to strike Plain-
tiffs’ experts, supported by Costco’s expert declarations chal-
lenging the relevance and reliability of Plantiffs’ experts’
analysis and conclusions.

On January 11, 2007, the district court filed a 37-page order
granting Plaintiffs’ motion to certify a class. The district court
certified a class that “consists of all current and former female
17704 ELLIS v. COSTCO WHOLESALE CORP.
Costco employees nationwide who have been denied promo-
tion to GM or AGM or denied promotion to Senior Staff posi-
tions since January 3, 2002.” Ellis v. Costco Wholesale Corp.,
240 F.R.D. 627, 652 (N.D. Cal. 2007). Because the district
court certified a class broader than the class requested by Plain-
tiffs,2 the parties stipulated to a narrower class definition that
consists of “all women employed by Costco on or after Janu-
ary 3, 2002 in a U.S. warehouse (including Puerto Rico) who,
at any time, have been employed at Costco as a Senior Staff
Manager . . . or [AGM]. The class includes women who have
been promoted to [GM] or [AGM] since January 3, 2002.”3
Stipulation and Order Regarding Class Definition, Class
Notice and For Regulation of Costco’s Communications 2.

The district court found that all of the requirements of Rule
23(a)—numerosity, commonality, typicality, and adequacy—
had been satisfied. Id. at 638-42. It further found that Rule
23(b)(2)4 was satisfied, ruling that signed statements from the
Plaintiffs proved their predominant intent in filing suit was to
recover injunctive relief. Id. at 642-43. It dismissed Costco’s
arguments that Plaintiffs’ claims for punitive and compensa-
tory damages precluded such a finding. Id. at 643. It did not
consider the fact that two of the named Plaintiffs—Ellis and
Horstman—were no longer employees of Costco at the time
of the filing of the complaint in making its determination.

As part of its order, the district court ruled on Costco’s
motions to strike Plaintiffs’ experts. Id. at 644-51. The district
2
The class certified by the district court was broader than that sought by
Plaintiffs because it included those employees who had been denied pro-
motion to Senior Staff positions.
3
Costco did not stipulate to certification of the class, only to narrowing
the district court’s description of the class assuming that it was properly
certified.
4
Although Plaintiffs requested certification under both Rule 23(b)(2)
and (b)(3), the district court did not address certifying the class under
(b)(3).
 ELLIS v. COSTCO WHOLESALE CORP. 17705
court granted in part and denied in part Costco’s motion
regarding Dr. Drogin, striking Dr. Drogin’s conclusion
regarding the average number of years required to reach
AGM because of the dates Dr. Drogin used to conduct his
analysis. Id. at 648-49. The district court denied Costco’s
motions regarding Dr. Bendick and Dr. Reskin. Id. at 651.

Costco then sought leave to file an interlocutory appeal,
alleging that the district court committed numerous errors by
certifying the class. On May 14, 2007, we granted permission
to appeal.

ANALYSIS

I. Standing

Costco argues that the district court abused its discretion by
certifying the class, because Plaintiffs lack standing to seek
injunctive relief. “Standing is a threshold matter central to our
subject matter jurisdiction.” Bates, 511 F.3d at 985. We
review the district court’s factual findings under the clearly
erroneous standard and review the district court’s determina-
tion of standing de novo. Lozano v. AT&T Wireless Servs.,
Inc., 504 F.3d 718, 725 (9th Cir. 2007). In a class action, the
plaintiff class bears the burden of showing that Article III
standing exists. Bates, 511 F.3d at 985. “[S]tanding requires
that (1) the plaintiff suffered an injury in fact, i.e., one that is
sufficiently concrete and particularized and actual or immi-
nent, not conjectural or hypothetical, (2) the injury is fairly
traceable to the challenged conduct, and (3) the injury is
likely to be redressed by a favorable decision.” Id. (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992))
(internal quotation marks omitted). Plaintiffs must show
standing with respect to each form of relief sought. Id. Stand-
ing exists if at least one named plaintiff meets the require-
ments. Id.

[1] In order to satisfy the Lujan requirements, “[t]he plain-
tiff must demonstrate that he has suffered or is threatened
17706 ELLIS v. COSTCO WHOLESALE CORP.
with a concrete and particularized legal harm, coupled with a
sufficient likelihood that he will again be wronged in a similar
way.” Id. (internal citations and quotation marks omitted).
“Past wrongs do not in themselves amount to a real and
immediate threat of injury necessary to make out a case or
controversy” but “are evidence bearing on whether there is a
real and immediate threat of repeated injury.” Id. (internal
citations, alterations, and quotation marks omitted). For Plain-
tiffs to have standing here, the claimed threat of injury must
be likely to be redressed by the prospective injunctive relief.
Id.

[2] Sasaki satisfies all aspects of the standing require-
ments. The parties’ stipulated class description includes
female Costco employees who have been denied promotion to
AGM or GM. Sasaki has been denied promotion to GM. Cost-
co’s failure to promote Sasaki (a current AGM) to GM is a
“concrete and particularized” harm, because the injury affects
her “in a personal and individual way.” Lujan, 504 U.S. at
560 n.1. Additionally, the “crux” of Plaintiffs’ lawsuit is that
the “harm alleged is directly traceable” to Costco’s promotion
practices and general corporate culture, which Plaintiffs allege
are discriminatory to women. See Bates, 511 F.3d at 986
(citation omitted). Sasaki can also show that there is a signifi-
cant likelihood that she will be wronged again in a similar
way. See id. at 985. Sasaki has been employed as an AGM for
twelve years. Despite her expressed interest in becoming a
GM, coupled with numerous relocations to avail herself of
that opportunity, Sasaki has been passed over for promotion
at least eight times. Because Costco’s challenged promotion
practices for GM and AGM positions have not changed,5 there
5
Costco’s adoption of the Rothman Workplan does not change this
result. The Workplan was adopted in response to criticisms that Costco’s
inconsistent promotion practices allowed for favoritism and individual
biases. However, it appears the Rothman Workplan only changed promo-
tion practices as to the four Senior Staff jobs, but not as to AGM or GM
positions.
 ELLIS v. COSTCO WHOLESALE CORP. 17707
is a likelihood that Costco will continue to fail to promote
Sasaki. Finally, if Costco’s allegedly discriminatory policies
are enjoined, Sasaki’s claimed threat of being passed over for
promotion due to her gender is likely to be redressed. See
Bates, 511 F.3d at 985.

[3] Costco, nevertheless, argues that Sasaki lacks standing
because, as a current AGM, she cannot challenge the denial
of AGM promotions. This argument more appropriately
addresses whether Sasaki’s claim is typical of other class
members, which we address below. Sasaki’s status as a cur-
rent AGM does not preclude her from meeting Lujan’s stand-
ing requirements, given that the purported class also includes
women denied promotion to GM. Because only one named
Plaintiff must meet the standing requirements, the district
court did not err in finding that Plaintiffs have standing.

II. Rule 23(a)

[4] The district court held that Plaintiffs established all
four Rule 23(a) factors necessary for class certification.
Costco argues that the district court abused its discretion by
finding that Plaintiffs established commonality, typicality, and
adequacy of representation. However, Costco does not contest
the district court’s holding that Plaintiffs established numero-
sity.

Parties seeking class certification bear the burden of dem-
onstrating that they have met each of the four requirements of
Federal Rule of Civil Procedure 23(a) and at least one of the
requirements of Rule 23(b). Zinser v. Accufix Research Inst.,
Inc., 253 F.3d 1180, 1186 (9th Cir.), amended by 273 F.3d
1266 (9th Cir. 2001). Here, the district court certified the class
under Rule 23(b)(2).

Rule 23(a) requires parties seeking class certification to
establish: (1) that the class is so large that joinder of all mem-
bers is impracticable (numerosity); (2) that there are one or
17708 ELLIS v. COSTCO WHOLESALE CORP.
more questions of law or fact common to the class (common-
ality); (3) that the named parties’ claims are typical of the
class (typicality); and (4) that the class representatives will
fairly and adequately protect the interests of other members of
the class (adequacy of representation). Fed. R. Civ. P. 23(a).

We review the district court’s decision regarding class cer-
tification for abuse of discretion. Lozano, 504 F.3d at 725.
“The district court abuses its discretion if its certification
order is premised on impermissible legal criteria.” Id. (citing
Moore v. Hughes Helicopters, Inc., 708 F.2d 475, 479 (9th
Cir. 1983)).

The United States Supreme Court requires district courts to
engage in a “rigorous analysis” of each Rule 23(a) factor
when determining whether plaintiffs seeking class certifica-
tion have met the requirements of Rule 23. Falcon, 457 U.S.
at 161. The Supreme Court has also noted that the
“[e]valuation of many of the questions entering into determi-
nation of class action questions is intimately involved with the
merits of the claims. The typicality of the representative’s
claims or defenses, the adequacy of the representative, and the
presence of common questions of law or fact are obvious
examples.” Coopers & Lybrand v. Livesay, 437 U.S. 463, 469
n.12 (1978) (internal citation and quotation marks omitted).
When considering class certification under Rule 23, district
courts are not only at liberty to, but must perform “a rigorous
analysis [to ensure] that the prerequisites of Rule 23(a) have
been satisfied.” Wal-Mart, 131 S. Ct. at 2551 (internal citation
and quotation marks omitted). In many cases, “that ‘rigorous
analysis’ will entail some overlap with the merits of the plain-
tiff ’s underlying claim. That cannot be helped.” Id. Here, the
question of commonality overlaps with Plaintiffs’ claim that
Costco’s system of promotion and corporate culture consti-
tutes a pattern or practice of discrimination.
 ELLIS v. COSTCO WHOLESALE CORP. 17709
A. Commonality

Costco challenges the district court’s finding of commonal-
ity, arguing primarily that the district court failed to conduct
the required “rigorous analysis” and impermissibly declined
to resolve numerous disputed issues of law and fact necessary
to determine whether Plaintiffs established commonality.
Costco argues that the district court erred by relying on the
declarations of Plaintiffs’ experts to establish commonality.6
We agree. Because the district court premised its certification
order on improper legal criteria, Lozano, 504 F.3d at 725, the
district court abused its discretion. We vacate its order as to
commonality and remand for the district court to reconsider
this issue consistent with our holding today.

[5] To show commonality, Plaintiffs must demonstrate that
there are questions of fact and law that are common to the
class. Fed. R. Civ. P. 23(a)(2). The requirements of Rule
23(a)(2) have “been construed permissively,” and “[a]ll ques-
tions of fact and law need not be common to satisfy the rule.”
Hanlon, 150 F.3d at 1019. However, it is insufficient to
6
In the district court, Costco moved to strike the entirety of Plaintiffs’
three expert declarations. With the exception of Dr. Drogin’s conclusion
regarding the average number of years required to reach AGM, the district
court held that Plaintiffs’ experts’ declarations were admissible. It noted
that, while Costco’s arguments may eventually render the declarations
unconvincing at trial, they did not render the declarations inadmissible. On
appeal, Costco does not argue that the district court abused its discretion
by failing to strike Plaintiffs’ experts’ declarations. Instead, it devotes a
substantial portion of its opening brief to arguments challenging the valid-
ity of the conclusions in Plaintiffs’ experts’ declarations, but only in the
context of challenging the district court’s conclusion that Plaintiffs had
established commonality under Rule 23(a). We “will not ordinarily con-
sider matters on appeal that are not specifically and distinctly argued in
appellant’s opening brief . . . .” Miller v. Fairchild Indus., Inc., 797 F.2d
727, 738 (9th Cir. 1986). Therefore, we affirm the district court’s decision
to not strike Plaintiffs’ experts’ declarations and consider Costco’s chal-
lenges to Plaintiffs’ experts only in our review of the district court’s Rule
23(a) analysis.
17710 ELLIS v. COSTCO WHOLESALE CORP.
merely allege any common question, for example, “Were
Plaintiffs passed over for promotion?” See Wal-Mart, 131 S.
Ct. at 2551-52. Instead, they must pose a question that “will
produce a common answer to the crucial question why was I
disfavored.” Id. at 2552; see also id. at 2551 (“What matters
to class certification is not the raising of common ‘questions’
. . . but, rather the capacity of a classwide proceeding to gen-
erate common answers apt to drive the resolution of the litiga-
tion.” (internal citation, alteration, and quotation marks
omitted)). In other words, Plaintiffs must have a common
question that will connect many individual promotional deci-
sions to their claim for class relief.

The precise standard the district court used to evaluate
commonality is difficult to discern from its order. The district
court began by citing Blackie v. Barrack, 524 F.2d 891, 901
n.17 (9th Cir. 1975), for the proposition that “in adjudicating
a motion for class certification, the court accepts the allega-
tions in the complaint as true so long as those allegations are
sufficiently specific to permit an informed assessment as to
whether the requirements of Rule 23 have been satisfied.”
Ellis, 240 F.R.D. at 635. It proceeded to note, relying on
Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78 (1974),
that the merits of the class members’ substantive claims were
generally irrelevant to its inquiry and that it should not inquire
into the merits of the suit during the certification process. Id.
However, later in its order, the district court seemed to qualify
its position by noting that it may consider the merits to the
extent that they overlap with class certification issues, relying
on In re Initial Public Offering Securities Litigation, 471 F.3d
24 (2d Cir. 2006). Id. After all this, the district court stated in
its analysis of commonality, that “[t]o the extent that the par-
ties’ commonality arguments overlap with the merits, the
court has evaluated all relevant evidence to determine whether
commonality has been established.” Id. at 638. This statement
mitigates the district court’s earlier erroneous suggestions that
it may (but not must) consider the merits to the extent they
overlap with the commonality issue.
 ELLIS v. COSTCO WHOLESALE CORP. 17711
[6] At best, it was unclear what standard the district court
used. Regardless of whether the district court applied an erro-
neous standard, we take this opportunity to clarify the correct
standard. As we explained above, the merits of the class mem-
bers’ substantive claims are often highly relevant when deter-
mining whether to certify a class. More importantly, it is not
correct to say a district court may consider the merits to the
extent that they overlap with class certification issues; rather,
a district court must consider the merits if they overlap with
the Rule 23(a) requirements. Wal-Mart, 131 S. Ct. at 2551-52;
Hanon, 976 F.2d at 509.

In Wal-Mart, for example, the Supreme Court considered
whether the statistical and sociological studies cited by the
plaintiffs were sufficient to link the alleged discriminatory
practice to harm suffered by the entire class. 131 S. Ct. at
2553-55. In that case, the alleged discriminatory practice was
the exercise of discretion by thousands of individual managers
throughout the country. Id. The only evidence of a nationwide
practice of discrimination was Wal-Mart’s “strong corporate
culture that makes it vulnerable to gender bias.” Id. (internal
quotation marks omitted). However, plaintiffs’ expert was
unable to show to what extent this was true—it was unclear
whether “0.5 percent or 95 percent of the employment deci-
sions” were based on this alleged bias. Id. at 2554. Without
some evidence of the extent of the bias, no “common mode
of exercising discretion that pervades the entire company”
(and thus no common question) had been shown. See id. at
2554-55.

Part of the confusion over the standard applied by the dis-
trict court in this case stems from the fact that the district
court addressed Costco’s objections to Plaintiffs’ experts in
both its commonality analysis and its analysis of Costco’s
motions to strike. As the district court noted, the parties
staged a battle of the experts over the issue of commonality.
In its analysis of Costco’s motions to strike, the district court
correctly applied the evidentiary standard set forth in Daubert
17712 ELLIS v. COSTCO WHOLESALE CORP.
v. Merrell Dow Pharms., Inc., 509 U.S. 579, 597 (1993). Cf.
Wal-Mart, 131 S. Ct. at 2553-54 (doubting proposition that
Daubert did not apply to the certification stage). Under Dau-
bert, the trial court must act as a “gatekeeper” to exclude junk
science that does not meet Federal Rule of Evidence 702’s
reliability standards by making a preliminary determination
that the expert’s testimony is reliable. Kumho Tire Co. v. Car-
michael, 526 U.S. 137, 145, 147-49 (1999). Daubert does not
require a court to admit or to exclude evidence based on its
persuasiveness; rather it requires a court to admit or exclude
evidence based on its scientific reliability and relevance. 509
U.S. at 589-90. Thus, an expert’s “inference or assertion must
be derived by the scientific method” to be admissible. Id. at
590. A trial court has broad latitude not only in determining
whether an expert’s testimony is reliable, but also in deciding
how to determine the testimony’s reliability. Kumho Tire, 526
U.S. at 152.

[7] However, the district court seems to have confused the
Daubert standard it correctly applied to Costco’s motions to
strike with the “rigorous analysis” standard to be applied
when analyzing commonality. Instead of judging the persua-
siveness of the evidence presented, the district court seemed
to end its analysis of the plaintiffs’ evidence after determining
such evidence was merely admissible. For example, the dis-
trict court stated that, although “Costco challenges the propri-
ety of using aggregate data,” such “arguments attack the
weight of the evidence and not its admissibility.” Ellis, 240
F.R.D. at 639. Therefore, to the extent the district court lim-
ited its analysis of whether there was commonality to a deter-
mination of whether Plaintiffs’ evidence on that point was
admissible, it did so in error.

Plaintiffs introduced expert declarations to establish that:
(1) female employees are promoted at a slower rate and are
underrepresented at the AGM and GM levels relative to their
male peers; (2) female Costco employees are under-
represented in the Senior Staff Manager, AGM, and GM posi-
 ELLIS v. COSTCO WHOLESALE CORP. 17713
tions relative to female employees in similar positions at com-
parable companies; and (3) Costco has a pervasive culture of
gender stereotyping and paternalism. Costco offered its own
evidence to show that: (1) “women are not underrepresented
at Costco and that any gender disparities, if they exist, are
confined to two regions of Costco;” and (2) “gender dispari-
ties, if they exist, are based upon factors, such as women’s
lack of interest in jobs requiring early morning hours, which
are unrelated to Costco’s culture and promotion processes.”
Id. at 638.

[8] As an initial matter, we agree that the district court was
not required to resolve factual disputes regarding: (1) whether
women were in fact discriminated against in relevant manage-
rial positions at Costco, or (2) whether Costco does in fact
have a culture of gender stereotyping and paternalism. How-
ever, the district court was required to resolve any factual dis-
putes necessary to determine whether there was a common
pattern and practice that could affect the class as a whole.7 If
there is no evidence that the entire class was subject to the
same allegedly discriminatory practice, there is no question
common to the class. In other words, the district court must
determine whether there was “significant proof that [Costco]
operated under a general policy of discrimination.” Wal-Mart,
131 S. Ct. at 2553 (alteration omitted).8
7
For example, the parties dispute whether promotional decisions for
AGMs were made by the GM of the local warehouse, or were made or
strongly influenced by upper management at Costco headquarters. If the
decisions were made at the local warehouse, Plaintiffs likely cannot show
this decisionmaking process affected the class as a whole, since “demon-
strating the invalidity of one manager’s use of discretion will do nothing
to demonstrate the invalidity of another’s. 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 to common questions.” Wal-
Mart, 131 S. Ct. at 2554.
8
Accordingly, we dispose of most of Costco’s arguments on this point.
Costco seems to equate a “rigorous analysis” with an in-depth examination
of the underlying merits—i.e., whether Costco was in fact discriminating
17714 ELLIS v. COSTCO WHOLESALE CORP.
Whether gender disparities are confined to only two regions
of Costco’s eight regions, for example, addresses precisely the
question of whether there are common questions of law and
fact among the putative class members. If, as Plaintiffs allege,
promotion decisions are based on the biased attitudes of the
CEO and upper management, one would expect disparities in
all, or at least most, regions. A disparity in only 25% of the
regions, however, would not show that “discrimination mani-
fested itself in . . . promotion practices in the same general
fashion,” Wal-Mart, 131 S. Ct. at 2553, throughout Costco—
which is necessary to show commonality in a nationwide
class. If no such nationwide discrimination exists, Plaintiffs
would face an exceedingly difficult challenge in proving that
there are questions of fact and law common to the nationwide
class.

[9] The district court failed to engage in a “rigorous analy-
sis” on this point. For example, Dr. Saad, Costco’s expert,
concluded that any gender disparities, if they exist, are con-
fined to two regions. The district court concluded that Dr.
Saad’s analysis was “relevant and reliable for the purposes of

against women. See, e.g., Costco’s Opening Br. 21 (“[T]here is no com-
monality absent (a) statistical proof of under-promotion of women and (b)
a plausible link between the practice and the impact.”). This is incorrect.
The district court is required to examine the merits of the underlying claim
in this context, only inasmuch as it must determine whether common ques-
tions exist; not to determine whether class members could actually prevail
on the merits of their claims. See Dukes v. Wal-Mart Stores, Inc., 603 F.3d
571, 592 (9th Cir. 2010) (en banc), reversed Wal-Mart, 131 S. Ct. 2541
(“[P]laintiffs and defendants disagree on whose statistical findings and
observations are more credible, but this disagreement is relevant only to
the merits of plaintiffs’ claim—whether plaintiffs actually suffered dispa-
rate treatment—and not to whether plaintiffs have asserted common ques-
tions of fact or law . . . .’ ” (citation omitted)); see also Wal-Mart, 131 S.
Ct. at 2552 n.6 (clarifying that Rule 23 does not authorize a preliminary
inquiry into the merits of the suit for purposes other than determining
whether certification was proper (citing Eisen, 417 U.S. at 177). To hold
otherwise would turn class certification into a mini-trial.
 ELLIS v. COSTCO WHOLESALE CORP. 17715
commonality and . . . that plaintiffs [had] not raised any sig-
nificant challenges in this regard.” Ellis, 240 F.R.D. at 639.
The district court ultimately denied Costco’s challenge on this
point, however, stating that “Dr. Saad’s analysis has presented
an alternative approach but it has not discredited Dr. Drogin’s
results or methods [the evidence proffered by Plaintiffs].” Id.
Instead of examining the merits to decide this issue, it appears
the district court merely concluded that, because both Plain-
tiffs’ and Costco’s evidence was admissible, a finding of com-
monality was appropriate.

[10] The district court applied an impermissible legal
criteria, see Lozano, 504 F.3d at 725, and failed to resolve the
critical factual disputes centering around the national versus
regional nature of the alleged discrimination. Accordingly, we
vacate the district court’s finding of commonality and remand
for application of the appropriate legal standard. Because we
vacate and remand, rather than reverse, the district court’s
commonality determination, we also address the other Rule
23(a) factors.

B. Typicality

[11] To demonstrate typicality, Plaintiffs must show that
the named parties’ claims are typical of the class. Fed. R. Civ.
P. 23(a)(3). “The test of typicality ‘is whether other members
have the same or similar injury, whether the action is based
on conduct which is not unique to the named plaintiffs, and
whether other class members have been injured by the same
course of conduct.’ ” Hanon, 976 F.2d at 508 (citation omit-
ted). “Typicality refers to the nature of the claim or defense
of the class representative, and not to the specific facts from
which it arose or the relief sought.” Id. (internal citation and
quotation marks omitted).

Costco argues that Plaintiffs cannot satisfy the typicality
requirement, because each of the named Plaintiffs’ respective
discrimination claims are subject to unique defenses. The dis-
17716 ELLIS v. COSTCO WHOLESALE CORP.
trict court, citing Hanon, rejected this argument and held that
“as a general matter, individualized defenses do not defeat
typicality.” Ellis, 240 F.R.D. at 641.

[12] Hanon, however, supports Costco’s position. In
Hanon, we stated that “a named plaintiff ’s motion for class
certification should not be granted if ‘there is a danger that
absent class members will suffer if their representative is pre-
occupied with defenses unique to it.’ ” 976 F.2d at 508 (quot-
ing Gary Plastic Packaging Corp. v. Merrill Lynch, Pierce,
Fenner & Smith, Inc., 903 F.2d 176, 180 (2d Cir. 1990)). We
found that the named plaintiff did not satisfy Rule 23(a)’s typ-
icality requirement because his “unique background and fac-
tual situation require[d] him to prepare to meet defenses that
[were] not typical of the defenses which may be raised against
other members of the proposed class.” Id.

Costco asserts that it has unique defenses against each of
the named Plaintiffs. Specifically, as to Horstman, Costco’s
claimed defense is that, due to family reasons, Horstman
rejected rotation to Front End Manager and stated several
times that she wished to defer her pursuit of promotion for
three to five years. As to Ellis, Costco’s claimed defense is
that Ellis misrepresented her way into Costco, lacked the
Costco experience of other AGMs, transferred to a market
with limited promotional opportunities, and was disciplined
for abusing subordinates. As to Sasaki, Costco’s claimed
defense is that Sasaki is not an outstanding performer and that
Costco’s expert has concluded that there is no statistical evi-
dence supporting a claim that females are promoted to GM at
a lesser rate in Sasaki’s region.

[13] We decline to express an opinion, in the first instance,
about whether these defenses are typical of those that Costco
may raise against other members of the class or whether they
are unique such that Plaintiffs cannot satisfy Rule 23(a)’s typ-
icality requirement.9 Instead, we hold that the district court
9
Costco also argues that Plaintiffs’ claims are not typical because expe-
rience as a Merchandise Manager is essential to promotion and, though
 ELLIS v. COSTCO WHOLESALE CORP. 17717
misapplied Hanon, and thus abused its discretion by basing its
typicality determination on impermissible legal criteria. See
Lozano, 504 F.3d at 725. We vacate the district court’s typi-
cality finding and remand so that the district court may apply
the appropriate legal standard.

C. Adequacy

[14] The named Plaintiffs must fairly and adequately pro-
tect the interests of the class. Fed. R. Civ. P. 23(a)(4). To
determine whether named plaintiffs will adequately represent
a class, courts must resolve two questions: “(1) do the named
plaintiffs and their counsel have any conflicts of interest with
other class members and (2) will the named plaintiffs and
their counsel prosecute the action vigorously on behalf of the
class?” Hanlon, 150 F.3d at 1020. Adequate representation
depends on, among other factors, an absence of antagonism
between representatives and absentees, and a sharing of inter-
est between representatives and absentees. Molski v. Gleich,
318 F.3d 937, 955 (9th Cir. 2003), overruled on other
grounds by Dukes, 603 F.3d at 617.

Costco argues that the district court abused its discretion by
holding that the named Plaintiffs are adequate representatives.
Specifically, Costco argues that Ellis and Horstman have little
incentive to vigorously pursue injunctive relief on behalf of

some plaintiffs may lack such experience, the named Plaintiffs do not. We
reject this argument. Plaintiffs do not challenge whether Costco’s unoffi-
cial requirement that a person have experience as a Merchandise Manager
to be eligible for promotion is, by itself, a discriminatory promotion
requirement. Unique defenses aside, all three Plaintiffs allege that they
were not promoted because of their gender. Differing factual scenarios
resulting in a claim of the same nature as other class members does not
defeat typicality. Hanon, 976 F.2d at 508. Thus, the fact that the named
Plaintiffs had Merchandise Manager experience does not mean that Plain-
tiffs’ claims of gender discrimination are not typical of those of absent
class members, even though other class members may lack experience as
a Merchandise Manager.
17718 ELLIS v. COSTCO WHOLESALE CORP.
the class, because they are former employees. Costco also
argues that Sasaki has little incentive to vigorously pursue
relief for those denied promotion to AGM, because she has
already reached the level of AGM.

[15] Sasaki is an adequate class representative. Costco’s
argument, that she does not have an incentive to vigorously
represent employees who have been denied a promotion to
AGM, misses the point of the litigation. The purported class
is composed of women who have been denied promotion to
either AGM or GM. The Costco policies and culture chal-
lenged by Plaintiffs apply equally to AGM and GM promo-
tion decisions. Sasaki, although a current AGM, claims she
has been wrongly denied promotion to GM and thus shares an
interest with all class members. Nothing in the record sug-
gests that Sasaki would not vigorously pursue injunctive relief
on behalf of the entire class. Thus, we hold that the district
court did not abuse its discretion by finding that Sasaki is an
adequate representative.

[16] Whether Ellis and Horstman adequately represent the
class, however, depends entirely on how the district court
chooses to manage the class on remand. Currently, the certi-
fied class includes both current and former employees of
Costco. Ellis and Horstman, as former Costco employees,
would share an interest with many class members who are
former Costco employees. However, as we discuss infra,
Plaintiffs not employed by Costco throughout this case do not
have standing to seek injunctive relief. As former employees,
Ellis and Horstman would not share an interest with class
members whose primary goal is to obtain injunctive relief.
Thus, as the class currently stands, Ellis and Horstman will
not adequately protect the interests of the class as a whole. If,
however, the district court decides on remand to certify a
class of employees under Rule 23(b)(3), pursuant to our
instructions in Part III of this opinion, it will need to consider
in the first instance whether Ellis and Horstman can ade-
 ELLIS v. COSTCO WHOLESALE CORP. 17719
quately represent the interests of the second class—i.e., those
seeking monetary damages.

III. Rule 23(b)

[17] Turning to Rule 23(b), Costco argues that the district
court abused its discretion by certifying the class pursuant to
Rule 23(b)(2), because Plaintiffs do not primarily seek injunc-
tive relief. Rule 23(b)(2) permits class actions for declaratory
or injunctive relief if “the party opposing the class has acted
or refused to act on grounds that apply generally to the class,
so that final injunctive relief or corresponding declaratory
relief is appropriate respecting the class as a whole . . . .” Id.
We agree that certification under Rule 23(b)(2) was improper,
although on another basis.

Relying primarily on our decision in Molski v. Gleich, 318
F.3d at 950, the district court examined the Plaintiffs’ subjec-
tive intent and held that injunctive relief was the predominant
form of relief sought. Ellis, 240 F.R.D. at 642-43. Specifi-
cally, the district court relied on declarations submitted by the
named Plaintiffs stating that their primary objective was
obtaining injunctive relief and noted that Costco had not
offered any alternative method of discerning Plaintiffs’ sub-
jective intent in bringing the suit. Id. Having so concluded,
the district court easily found that Plaintiffs’ claims for com-
pensatory and punitive damages were merely incidental to the
claim for injunctive relief.

“Class certification under Rule 23(b)(2) is appropriate only
where the primary relief sought is declaratory or injunctive.”
Zinser, 253 F.3d at 1195. Although we have previously held
that in “Rule 23(b)(2) cases, monetary damage requests are
generally allowable only if they are merely incidental to the
litigation,” Kanter v. Warner-Lambert Co., 265 F.3d 853, 860
(9th Cir. 2001), this standard has been called into doubt by the
Supreme Court. Wal-Mart, 131 S. Ct. at 2560 (“We need not
decide in this case whether there are any forms of ‘incidental’
17720 ELLIS v. COSTCO WHOLESALE CORP.
monetary relief that are consistent with the interpretation of
Rule 23(b)(2) we have announced and that comply with the
Due Process Clause.”).

The Supreme Court recently rejected the “predominance”
test for determining whether monetary damages may be
included in a 23(b)(2) class certification. Id. at 2559. Instead
of considering the amount of the damages sought or the sub-
jective intent of the class members seeking relief to determine
if injunctive relief “predominates,” the relevant inquiry is
what procedural safeguards are required by the Due Process
Clause for the type of relief sought. Id. at 2557-58.

The Advisory Committee, in amending the Rules to include
a (b)(3) class, noted that it was created for situations where
“class-action treatment is not as clearly called for.” Id. at 2558
(citation omitted). While expanding the breadth of possible
class actions, it also expanded the procedural protections
afforded the class. Id. Unlike classes certified under Rule
23(b)(1) or (b)(2), a (b)(3) class is not mandatory. Id. Instead,
putative class members are afforded the right to be notified of
the action and to opt out of the class. Id. (citing Rule
23(c)(2)(B)). The absence of these protections in a class
action predominantly for monetary damages violates due pro-
cess. Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812
(1985). The Wal-Mart court later opined: “We fail to see why
the Rule should be read to nullify these protections whenever
a plaintiff class, at its option, combines its monetary claims
with a request—even a ‘predominating request’—for an
injunction.” 131 S. Ct. at 2559.

[18] The Court relatedly held that “claims for individual-
ized relief (like the backpay at issue here) do not satisfy [Rule
23(b)(2)],” noting that the “key to the (b)(2) class is the ‘indi-
visible nature of the injunctive or declaratory remedy warrant-
ed.’ ” Id. at 2557 (citation omitted). Rule 23(b)(2) “does not
authorize class certification when each class member would
be entitled to an individualized award of monetary damages.”
 ELLIS v. COSTCO WHOLESALE CORP. 17721
Id. The district court erred, therefore, by focusing on evidence
of Plaintiffs’ subjective intent, instead of on whether the mon-
etary relief could be granted absent “individualized determi-
nations of each employee’s eligibility for [monetary
damages].” Id. at 2560.

[19] We vacate the district court’s order finding that Plain-
tiffs had satisfied Rule 23(b)(2) and remand for the district
court to apply the legal standard established in Wal-Mart. On
remand, we highlight several factors for the district court to
consider.

First, if the district court determines that a (b)(2) class may
be certified consistent with this opinion, it may consider
whether Plaintiffs’ claim for punitive damages may properly
be sought by a (b)(2) class.10 The district court earlier found
that claims for punitive damages are suitable for certification
under 23(b)(2), “because such . . . claim[s] focus[ ] on the
conduct of the defendant and not the individual characteristics
of the plaintiffs.” Ellis, 240 F.R.D. at 643; see also Dukes,
603 F.3d at 622 (noting that plaintiffs’ claim for punitive
damages did “not require individualized punitive damages
determinations”); Kolstad v. Am. Dental Assoc., 527 U.S. 526,
535 (1999) (noting that whether punitive damages are war-
ranted is based on the employer’s state of mind, i.e., if “[t]he
employer [acted] with ‘malice or with reckless indifference to
the plaintiff ’s federally protected rights.’ ” (quoting 42
U.S.C. § 1981a(b)(1)) (emphasis and alterations omitted)).
The court may consider whether punitive damages are an
allowable “form[ ] of ‘incidental’ monetary relief” consistent
with the Court’s interpretation of 23(b)(2) because they do not
require an individual determination.” See Wal-Mart, 131 S.
Ct. at 2560.
10
In the alternative, if the district court certifies a (b)(3) class in place
of, or in addition to a (b)(2) class, it may determine that the punitive dam-
ages claim is more appropriate to a (b)(3) class.
17722 ELLIS v. COSTCO WHOLESALE CORP.
Second, the district court must consider whether a class
may be certified under (b)(3) to address Plaintiffs’ compensa-
tory damages and backpay claims. As the court properly rec-
ognized, compensatory damages require individual
determinations. Ellis, 240 F.R.D. at 643. We remand, there-
fore, for the district court to consider whether the class may
properly be certified under Rule 23(b)(3). The district court
must also consider whether the named Plaintiffs are adequate
representatives of the putative (b)(3) class.

Finally, if the district court determines that a class may be
certified, it must consider anew how to manage those mem-
bers of the proposed class who are no longer Costco employ-
ees. As the Supreme Court explained, only current employees
have standing to seek injunctive relief. Wal-Mart, 131 S. Ct.
at 2559-60. Therefore, the district court must consider how
best to define the class(es) to ensure that all class members
have standing to seek the requested relief. See, e.g., Dukes,
603 F.3d at 620 (suggesting the court certify a “Rule 23(b)(2)
class for equitable relief and a separate Rule 23(b)(3) class for
damages”).

IV. Manageability

Finally, Costco argues that certification of the class would
either be unmanageable or violate its constitutional rights.
Although the district court declined to formally adopt a trial
plan at this stage, it did indicate that it could accommodate the
need for individualized determinations of compensatory dam-
ages by bifurcating the trial into different phases. Costco,
relying on International Brotherhood of Teamsters v. United
States, 431 U.S. 324 (1977), argues that such a plan is unman-
ageable and violates both its due process and Seventh Amend-
ment rights.

Because the district court has not actually adopted a trial
plan yet and in light of our holding today to vacate the district
 ELLIS v. COSTCO WHOLESALE CORP. 17723
court’s certification of the class under Rule 23, it is premature
for us to address these arguments now.

CONCLUSION

To summarize, we hold that at least one named Plaintiff
(Sasaki) has standing to bring suit. We hold that the district
court abused its discretion by applying the wrong legal stan-
dard in its analyses of commonality and typicality under Rule
23(a). Accordingly, we vacate the district court’s findings on
those issues and remand for application of the correct stan-
dard. Although we hold that the district court correctly deter-
mined that Sasaki is an adequate class representative, we hold
that Ellis and Horstman are inadequate representatives for
pursuing injunctive relief, given that they are former employ-
ees, and remand for the district court to consider whether they
are adequate representatives if a (b)(3) class is certified. We
vacate the district court’s certification of a class pursuant to
Rule 23(b)(2) and remand for reconsideration in light of this
opinion.

AFFIRMED in part; VACATED in part; REMANDED.

Parties shall bear their own costs on appeal.