By Scott Flaherty, From The Litigation Daily

After almost five years of intense, closely-watched litigation, defense lawyers at Sullivan & Cromwell and Paul Hastings may finally be close to knocking out a proposed gender discrimination class action against Goldman Sachs & Co.

The lawsuit was brought by former Goldman vice president Cristina Chen-Oster and former associate Shanna Orlich, who sought to represent a class of nearly 1,800 women who worked at the bank from 2002 to the present. The women, represented by Outten & Golden and Lieff, Cabraser, Heimann & Bernstein, allege that Goldman’s pay and promotion practices systematically favored men and that the bank maintained a “boy’s club” work atmosphere.

In a 46-page opinion issued on Tuesday, U.S. Magistrate Judge James Francis in Manhattan recommended against certifying the case as a class action. While the plaintiffs had presented evidence that female Goldman vice presidents and associates earned less than their male counterparts, the judge found, differences between individual business units at the bank made it too hard to show on a classwide basis that gender discrimination was the cause of any disparities.

If adopted by U.S. District Judge Analisa Torres, the decision could spell the end of the case. But the defendants haven’t always had the upper hand. U.S. District Judge Leonard Sand, who originally presided over the case, refused in 2011 to force a third plaintiff, former Goldman managing director Lisa Parisi, to arbitrate her claims against Goldman individually. Sands also refused to dismiss most of the class allegations in July 2012.

The U.S. Court of Appeals for the Second Circuit reversed Sand’s decision on Parisi’s arbitration agreement in 2013, siding with Goldman counsel Robert Giuffra Jr. of Sullivan & Cromwell.

With those rulings behind them, in October the two sides clashed at a lengthy hearing on class certification before Judge Francis.

Plaintiffs lawyers Adam Klein of Outten & Golden and Kelly Dermody of Lieff Cabraser argued that the former employees’ suit challenged common practices, such as Goldman’s review process and the forced ranking of employees into different tiers, that effectively favored men.

Goldman’s defense team—led by Giuffra, Sullivan & Cromwell’s Theodore Rogers and Barbara Brown of Paul Hastings—maintained that the investment bank’s corporate structure was complex and included a host of separate business with different compensation ranges based on their profitability.

Francis concluded Tuesday that the plaintiffs lawyers had teed up a common question of whether Goldman’s reviews and rankings put women at a disadvantage. But citing the organization of Goldman’s business units, the judge concluded that individual factors affecting pay and promotion “would effectively swamp the common question of whether the evaluative policies have, on average a discriminatory impact.”

“While the validity or bias of Goldman Sachs’ performance measures is a common issue, there are countless individualized factors that influence whether those performance measures cause legally cognizable injury,” Francis wrote.

Outten & Golden’s Klein, who took the lead for the plaintiffs at the class certification hearing, wasn’t immediately available to comment. Goldman spokesman David Wells said the bank is pleased with Francis’ opinion. S&C’s Giuffra declined to comment.

For more on this story go to: http://www.litigationdaily.com/id=1202720308917/Magistrate-Judge-Rejects-Goldman-Sachs-Sex-Bias-Class-Action#ixzz3UB1aDGmD