Culver, Scott v. City of Milwaukee ( 2002 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 01-1555
Scott Culver,
Plaintiff-Appellant,
v.
City of Milwaukee, et al.,
Defendants-Appellees,
and
United States of America,
Defendant-Intervenor-Appellee.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 93 C 189--Lynn Adelman, Judge.
Argued November 5, 2001--Decided January 15, 2002
Before Bauer, Posner, and Ripple, Circuit
Judges.
Posner, Circuit Judge. A class action
suit was brought on behalf of white males
who claimed to have been discriminated
against in hiring by the Milwaukee police
department. The district court granted
the defendants’ motion to decertify the
class and having done so dismissed the
suit because the class representative’s
own claim was conceded to be moot. A
properly certified class action survives
the mootness of the original
representative’s claims, but an
individual action must be dismissed in
identical circumstances, Nelson v.
Murphy, 44 F.3d 497, 500 (7th Cir. 1995);
Lusardi v. Xerox Corp., 975 F.2d 964,
974-75 (3d Cir. 1992), and this suit
became an individual action when the
class was decertified. The would-be class
representative has standing to appeal,
however, United States Parole Commission
v. Geraghty, 445 U.S. 388, 404 (1980), as
otherwise the defendant in a class action
suit could delay appeals indefinitely by
buying off successive class
representatives. Cf. Parks v. Pavkovic,
753 F.2d 1397, 1403 (7th Cir. 1985);
Susman v. Lincoln American Corp., 587
F.2d 866, 870 (7th Cir. 1978); Zeidman v.
J. Ray McDermott & Co., 651 F.2d 1030,
1051 (5th Cir. 1981).
The suit was filed in 1993. Culver, the
plaintiff and class representative,
claimed that the previous year he had re
quested from the Milwaukee police
department an application for employment
as a police officer and had been told he
could not have one because the department
would not be accepting applications from
white males until 1994. He sought to
certify a class consisting not only of
other white males whose requests for job
applications had been turned down but
also white males who had somehow
succeeded in applying but had not been
hired because the department had changed
the scores on the entrance exams to favor
women and members of minority groups. The
district court certified this broad class
in 1995. Six years later, a different
district judge, to whom the case had been
reassigned, granted the City’s motion to
decertify the class on the ground that
the class was improper and Culver not an
adequate representative of any subclass
that might be carved out of it. The judge
then dismissed the suit, as we said,
because Culver’s claim was moot.
The class action is an awkward device,
requiring careful judicial supervision,
because the fate of the class members is
to a considerable extent in the hands of
a single plaintiff (or handful of
plaintiffs, when, as is not the case
here, there is more than one class
representative) whom the other members of
the class may not know and who may not be
able or willing to be an adequate
fiduciary of their interests. Often the
class representative has a merely nominal
stake (Culver has no stake), and the real
plaintiff in interest is then the lawyer
for the class, who may have interests
that diverge from those of the class
members. The lawyer for the class is not
hired by the members of the class and his
fee will be determined by the court
rather than by contract with paying
clients. The cases have remarked the dan
ger that the lawyer will sell out the
class in exchange for the defendant’s
tacit agreement not to challenge the
lawyer’s fee request. Blair v. Equifax
Check Services, Inc., 181 F.3d 832, 839
(7th Cir. 1999); Mars Steel Corp. v.
Continental Illinois National Bank &
Trust Co., 834 F.2d 677, 681 (7th Cir.
1987); In re General Motors Corp. Pick-Up
Truck Fuel Tank Products Liability
Litigation, 55 F.3d 768, 801-05 (3d Cir.
1995); Weinberger v. Great Northern
Nekoosa Corp., 925 F.2d 518, 524 (1st
Cir. 1991).
Rule 23 tries to minimize the potential
abuses of the class action device in two
principal ways, first by insisting that
the class be reasonably homogeneous, Fed.
R. Civ. P. 23(a)(2); Sosna v. Iowa, 419
U.S. 393, 403 n. 13 (1975), and second by
insisting that the class representative
be shown to be an adequate representative
of the class. Fed. R. Civ. P. 23(a)(3);
Amchem Products, Inc. v. Windsor, 521
U.S. 591, 625-26 and n. 20 (1997);
Harriston v. Chicago Tribune Co., 992
F.2d 697, 704 (7th Cir. 1993); cf. In re
American Medical Systems, Inc., 75 F.3d
1069, 1083 (6th Cir. 1996). These are
often and here related controls because
if the class is heterogeneous, the
representative is unlikely to be able to
offer representation to all members,
Robinson v. Sheriff of Cook County, 167
F.3d 1155, 1157 (7th Cir. 1999), in much
the same way that if a collective
bargaining unit is heterogeneous, a union
will not be able to offer representation
to all members free of any conflict of
interest, and so a unit may not be
certified for collective bargaining
purposes unless the members have a
"community of interest." Continental Web
Press, Inc. v. NLRB, 742 F.2d 1087, 1089-
90 (7th Cir. 1984). One is not surprised,
therefore, that the Supreme Court has
disapproved the "across the board" class
action, that is, a class action in which
the class representative has suffered a
different kind of injury from other
members of the class. General Telephone
Co. v. Falcon, 457 U.S. 147, 157-59
(1982). And Falcon was a discrimination
case, like this one.
The class that was originally certified
in this case and has now been decertified
was heterogeneous. Would-be Milwaukee
police officers who never received a job-
application form to fill out are very
differently situated from those who
received and completed the form and took
the entrance test but were not hired
because the test was scored in a
discriminatory fashion. The members of
the first set are more difficult to
identify than the members of the second,
since the City has no record of persons
who request but are not sent application
forms. Also unlike members of the second
set, members of the first, to have any
sort of claim for which relief could be
granted, would have to prove that they
had the minimum qualifications to be
hired. But--and this is still a third
difference--the members of the first set,
unlike the members of the second, would
not have to prove that the entrance exams
were scored in a discriminatory fashion,
because their complaint is that they were
not even considered for employment.
These differences show that as the
district judge directed, the previously
certified class had to be divided into
two classes, Fed. R. Civ. P. 23(c)(4)(B);
Ortiz v. Fibreboard Corp., 527 U.S. 815,
856 (1999); Williams v. Chartwell
Financial Services, Ltd., 204 F.3d 748,
760 (7th Cir. 2000), especially since
Culver, the class representative, is not,
and cannot be (because the classes are
mutually exclusive), a member of both. He
is a member of the first, and so it would
be passing strange for him (and a
violation of the rule of Falcon,
rejecting "across the board" classes) to
be considered an adequate representative
of members of the second. Gilchrist v.
Bolger, 89 F.R.D. 402, 408 (S.D. Ga.
1981), aff’d (on this point), 733 F.2d
1551, 1555 (11th Cir. 1984); Vuyanich v.
Republic National Bank, 82 F.R.D. 420,
434-35 (N.D. Tex. 1979). (These cases so
held before the Supreme Court in Falcon
wiped out the Fifth Circuit’s favorable
policy toward "across the board"
classes.) For that would require him to
get into issues, such as the scoring
system used by the Milwaukee police
department, that are inapplicable to his
own situation. See Rutherford v. City of
Cleveland, 137 F.3d 905, 909-10 (6th Cir.
1998). Another route to the same
conclusion is that Culver’s claim is not
typical of the claims of the entire
class, as Rule 23 also requires. Fed. R.
Civ. P. 23(a)(3); Retired Chicago Police
Ass’n v. City of Chicago, 7 F.3d 584, 597
(7th Cir. 1993); Castro v. Beecher, 459
F.2d 725, 732 (1st Cir. 1972).
Of course, the fact that a class is
overbroad and should be divided into
subclasses is not in itself a reason for
refusing to certify the case as a class
action. Williams v. Chartwell Financial
Services, Ltd., supra, 204 F.3d at 760;
In re Brand Name Prescription Drugs
Antitrust Litigation, 115 F.3d 456, 457-
58 (7th Cir. 1997); Boucher v. Syracuse
University, 164 F.3d 113, 119 (2d Cir.
1999). Culver might (in principle, though
not in actuality, as we’re about to see)
be an adequate representative of the
subclass to which he belongs, and the
lawyer for the class might be able to
interest a member of the other subclass
in becoming the representative of that
subclass. Kremens v. Bartley, 431 U.S.
119, 134-35 (1977); In re Brand Name
Prescription Drugs Antitrust Litigation,
supra, 115 F.3d at 457-58; Johnson v.
American Credit Co., 581 F.2d 526, 532-33
and n. 13 (5th Cir. 1978). But the lawyer
has not tried to do that; she insists
that the class not be divided.
The district judge was justifiably
skeptical of Culver’s adequacy to
represent even his own subclass. Culver
made only perfunctory efforts back in
1993 to obtain a job application, and
shortly afterwards he obtained another
job, with which he is content. Having
thus no interest in injunctive relief and
not seeking damages either (he admits
that his claim is moot), Culver not
surprisingly has pursued the suit in a
most lackadaisical manner. In the eight
years that it has been pending, he has
yet to identify any other members of
either the larger class or his subclass.
He has done nothing to move the case
forward except file a flurry of frivolous
motions to recuse the various district
judges who have succeeded each other in
the unrewarding task of shepherding this
case. The least frivolous ground, though
still frivolous, is that the current
district judge’s former law firm
represented the union that represents
Milwaukee police officers. The judge
himself did not represent the union; the
firm did not represent the union while
the judge was a member of the firm; and
the union is not a party to this
litigation. There was thus no basis for
recusal. See 28 U.S.C. sec. 455(b)(2);
Murray v. Abt Associates, Inc., 18 F.3d
1376, 1379 (7th Cir. 1994); In re
National Union Fire Ins. Co., 839 F.2d
1226, 1230 (7th Cir. 1988); Cipollone v.
Liggett Group, Inc., 802 F.2d 658, 659
(3d Cir. 1986).
Although the mootness of a named
plaintiff’s claim does not automatically
disqualify him from serving as class rep
resentative, since it does not make the
suit moot (the unnamed class members’
claims are not moot), Sosna v. Iowa,
supra, 419 U.S. at 401, it makes him
presumptively inadequate, in our view,
unless the defendant is executing a
strategy of buying off class
representatives successively in an effort
to derail the suit. Cf. Kremens v.
Bartley, supra, 431 U.S. at 129-30, 132;
Susman v. Lincoln American Corp., supra,
587 F.2d at 870; Reed v. Bowen, 849 F.2d
1307, 1312 n. 6 (10th Cir. 1988); Harris
v. Peabody, 611 F.2d 543, 545 (5th Cir.
1980) (per curiam). The City of Milwaukee
has not employed that strategy; Culver’s
job that has mooted his claim is not with
or arranged by the City. Given the
mootness of Culver’s claim and his
consequent lack of any material stake in
prosecuting this litigation--given as
well the lack of energy with which he has
discharged his duties as class
representative--the lawyer for the class
should have lined up another class member
to take Culver’s place as class represen
tative in the event that we ordered the
class recertified. She has not done this.
So far as we can tell, no member of the
class has any interest beyond that of a
curious onlooker in pursuing this
litigation. That is a compelling reason
for decertification unless the
requirement that a class action, like any
other suit, have a plaintiff is to be
dropped and the class lawyer recognized
as the true plaintiff, a step that
however "logical" the courts and Congress
have balked at taking.
Furthermore, even if Culver were an
adequate representative of his own
subclass, the district judge was not
obliged to allow the suit to be
maintained as a class action in the face
of the refusal of the class
representative’s lawyer to cooperate in
dividing the class into subclasses. That
refusal was another ground for
decertification, as it was a further
indication that the plaintiff was an
inadequate representative of the
class(es). Robert H. Klonoff, Class
Actions and Other Multi-Party Litigation
in a Nutshell 44 (1999). For purposes of
determining whether the class
representative is an adequate
representative of the members of the
class, the performance of the class
lawyer is inseparable from that of the
class representative. This is so because
even when the class representative has
some stake (unlike Culver), it is usually
very small in relation to the stakes of
the class as a whole, magnifying the role
of the class lawyer and making him (or in
this case her) realistically a principal.
Indeed the principal. When we said
earlier in this opinion that "Culver has
done nothing to move the case forward
except to file a flurry of frivolous
motions" and remarked "the lack of energy
with which he [Culver] has performed his
function of class representative" and
that the courts and Congress had refused
as yet to rule that "the requirement that
a class action, like any other suit, have
a plaintiff is to be dropped and the
class lawyer recognized as the true
plaintiff," realists reading this opinion
no doubt sniggered. All Culver’s moves in
this suit were almost certainly the
lawyer’s. Realistically, functionally,
practically, she is the class
representative, not he. "Experience
teaches that it is counsel for the class
representative and not the named parties,
who direct and manage these actions.
Every experienced federal judge knows
that any statements to the contrary is
[sic] sheer sophistry." Greenfield v.
Villager Industries, Inc., 483 F.2d 824,
832 n. 9 (3d Cir. 1973); see Mars Steel
Corp. v. Continental Illinois National
Bank & Trust Co., supra, 834 F.2d at 681.
If, therefore, the lawyer, through
breach of his fiduciary obligations to
the class, see Zucker v. Occidental
Petroleum Corp., 192 F.3d 1323, 1327-28
(9th Cir. 1999); Sondel v. Northwest
Airlines, Inc., 56 F.3d 934, 938 (8th
Cir. 1995); Piambino v. Bailey, 757 F.2d
1112, 1139 (11th Cir. 1985); Greenfield
v. Villager Industries, Inc., supra, 483
F.3d at 832, or otherwise, demonstrates
that he is not an adequate representative
of the interests of the class as a whole,
realism requires that certification be
denied. Dubin v. Miller, 132 F.R.D. 269,
273 (D. Colo. 1990) ("adequacy of
representation also requires that counsel
for the class fulfill a fiduciary
obligation to the class"); Wagner v.
Lehman Bros. Kuhn Loeb Inc., 646 F. Supp.
643, 661 (N.D. Ill. 1986) ("where there
is reason to doubt [class] counsel’s
ability to meet those [fiduciary] duties
[to the class], class certification must
be denied").
Although the class was rightly
decertified, and the suit, having thus
been demoted to an individual action,
therefore rightly dismissed because
Culver’s claim had become moot, there is
a loose end. Rule 23(e) requires that
notice of a proposed dismissal "be given
to all members of the class." The purpose
is to enable the class members to protect
their interests in the face of the
dismissal of the class action. One thing
they may need protection against is the
class representative’s selling out the
class by trading dismissal for benefits
to himself. This was not a factor here;
another thing they may need protection
against, however, and it may be a factor
here, is the expiration of the statute of
limitations on the class members’ claims
without their realizing it. The filing of
a class action suit tolls the statute of
limitations for all the members of the
class, Crown, Cork & Seal Co. v. Parker,
462 U.S. 345, 352-54 (1983); American
Pipe & Construction Co. v. Utah, 414 U.S.
538, 554 (1974); Elmore v. Henderson, 227
F.3d 1009, 1012 (7th Cir. 2000); Glidden
v. Chromalloy American Corp., 808 F.2d
621, 627 (7th Cir. 1986), but when the
suit is dismissed without prejudice or
when class certification is denied the
statute resumes running for the class
members. Crown, Cork & Seal Co. v.
Parker, supra, 462 U.S. at 354; Chardon
v. Fumero Soto, 462 U.S. 650, 658-60
(1983); Elmore v. Henderson, supra, 227
F.3d at 1012; In re Rhone-Poulenc Rorer
Inc., 51 F.3d 1293, 1298 (7th Cir. 1995);
Glidden v. Chromalloy American Corp.,
supra, 808 F.2d at 627; Stone Container
Corp. v. United States, 229 F.3d 1345,
1355-56 (Fed. Cir. 2000); Armstrong v.
Martin Marietta Corp., 138 F.3d 1374,
1384-85 (11th Cir. 1998) (en banc);
Rodriguez v. Banco Central, 790 F.2d 172,
179 (1st Cir. 1986). Unless they are
notified that the suit is dismissed, they
may fail to file their own suits and thus
fail to "re-arrest" the statute of
limitations, Glidden v. Chromalloy
American Corp., supra, 808 F.2d at 627;
Diaz v. Trust Territory of Pacific
Islands, 876 F.2d 1401, 1409 (9th Cir.
1989), and as a result they may find
themselves time barred without knowing
it.
We are mindful that some cases confine
the duty of notice to settlements, on the
theory that if a suit is dismissed as the
result of an adjudication of the merits,
the danger that the class representative
or class counsel is selling out the class
in exchange for benefits for himself is
obviated. See, e.g., Riddick by Riddick
v. School Board, 784 F.2d 521, 531 (4th
Cir. 1986); Shelton v. Pargo, Inc., 582
F.2d 1298, 1300 n. 1 (4th Cir. 1978); 7B
Charles Alan Wright, Arthur R. Miller &
Mary Kay Kane, Federal Practice and
Procedure sec. 1797, pp. 345-46 (2d ed.
1986). But these cases overlook the other
danger to the members of the class, the
danger that the statute of limitations on
their claims will run without their
knowing it until it is too late, a danger
that is independent of whether the
dismissal is voluntary or involuntary.
The district judge failed to notify the
class members of the decertification of
the class. He thought they probably were
unaware of the suit and therefore would
not be prejudiced by its demise.
"Probably" is not good enough; it implies
that some class members may well have
been prejudiced. Although it is not yet
definitively settled whether Rule 23(e)
is applicable when a class action suit is
dismissed before the class is certified
(the rule does not indicate which sense
of "class" it intends, the certified or
the certified plus the "putative," that
is, the class alleged in the complaint
before any class is certified), see,
e.g., Rice v. Ford Motor Co., 88 F.3d
914, 919-20 n. 8 (11th Cir. 1996), we
think it the better view, as well as the
one suggested in Glidden v. Chromalloy
American Corp., supra, 808 F.2d at 625-
27, that it is indeed applicable to such
suits. The prejudice to class members
from a dismissal of which they may be
unaware is the same in either case.
Stated otherwise, the context in which
"class" is used in Rule 23(e) indicates
that it is not limited to a certified
class. Even cases that refuse to apply
Rule 23(e) to putative class actions
require notice to the members of the
putative class if it seems clear that
otherwise their interests would be
harmed. E.g., Pearson v. Ecological
Science Corp., 522 F.2d 171, 177 (5th
Cir. 1975).
Three qualifications or refinements must
be noted, however. First, if it is plain
that there is no prejudice, violation of
the rule is harmless and compliance will
not be ordered. See Simer v. Rios, 661
F.2d 655, 666 (7th Cir. 1981); Crawford
v. F. Hoffman-La Roche Ltd., 267 F.3d
760, 764-65 (8th Cir. 2001); Navarro-
Ayala v. Hernandez-Colon, 951 F.2d 1325,
1336-37 (1st Cir. 1991); Diaz v. Trust
Territory of Pacific Islands, supra, 876
F.2d at 1410-11. A good example of such a
case is Wimber v. Department of Social
and Rehabilitation Services, 156 F.R.D.
259, 263 (D. Kan. 1994), where the court
pointed out that "in light of the small
class size, the likelihood of former
Terramara clients learning of this
dismissal through other channels, the
early dismissal without prejudice, the
lack of possible collusion, and the small
danger of the statute of limitations
expiring, the court dispenses with the
notice and hearing requirements and
approves the dismissal without
prejudice." But in the present case the
danger of prejudice is, so far as we are
able to determine, much greater.
Second, the class action was not
literally dismissed. First the class was
decertified and then the suit, now an
individual rather than a class action,
was dismissed. But decertification has
the same effect on the members of the
class, so far as the running of the
statute of limitations is concerned, as
dismissal of the class action--it is
tantamount to dismissal--and so it should
be treated the same under Rule 23(e).
Another path to this conclusion is Rule
23(c)(1), which provides that an order
certifying a class "may be altered . . .
before the decision on the merits." It
was on the authority of this rule that
the district judge decertified the class.
Part of any order "altering" the
certification in this way should be a
provision for notice to the class
members.
Third, since it is the class lawyer who
is objecting to the district judge’s
failure to order that notice of
decertification be given, and since the
cost of the notice will be borne by her
or her client, it might seem that if she
wants the class members notified she
should go ahead and do it, without
bothering the district court or us, and
will do so whether or not ordered to do
so. But of course she may change her
mind, or select an inadequate method of
notice. Rule 23(e) is for the protection
of the class members, not of the class
representative or his lawyer--who will
usually have no interest in notifying the
class members of the failure of the class
action--let alone for the protection of
the defendant, who will be content to let
sleeping dogs lie. Rule 23(e) should
therefore be understood as imposing a
duty on the district judge that is
nondelegable, he being himself a
fiduciary of the class. See Stewart v.
General Motors Corp., 756 F.2d 1285, 1293
(7th Cir. 1985); Maywalt v. Parker &
Parsley Petroleum Co., 67 F.3d 1072, 1078
(2d Cir. 1995); Greenfield v. Villager
Industries, Inc., supra, 483 F.2d at 832.
The judge’s duty is to order notice
unless the risk of prejudice to absent
class members is nil and to review for
adequacy the form of notice proposed by
class counsel in response to the order.
The case is remanded for compliance with
Rule 23(e), but in all other respects the
judgment of the district court is
affirmed.