Allison v. Citgo Petro Corp

Revised August 20, 1998
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-30489
_____________________
JAMES E. ALLISON; RAY ANDERSON;
JOANNE ANDREPONT; RAYMOND ARTIS;
JOSEPH AUSTIN; CHARLES AVERY;
RONALD BALLOU; LEROY BALLOU; DANIEL
BARRON; ARNOLD BATISTE; REGINALD BILBO;
DAVID L. BLANEY; ALEX BROUSSARD;
CALVIN BROUSSARD; NORTHERN BROWN;
SANDRA BROWN; SOLOMON BUTLER; JESSE L.
CARMEN; CHARLES CARRIER; JUNIUS CARTER;
DONALD CEASAR; AUDREY T. CELESTINE;
ANTHONY CHAMPAGE; REID CHAMPMAN; JAQUELINE
CLEMONS; LEONARD COLE; GLENNETH COLEMAN;
LESTER COLEMAN; CLEVELAND J. COLLINS;
LARRY A. COMBEST; LYNETTE CORMIER; GEORGE
DARBONNE; PATRICIA DARBONNE; XAVIER DARBONNE;
WILLIE DEJEAN; LOUIS A DUDLEY; JOSEPH DUGAR;
LONEY M. DUGAR; CHARLES ELLIS; PETER EVANS;
CLYDE FELIX; CHARLES FOBB, JR.; CLINTON
FOBBS, JR; GILBERT FOOTE; HOWARD DEE FOREMAN;
VELMA M. GALLIEN; RAY A. GARLAND; MCARTHUR
GILLIAM; PAUL GOODWIN; MARION R. GREENE;
SHELTON GUILLORY; WILTON GUILLORY; WILLIE RAY
HAMILTON; DONALD HARRIS; EDWINA M. HARRIS;
SILVER RAY HARRIS; RAY HARRIS; DONALD HARRISON;
HENRY G. HAWKINS; HELEN G. HENRY; WILLIE IRVING;
DONALD D. JACKSON; JACK JOHNSON; SAMUEL JOHNSON;
LAWRENCE JONES; EDWARD JORDAN; HORACE J. LAMBERT;
ANGEL LEBLANC; ALBERT LEDAY, JR.; CLIFFORD LEDAY;
ARTHUR K. LEE; EARL J. LEMELL; JOSEPH LEMELL, JR.;
WILBERT J. LEWIS; HAROLD J. LOCKETT; KATHLEEN V.
MANUEAL; PAUL D. MATTHEWS; AUBREY MATTHEWS;
CHARLET L. MCCAIN; LOUIS E. METOYER; WESLEY J.
MONROE; MELVIN MOREAU; MARK A. MOTT; WILLIE MOUTON;
JOSEPH LARRY NELSON; MOSES NELSON; HERBERT L.
OLIVER; EDWARD OLIVER; MARK H. PAPPION;
CORNELIUS PAPPION; FREDERICK PERRODIN; JOSEPH
PERRON, JR.; AUGUST PETE; DARRELL PETE; GUSSIE
PITRE; PATRICIA PITRE; GEORGE POLK, JR; LINTON
POULLARD, JR.; JOSEPH PRUDHOMME; LARRY
PRUDHOMME, JR.; HARVEY C. PULLARD; CHARLES W.
RAWL; FREDERICK RIDEAUX; JOSEPH A. RILEY;
VIRGINIA RILEY; NANCY RYAN; NATHANIEL H. SAPP;
LOUIS SEMIEN, JR.; CHESTER SENEGAL; JOSEPH
SENIEN, JR.; JESSIE L. SHAW; HOWARD W. SHERMAN;
WANDA F. SMITH; GEORGE STENSON; GERALD STERLING;
RICHARD STERLING; CHARLES A. TALBERT; PATRICIA
TAYLOR; GEORGE E. TAYLOR; MARTIN THOMAS;
WARREN G. THOMAS; DONALD THOMPSON; HUEY P.
TOLSTON; ELRAY VICTORIAN; SHEILA WARD; CYNTHIA
WASHINGTON; VICTOR WASHINGTON; WARREN
WASHINGTON; WILSON WASHINGTON; HUEY WILLIAM;
WILBERT WILLIAMS; ERROL WILSON; ARMOND WYATT,
Plaintiffs-Appellants,
JONATHAN ANDERSON; DANIEL COX; RUSSELL
METOYER; HILLERY RANDELL; LEO P. REEDER,
Intervenors Plaintiffs-Appellants,
versus
CITGO PETROLEUM CORP.,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court for the
Western District of Louisiana
_________________________________________________________________
August 18, 1998
Before JOLLY, SMITH, and DENNIS, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
This interlocutory appeal presents the question whether the
district court properly refused to certify a class action
challenging employment practices by the Citgo Petroleum Corporation
2
_____________________
On May 15, 1998, the panel issued its opinion in this case.
The earlier opinion is withdrawn and this opinion is substituted
therefor. The primary modifications from the previous opinion
appear in Part VII of this substituted opinion.
(“Citgo”) under Title VII (as amended in 1991) and the Civil Rights
Act of 1866, 42 U.S.C. § 1981. The plaintiffs, Allison and over
130 other named plaintiffs and intervenors, filed suit on behalf of
black employees and applicants for employment alleging that Citgo
engaged in class-wide racial discrimination with respect to general
hiring, promotion, compensation, and training policies at its
manufacturing facilities in Lake Charles, Louisiana. The
plaintiffs challenged these policies under disparate impact and
systemic disparate treatment theories of discrimination. Seeking
injunctive, declaratory, and monetary relief, the plaintiffs moved
for class certification under Rule 23 of the Federal Rules of Civil
Procedure, which Citgo opposed. The district court denied the
motion. On appeal, the plaintiffs contend that the district
court’s denial of class certification was an abuse of discretion.
Before the passage of the Civil Rights Act of 1991, which for the
first time provided plaintiffs with a right to compensatory and
punitive damages as well as a jury trial (each demanded here),
aspects of this case clearly would have qualified for class
certification. As we shall explain, however, the plaintiffs’
claims for money damages and the constitutional right of both
3
parties to a jury trial, with all its substantive rights and
procedural complications, ultimately render this case unsuitable
for class certification under Rule 23. We therefore affirm and
hold that the district court did not abuse its discretion in
denying class certification.
4
I
This race discrimination case involves a potentially huge and
wide-ranging class action lawsuit concerning employment practices
at Citgo’s Lake Charles manufacturing complex. Specifically, the
plaintiffs identified the following employment practices as
resulting in unlawful race discrimination: (1) failure to post or
announce job vacancies; (2) use of an informal word-of-mouth
announcement process for filling job vacancies; (3) use of racially
biased tests to evaluate candidates for hire or promotion; and (4)
use of a subjective decision-making process by a predominantly
white supervisory staff in reviewing applicants for hire and
employees for promotion. The plaintiffs challenged each of these
policies under both the disparate impact and systemic disparate
treatment theories of Title VII.
In September 1993, the plaintiffs filed a motion for the
certification of a class estimated to contain more than 1000
potential members. The class was identified as “[a]ll African-
American employees and applicants of Citgo Petroleum Corporation
(Citgo) from April 11, 1979 until the present.” Its members are
current and former employees and unsuccessful applicants for
employment in “hourly” positions at Citgo’s Lake Charles complex.
They are spread across two separate facilities. They are
represented by six different unions, come from five different skill
5
groups, and work in seven different functional areas at the
complex. Nevertheless, the plaintiffs maintain that a class action
is appropriate because they are challenging general hiring,
training, and promotional policies applied uniformly throughout the
complex.
To remedy the alleged discrimination, the plaintiffs seek
every available form of injunctive, declaratory, and monetary
relief. In terms of affirmative injunctive relief, the plaintiffs
seek restructuring of offending policies, instatement into existing
jobs, and retroactive seniority and benefits. As for monetary
relief traditionally available under Title VII, the plaintiffs
request back pay, front pay, pre-judgment interest, and attorneys’
fees. Furthermore, invoking the provisions added to Title VII by
the Civil Rights Act of 1991, the plaintiffs seek compensatory and
punitive damages to the maximum amount permissible under the law.
Finally, the plaintiffs demand a jury trial on their claims of
intentional discrimination, to which they are now also entitled
under the 1991 amendments.
The district court referred the plaintiffs’ motion for class
certification to a magistrate judge, who conducted an evidentiary
hearing and subsequently entered a report and recommendation
denying class certification. The magistrate judge determined that,
although the proposed class met the requirements of Rule 23(a) of
6
the Federal Rules of Civil Procedure, it could not be certified
under any of the alternatives provided in 23(b). The plaintiffs
sought certification primarily under subsection (b)(2), but the
magistrate judge found certification under (b)(2) inappropriate
because money damages were the “predominant” form of relief sought.
Focusing on the individualized nature of the damages claims and the
consequent need for significant individualized proof, he reasoned
that they were not sufficiently incidental to the injunctive relief
to warrant class certification under 23(b)(2). The magistrate
judge also considered class certification under Rule 23(b)(3), but
found that the need for individualized damages determinations
caused individual issues to predominate over common ones and that
a class action would not be a superior method for fair and
efficient adjudication of the controversy.
Finally, the magistrate judge contemplated bifurcating the
trial into liability and damages stages and certifying a class on
only the claims for injunctive relief. He expressed concern,
however, over Seventh Amendment complications arising out of
bifurcated proceedings with multiple juries and the difficulty in
separating liability and damages issues in discrimination cases.
The magistrate judge suggested that the proper use of consolidation
under Rule 42 of the Federal Rules of Civil Procedure would permit
7
the court to avoid the problems presented by a class action in this
case while still achieving some degree of efficiency.
The district court adopted the report and recommendation in
its entirety and denied class certification. On petition by the
plaintiffs, the court certified the question for interlocutory
appeal under 28 U.S.C. § 1292(b), which we granted in May 1996.
This appeal followed.
II
We note at the outset that the district court maintains
substantial discretion in determining whether to certify a class
action, a decision we review only for abuse. See Jenkins v.
Raymark Indus., 782 F.2d 468, 471-72 (5th Cir. 1986). Implicit in
this deferential standard is a recognition of the essentially
factual basis of the certification inquiry and of the district
court’s inherent power to manage and control pending litigation.
See Pegues v. Mississippi State Employment Serv., 699 F.2d 760, 763
(5th Cir.), cert. denied, 464 U.S. 991 (1983). Whether the
district court applied the correct legal standard in reaching its
decision on class certification, however, is a legal question that
we review de novo. See Forbush v. J.C. Penney Co., 994 F.2d 1101,
1104 (5th Cir. 1993).
III
8
Perhaps it is best at the beginning of this rather extended
opinion to say a preliminary word about the task before us. The
breadth and complexity of the issues relating to the plaintiffs’
broad claims for monetary relief and demand for a jury trial,
raised in the context of multiple alternative arguments, make it
necessary for us to examine the nature of class actions under Rule
23 and its subparts, as they relate specifically to this case. The
plaintiffs urge primarily that the entire case is certifiable as a
class action under Rule 23(b)(2). Because they argue that the wide
array of monetary remedies they seek does not predominate over
requested injunctive or declaratory relief, we must dwell at some
length on what “predomination” means for the purposes of Rule
23(b)(2) and how it applies here.
Next, we consider the plaintiffs’ argument that, if this case
cannot be certified in a (b)(2) class action, it may nevertheless
be certified under Rule 23(b)(3). In addressing this argument, we
consider whether issues common to the class predominate over issues
relating solely to individuals, and whether a (b)(3) class action
would be an efficient and manageable means of resolving this case
in the light of the plaintiffs’ claims for compensatory and
punitive damages and their demand for a jury trial.
Finally, given that the plaintiffs ultimately resort to a
request for a class action on any available basis (but without
9
foregoing any of their class claims for monetary relief), we
consider whether this case can be severed in such a way as to make
class certification appropriate for any of the plaintiffs’ claims,
while reserving the question whether to certify the remaining
claims for subsequent proceedings. Because of the plaintiffs’
demand for a jury trial, resolving this issue requires us to
consider the Seventh Amendment implications of severing claims that
share common factual issues with the remainder of the case.
IV
Class actions brought under Title VII typically proceed under
two theories, disparate impact and systemic disparate treatment,
both of which are advanced in this case. The disparate impact
theory is used to challenge a facially neutral employment policy
that falls more harshly on a protected class of employees. Pouncy
v. Prudential Ins. Co. of Am., 668 F.2d 795, 799 (5th Cir. 1982).
The systemic disparate treatment theory focuses on whether the
employer engaged in a “pattern or practice” of intentional
discrimination, that is, whether discrimination was the employer’s
standard operating procedure rather than a sporadic occurrence.
See International Bhd. of Teamsters v. United States, 431 U.S. 324,
336 (1977). In years past, we have routinely upheld certification
of class actions to resolve Title VII cases involving disparate
impact and pattern or practice claims of discrimination. See,
10
e.g., Richardson v. Byrd, 709 F.2d 1016 (5th Cir.), cert. denied,
464 U.S. 1009 (1983); Robinson v. Union Carbide Corp., 538 F.2d 652
(5th Cir. 1976), cert. denied, 434 U.S. 822 (1977); Pettway v.
American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974).
In doing so, we have recognized that the class action device
could be implemented effectively to eradicate widespread or
institutional-scale discrimination. See Jenkins v. United Gas
Corp., 400 F.2d 28, 34 & n.14 (5th Cir. 1968); see also Wright,
Miller & Kane, 7A Federal Practice and Procedure § 1776, at 495-96
(2d ed. 1986) (civil rights cases frequently involve group
discrimination). Disparate impact cases in particular, which
challenge specific, facially-neutral policies with proof of
statistical disparities resulting from their uniform application to
an employer’s workforce, by their very nature implicate class-based
claims. We also have molded class actions to accommodate claims
that an employer engaged in a pattern or practice of intentional
discrimination. Ordinarily, such cases are handled in bifurcated
proceedings imposing on the plaintiffs different burdens of proof.
See Shipes v. Trinity Indus., 987 F.2d 311, 318 (5th Cir.), cert.
denied, 510 U.S. 991 (1993). During the first or “liability”
stage, the plaintiffs seek to prove a pattern or practice of
invidious class-based discrimination. See id. If successful,
individual class members benefit from a presumption of back pay,
11
their entitlement to which is determined at the second or
“remedial” stage. To obtain back pay, class members need only
prove that they were denied employment opportunities and the extent
of their loss, while the burden then shifts to the employer to
demonstrate that those class members were denied employment
opportunities for legitimate reasons. See Richardson, 709 F.2d at
1021; see also Teamsters, 431 U.S. at 362. Although this final
determination typically involves separate hearings for each
individual, see Johnson v. Goodyear Tire & Rubber Co., 491 F.2d
1364, 1375 (5th Cir. 1974), courts, without the need to consider
the implications of a jury trial, developed techniques such as the
use of special masters to streamline the process, see Newberg &
Conte, Newberg on Class Actions §§ 24.119-24.121 (3d ed. 1992).
The Civil Rights Act of 1991, however, made fundamental
changes in both the procedures and remedies available to Title VII
litigants. Among other things, the Act now permits plaintiffs to
recover compensatory and punitive damages from an employer who
engaged in unlawful intentional discrimination (to include
individual disparate treatment and pattern or practice cases). See
42 U.S.C. § 1981a(a)(1). Compensatory damages include relief for
“future pecuniary losses, emotional pain, suffering, inconvenience,
mental anguish, loss of enjoyment of life, and other nonpecuniary
losses.” § 1981a(b)(3). The Act also allows punitive damages if
12
the employer discriminated “with malice or with reckless
indifference to the federally protected rights of an aggrieved
individual,” § 1981a(b)(1)(2), with the total recovery of
compensatory and punitive damages capped at a maximum of $300,000
per plaintiff, see § 1981a(b)(3). Finally, in all cases where the
plaintiff seeks compensatory and punitive damages, either party is
entitled to demand a trial by jury. See § 1981a(c).
In the class action context, the changes to Title VII are not
inconsequential.1 It is important to remember that the class
action device exists primarily, if not solely, to achieve a measure
of judicial economy, which benefits the parties as well as the
entire judicial system. It preserves the resources of both the
courts and the parties by permitting issues affecting all class
members to be litigated in an efficient, expedited, and manageable
fashion. See Jenkins v. Raymark Indus., 782 F.2d 468, 471 (5th
Cir. 1986) (citing General Tel. Co. of the Southwest v. Falcon, 457
U.S. 147, 155 (1982)). Before passage of the Civil Rights Act of
1
To the extent this appeal requires us to examine the effects
of the Civil Rights Act of 1991 on class certification in Title VII
cases, it is a case of first impression at the appellate level.
District courts addressing this and related issues have reached
varying conclusions. See, e.g., EEOC v. McDonnell Douglas Corp.,
960 F. Supp. 203 (E.D. Mo. 1996); Morgan v. United Parcel Serv. of
Am., Inc., 169 F.R.D. 349 (E.D. Mo. 1996); Griffin v. Home Depot,
Inc., 168 F.R.D. 187 (E.D. La. 1996); Zapata v. IBP, Inc., 167
F.R.D. 147 (D. Kan. 1996); Bremiller v. Cleveland Psychiatric
Inst., 898 F. Supp. 572 (N.D. Ohio 1995); Arnold v. United Artists
Theatre Circuit, Inc., 158 F.R.D. 439 (N.D. Cal. 1994).
13
1991, liability and the appropriate remedies in all Title VII cases
were determined in bench trials. Monetary relief was limited to
back pay and other equitable remedies. By bringing additional
monetary claims within the scope of intentional discrimination
cases, the Civil Rights Act of 1991 added to the complexity and
diversity of the issues to be tried and decided. By injecting jury
trials into the Title VII mix, the 1991 Act introduced, in the
context of class actions, potential manageability problems with
both practical and legal, indeed constitutional, implications. The
broad question we consider here is whether and to what extent these
factors affect a class action in this case.
V
The plaintiffs’ principal argument is that the district court
erred in refusing to certify the entire case as a class action
under Rule 23(b)(2). The district court determined that a primary
limitation on the (b)(2) class action is the requirement that
injunctive or declaratory relief be the predominant relief sought
for the class. Provided this requirement were met, claims for
related monetary relief could be entertained in the class action.
To ascertain the predominant form of relief sought, the district
court considered whether: (1) the request for money damages was
integral to and flowed directly from the injunctive or declaratory
relief; (2) the request for money damages affected the cohesiveness
14
of the class and the homogeneity of interests; (3) issues common to
the claims for injunctive or declaratory relief predominated; and
(4) the money damages arose out of conduct based on policies
generally applicable to all plaintiffs. Applying these factors,
the court concluded that the plaintiffs’ claims for money damages
predominated over their claims for nonmonetary relief, making
certification of the class inappropriate under (b)(2).
The plaintiffs argue that the district court committed legal
error in this respect. They first contend that Rule 23(b)(2)
contains no predomination requirement. Next, assuming that it
does, the plaintiffs argue that the district court erred in its
formulation of the (b)(2) predomination requirement as well as in
its application of that requirement to deny class certification.
A
We consider first whether the district court erred in
determining that the primary limitation on a Rule 23(b)(2) class
action is the requirement that injunctive or declaratory relief be
the predominant relief sought for the class. Naturally, we begin
by looking at the plain language of the rule. Rule 23(b)(2)
15
permits cases meeting the requirements of Rule 23(a)2 to be
certified as class actions if:
the party opposing the class has acted or refused to act
on grounds generally applicable to the class, thereby
making appropriate final injunctive relief or
corresponding declaratory relief with respect to the
class as a whole.
The rule is clear that claims seeking injunctive or declaratory
relief are appropriate for (b)(2) class certification. Thus, if
the plaintiffs sought only injunctive and declaratory relief, this
case could readily be certified as a class action under Rule
23(b)(2).
The plaintiffs, however, also seek monetary relief. Rule
23(b)(2) is silent as to whether monetary remedies may be sought in
conjunction with injunctive or declaratory relief. The Advisory
Committee Notes on Rule 23 state that class certification under
(b)(2) “does not extend to cases in which the appropriate final
relief relates exclusively or predominantly to money damages.”
Fed. R. Civ. P. 23 (advisory committee notes) (emphasis added).
This commentary implies that the drafters of Rule 23 believed that
at least some form or amount of monetary relief would be
2
Citgo does not seriously challenge whether the district court
was correct in finding that the plaintiff class satisfied the
requirements of Rule 23(a), and we assume it does for purposes of
this appeal.
16
permissible in a (b)(2) class action. See Pettway v. American Cast
Iron Pipe Co., 494 F.2d 211, 257 (5th Cir. 1974).
In addressing what monetary relief is permissible in a (b)(2)
class action, this circuit has chosen an intermediate approach,
neither allowing certification without regard to the monetary
remedies being sought, nor restricting certification to classes
seeking exclusively injunctive or declaratory relief. See Johnson
v. General Motors Corp., 598 F.2d 432, 437 (5th Cir. 1979). We,
like nearly every other circuit, have adopted the position taken by
the advisory committee that monetary relief may be obtained in a
(b)(2) class action so long as the predominant relief sought is
injunctive or declaratory.3 See Jenkins, 400 F.2d at 34 n.14; see
also, e.g., Eubanks v. Billington, 110 F.3d 87, 92 (D.C. Cir.
1997); Boughton v. Cotter Corp., 65 F.3d 823, 827 (10th Cir. 1995);
Zimmerman v. Bell, 800 F.2d 386, 389-90 (4th Cir. 1986); In re
School Asbestos Litigation, 789 F.2d 996, 1008 (3d Cir.), cert.
3
We recognize that the Supreme Court’s decision in Ticor Title
Ins. Co. v. Brown, 114 S. Ct. 1359 (1994), casts doubt on the
proposition that class actions seeking money damages can be
certified under Rule 23(b)(2). See id. at 1361 (noting existence
of “at least a substantial possibility” that actions seeking money
damages are certifiable only under Rule 23(b)(3)). Were we writing
on a clean slate, we might give further consideration to the extent
to which monetary relief is available at all in 23(b)(2) class
actions. However, in the absence of a clearer statement by the
Supreme Court or en banc reconsideration of the issue, this panel
is bound by circuit precedent. See Texaco v. Louisiana Land &
Exploration Co., 995 F.2d 43, 44 (5th Cir. 1993).
17
denied, 479 U.S. 852 (1986); Holmes v. Continental Can Co., 706
F.2d 1144, 1155 (11th Cir. 1983); Simer v. Rios, 661 F.2d 655, 668
n.24 (7th Cir. 1981), cert. denied, 456 U.S. 917 (1982); Eisen v.
Carlisle & Jacquelin, 391 F.2d 555, 564 (2d Cir. 1968). The
district court’s decision to impose a predomination requirement for
(b)(2) class certification is fully consistent with these cases
and, therefore, was not error.
B
We consider next the substantially more difficult question
whether the district court’s formulation of (b)(2)’s predomination
requirement was correct. As the district court noted, there is
little discussion by appellate courts as to what it means for a
particular form of relief to be “predominant.” The Advisory
Committee Notes make no effort to define or explain the concept.
Interpreting the term literally, predominant means “controlling,
dominating, [or] prevailing.” Webster’s Third New International
Dictionary 1786 (1993). But how that translates into a workable
formula for comparing different types of remedies is not at all
clear. Commentators have taken the position that determining
whether one form of relief actually predominates in some
quantifiable sense is a wasteful and impossible task that should be
avoided. See, e.g., Wright, Miller & Kane, supra, at § 1775;
Newberg, supra, at § 4.14. Nevertheless, the requirement that
18
injunctive or declaratory relief predominate in a (b)(2) class
action is the standard our cases have adopted and which we are
bound to apply here. We must determine, therefore, what the
concept of predomination means in the context of Rule 23(b)(2).
19
(1)
In the absence of clear guidance from the Rule or our cases,
we turn to the principles and assumptions underlying the (b)(2)
class and class actions in general to ascertain whether they add
substance to the concept of predomination under Rule 23(b)(2). Cf.
United Savings Ass’n v. Timbers of Inwood Forest Assoc., Ltd., 484
U.S. 365, 371 (1988) (Scalia, J.) (explaining that statutory
construction is a “holistic endeavor” because provisions that seem
ambiguous in isolation are often clarified by the remainder of the
statutory scheme).
(a)
Under Rule 23, the different categories of class actions, with
their different requirements, represent a balance struck in each
case between the need and efficiency of a class action and the
interests of class members to pursue their claims separately or not
at all. See Amchem Prod., Inc. v. Windsor, 117 S. Ct. 2231, 2246
(1997); United States Parole Comm’n v. Geraghty, 445 U.S. 388,
402-03 (1980); Rutherglen, Title VII Class Actions, 47 U. Chi. L.
Rev. 688, 697-98 (1980) (citing Kaplan, Continuing Work of the
Civil Committee: 1966 Amendments of the Federal Rules of Civil
Procedure, 81 Harv. L. Rev. 356, 387-92 (1967)). The different
types of class actions are categorized according to the nature or
effect of the relief being sought. The (b)(1) class action
20
encompasses cases in which the defendant is obliged to treat class
members alike or where class members are making claims against a
fund insufficient to satisfy all of the claims. See Amchem, 117
S. Ct. at 2245. The (b)(2) class action, on the other hand, was
intended to focus on cases where broad, class-wide injunctive or
declaratory relief is necessary. See Holmes v. Continental Can
Co., 706 F.2d 1144, 1155 n.8 (11th Cir. 1983). Finally, the (b)(3)
class action was intended to dispose of all other cases in which a
class action would be “convenient and desirable,” including those
involving large-scale, complex litigation for money damages. See
Amchem, 117 S. Ct. at 2245; see also Penson v. Terminal Transp. Co.,
634 F.2d 989, 993 (5th Cir. Unit B Jan. 1981) (citing Fed. R. Civ.
P. 23 (advisory committee notes)). Limiting the different
categories of class actions to specific kinds of relief clearly
reflects a concern for how the interests of class members will
vary, depending upon the nature of the class injury alleged and the
nature of the relief sought.
First, different presumptions with respect to the cohesiveness
and homogeneity of interests among members of (b)(1), (b)(2), and
(b)(3) classes are reflected in the different procedural safeguards
provided for each potential class. See Holmes, 706 F.2d at
1155-56. For example, the drafters of Rule 23 found it unnecessary
to provide (b)(1) and (b)(2) class members with the absolute right
21
to notice or to opt-out of the class--procedural safeguards made
mandatory under (b)(3) for class members who might wish to pursue
their claims for money damages in individual lawsuits and to not be
bound by membership in a class action. See Fed. R. Civ. P.
23(c)(2).4 Providing these rights exclusively to (b)(3) classes
demonstrates concern for the effect of monetary claims on class
cohesiveness. See Fed. R. Civ. P. 23 (advisory committee notes)
(“[i]n the degree there is cohesiveness or unity in the class and
the representation is effective, the need for notice to the class
will tend toward a minimum”). Monetary remedies are more often
related directly to the disparate merits of individual claims. See
Holmes, 706 F.2d at 1155-56 (citing Rosen, Title VII Classes and
Due Process: To (b)(2) Or Not To (b)(3), 26 Wayne L. Rev. 919, 923
(1980); Note, Antidiscrimination Class Actions Under the Federal
Rules of Civil Procedure: the Transformation of Rule 23(b)(2), 88
Yale L.J. 868, 875-76 (1979)). As a result, a class seeking
4
We have held that the absolute right to notice is a minimum
requirement of due process in actions involving claims for monetary
relief. See Johnson v. General Motors Corp., 598 F.2d 432, 436-38
(5th Cir. 1979). In at least some circumstances, due process
implicates the right to opt-out as well. See Phillips Petroleum
Co. v. Shutts, 472 U.S. 797, 811-12 (1985) (in actions
predominantly for money damages and seeking to bind absent
plaintiffs in forum with which plaintiffs do not have minimum
contacts); Brown v. Ticor Title Ins. Co., 982 F.2d 386, 392 (9th
Cir. 1992) (in actions predominantly for money damages regardless
of forum), cert. dismissed, 114 S. Ct. 1359 (1994).
22
substantial monetary remedies will more likely consist of members
with divergent interests.
In contrast, because of the group nature of the harm alleged
and the broad character of the relief sought, the (b)(2) class is,
by its very nature, assumed to be a homogenous and cohesive group
with few conflicting interests among its members.5 See Penson, 634
F.2d at 994; Holmes, 706 F.2d at 1155. The underlying premise of
the (b)(2) class--that its members suffer from a common injury
properly addressed by class-wide relief--“begins to break down when
the class seeks to recover back pay or other forms of monetary
relief to be allocated based on individual injuries.” Eubanks v.
Billington, 110 F.3d 87, 95 (D.C. Cir. 1997). Thus, as claims for
individually based money damages begin to predominate, the
presumption of cohesiveness decreases while the need for enhanced
procedural safeguards to protect the individual rights of class
members increases, see id.; Johnson v. General Motors Corp., 598
5
These assumptions have not escaped criticism. See, e.g.,
Rutherglen, Better Late Than Never: Notice and Opt Out at the
Settlement Stage of Class Actions, 71 N.Y.U. L. Rev. 258, 272-76
(1996); Weber, Preclusion and Procedural Due Process in Rule
23(b)(2) Class Actions, 21 U. Mich. J.L. Reform 347 (1988); Grant,
Comment, The Right Not To Sue: A First Amendment Rationale for
Opting Out of Mandatory Class Actions, 63 U. Chi. L. Rev. 239
(1996).
23
F.2d 432, 437-38 (5th Cir. 1979), thereby making class
certification under (b)(2) less appropriate.6
We know, then, that monetary relief “predominates” under Rule
23(b)(2) when its presence in the litigation suggests that the
procedural safeguards of notice and opt-out are necessary, that is,
when the monetary relief being sought is less of a group remedy and
instead depends more on the varying circumstances and merits of
each potential class member’s case. Cf. Sosna v. Iowa, 419 U.S.
393, 398 n.4 (1975) (“[T]he absence of a claim for monetary relief
and the nature of the claim asserted disclose that a Rule 23(b)(2)
class action was contemplated. Therefore, the problems [of notice
and opt-out] associated with a Rule 23(b)(3) class action . . . are
not present in this case.”). Because it automatically provides the
right of notice and opt-out to individuals who do not want their
monetary claims decided in a class action, Rule 23(b)(3) is the
appropriate means of class certification when monetary relief is
6
The Advisory Committee Notes do suggest that civil rights
cases are examples of the types of cases generally appropriate for
(b)(2) certification. As at least one commentator has persuasively
demonstrated, however, the Committee’s suggestion must not be
interpreted as evidencing an intent to give special treatment to
civil rights cases. See Rutherglen, supra, 47 U. Chi. L. Rev. at
701-02. To do so would cast doubt on the validity of Rule 23 under
the Rules Enabling Act, id., which provides that the Federal Rules
of Civil Procedure “shall not abridge, enlarge or modify any
substantive right,” 28 U.S.C. § 2072(b). See also Amchem, 117
S. Ct. at 2244 (“Rule 23's requirements must be interpreted in
keeping with Article III constraints, and with the Rules Enabling
Act”).
24
the predominant form of relief sought and the monetary interests of
class members require enhanced procedural safeguards.7
(b)
The fact that the predomination requirement serves to protect
the rights of class members regarding their monetary interests does
not imply, however, that the availability of monetary relief in a
(b)(2) class action depends solely or directly on whether class
7
The plaintiffs argue that because our cases have already held
that members of a (b)(2) class need no absolute right to opt-out
even when monetary relief is sought and made available, see Penson,
634 F.2d at 994; Kincade v. General Tire & Rubber Co., 635 F.2d
501, 507 (5th Cir. Jan. 1981), this class action should be
certified under Rule 23(b)(2), notwithstanding any claims for money
damages. We cannot agree. When we determined in Penson and
Kincade that class members have no absolute right to opt-out of a
(b)(2) class, we did not imply that any form of monetary relief
could therefore be sought in a (b)(2) class action. The issue in
those cases was whether, given a properly certified (b)(2) class,
claims for monetary relief entitled class members to an absolute
right to opt-out, not whether a class seeking monetary relief could
be certified under (b)(2) without regard to the monetary relief
being sought. See Penson, 634 F.2d at 993; Kincade, 635 F.2d at
506-07. Indeed, we all but expressly rejected the plaintiffs’
argument in Nix v. Grand Lodge of the Int’l Ass’n of Machinists &
Aerospace Workers, 479 F.2d 382 (5th Cir. 1973), cert. denied, 414
U.S. 1024 (1974). There, a plaintiff class suing under the Labor-
Management Reporting and Disclosure Act sought injunctive and
declaratory relief as well as compensatory damages. The district
court certified the class under Rule 23(b)(2), but only with
respect to the nonmonetary claims. On appeal, we concluded that
the recovery of class-wide money damages would be highly
speculative without proof of individual injury. See id. at 386.
Given the differing nature of each plaintiff’s claim for money
damages and the problems involved with proving separate damages for
each class member, we held that “the district court wisely used its
discretion to limit the class aspects to the declaratory action.”
Id.
25
members are entitled to notice or opt-out rights. Such a narrow
focus would ignore the other half of the balance struck by the
different categories of Rule 23(b)--the need and efficiency of a
class action. As we have earlier observed, the chief purpose
behind the class action device is to achieve a significant measure
of judicial economy, see Jenkins, 782 F.2d at 471, an interest for
which (b)(2)’s predomination requirement must also account. By
requiring the predomination of injunctive or declaratory remedies,
(b)(2) was intended to serve this purpose by inherently
concentrating the litigation on common questions of law and fact.
See Holmes, 706 F.2d at 1156; Antidiscrimination Class Actions,
supra, at 875-76.
Actions for class-wide injunctive or declaratory relief are
intended for (b)(2) certification precisely because they involve
uniform group remedies. Such relief may often be awarded without
requiring a specific or time-consuming inquiry into the varying
circumstances and merits of each class member’s individual case.
When it does, the relatively complex calculations typically
required in class actions for money damages are unnecessary. For
these reasons, proposed (b)(2) classes need not withstand a court’s
independent probe into the superiority of the class action over
other available methods of adjudication or the degree to which
common issues predominate over those affecting only individual
26
class members, as (b)(3) classes must. See Amchem, 117 S. Ct. at
2245-46; Forbush v. J.C. Penney Co., 994 F.2d 1101, 1105 (5th Cir.
1993); Johnson v. American Credit Co. of Am., 581 F.2d 526, 531 n.9
(5th Cir. 1978); Manual for Complex Litigation § 33.52, at 348-49
(3d ed. 1995).8
(c)
In sum, the predomination requirement of Rule 23(b)(2) serves
essentially the same functions as the procedural safeguards and
efficiency and manageability standards mandated in (b)(3) class
actions. In balancing the competing interests underlying the class
action device, (b)(2)’s predomination requirement serves two basic
8
In Forbush, we held that inquiry into the manageability or
superiority of a class action and whether common issues predominate
over individual ones has “no place in determining whether a class
should be certified under 23(b)(2).” 994 F.2d at 1105; see also
Johnson, 581 F.2d at 531 n.9 (“The defendants argue that the class
[certified under Rule 23(b)(2)] is unmanageable because it is too
large and too diversified. This argument would be relevant only if
Johnson had sought class certification under Rule 23(b)(3).”).
Given that judicial economy is a fundamental purpose of a class
action, the rule announced in Forbush may seem counterproductive.
See Simer v. Rios, 661 F.2d 655, 668 n.24 (7th Cir. 1981), cert.
denied, 456 U.S. 917 (1982). Forbush, however, is entirely
consistent with the language and structure of Rule 23. The rule
expressly and specifically directs district courts to consider the
predomination of common issues and the manageability of a class
action under 23(b)(3). Rule 23(b)(2) contains no such restriction
on class certification. Thus, Forbush merely applies the
time-honored maxim of statutory construction, expressio unius est
exclusio alterius. Clearly, the drafters of Rule 23 found it
unnecessary to place these restrictions expressly on (b)(1) and
(b)(2) class actions because they believed that the nature of the
relief permissible in such actions would inherently account for the
interests served by the restrictions.
27
purposes: first, it protects the legitimate interests of potential
class members who might wish to pursue their monetary claims
individually; and, second, it preserves the legal system’s interest
in judicial economy.
(2)
Consistent with this analysis, we reach the following holding:
monetary relief predominates in (b)(2) class actions unless it is
incidental to requested injunctive or declaratory relief. Accord
Williams v. Owens-Illinois, Inc., 665 F.2d 918, 928-29 (9th Cir.),
cert. denied, 459 U.S. 971 (1982). By incidental, we mean damages
that flow directly from liability to the class as a whole on the
claims forming the basis of the injunctive or declaratory relief.
See Fed. R. Civ. P. 23(b)(2) (referring only to relief appropriate
“with respect to the class as a whole”). Ideally, incidental
damages should be only those to which class members automatically
would be entitled once liability to the class (or subclass) as a
whole is established. See Manual for Complex Litigation, supra, at
348 (citing Simer v. Rios, 661 F.2d 655 (7th Cir. 1981)); see also,
e.g., Arnold v. United Artists Theatre Circuit, Inc., 158 F.R.D.
439 (N.D. Cal. 1994) (defendant’s liability entitled class to a
statutorily mandated damage award). That is, the recovery of
incidental damages should typically be concomitant with, not merely
consequential to, class-wide injunctive or declaratory relief.
28
Moreover, such damages should at least be capable of computation by
means of objective standards and not dependent in any significant
way on the intangible, subjective differences of each class
member’s circumstances. Liability for incidental damages should
not require additional hearings to resolve the disparate merits of
each individual’s case; it should neither introduce new and
substantial legal or factual issues, nor entail complex
individualized determinations. Thus, incidental damages will, by
definition, be more in the nature of a group remedy, consistent
with the forms of relief intended for (b)(2) class actions.
Our holding in this respect is not inconsistent with our cases
permitting back pay under Title VII in (b)(2) class actions. In
Pettway, for example, we noted that Rule 23(b)(2), by its own
terms, does not preclude all claims for monetary relief. See 494
F.2d at 257. We construed (b)(2) to permit monetary relief when it
was an equitable remedy, and the defendant’s conduct made equitable
remedies appropriate. See id. Back pay, of course, had long been
recognized as an equitable remedy under Title VII. See Johnson v.
Georgia Highway Express, Inc., 417 F.2d 1122, 1125 (5th Cir. 1969)
(“[a] demand for back pay is not in the nature of damages, but
rather is an integral part of the statutory equitable remedy”).
Thus, the Pettway court reasoned:
This is a case in which final injunctive relief is
appropriate and the defendant’s liability for back pay is
29
rooted in grounds applicable to all members of the
defined class. Under these circumstances the award of
back pay, as one element of the equitable remedy,
conflicts in no way with the limitations of Rule
23(b)(2).
494 F.2d at 257 (emphasis added). In short, Pettway held that back
pay could be sought in a (b)(2) class action because, as an
equitable remedy similar to other forms of affirmative injunctive
relief permitted in (b)(2) class actions, it was an integral
component of Title VII’s “make whole” remedial scheme. See id. at
252, 257.9 If the instant case involved only claims for equitable
monetary relief, Pettway would control. Pettway, however, did not
address the availability in (b)(2) class actions of other forms of
monetary relief, such as compensatory and punitive damages, nor did
it have any occasion to do so.
As the plaintiffs correctly point out, Pettway stated that the
(b)(2) inquiry into whether one form of relief predominates over
9
Although, as the dissent notes, the Pettway opinion included
some broad language regarding the potential availability of
monetary relief in (b)(2) class actions, our subsequent cases have
not construed Pettway so broadly. As discussed previously, our
cases have adopted the position taken by the Rule 23 advisory
committee that monetary relief may not be sought in a (b)(2) class
action if it predominates over the requested injunctive or
declaratory relief. We do not attempt to say how Pettway is to be
interpreted in the light of these subsequent opinions. Cf., e.g.,
Rutherglen, Notice, Scope, and Preclusion in Title VII Class
Actions, 69 Va. L. Rev. 11, 24-26 (1983) (suggesting that
classification of monetary remedies as legal or equitable may be
unhelpful in understanding what types of monetary relief should be
permitted in a (b)(2) class action).
30
another involves consideration of the “pragmatic ramifications of
adjudication” and the effect of the relief sought, rather than any
special attributes of the class involved. See id. at 256 (citing
3B Moore’s Federal Practice § 23.45[1] at 703 (2d ed. 1969)). The
incidental damages standard actually takes these considerations
into account. We recognize that, as a matter of degree, whether a
given monetary remedy qualifies as incidental damages will not
always be a precise determination. Nor is it intended to be.
“[C]omplex cases cannot be run from the tower of the appellate
court given its distinct institutional role and that it has before
it printed words rather than people.” Richardson v. Byrd, 709 F.2d
1016, 1019 (5th Cir.), cert. denied, 464 U.S. 1009 (1983). The
district courts, in the exercise of their discretion, are in the
best position to assess whether a monetary remedy is sufficiently
incidental to a claim for injunctive or declaratory relief to be
appropriate in a (b)(2) class action.
(3)
Returning to the district court’s decision in the instant
case, we conclude that it applied the correct legal standard in
determining whether to certify a class under Rule 23(b)(2).
Although it was inappropriate for (b)(2) certification to consider
whether issues common to the class predominated over other issues,
see Forbush, 994 F.2d at 1105, the district court’s analysis in
31
this respect was separate from and in addition to its application
of the proper predomination inquiry. It is clear that the district
court concentrated its analysis on the extent to which the various
forms of requested monetary relief would flow directly from a
finding of liability on the plaintiffs’ claims for class-wide
injunctive and declaratory relief. With respect to applying the
correct legal standard for predomination under Rule 23(b)(2),
therefore, we cannot say that the district court erred in any way
requiring reversal.
C
Having determined that the district court adopted the correct
legal standard in assessing the plaintiffs’ monetary claims, we
must now resolve whether it abused its discretion in applying that
standard to deny certification of a class action under Rule
23(b)(2). The plaintiffs’ claims for monetary relief include back
pay, front pay, compensatory damages, punitive damages, prejudgment
interest, attorneys’ fees, and retroactive benefits. Examining the
different forms of monetary relief, the district court concluded
that they did not flow directly from proof of liability on the
aspects of the plaintiffs’ disparate impact or pattern or practice
claims that entitled them to injunctive or declaratory relief.
Entitlement to back pay and other equitable monetary remedies, it
explained, still required separate hearings in which each class
32
member would have to show that the discrimination caused a loss.
Similarly, recovery of compensatory and punitive damages required
particularly individualized proof of injury, including how each
class member was personally affected by the discriminatory conduct.
Thus, the district court held that the claims for money damages
were not sufficiently incidental to the injunctive and declaratory
relief being sought to permit certification under (b)(2).10
We have little trouble affirming the district court’s finding
that the plaintiffs’ claims for compensatory and punitive damages
are not sufficiently incidental to the injunctive and declaratory
relief being sought to permit them in a (b)(2) class action. We
start with the premise that, in this circuit, compensatory damages
for emotional distress and other forms of intangible injury will
not be presumed from mere violation of constitutional or statutory
rights. See Patterson v. P.H.P Healthcare Corp., 90 F.3d 927,
938-40 (5th Cir. 1996), cert. denied, 117 S. Ct. 767 (1997).
Specific individualized proof is necessary, and testimony from the
plaintiff alone is not ordinarily sufficient. See id. at 940;
Price v. City of Charlotte, N.C., 93 F.3d 1241, 1250-54 (4th Cir.
1996). Compensatory damages may be awarded only if the plaintiff
10
Of course, to the extent the district court applied an
incidental damages standard to the plaintiffs’ claims for back pay,
its analysis was flawed. See Pettway, 494 F.2d at 256-57. As we
shall explain, however, see infra Part VII, the district court’s
error in this respect has no effect on the outcome of this appeal.
33
submits proof of actual injury, often in the form of psychological
or medical evidence, or other corroborating testimony from a third
party. See Patterson, 90 F.3d at 940 (citing Carey v. Piphus, 435
U.S. 247, 264 (1978)); Brady v. Fort Bend County, No. 96-20886,
1998 WL 353861, *25-28 (5th Cir. July 2, 1998). The very nature of
these damages, compensating plaintiffs for emotional and other
intangible injuries, necessarily implicates the subjective
differences of each plaintiff’s circumstances; they are an
individual, not class-wide, remedy.11 The amount of compensatory
damages to which any individual class member might be entitled
cannot be calculated by objective standards. Furthermore, by
requiring individualized proof of discrimination and actual injury
to each class member, compensatory damages introduce new and
substantial legal and factual issues. Clearly, after Patterson,
compensatory damages under Title VII and 42 U.S.C. § 1981 are not
incidental to class-wide injunctive or declaratory relief for
discrimination.
11
For example, in Bogard v. Cook, 586 F.2d 399 (5th Cir. 1978),
a civil rights case under section 1983, we pointed out that
“[c]laims for individual damage relief . . . would have required
separate mini-trials for each prisoner,” and for that reason, a
(b)(3) class action, and not a (b)(1) or (b)(2) class action,
“would have been the proper classification” for such a case. Id.
at 409. Even so, we opined, “[g]iven the lack of common questions
of fact as to many of those claims, and the unmanageability of the
suit had they been included, we cannot believe that the district
court would have allowed the claims as part of that action if they
had been recognized as potentially possible.” Id.
34
The plaintiffs’ claims for punitive damages are similarly non-
incidental. Although the plain language of the Civil Rights Act of
1991 could be interpreted to preclude class-wide punitive damages
awards in any case without individualized proof of injury, see 42
U.S.C. § 1981a(b)(1) (punitive damages available if employer acted
with malice or reckless indifference to rights of “aggrieved
individual”), we need not determine today whether it is so
limiting. Assuming punitive damages may be awarded on a class-wide
basis, without individualized proof of injury, where the entire
class or subclass is subjected to the same discriminatory act or
series of acts, no such discrimination is alleged in this case.
The plaintiffs challenge broad policies and practices, but they do
not contend that each plaintiff was affected by these policies and
practices in the same way. Indeed, the plaintiffs seek to certify
a class of a thousand potential plaintiffs spread across two
separate facilities, represented by six different unions, working
in seven different departments, challenging various policies and
practices over a period of nearly twenty years. Some plaintiffs
may have been subjected to more virile discrimination than others:
with greater public humiliation, for longer periods of time, or
based on more unjustifiable practices, for example. Particular
discriminatory practices may have been gradually ameliorated year
by year over the twenty-year period. Some discriminatory policies
35
may have been implemented more--or less--harshly depending on the
department or facility involved.
Punitive damages cannot be assessed merely upon a finding that
the defendant engaged in a pattern or practice of discrimination.
Such a finding establishes only that there has been general harm to
the group and that injunctive relief is appropriate. See Price
Waterhouse v. Hopkins, 490 U.S. 228, 266 (1989) (O’Connor, J.,
concurring in the judgment). Actual liability to individual class
members, and their entitlement to monetary relief, are not
determined until the second stage of the trial. See id.; Dillon v.
Coles, 746 F.2d 998, 1004 (3d Cir. 1984). And because punitive
damages must be reasonably related to the reprehensibility of the
defendant’s conduct and to the compensatory damages awarded to the
plaintiffs, see Patterson, 90 F.3d at 943-44 (citing BMW v. Gore,
116 S. Ct. 1589, 1598-99 (1996)), recovery of punitive damages must
necessarily turn on the recovery of compensatory damages. Thus,
punitive damages must be determined after proof of liability to
individual plaintiffs at the second stage of a pattern or practice
case, not upon the mere finding of general liability to the class
at the first stage. Moreover, being dependent on non-incidental
compensatory damages, punitive damages are also non-incidental--
requiring proof of how discrimination was inflicted on each
plaintiff, introducing new and substantial legal and factual
36
issues, and not being capable of computation by reference to
objective standards.
Given the degree to which recovery of compensatory and
punitive damages requires individualized proof and determinations,
they clearly do not qualify as incidental damages in this case.12
Such damages, awarded on the basis of intangible injuries and
interests, are uniquely dependent on the subjective and intangible
differences of each class member’s individual circumstances. We
12
The plaintiffs’ reliance on Parker v. Local Union No. 1466,
United Steelworkers of Am., AFL-CIO, 642 F.2d 104 (5th Cir. Unit B
April 1981) (per curiam), for the proposition that claims for
compensatory and punitive damages are properly certified under Rule
23(b)(2) is misplaced. First and foremost, the Parker court was
operating under the assumption that compensatory and punitive
damages could be presumed from violation of the plaintiffs’ rights,
see Gore v. Turner, 563 F.2d 159, 164 (5th Cir. 1977), a rule
adopted before Carey and Patterson. Second, under the abuse of
discretion standard, we are required to defer to the judgments of
the district courts as to whether certain monetary relief
predominates over injunctive or declaratory relief in any given
case. See Nix v. Grand Lodge of the Int’l Ass’n of Machinists &
Aerospace Workers, 479 F.2d 382, 386 (5th Cir. 1973) (refusal to
certify class action under Rule 23(b)(2) on claims for compensatory
damages was not an abuse of discretion), cert. denied, 414 U.S.
1024 (1974). Reasonable differences in judgment are part and
parcel of the substantial discretion district courts maintain over
certification of class actions. See, e.g., Boughton v. Cotter
Corp., 65 F.3d 823, 827 (10th Cir. 1995) (no abuse of discretion in
refusing to certify class seeking predominantly money damages).
Finally, to the extent Parker is inconsistent with Nix, a case also
decided under the Labor Management Reporting and Disclosure Act, we
are bound to follow Nix, the earlier of the two decisions. See
Texaco v. Louisiana Land & Exploration Co., 995 F.2d 43, 44 (5th
Cir. 1993) (“[i]n the event of conflicting panel opinions, the
earlier one controls”). We do so by affirming the district court’s
decision that claims for compensatory and punitive damages were not
properly certifiable in a (b)(2) class action.
37
cannot, therefore, detect an abuse of discretion in the district
court’s finding that the plaintiffs’ claims for compensatory and
punitive damages were inappropriate for (b)(2) certification.13
VI
A
Given that the district court acted within its discretion in
denying class certification of the entire action under Rule
23(b)(2) because of the predomination of money damages in this
case, we next consider the plaintiffs’ argument that the district
court erred in refusing to certify a “hybrid” class action, whereby
the plaintiffs’ claims for compensatory and punitive damages would
13
The plaintiffs are apprehensive that such a holding will
preclude (b)(2) class actions in civil rights cases. They suggest
that class representatives may no longer be adequate under Rule
23(a)(4) because they would not be able to seek for the class the
full (monetary) recovery otherwise available to its members on an
individual basis. In the first place, we are not certain that an
adequacy of representation problem would exist under these
circumstances. But even if it would, this concern might well be
addressed, it seems to us, through the use of the notice and opt-
out mechanisms under Rule 23(d), see, e.g., Penson, 634 F.2d at
994; Eubanks, 110 F.3d at 93, 96, provided the other criteria for
class certification have been met. Those members of the putative
class who ultimately did not wish to participate in the class
action could simply opt out. Indeed, we have long-required notice
in (b)(2) class actions in which equitable monetary claims are at
stake. See Johnson, 598 F.2d at 438. By providing (b)(2) class
members with the procedural safeguards of notice and opt-out, the
district court can permit civil rights class actions to proceed
under 23(b)(2) without requiring that such actions meet the stiffer
substantive requirements of 23(b)(3), yet still ensure that the
class representatives adequately represent the interests of unnamed
class members.
38
be certified under Rule 23(b)(3), and the rest of the class action
certified under Rule 23(b)(2). Rule 23(b)(3) permits certification
of a class action otherwise meeting the requirements of Rule 23(a)
when:
the court finds that the questions of law or fact common
to the members of the class predominate over any
questions affecting only individual members, and that the
class action is superior to other methods for a fair and
efficient adjudication of the controversy. The matters
pertinent to the findings include: (A) the interests of
the members of the class in individually controlling
prosecution or defense of separate actions; (B) the
extent and nature of any litigation concerning the
controversy already commenced by or against members of
the class; (C) concentrating the litigation of the claims
in a particular forum; (D) the difficulties likely to be
encountered in management of a class action.
The plaintiffs argue that these requirements are clearly satisfied
in this case. They contend that the (b)(3) predominance standard
focuses on the issue of liability, and if the liability issues are
common to the class, common questions predominate over individual
ones, citing In re Kirschner Med. Corp. Sec. Litig., 139 F.R.D. 74
(D. Md. 1991). The plaintiffs insist further that, here, a class
action is plainly superior to hundreds of individual lawsuits.
The district court disagreed. It concluded that, class action
or not, Citgo’s liability for compensatory and punitive damages
could be established only through examination of each plaintiff’s
individual circumstances. Individual issues therefore predominated
the litigation. Furthermore, the district court expressed concern
39
that individualized monetary damages determinations for more than
a thousand potential plaintiffs would require multiple juries.
This concern, as well as the potential overlap of issues that would
be decided in bifurcated proceedings, implicated significant
Seventh Amendment, efficiency, and manageability problems.
B
In assessing whether the district court abused its discretion
in refusing to certify a (b)(3) class action, we begin with this
circuit’s most recent case on Rule 23(b)(3) analysis, Castano v.
American Tobacco Co., 84 F.3d 734 (5th Cir. 1996). Castano makes
clear that deciding whether common issues predominate and whether
the class action is a superior method to resolve the controversy
requires an understanding of the relevant claims, defenses, facts,
and substantive law presented in the case. Id. at 744. As we have
discussed previously, Patterson holds that the recovery of
compensatory and punitive damages in Title VII cases requires
individualized and independent proof of injury to, and the means by
which discrimination was inflicted upon, each class member. See 90
F.3d at 938-44. The plaintiffs’ claims for compensatory and
punitive damages must therefore focus almost entirely on facts and
issues specific to individuals rather than the class as a whole:
what kind of discrimination was each plaintiff subjected to; how
did it affect each plaintiff emotionally and physically, at work
40
and at home; what medical treatment did each plaintiff receive and
at what expense; and so on and so on. Under such circumstances, an
action conducted nominally as a class action would “degenerate in
practice into multiple lawsuits separately tried.” Castano, 84
F.3d at 745 n.19 (citing Fed. R. Civ. P. 23 (advisory committee
notes)).
The predominance of individual-specific issues relating to the
plaintiffs’ claims for compensatory and punitive damages in turn
detracts from the superiority of the class action device in
resolving these claims. See id. (explaining that the greater the
number of individual issues, the less likely superiority can be
established); see also Andrews v. AT&T, 95 F.3d 1014, 1023 (11th
Cir. 1996). These manageability problems are exacerbated by the
fact that this action must be tried to a jury and involves more
than a thousand potential plaintiffs spread across two separate
facilities, represented by six different unions, working in seven
different departments, and alleging discrimination over a period of
nearly twenty years. See, e.g., In re Chevron U.S.A., Inc., 109
F.3d 1016, 1018 (5th Cir. 1997) (considering the use of bellwether
trials to resolve mass torts with widely diverse issues). In order
to manage the case, the district court faced the likelihood of
bifurcated proceedings before multiple juries. This result in turn
increased the probability that successive juries would pass on
41
issues decided by prior ones, introducing potential Seventh
Amendment problems and further decreasing the superiority of the
class action device. See Castano, 84 F.3d at 750-51; In re Rhone-
Poulenc Rorer, Inc., 51 F.3d 1293, 1302-03 (7th Cir. 1995).
Finally, the “most compelling rationale for finding superiority in
a class action--the existence of a negative value suit,” is missing
in this case. Castano, 84 F.3d at 748; see also Amchem, 117 S. Ct.
at 2246. The relatively substantial value of these claims (for the
statutory maximum of $300,000 per plaintiff) and the availability
of attorneys’ fees eliminate financial barriers that might make
individual lawsuits unlikely or infeasible. See Castano, 84 F.3d
at 748. Thus, the principles underlying the (b)(3) class action
counsel against (b)(3) certification in this case.
The plaintiffs attempt to avoid this result by arguing that
the common, overarching issue regarding the existence of plant-wide
racially discriminatory practices or policies at the Citgo
manufacturing complex justifies (b)(3) class certification. This
argument, however, fails to appreciate the overwhelming number of
individual-specific issues in this case. The Eleventh Circuit
recently encountered this situation in rejecting (b)(3) class
certification in a race discrimination suit similar to this one.
In Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999 (11th Cir.
1997), plaintiffs alleged that Motel 6 engaged in a nationwide
42
practice of racial discrimination in renting vacant rooms and
providing housekeeping services. The district court certified a
class action under Rule 23(b)(3). The Eleventh Circuit reversed,
holding that class certification was an abuse of discretion.14 The
court reasoned that the plaintiffs’ claims would require
“distinctly case-specific inquiries into the facts surrounding each
alleged incident of discrimination.” Id. at 1006. It found
dispositive the fact that “most, if not all, of the plaintiffs’
claims [would] stand or fall, not on the answer to the question
whether Motel 6 has a practice or policy of discrimination, but on
the resolution of these highly case-specific issues.” Id. We find
the same logic applicable to the plaintiffs’ claims for
compensatory and punitive damages in the instant case. The success
of these claims will turn ultimately on the special circumstances
of each individual’s case. Accordingly, we hold that the district
court did not abuse its discretion in refusing to certify these
claims in a class action under Rule 23(b)(3). See, e.g., Howard v.
City of Greenwood, 783 F.2d 1311, 1313 n.2 (5th Cir. 1986)
(rejecting certification of a (b)(3) class action because the
14
The court dismissed, without analysis, the possibility that
the case could be certified as a (b)(2) class action. See id. at
1005 (“[t]he only one of Rule 23's alternatives that is arguably
fulfilled by the Jackson plaintiffs’ claims is that found in Rule
23(b)(3)”).
43
plaintiffs’ claims of systemic police brutality involved a
predomination of individualized issues).15
VII
Finally, the plaintiffs argue that, in the event their claims
for compensatory and punitive damages cannot be certified in a
class action at this initial stage of the litigation, they are
entitled to have some part of this case certified now and tried as
a class action to whatever extent permissible under Rule 23. More
specifically, as we understand the plaintiffs’ argument, they
suggest that the court should certify a class action on the
disparate impact claim and the first stage of the pattern or
practice claim--under Rule 23(b)(2) or 23(b)(3)--and reserve
judgment on whether to certify under 23(b)(3) the other claims--
including the claims for compensatory and punitive damages--until
these initial issues have been resolved. The record is not
15
The plaintiffs argue that we could break the class into
subclasses to avoid manageability problems, yet they have never
offered us or the district court any workable plan for doing so.
As the district court expressly observed: “[T]he plaintiffs have
failed to present the court with a practical plan for handling this
action as a class action despite the request from the court to do
so. Other than a generalized claim that bifurcating the trial into
liability and damages stages would be helpful, the plaintiffs have
offered no specific methods for handling the various issues and
theories alleged in this action.” Celestine v. Citgo Petroleum
Corp., 165 F.R.D. 463, 471 (W.D. La. 1995). Without any help from
the plaintiffs, the district court certainly did not abuse its
discretion in not attempting to devise a workable subclassing plan
of its own.
44
entirely clear as to whether the plaintiffs advanced this same
position below. Nevertheless, they did consistently maintain that,
if the district court certified a class action, it could always
modify or limit certification under Rule 23(c)(1), depending on the
facts and issues developed in discovery. In response, the district
court expressly considered severing particular claims for class
action treatment--for example, certifying a class action on only
the claims for injunctive relief. It declined to do so, however,
based on concerns for the Seventh Amendment as well as the
efficiency and manageability implications of the plaintiffs’ jury
demand. We will therefore consider the possibility of severing the
first stage of the pattern or practice claim for certification
under (b)(2) or (b)(3), and allowing the district court to try it
and the disparate impact claim together to a jury--the court
reserving its equitable determinations until after the jury submits
its findings.16
16
The plaintiffs briefly raise the possibility that this case
could be certified as a class action under Rule 23(b)(1) because
the prosecution of separate actions would create the risk of
inconsistent adjudications with respect to individual class members
and incompatible standards of conduct for Citgo. See Fed. R. Civ.
P. 23(b)(1)(A). Given the individual-specific nature of the
plaintiffs’ claims for compensatory and punitive damages, we
perceive no risk of inconsistent adjudications or incompatible
standards of conduct in having those claims adjudicated separately.
Separate adjudication of the plaintiffs’ claims for injunctive or
equitable relief, however, may present such a risk. But we have
already noted that these claims meet the requirements of Rule
23(b)(2), and because the Seventh Amendment ultimately precludes a
45
A
(1)
We should make clear from the outset that in asserting this
partial certification argument, the plaintiffs have not agreed to
drop their claims for compensatory and punitive damages as a class
action issue. In making their argument for a tentative, “partial
certification,” the plaintiffs are relying presumably on the
possibility that class-wide discovery and the resolution of the
disparate impact claim and first stage of the pattern or practice
claim may narrow the issues in the case, which in turn may make
later certification of the remaining claims in a (b)(3) class
action appropriate. Cf., e.g., Butler v. Home Depot, 70 Fair Empl.
Prac. Cas. (BNA) 51 (N.D. Cal. 1996) (certifying class action on
the first stage of a pattern or practice case and reserving
judgment on certification of the second stage). The plaintiffs’
choice to preserve the claims for compensatory and punitive damages
as a class action issue, however, has significant implications for
certification of the remaining issues.
First, we fail to see how certifying the first stage of the
pattern or practice claim significantly increases the likelihood
class action in this case regardless of the Rule 23(b) provision
under which the action could be certified, we need not consider
whether the plaintiffs’ equitable claims could also be certified
under Rule 23(b)(1).
46
that later certification of the second stage of the pattern or
practice claim, including the claims for compensatory and punitive
damages, would be possible. The second stage of a pattern or
practice claim is essentially a series of individual lawsuits,
except that there is a shift of the burden of proof in the
plaintiff’s favor. As the Supreme Court has made clear, there are
no common issues between the first stage of a pattern or practice
claim and an individual discrimination lawsuit. See Cooper v.
Federal Reserve Bank, 467 U.S. 867, 877-80 (1984). As a result, we
see no legal basis for the district court to certify a class action
on the first stage of the plaintiffs’ pattern or practice claim
when there is no foreseeable likelihood that the claims for
compensatory and punitive damages could be certified in the class
action sought by the plaintiffs. Thus, we cannot say that the
district court’s refusal to grant a partial certification of the
first stage of the plaintiffs’ pattern or practice claim was an
abuse of discretion.
Second, certifying the first stage of the pattern or practice
claim under (b)(3) is foreclosed by Castano. We have already held
that, when considered as a whole, the plaintiffs’ pattern or
practice claim in this case implicates predominantly individual-
specific issues. We based this holding on the wide array of
individual issues attendant to the compensatory and punitive
47
damages claims. Thus, under the plaintiffs’ theory, certification
of the first stage of the pattern or practice claim would be
appropriate presumably because individual-specific issues would be
“severed”--but only temporarily--under Rule 23(c)(4), making issues
common to the class predominant (at least theoretically) for the
purposes of meeting the (b)(3) requirements. But such an attempt
to “manufacture predominance through the nimble use of subdivision
(c)(4)” is precisely what Castano forbade. See 84 F.3d at 745
n.21. As the court explained, “[r]eading rule 23(c)(4) as allowing
a court to sever issues until the remaining common issue
predominates over the remaining individual issues would eviscerate
the predominance requirement of rule 23(b)(3); the result would be
automatic certification in every case where there is a common
issue, a result that could not have been intended.” Id.17
(2)
17
We further note that the plaintiffs’ attempts at piecemeal
certification of a class action, which they refuse to limit
voluntarily, distorts the certification process and ultimately
results in unfairness to all because of the increased uncertainties
in what is at stake in the litigation and in whether the litigation
will ever resolve any significant part of the dispute. The
plaintiffs have emphasized that class certification will
“facilitate” settlement. We are not sure of such a result. In any
event, we should not condone a certification-at-all-costs approach
to this case for the simple purpose of forcing a settlement.
Settlements should reflect the relative merits of the parties’
claims, not a surrender to the vageries of an utterly unpredictable
and burdensome litigation procedure.
48
Consequently, the plaintiffs are left with the possibility of
certifying a class action only on the disparate impact claim--
again, holding in abeyance the decision whether to certify the
pattern or practice claim at a later time. As noted previously,
injunctive, declaratory, and other forms of equitable relief such
as back pay are available to a disparate impact claimant and in
class actions certified under Rule 23(b)(2). Indeed, our cases
have held that failure to certify a class action on such claims may
amount to an abuse of discretion. See, e.g., Johnson, 491 F.2d at
1375. Furthermore, resolution of the entire disparate impact claim
could conceivably narrow the issues to be tried in the pattern or
practice claim. It is arguable that the court would have a better
understanding of Citgo’s employment policies--e.g., which
plaintiffs were subjected to which policies in which department or
facility, when and for how long. And it may be likely that class
members without colorable claims could be identified, which would
decrease the size of the class and the number of individual-
specific issues. This, in turn, could make the case more
manageable as a jury trial and make the class action device a
superior method for adjudicating the controversy. Thus, in the
context of the plaintiffs’ partial certification argument, we will
consider the possibility of certifying a class action on the
disparate impact claim, with the district court reserving judgment
49
on whether to certify the pattern or practice claim under Rule
23(b)(3) until the disparate impact claim has been resolved.18
The standards of Rule 23, however, are not the only
limitations on the availability of a class action in this case. As
the district court recognized, the right to a jury trial provided
by the Civil Rights Act of 1991, and demanded by the plaintiffs,
implicates the Seventh Amendment. We therefore consider whether
Seventh Amendment concerns preclude a class action on the
plaintiffs’ disparate impact claim, severed from their pattern or
practice claim.
B
The Seventh Amendment preserves the right to a jury trial “in
Suits at common law.” U.S. Const. amend. VII. This right
encompasses all actions in which legal rights are to be determined,
as opposed to those in which only equitable rights and remedies are
involved. Cox v. C.H. Masland & Sons, Inc., 607 F.2d 138, 142 (5th
Cir. 1979) (citing Ross v. Bernhard, 396 U.S. 531 (1970)). Of
course, application of the Seventh Amendment is not limited to
actions at common law. Legal rights, to which the right to a jury
trial attaches, may be statutorily created as well. Curtis v.
Loether, 415 U.S. 189, 194 (1974). Section 1981a of the Civil
18
Of course, in speaking of a disparate impact claim, we are
referring to the entire claim, for all forms of available relief--
including individual monetary relief such as back pay.
50
Rights Act of 1991 is such a statute. It grants both parties the
right to demand a jury trial when compensatory and punitive damages
are sought in intentional discrimination claims under Title VII.
See 42 U.S.C. § 1981a(c).
Because the statute expressly provides that compensatory and
punitive damages are not available in disparate impact claims, see
§ 1981a(a)(1), the right to a jury trial under Title VII extends
only to the plaintiffs’ pattern or practice claim, see § 1981a(c).19
Once the right to a jury trial attaches to a claim, however, it
extends to all factual issues necessary to resolving that claim.
See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11 (1959).
Thus, under section 1981a, the right to a jury trial extends to all
factual issues necessary to determine liability on the plaintiffs’
pattern or practice claim and the recovery of compensatory and
punitive damages.
19
Of course, even in pattern or practice cases involving
requests for compensatory and punitive damages, the right to a jury
trial provided by section 1981a(c) does not include the power to
determine the availability of back pay or front pay. See §
1981a(b)(2) (“Compensatory damages awarded under this section shall
not include backpay, interest on backpay, or any other type of
relief authorized under [42 U.S.C. § 2000e-5(g)].”). These are
equitable remedies to which no right to jury trial attaches. See
Wilson v. Belmont Homes, Inc., 970 F.2d 53, 55-56 (5th Cir. 1992)
(no right to have a jury determine back pay because it is an
equitable remedy under Title VII); Johnson v. Chapel Hill Indep.
Sch. Dist., 853 F.2d 375, 383 (5th Cir. 1986) (front pay is
equitable remedy like back pay under Title VII). Nevertheless, a
district court may empanel an advisory jury on such issues in
accordance with Rule 39(c) of the Federal Rules of Civil Procedure.
51
The Federal Rules of Civil Procedure also act to protect the
parties’ right to a jury trial, once one is demanded, on the claims
for compensatory and punitive damages. Rule 38(d) provides that
once a party has demanded a jury trial, the demand cannot be
withdrawn without the consent of both parties.20 Moreover, a
general demand will be deemed to extend to all issues in the case
triable to a jury. Fed. R. Civ. P. 38(c). Thus, the jury demand
in this case extends to all issues that materially relate to
liability on the pattern or practice claims and the recovery of
compensatory or punitive damages; on the other hand, the jury
demand itself does not reach the disparate impact claim or any
equitable relief.
Resolution of the disparate impact claim and of equitable
remedies must nevertheless take into account the Seventh Amendment.
When claims involving both legal and equitable rights are properly
joined in a single case, the Seventh Amendment requires that all
factual issues common to these claims be submitted to a jury for
decision on the legal claims before final court determination of
the equitable claims. Roscello v. Southwest Airlines Co., 726 F.2d
217, 221 (5th Cir. 1984) (citing Dairy Queen, Inc. v. Wood, 369
U.S. 469, 479 (1962)); see also Ross, 396 U.S. at 537-38. In this
20
Neither party has consented to withdrawing the demand in this
case.
52
case, both parties have a Seventh Amendment right to have a jury
determine all factual issues necessary to establish the plaintiffs’
pattern or practice claim, a claim for legal damages that they have
properly joined in the same action with a disparate impact claim
for equitable relief. As a result, each factual issue common to
these claims,21 if any, must be decided by the jury before the
district court considers the merits of the disparate impact claim
and whether the plaintiffs are entitled to any equitable relief.
See Ward v. Texas Employment Comm’n, 823 F.2d 907, 908-09 (5th Cir.
1987).
C
In deciding whether the district court should have temporarily
severed the disparate impact claim for class treatment, we must
ascertain whether this claim shares any factual issues with the
pattern or practice claim, which both parties are entitled to have
decided first by a jury.
21
The existence of common factual issues is to be distinguished
from the existence of overlapping evidence. For purposes of the
Seventh Amendment, the question is whether factual issues overlap,
thus requiring one trier-of-fact to decide a disputed issue that
must be decided by a subsequent jury, not whether the two fact-
finders will merely have to consider similar evidence in deciding
distinct issues. See Alabama v. Blue Bird Body Co., 573 F.2d 309,
318-19 (5th Cir. 1978).
53
Because the same employment policies and practices are
challenged under both claims,22 it is clear that there are over-
lapping issues. First and foremost, an essential factual element
of both claims is a finding that the challenged employment practice
caused each individual class member to suffer an adverse employment
action (e.g., whether each individual class member failed a
challenged employment test and was not hired because of that
failure). Indeed, in resolving either claim, the trier of fact
must determine whether each class member was even in a position to
be affected by the challenged employment practice (e.g., whether
each class member applied for an open job). Furthermore, as Judge
Skelly Wright explained in Segar v. Smith, significant overlap of
factual issues is almost inevitable whenever disparate impact and
pattern or practice claims are joined in the same action:
[T]he employer’s effort to rebut the pattern or practice
claim by articulating a legitimate nondiscriminatory
explanation may have the effect of putting before the
court all of the elements of a traditional disparate
impact case. By its explanation of an observed disparity
the employer will typically pinpoint an employment
practice (or practices) having a disparate impact on a
22
Recall that the plaintiffs identified the following employ-
ment practices as resulting in unlawful race discrimination: (1)
failure to post or announce job vacancies; (2) use of an informal
word-of-mouth announcement process for filling job vacancies; (3)
use of racially biased tests to evaluate candidates for hire or
promotion; and (4) use of a subjective decision-making process by
a predominantly white supervisory staff in reviewing applicants for
hire and employees for promotion.
54
protected class. And to rebut plaintiffs’ case the
employer will typically be required to introduce evidence
showing that the employment practice in fact caused the
observed disparity. In this situation, between the
plaintiffs’ prima facie showing of disparity and the
defendant’s rebuttal explanation of the disparity, the
essential elements of a disparate impact case will have
been placed before the trier of fact.
738 F.2d 1249, 1268-70 (D.C. Cir. 1984), cert. denied, 471 U.S.
1115 (1985); see also Fentonmiller, Damages, Jury Trials and the
Class Action under the Civil Rights Act of 1991, 12 Lab. Law. 421,
438-46 (1997).
Similarly, the business necessity defense to disparate impact
claims and the legitimate nondiscriminatory reason defense to
disparate treatment claims are not “so distinct and separable” from
one another that they may be considered separately by multiple
factfinders without violating the Seventh Amendment. See Gasoline
Prod. Co. v. Champlin Refining Co., 283 U.S. 494, 500 (1931). To
rebut the plaintiffs’ claim that any one of Citgo’s challenged
employment practices resulted in a disparate impact, Citgo would
have to establish that the “challenged practice is job-related for
the position in question and consistent with business necessity.”
42 U.S.C. § 2000e-2(k)(1)(A)(I). It is the rare case indeed in
which a challenged practice is job-related and a business
necessity, yet not a legitimate nondiscriminatory reason for an
adverse employment action taken pursuant to that practice. Thus,
a finding that a challenged practice is job related and a business
55
necessity in response to a disparate impact claim strongly, if not
wholly, implicates a finding that the same practice is a legitimate
nondiscriminatory reason for the employer’s actions in a pattern or
practice claim. These issues are questions of fact, see, e.g., St.
Mary’s Honor Ctr. v. Hicks, 509 U.S. 502, 524 (1993); Wards Cove
Packing Co. v. Atonio, 490 U.S. 642, 660 (1989), common to the
plaintiffs’ disparate impact and pattern or practice claims.23
23
The plaintiffs have argued that Cooper v. Federal Reserve
Bank, 467 U.S. 867 (1984), stands for the proposition that there is
no overlap of factual issues among their claims. We disagree. In
Cooper, the Supreme Court held that an adverse judgment at the
liability stage of a pattern or practice class action does not
automatically preclude--by virtue of res judicata or collateral
estoppel--individual discrimination lawsuits by class members. See
id. at 880. The Court reasoned that “the existence of a valid
individual claim does not necessarily warrant the conclusion that
the individual plaintiff may successfully maintain a class action
[while] [i]t is equally clear that a class plaintiff’s attempt to
prove the existence of a companywide policy . . . may fail even
though discrimination against one or two individuals has been
proved.” Id. at 877-78. At the first or liability stage of a
pattern or practice case, the plaintiffs seek to prove that
discrimination was the defendant’s standard operating procedure.
See id. at 876. The focus will be not on individual hiring
decisions, but on the existence of a pattern or practice of
discriminatory decision-making. Id. In other words, the liability
stage of a pattern or practice class action does not necessarily
implicate the same factual issues as an individual discrimination
lawsuit brought separately by a class member. See id. at 881.
However, the same cannot be said of the plaintiffs’ disparate
impact and pattern or practice claims in this case. The same
policies and practices are challenged under both claims. As a
result, overlap of factual issues between the two claims is
inevitable. Because Cooper did not consider the issues presented
by this case, it is inapposite.
56
In sum, the existence of factual issues common between the
plaintiffs’ disparate impact and pattern or practice claims
precludes trial of the disparate impact claim in a class action
severed from the remaining nonequitable claims in the case. The
claims for injunctive relief, declaratory relief, and any equitable
or incidental monetary relief cannot be litigated in a class action
bench trial (in the same case prior to certification of any aspects
of the pattern or practice claim) without running afoul of the
Seventh Amendment. See Roscello, 726 F.2d at 221. Nor may they be
advanced in a subsequent class action without being barred by res
judicata and collateral estoppel, see Montana v. United States, 440
U.S. 147, 153 (1979); Nilson v. City of Moss Point, 701 F.2d 556,
559-64 (5th Cir. 1983) (en banc), because all of the common factual
issues will already have been decided, or could have been decided,
in the prior litigation. The district court, therefore, did not
abuse its discretion in denying partial certification in a
temporarily severed class action nor in denying class certification
on any or all aspects of this case.24
24
We end by saying that neither the holdings of the district
court nor this court have denied any of the plaintiffs a right to
trial on the merits of his or her claims. The district court
suggested that it would go forward resolving the claims in this
case through the use of consolidated actions. See Celestine, 165
F.R.D. at 471-72. We have encouraged district courts to use
consolidation under Fed. R. Civ. P. 42(a) to deal with these types
of situations, see, e.g., Woolen v. Surtran Taxicabs, Inc., 684
F.2d 324, 334 (5th Cir. 1982); see also generally In re Fibreboard
57
VIII
In summary, we hold that nonequitable monetary relief may be
obtained in a class action certified under Rule 23(b)(2) only if
the predominant relief sought is injunctive or declaratory. Claims
for such monetary relief predominate unless they are incidental to
related claims for injunctive or declaratory relief. Incidental
damages are damages that flow directly from liability to the class
as a whole on claims forming the basis of the injunctive or
declaratory relief. Because the district court adopted the correct
standard for certifying class actions under Rule 23(b)(2), and
correctly applied that standard in finding that the plaintiffs’
claims for compensatory and punitive damages are not incidental
damages in this case, it did not abuse its discretion in denying
(b)(2) class certification of these claims. Furthermore, because
these claims require individualized proof and determinations, the
district court did not err in finding that issues common to the
proposed class do not predominate over those affecting only
individual plaintiffs and that a class action would not be a fair
and efficient method for adjudicating these claims. The district
Corp., 893 F.2d 706 (5th Cir. 1990), and we approve of the district
court’s attempt to do so here. We cannot help but observe that,
even if Rule 23 was somehow appropriate to address this complex,
multi-faceted action, it would hardly serve to provide a more
efficient resolution of this case than a series of consolidated
actions.
58
court did not, therefore, abuse its discretion in denying class
certification of these claims under Rule 23(b)(3). Finally, we
hold that the Seventh Amendment precludes a partial certification
of a class action on the plaintiffs’ claims for equitable relief,
with the court reserving judgment on whether to certify a class
action on the remaining claims until later proceedings.
In accordance with the above-stated reasons, the judgment of
the district court is
A F F I R M E D.
ENDRECORD
59
DENNIS, J., Circuit Judge, dissenting:
I respectfully dissent.
The majority incorrectly holds that African Americans who
claim to have been harmed by Citgo’s alleged unlawful racially
discriminatory employment policies and practices cannot bring a
class action under Federal Rule of Civil Procedure 23(b)(2) to
enforce collectively their rights and remedies afforded for such
violations under both the 1991 Civil Rights Act and Title VII of
the 1964 Civil Rights Act.
The primary purposes of Title VII are to deter and abolish
racial and other discrimination in employment and to make
discriminatees whole. By the 1991 Civil Rights Act, Congress
expressly intended to further these goals more effectively by
affording in a Title VII action limited compensatory and punitive
damage remedies to disparate treatment victims. The majority
concludes, however, that the legislative intent of the 1991 Civil
Rights Act cannot be effectuated in a Rule 23(b)(2) class action.
The majority reaches this conclusion by erroneously
interpreting Rule 23(b)(2) as disallowing certification of a class
action under that subdivision whenever the plaintiffs seek
compensatory or punitive damages for individual members of the
class in addition to injunctive and declaratory relief. The
60
majority’s preclusive interpretation is built on nothing more than
its own assertion that, in effect, the prayer for such damages
gives rise to a conclusive or irrebuttable presumption that the
final relief sought by the plaintiffs relates exclusively or
predominantly to money damages, rather than to the final injunctive
relief or corresponding declaratory relief with respect to the
class as a whole.
The majority’s decision rests on a conception of Rule 23(b)(2)
that is irreconcilable with the basic purposes of Rule 23, the text
of Rule 23(b)(2), the Advisory Committee Notes on Rule 23(b)(2),
the exercise of informed and sound discretion by the district court
in deciding whether to certify a class, and Rule 23(b)(2)’s proven
effectiveness and unique appropriateness in civil rights cases,
especially Title VII actions. Rule 23 plainly limits this court’s
judicial inventiveness; we have no authority to require a district
court to automatically disallow (b)(2) certification simply because
a member of the class seeks compensatory or punitive damages in
addition to final injunctive relief. Rather, Rule 23 obliges the
trial court to conduct a rigorous analysis, often necessarily
probing behind the pleadings, before exercising its own broad
discretion within the framework of the rule to decide whether to
certify a class.
I.
61
The majority opinion introduces a new interpretation of Rule
23 (b)(2) which provides, in effect, that a class action cannot be
certified under that subdivision when the plaintiffs seek
individual compensatory or punitive damages in addition to
injunctive or declaratory relief under Title VII. That
interpretation is based on a circuitous rationale: (i) a claim for
monetary relief automatically predominates and defeats
certification of a (b)(2) class unless it is “incidental” to
requested injunctive or declaratory relief; (ii) “incidental”
damages are those that flow directly and automatically from
liability to the class as a whole on the claims forming the basis
of the injunctive or declaratory relief; (iii) “incidental” damages
are those that do not require additional hearings to resolve the
merits of each individual’s case and that do not introduce new and
substantial legal or factual issues or complex individualized
determinations; (iv) except that, a request for individualized back
pay awards under Title VII may be included without defeating
certification of a (b)(2) class.*
*
The majority is forced to create an exception to its
“incidental” damages rule in order to preserve our case law
permitting (b)(2) certifications when both injunctive and monetary
relief (back pay) were sought under Title VII. See, e.g., Pettway
v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974).
Although back pay has often been characterized as an equitable
remedy for practical purposes, functionally there is little to
distinguish back pay awards from compensatory damages. Both
62
The majority states that under its rule the district courts
have discretion to decide whether monetary damages sought are
“incidental.” However, the majority’s definition of “incidental
damages” unquestionably excludes all individual compensatory and
punitive damages. Consequently, under the majority’s rule a
district court cannot certify a (b)(2) class action suit seeking
any such damages without committing an abuse of discretion or an
error of law. Therefore, the trial court’s discretion to determine
whether damages are “incidental” is illusory. Because of this
formulation, trial courts in this circuit will, in fact, have no
require complex individualized determinations, Johnson v. Goodyear
Tire and Rubber Co., 491 F.2d 1364, 1375 (5th Cir. 1974) (“There
should be a separate determination on an individual basis as to who
is entitled to recover[] [back pay] and the amount of such
recovery.”); Shipes v. Trinity Indust., 987 F.2d 311, 317 (5th
Cir.) (“[F]ashioning a class-wide back pay award is exceedingly
complex and difficult . . . .”), cert. denied, 510 U.S. 991 (1993),
of t he sort eschewed by the majority’s new “incidental” damages
test. Moreover, the equitable characterization of back pay as the
only basis for allowing back pay award in a (b)(2) case was
explicitly rejected by the court in Frank v. Bowman Transp., 495
F.2d 398, 422 (5th Cir. 1974) (“Even if back pay is considered as
equivalent to damages [and not equitable] under Rule 23, in this
case back pay is not the exclusive or predominant remedy sought.”).
Even with the back pay exception, the majority’s formulation runs
afoul of our precedent which has held that compensatory and
punitive damages may be recovered in a (b)(2) class action in
situations where they would not be “incidental” as so defined by
the majority. See, e.g., Parker v. Local Union No. 1466, 642 F.2d
104, 107 (5th Cir. 1981).
63
discretion to certify a (b)(2) class where individual compensatory
and punitive damage claims are sought.**
A.
The majority’s rule absolutely precluding compensatory and
punitive damages claims in (b)(2) class actions patently conflicts
with or does not demonstrably further the basic purposes served by
class action suits. The fundamental aims of class actions are (1)
“to promote judicial economy and efficiency by obviating the need
for multiple adjudications of the same issues[,]” 5 JAMES WM. MOORE,
MOORE’S FEDERAL PRACTICE § 23.02 (3d ed. 1998) (citing General Tel. Co.
Of Southwest v. Falcon, 457 U.S. 147, 156 (1982) and American Pipe
& Constr. Co. v. Utah, 414 U.S. 538, 553 (1974)), (2) “to afford
aggrieved persons a remedy if it is not economically feasible to
obtain relief through . . . multiple individual damage actions[,]”
id. (citing Deposit Guar. Nat. Bank v. Roper, 445 U.S. 326, 339
(1980); Amchem Prods., Inc. v. Windsor, --U.S.--, 117 S. Ct. 2231,
2246 (1997)(“the very core of the class action mechanism is to
overcome the problem that small recoveries do not provide the
incentive for any individual to bring a solo action prosecuting his
**
For example, the majority opinion states: “Clearly, after
Patterson, compensatory damages under Title VII and 42 U.S.C. §
1981 are not incidental to class-wide injunctive or declaratory
relief for discrimination.” slip op. at 29. “[B]eing dependent on
non-incidental compensatory damages, punitive damages are also non-
incidental[.]”
64
or her rights. A class action solves this problem by aggregating
the relatively paltry potential recoveries into something worth
someone’s (usually an attorney’s) labor.”)(quoting Mace v. Van Ru
Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)); Phillips
Petroleum Co. v. Shutts, 472 U.S. 797, 809 (1985)), (3) to enhance
access to the courts “by spreading litigation costs among numerous
litigants with similar claims[,]” id. (citing United States Parole
Comm’n v. Geraghty, 445 U.S. 388, 402-403 (1980)), (4) “[to
protect] the defendant from inconsistent adjudications[,]” id., and
(5) “to ensure . . . that the interests of absentee class members
are considered fairly and adequately,” id. (citing Hansberry v.
Lee, 311 U.S. 32, 42-43 (1940) and Baby Neal ex rel. Kanter v.
Casey, 43 F.3d 48, 55 (3rd Cir. 1994)).
Rule 23's requirements for class action suits should be
interpreted in light of the basic purposes of the rule. In re A.H.
Robins Co., 880 F.2d 709, 740 (4th Cir.), cert. denied, 493 U.S.
959 (1989); see also Mace, 109 F.3d at 344; Andrews v. Amer. Tel.
& Tel. Co., 95 F.3d 1014, 1025 (11th Cir. 1996); 5 MOORE, supra, at
§ 23.04.
The majority fails to demonstrate that its rigid bright-line
rule will further the basic purposes of Rule 23 class action suits.
On the contrary, it is self-evident that the application of such an
65
inflexible, arbitrary rule frequently will disallow (b)(2) class
action suits seeking predominantly final injunctive relief and
only secondarily damages, and thus derogate from the class action
goals of judicial economy and efficiency; affording aggrieved
persons a remedy not otherwise economically feasible; enhancing
access to courts by spreading costs; and protecting defendants from
inconsistent adjudications.
B.
The majority’s rule sharply conflicts with the text, advisory
notes and underlying policies of Rule 23(b)(2) in several important
respects.
Rule 23(b)(2) provides, in pertinent part, that “[a]n action
may be maintained as a class action if the prerequisites of
subdivision (a) are satisfied, and in addition . . . the party
opposing the class has acted or refused to act on grounds generally
applicable to the class, thereby making appropriate final
injunctive relief or corresponding declaratory relief with respect
to the class as a whole[.]” The rule plainly does not say that a
class (b)(2) may not be certified if the parties seeking injunctive
relief or corresponding declaratory relief also pray for individual
compensatory or punitive damages. See Parker v. Local Union No.
1466, 642 F.2d 104, 107 (5th Cir. 1981)(“Class certification under
Rule 23(b)(2) does not automatically preclude an award of monetary
66
damages when the primary relief sought is injunctive or
declaratory. The rule pointedly refers to injunctive or
declaratory relief but does not, in terms, preclude monetary
relief.”)
The Advisory Committee Notes on Rule 23(b)(2), in pertinent
part, state that “[t]his subdivision is intended to reach
situations where a party has taken action or refused to take action
with respect to a class, and final relief of an injunctive nature
or of a corresponding declaratory nature, settling the legality of
the behavior with respect to the class as a whole, is appropriate
. . . . The subdivision does not extend to cases in which the
appropriate final relief relates exclusively or predominantly to
money damages.” FED. R. CIV. P. 23 advisory committee’s note
(discussing Subdivision (b)(2) under 1996 Amendments). The
advisory note does not state that a Rule (b)(2) class may not
extend to cases in which a plaintiff seeks money damages. The
advisory exclusion applies only to cases in which (i) the
appropriate final relief (ii) relates exclusively or predominantly
(iii) to money damages. In other words, if the plaintiffs seek
relief of an injunctive nature temporarily or not as the final
relief for the whole class but instead seek a final relief relating
exclusively or predominantly to money damages, a (b)(2) class would
not be appropriate. In fact, a plain reading of the advisory note
67
clearly indicates that money damages may be sought in a (b)(2)
class action along with final injunctive relief so long as money
damages are not be the exclusive or predominant relief sought.
Even if one disregards the text of Rule 23 (b)(2) and focuses
only on the Advisory Committee Note, the majority’s extrapolation
of a rule therefrom, arbitrarily barring (b)(2) certification if
the plaintiffs seek any compensatory damages to make individual
members of the class whole, is unwarranted. The plain language of
the note does not support the formulation of such a rule and its
sweeping preclusion of certification of all cases involving
compensatory or punitive damages conflicts with the specifications
and the clear intent and concerns of the drafters of the rule.
The Advisory Committee pointed to, as the outstandingly clear
or typical example or archetype of a case eligible for (b)(2)
certification, “actions in the civil-rights field where a party is
charged with discriminating unlawfully against a class, usually one
whose members are incapable of specific enumeration.” Id.
(collecting civil rights cases including Potts v. Flax, 313 F.2d
284 (5th Cir. 1963) and Bailey v. Patterson, 323 F.2d 201 (5th Cir.
1963), cert. denied, 376 U.S. 910 (1964)). In fact, “Rule 23(b)(2)
was promulgated . . . essentially as a tool for facilitating civil
rights actions.” 5 MOORE, supra, § 23.43[1][a], at 23-191. Under
the majority’s bright-line rule, however, no consideration is given
68
or importance attached to the fact that the case not only qualifies
under the text of Rule 23(b)(2), but also is a civil rights action
seeking to permanently enjoin unlawful discrimination. Cf. Jenkins
v. United Gas Corp., 400 F.2d 28, 32-33 (5th Cir. 1968) (“[The
claim to remedy class-wide discriminatory employment practices] has
extreme importance with heavy overtones of public interest.”);
Young v. Pierce, 544 F. Supp. 1010, 1028 (E.D. Tex. 1982)(“[W]hen
the relief sought is injunctive relief, the benefits . . . would
inure not only to known class, but also to a future class of
indefinite size.”); Note, Antidiscrimination Class Actions Under
the Federal Rules of Civil Procedure: The Transformation of Rule
23(b)(2), 88 Yale L. J. 868, 873 n.32 (“The desirability of an
injunction to shield all putative class members against whom the
discrimination was by its ‘very nature’ directed, provided the
‘most important’ reason for upholding class treatment in the (b)(2)
situation.”)(citing Potts v. Flax, 313 F.2d 284, 289 (5th Cir.
1963) and Bailey v. Patterson, 323 F.2d 201, 206-07 (5th Cir.
1963)). Instead, the majority decrees that if compensatory or
punitive damages are prayed for, the case is automatically
classified as “predominantly” related to money damages and
therefore not certifiable under (b)(2). By the same token, the
majority’s hard and fast rule distorts the meaning of Rule 23(b)(2)
69
and the Advisory Committee Note so as to reclassify such a civil
rights action as a (b)(3) situation, in which “class-action
treatment is not as clearly called for as in” (b)(1) or (b)(2)
situations. FED. R. CIV. P. 23 advisory committee’s note (discussing
Subdivision (b)(3)). If civil rights plaintiffs combine their
otherwise (b)(2) class-worthy claim for injunctive relief with
claims for compensatory or punitive damages, even if the damage
claims are small and do not predominate, the rule formulated by the
majority would deny (b)(2) class certification.
The Advisory Committee, in stating that the (b)(2) class “does
not extend to cases in which the appropriate final relief relates
exclusively or predominantly to money damages,” most certainly did
not have in mind the incongruous meaning derived from the
commentary by the majority, i.e. an absolute, inflexible rule
precluding (b)(2) certification when the plaintiffs seek to recover
compensatory or punitive damages regardless of the nature or
significance of the class-wide final injunctive relief sought. In
referring to a case in which “the appropriate final relief relates
exclusively or predominantly to money damages” the Advisory
Committee may have intended to exclude situations in which the
plaintiffs either do not seek final injunctive relief for the whole
class or do so only as a sham to obtain easier certification for
what is truly only an action for money damages. Or the committee
70
may have meant for the court to compare the quantity and quality of
the injunctive and monetary remedies in the particular case to see
which was predominant, a consideration that has been at least
suggested by this court, see Jenkins, 400 F.2d at 32-33.
(“Considering that in this immediate field of labor relations what
is small in principal is often larger in principle, [the claim to
remedy class-wide discriminatory employment practices] has extreme
importance with heavy overtones of public interest.”), and yet,
would be precluded by the majority’s strict no plenary damages
rule.***
***
The latter interpretation of the Advisory Committee’s
note is also suggested by a court’s approach in considering the
propriety of its certification of a (b)(2) class action in
evaluating an objection to settlement. In Stewart v. Rubin, 948
F. Supp. 1077 (D. D.C. 1996), aff’d, No. 96-5377, slip. op. (D.C.
Cir. May 22, 1997) (unpublished), involving a class of Treasury
Department Special Agents, the court concluded that the equitable
relief predominated. It elaborated:
Although the compensatory damage award is substantial,
$4,025,000, it constitutes an average of less than
$16,500 for each member of the class, and no class member
is guaranteed any award form the Backpay or Compensatory
Damage Funds unless he or she provides evidence of
discrimination and resulting damage. Weighed against the
possible receipt of $16,500 is each class member’s right
to participate in the individualized equitable relief
procedure, receive promotions, reinstatement, new or
adjusted performance evaluations, adjusted personnel
records, including awards, lateral changes of
assignments, correction or removal of disciplinary
action, and a host of other equitable measures. Any one
of these equitable remedies could be worth more than
$16,500 to a Special Agent for the life of his or her
career. Cumulatively, they can make or break a Special
71
The assessment of the value of each remedy sought in a
particular class action suit is problematic. However, the
majority’s no-damage-claim-or-no-certification rule precludes even
ballpark estimates of equitable and money damage remedies for
purposes of determining whether potential damages predominate or
rather are so small individually as to make the final injunctive
relief sought more important, valuable, and predominant.
C.
The majority’s rule improperly prevents the exercise of
informed, sound judicial discretion by a trial court to determine
that in a particular Title VII class action suit the positive
weight or value of the injunctive or declaratory relief sought is
predominant even though compensatory or punitive damages are also
claimed. The majority’s judicially invented limitation upon the
district court’s power is contrary to Rule 23, the congressional
drafters’ and reviewers’ intent, and the well-established
precedents of the Supreme Court and this court.
Rule 23(b)(2) provides that “[a]n action may be maintained as
a class action if the prerequisites of subdivision (a) are
satisfied, and in addition [] the party opposing the class has
acted or refused to act on grounds generally applicable to the
Agent’s career.
Id. at 1092.
72
class, thereby making appropriate final injunctive relief or
corresponding declaratory relief with respect to the class as a
whole[.]” The text of the rule does not contain a predominance
requirement or purport to grant a district court the discretion to
deny certification if the prerequisites of (a) and (b)(2) are
satisfied. The Advisory Committee Note that subdivision (b)(2)
“does not extend to cases in which the appropriate final relief
relates exclusively or predominantly to money damages” implies an
intention to vest the trial court with the discretion to deny
certification in such cases. Rule 23(c)(1) provides that “[a]s
soon as practicable after the commencement of an action brought as
a class action, the court shall determine by order whether it is to
be so maintained.” Thus, the discretion to determine whether
money damages predominate in a particular case, requiring that it
not be maintained as a (b)(2) class action, is clearly delegated
to the district court as part of its certification function. There
is simply no justification for an appellate court to use the
Advisory Committee Note as a pretext for formulating a judicial
rule that nullifies the district court’s legislatively granted
authority or discretion in this respect. Cf. 1 HEBERT B. NEWBERG &
ALBA CONTE, NEWBERG ON CLASS ACTIONS §4.14, at 4-49 (3d ed. 1992) (“No
clear standards have or could be developed . . . in this area so
pregnant with judicial discretion.”) (emphasis added).
73
The Supreme Court, in Amchem Products, Inc. v. Windsor, --
U.S. -- , 117 S. Ct. 2231, 2235 (1997), held that federal courts
“lack authority to substitute for Rule 23's certification criteria
a standard never adopted by the rulemakers--that if a settlement is
‘fair,’ then certification is proper.” Thus, the majority exceeds
the limits of its judicial power by substituting for the
certification criteria a rule based on its own definition of terms
in the Advisory Committee Note that in effect usurps the district
court’s legislated authority to perform its certification function.
For, as the Supreme Court admonished:
And, of overriding importance, courts must be mindful
that the rule as now composed sets the requirements they
are bound to enforce. Federal Rules take effect after an
extensive deliberative process involving many reviewers:
a Rules Advisory Committee, public commenters, the
Judicial Conference, this Court, the Congress. See 28
USC §§ 2073, 2074. The text of a rule thus proposed and
reviewed limits judicial inventiveness. Courts are not
free to amend a rule outside the process Congress
ordered, a process properly tuned to the instruction that
rules of procedure “shall not abridge . . . any
substantive right.” § 2072(b).
Id.
Our decisions and those of the Supreme Court have held that
the district court, within the bounds of the Federal Rules, has
broad discretion to decide whether to allow the maintenance of a
74
class action; that inherent in that discretion is the district
court’s duty to rigorously analyze each case to determine whether
the certification prerequisites have been satisfied; and that the
district court, when necessary, must probe behind the pleadings
before coming to rest on the certification question. General Tel.
Co. of S. W. v. Falcon, 457 U.S. 147, 160-161 (1982); Gulf Oil Co.
v.. Bernard, 452 U.S. 89, 100 (1981). As this court, in Castano v.
American Tobacco Co., 84 F.3d 734, 740 (5th Cir. 1996), recently
held:
A district court must conduct a rigorous analysis of
the rule 23 prerequisites before certifying a class.
General Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S. Ct.
2364, 2372, 72 L. Ed. 2d 740 (1982); Applewhite v.
Reichhold Chems., 67 F.3d 571, 573 (5th Cir. 1995). The
decision to certify is within the broad discretion of the
court, but that discretion must be exercised within the
framework of rule 23. Gulf Oil Co. v. Bernard, 452 U.S.
89, 100, 101 S. Ct. 2193, 2200, 68 L. Ed. 2d 693 (1981).
We have found no other circuit court that has adopted a
jurisprudential rule completely barring (b)(2) certification when
compensatory damages are sought as well as final injunctive relief.
The majority cites Williams v. Owens-Illinois, Inc., 665 F.2d 918
(9th Cir.), cert. denied, 459 U.S. 971 (1982), as being in accord
with its position. But the Ninth Circuit did not adopt such a rule
in that case. Rather, it merely affirmed the trial court’s
75
exercise of discretion in limiting the issues in a class action to
claims for injunctive relief, although the plaintiffs had also
prayed for compensatory damages. Id. at 928-29. In fact, if the
textual prerequisite of Rule 23 (a) and (b)(2) have been satisfied,
many courts and leading commentators favor either leaving the trial
court’s discretion untrammeled or using a variety of flexible and
practical approaches that encourage the certification of some type
of class even when money damages are sought along with final
injunctive relief.**** 1 NEWBERG, supra, § 4.14 (discussing these
approaches with approval and collecting cases therein); 7A CHARLES
A. WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1775, at 470
(2d ed. 1986) (“If the Rule 23(a) prerequisites have been met and
injunctive or declaratory relief has been requested, the action
usually should be allowed to proceed under subdivision (b)(2).
****
For a sensible approach to certification of civil rights
class actions under Subsection (b)(2) when claims for injunctive
relief are coupled with individual claims for damages see Thomas v.
Albright, --- F.3d ---, 1998 WL 135494 (D.C. Cir. 1998). See also
1 NEWBERG, supra, §4.41, at 4-51 to 52(noting that courts have
employed one of four options either (1) limiting the certification
to certain issues, (2) certifying the claims for injunctive relief
under Subsection(b)(2) and the damage claims under Subsection
(b)(3); (3) certifying the entire class under Subsection (b)(2) and
reconsidering the certification category if the class is successful
at the liability stage; or (4) certifying certain issues and
treating other issues as incidental ones to be determined
separately after liability to the class has been decided.).
76
Those aspects of the case not falling within Rule 23(b)(2) should
be treated as incidental.”).
The rule adopted by the majority in the present case exceeds
the bounds of its authority because it usurps the district courts’
authority granted by Rule 23 (when a member of a class seeks to
maintain a class action under (b)(2) for both final injunctive
relief and compensatory or punitive damages) to rigorously analyze
the case, probe behind the pleadings if necessary, and exercise its
own discretion within the framework of the rules in determining
whether the action is to be so maintained.
D.
By adopting an absolute rule against compensatory or punitive
damages claims in (b)(2) class actions, the majority ignores the
intent of the drafters of Rule 23 that class actions against
discriminatory employment practices would be maintained under
(b)(2). The majority’s rule, contrary to the intent of the
drafters and Congress, threatens a drastic curtailment of the use
of (b)(2) class actions in the enforcement of Title VII and other
civil rights acts.
Courts routinely have certified Title VII class actions under
Rule 23(b)(2) on the theory that such suits, by their very nature,
are directed at eliminating class-based discrimination. See, e.g.,
Kincade v. General Tire and General Motors Corp., 635 F.2d 501, 506
77
& n.6 (5th Cir. 1981). As the Third Circuit in Wetzel v. Liberty
Mutual Insurance Company, 508 F.2d 239, 250 (3d. Cir.)(emphasis
added), cert. denied, 421 U.S. 1011 (1975), observed:
[A] Title VII suit against discriminatory hiring and
promotion policies is necessarily a suit to end
discrimination because of a common class characteristic,
[such as race]. Bowe v. Colgate-Palmolive Co., 416 F.2d
711, 719 (7th Cir. 1969); Oatis v. Crown Zellerbach
Corp., 398 F.2d 496, 499 (5th Cir. 1968). The conduct of
the employer is actionable “on grounds generally
applicable to the class,” and the relief sought is
“relief with respect to the class as a whole.” The
class, all sharing a common characteristic subjected to
discrimination, is cohesive as to the claims alleged in
the complaint. Thus, a Title VII action is usually
particularly fit for (b)(2) treatment, and the drafters
of Rule 23 specifically contemplated that suits against
discriminatory hiring and promotion policies would be
appropriately maintained under (b)(2). Advisory
Committee, supra at 102.
This court and others have held that a (b)(2) class is
appropriate in a Title VII suit where both final injunctive and
monetary relief are granted. See Franks v. Bowman Transp. Co., 495
78
F.2d 398, 422 (5th Cir. 1974); Pettway v. American Cast Iron Pipe
Co., 494 F.2d 211, 257 (5th Cir. 1974); Johnson v. Goodyear Tire
& Rubber Co., 491 F.2d 1364, 1375 (5th Cir 1974); Robinson v.
Lorillard Corp., 444 F.2d 791, 801-802 (4th Cir. 1971); Bowe, 416
F.2d at 720. The basic nature of a Title VII suit has not been
altered merely because the plaintiff may also pray for compensatory
or punitive damages, if money damages are not the exclusive or
dominant relief sought.
After the 1991 Civil Rights Act the thrust of a Title VII
action continues to be society’s interest in eliminating
discrimination and the individual’s interest in being made whole.
H.R. Rep. No. 102-40(I), at 64-65, reprinted in 1991 U.S.C.C.A.N.
602-03. Title VII plaintiffs may still seek extensive and
systematic injunctive relief for claims that arise from a system of
employment action that has been uniformly imposed based on a
characteristic common to all class members, such as race.
Therefore, “[t]he conduct of the employer is still answerable ‘on
grounds generally applicable to the class,’ and the primary relief
sought is still ‘relief with respect to the class as a whole,’”
Wetzel, 508 F.2d at 251, even when nonpredominant money damages are
sought. Cf. Thomas v. Albright, --- F.3d ---, 1998 WL 135494, at *8
(D.C. Cir. March 27, 1998) (assumption of cohesiveness underlying
certification of a (b)(2) class is not necessarily destroyed when
79
claims for injunctive relief are coupled with individual claims for
monetary damages).
As this court stated in Pettway v. American Cast Iron Pipe
Co., 494 F.2d 211, 257 (5th Cir. 1974):
All that need be determined is that conduct of the
party opposing the class is such as makes such equitable
relief appropriate. This is no limitation on the power
of the court to grant other relief to the established
class, especially where it is required by Title VII[.]
Citgo’s employment practices and policies were alleged to be such
that final injunctive relief was appropriate. The text of Rule 23
(b)(2) requires nothing more. The nature of those alleged racially
discriminatory policies, and the nature of the class opposing those
policies does not change merely because the plaintiffs also seek
monetary damages if they are not the exclusive or predominant
relief sought. Cf. Wetzel, 508 F.2d at 251.
II.
Because I disagree fundamentally with the path followed by the
majority and the district court in interpreting and applying Rule
23(b)(2), I see no need to address the particular Seventh Amendment
problems that might arise under the application of their erroneous
interpretation of the rule. If, upon remand, the district court
were to certify a class action after applying the correct
80
principles of law, care must be taken to accommodate the parties’
rights to a jury trial of the compensatory and punitive damages
issues with the court’s trial of the injunctive and declaratory
relief issues. Under the circumstances of a particular case, this
task may be difficult, but it is by no means impossible in every
instance when proper safeguards are used.
Title VII class actions for disparate treatment have
traditionally been conducted in two stages. In Baxter v. Savannah
Sugar Refining Corp., 495 F.2d 437, 443-44 (5th Cir. 1974), this
court explained the bifurcation of a Title VII class action as
follows:
A Title VII class action presents a bifurcated burden of
proof problem. Initially, it is incumbent on the class
to establish that an employer’s employment practices have
resulted in cognizable deprivations to it as a class. At
that juncture of the litigation, it is unnecessarily
complicating and cumbersome to compel any particular
discriminatee to prove class coverage by showing personal
monetary loss. What is necessary to establish liability
is evidence that the class of black employees has
suffered from the policies and practices of the
particular employer. Assuming that the class does
establish invidious treatment, the court should then
81
properly proceed to resolve whether a particular employee
is in fact a member of the covered class, has suffered
financial loss, and thus entitled to back pay or other
appropriate relief.
Id. at 443-44. See International Brotherhood of Teamsters v. United
States, 431 U.S. 324, 360 (1977); Franks v. Bowman Transp., 424
U.S. 747, 772 (1976).
This approach allows the court and the jury to focus on the
employment practices of the employer as they affect the defendant’s
liability to the class during the liability stage. Cf. 6 NEWBERG,
supra, § 24.122, n. 1000 (citing Swint v. Pullman-Standard, 539
F.2d 77 (5th Cir. 1976); United States v. United States Steel
Corp., 520 F.2d 1043 (5th Cir. 1976)). If the class does establish
to the satisfaction of the jury that policies or practices of
discrimination exist, the jury may then resolve in a stage II
proceeding whether individual class members are entitled to receive
compensatory or punitive damages and the quantum of any award. Cf.
Id.
Because equitable relief and legal claims may depend on common
issues of fact, the court must allow the jury to determine in stage
I the issue of legal liability to the class before the court
determines whether the class is entitled to injunctive or
declaratory relief. See Dairy Queen v. Wood, 369 U.S. 469, 479-480
82
(1962). Also, in stage II, the court must clearly instruct the
jury that it is not to revisit the issues decided by the jury in
the first phase as to whether the defendant had an employment
policy of unlawful discrimination but must decide only the issues
of whether individual plaintiffs are entitled to compensatory or
punitive damages. See Gasoline Products Co., Inc. v. Champlin
Refining Co., 283 U.S. 494 (1931)
Because the issue of whether an individual employee has been
damaged by the employer’s intentional disciminatory conduct is
separate and distinct from the issue of whether the employer had an
unlawful discriminatory practice or policy so that, with adequate
instructions and guidance by the court, a trial of it alone may be
had without injustice, the Seventh Amendment does not prohibit the
separate jury trials of those issues. See id. That is, the issues
may be divided between separate trials if done “in such a way that
the same issue is [not] reexamined by different juries.” In re
Rhone-Poulenc, 51 F.3d 1293, 1303 (7th Cir. 1995); see also
Castano v. American Tobacco Co., 84 F.3d 734, 750 (5th Cir.
1996)(“Thus, Constitution allows bifurcation of issues that are so
separable that the second jury will not be called upon to
reconsider findings of fact by the first.”); Alabama v. Blue Bird
Body Co., 573 F.2d 309, 318 (5th Cir. 1978) (“[I]nherent in the
Seventh Amendment guarantee of a trial by jury is the general right
83
of a litigant to have only one jury pass on a common issue . . .
”).
In other words, the bifurcated phases of a Title VII class
action contemplate separate and distinct issues. The first stage
of a Title VII class action focuses exclusively on class-wide
claims, Price Waterhouse v. Hopkins, 490 U.S. 228, 245 n.10 (The
focus in Stage I is “‘not [] on [the] individual hiring decisions,
but on a pattern of discriminatory descisionmaking.’”) (quoting
Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 876
(1984)), whereas the second stage focuses on individual claims.
At the first stage the class must establish “that
discrimination against a protected group was essentially the
employer’s ‘standard practice,’ there has been harm to the group
and injunctive relief is appropriate.” Id. at 266 (O’Connor, J.,
concurring); see also United States Steel Corp., 520 F.2d at 1053;
6 NEWBERG, supra, § 24.123. Once it has been shown that the
employer maintained a policy or practice that unlawfully
discriminates in the first stage, that issue will not be revisited
in the second stage. See International Brotherhood of Teamsters,
431 U.S. at 361-62. Rather, at the second stage the issue is
whether individual employment decisions were made pursuant to any
such procedure or policy. Id. at 362; MANUAL FOR COMPLEX LITIGATION,
THIRD §33.54 (1995)(“Individual [class members] . . . are permitted
84
to present their individual claims of injury.”). Therefore, the
issues to be decided in the two stages -- class-wide liability at
Stage I and individual claims at Stage II -- are separate and
distinct and the second jury will not reexamine issues decided by
the first jury. Nor does the fact that some of the same evidence
may be presented in both phases make the bifurcation
unconstitutional, for the “prohibition is not against having two
juries review the same evidence, but rather against having two
juries decide the same essential issues.” In re Innotron
Diagnostics, 800 F.2d 1077, 1086 (Fed. Cir. 1986); see also In re
Paoli R.R. Yard, 113 F.3d 444, 452-53 n.5 (3d Cir. 1997).
In summary, I respectfully dissent from the majority opinion
because it adopts an unauthorized and erroneous interpretation of
Rule 23(b)(2), affirms the district court decision based on the
same error of law, and raises constitutional questions that would
not be encountered under a correct interpretation and application
of the rule.
85