Smith v. Texaco Inc

REVISED OCTOBER 25, 2001
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 00-40337
_______________
MATTHEWS SMITH, JOHN COMEAUX, JOHN LUMPKINS,
KENNETH FORD, AND DARLENE GREENE, ET AL.,
Plaintiffs-Appellees,
VERSUS
TEXACO, INC., ARAMCO SERVICES COMPANY, SAUDI REFINING, INC.,
SHELL OIL COMPANY, STAR ENTERPRISE, TEXACO, INC.,
TEXACO REFINING AND MARKETING INCORPORATED,
AND TEXACO REFINING AND MARKETING EAST, INC.,
Defendants-Appellants.
_________________________
Appeal from the United States District Court
for the Eastern District of Texas
_________________________
August 22, 2001
Before REAVLEY, SMITH, and DeMOSS, class does not meet the requirements of the
Circuit Judges. applicable rules, we reverse and remand.
JERRY E. SMITH, Circuit Judge: I.
This case has its origins in race discrimina-
In this appeal brought pursuant to FED. R. tion claims made against Texaco, Inc. (“Tex-
CIV. P. 23(f), the defendants challenge a class aco”), and its subsidiaries in Roberts v. Tex-
certification. Concluding that the attempted aco, Inc., 979 F. Supp. 185 (S.D.N.Y 1997).
During that litigation, counsel for Roberts joined because it owns SRI.
mentioned in briefs that employees of Star Plaint iffs, individually and as
Enterprise (“Star”) were considered members representatives of a class of approximately two
of the class; he also made representations to hundred other salaried black employees, allege
Matthews Smith that Star employees were that defendants discriminated on the basis of
included. When the Roberts case settled and race in violation of title VII of the Civil Rights
a settlement class was certified, however, Star Act of 1964, as amended by the Civil Rights
employees were written out of the class.1 Act of 1991, 42 U.S.C. § 2000e, and the Civil
Rights Act of 1871, as amended by the Civil
A short time after the settlement was an- Rights Act of 1991, 42 U.S.C. § 1981. The
nounced, Smith obtained a state court tempo- plaintiffs assert discrimination in promotions,
rary restraining order prohibiting Star and compensation, and other benefits and
Texaco from removing or destroying docu- privileges of employment throughout Star’s
ments; media reports had suggested that they facilities in various states.
were destroying evidence.2 At this point, the
statute of limitations already had expired. The allegations involve Star’s evaluation,
job posting, and compensation/pay grade sys-
Star then removed the case to federal court. tems and promotion practices. Star and
After a hearing, the district court entered pre- Texaco also are accused of creating or
liminary injunctions and document preserva- permitting the creation of a hostile work
tion orders that Star and Texaco appealed. environment for black employees.3 The claims
This court affirmed. focus on the policies’ subjectivity, which
allegedly allows defendants to apply the
The plaintiffs have filed a series of amended facially-neutral practices in a discriminatory
complaints, including inter alia, claims against manner. Plaintiffs seek monetary damages
Texaco based on agency principles and stem- including, but not limited to, compensatory
ming from its part ownership of Star (through and punitive damages. After a hearing, the
its wholly-owned subsidiaries Texaco Refining district court certified the following class:
and Marketing Incorporated (“TRMI”) and
Texaco Refining and Marketing East (“TRMI All African-American employees of
East”)). TRMI and its wholly-owned subsid- Star Enterprise, at any time from March
iary TRMI East were included, based on the 23, 1991 to the present who have held
latter’s role as joint venturer in Star. Saudi or who have tried to obtain, a
Refining Incorporated (“SRI”) was joined as managerial, supervisory, or professional
the other joint venturer in Star. Finally, salaried position, and who have been,
Aramco Services Company (“ASC”) was continue to be, or may in the future be
adversely affected by Star’s alleged
racially discriminatory employment and
1
Star was found not to meet the definition of a
Texaco subsidiary as defined by the agreement.
3
To reduce repetition, we write predominantly
2
See Smith v. Texaco, Inc., 951 F. Supp. 109 with regard to the particular evaluation policy
(E.D. Tex.), aff’d, 117 F.3d 1417 (5th Cir. 1997) (“PMP”). Where necessary, we include specific
(table) (unpublished). reference to the other challenged practices.
2
practices. The class does not include
any hourly individuals who have tried to
obtain salary positions. 4
(...continued)
cific practices as being responsible for any ob-
II. served disparities, see Johnson v. Uncle Ben’s,
A. Inc., 965 F.2d 1363, 1367 (5th Cir. 1992), and
A district court maintains substantial must present a systemic analysis of those
discretion in determining whether to certify a employment practices to establish their case, see
class. See Jenkins v. Raymark Indus., Inc., Black Fire Fighters Ass’n v. City of Dallas, 905
F.2d 63, 63 (5th Cir. 1990).
782 F.2d 468, 471-72 (5th Cir. 1986). We
recognize the essentially factual basis of the
Disparate impact claims may be brought by
certification inquiry and defer to the district individual plaintiffs or by a class. In either case,
court’s inherent power to manage and control the evidence will focus on the degree of statistical
pending litigation, so we review certification disparity between protected and non-protected
decisions only for abuse of that discretion. See workers in regard to employment or promotion.
Pegues v. Miss. State Employment Serv., 699
5
F.2d 760, 763 (5th Cir. 1983). Nonetheless, The disparate treatment model is based on
“[a] district court by definition abuses its section 703(a)(1) of title VII, 42 U.S.C. § 2000e-
discretion when it makes an error of law.” 2(a)(1), which provides that it is an unlawful em-
Koon v. United States, 518 U.S. 81, 99-100 ployment practice “to discriminate against any
(1996). Whether the court applied the correct individual with respect to his compensation, terms,
legal standard is a question subject to de novo conditions, or privileges of employment” because
of race or sex. The prima facie elements of a
review. See Forbush v. J.C. Penney Co., 994
claim for disparate treatment are (1) that the plain-
F.2d 1101, 1104 (5th Cir. 1993). tiff is a member of a protected class under the
statute; (2) that he applied and was qualified for a
B. job or promotion for which his employer was
As a guide, we compare the causes of ac- seeking applicants; (3) that, despite his
tion before delving into the specifics of this qualifications, he was rejected; and (4) that
case. Class actions brought under title VII afterwards the position remained open, and the
typically proceed under two theories, disparate employer continued to look for candidates with
impact4 and systemic disparate treatment5; plaintiff’s qualifications. See McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973).
4
The disparate impact model of title VII lia- Disparate treatment claims can be brought as
bility is based on section 703(a)(2) of title VII, 42 class actions, as well. Plaintiffs must show a
U.S.C. § 2000e-2(a)(2), which forbids an employer “pattern or practice” of discrimination by the em-
to “limit, segregate, or classify” employees “in any ployer, i.e., that “racial discrimination was the
way which would deprive or tend to deprive any company’s standard operating procedureSSthe
individual of employment opportunities or regular rather than the unusual practice.” Int’l
otherwise adversely affect his status as an Bhd. of Teamsters v. United States, 431 U.S. 324employee” because of race or sex. Disparate im- (1977). Proving a pattern or practice is necessary
pact claims, recognized in Griggs v. Duke Power to establishing a prima facie case in a disparate
Co., 401 U.S. 424 (1971), do not require proof of treatment class action: “Proving isolated or spo-
intent to discriminate. Plaintiffs must identify spe- radic discriminatory acts by the employer is in-
(continued...) (continued...)
3
plaintiffs advance both. The disparate impact determined during the second or “remedial”
theory is used to challenge a facially-neutral stage.
employment policy that affects a protected
employee class more harshly. Pouncy v. Pru- To obtain back pay, class members need
dential Ins. Co. of Am., 668 F.2d 795, 799 only prove that they were denied employment
(5th Cir. 1982). Disparate impact cases in opportunities and the extent of their loss; the
particular, which challenge specific, facially- burden then shifts to the employer to
neutral policies with proof of statistical demonstrate that the denial was for legitimate
disparit ies despite uniform application, reasons. See Richardson, 709 F.2d at 1021;
implicate class-based claims. see also Teamsters, 431 U.S. at 362.
Although this final determination typically
The disparate treatment theory focuses on involves individual hearings, see Johnson v.
whether the employer engaged in a “pattern or Goodyear Tire & Rubber Co., 491 F.2d 1364,
practice” of intentional discrimination, that is, 1375 (5th Cir. 1974), courts, until 1991,
whether discrimination was the employer’s streamlined the process by employing special
standard operating procedure rather than a masters, see NEWBERG & CONTE, NEWBERG
sporadic occurrence. See Teamsters, 431 U.S. ON CLASS ACTIONS §§ 24.119-24.121 (3d ed.
at 336. We previously have upheld class ac- 1992).
tion certifications involving both causes of
action.6 The Civil Rights Act of 1991 fundamentally
changed the procedures and remedies available
Class actions in which an employer engaged under title VII. Inter alia, the act now permits
in a pattern o r practice of intentional dis- plaintiffs to recover, in cases raising individual
crimination ordinarily are handled in bifurcated disparate treatment and pattern or practice
proceedings imposing different burdens of claims, compensatory and punitive damages
proof in the respective phases. See Shipes v. for unlawful intentional discrimination. See 42
Trinity Indus., 987 F.2d 311, 318 (5th Cir. U.S.C. § 1981a(a)(1). Compensatory
1993). During the first or “liability” stage, damages include relief for “future pecuniary
plaintiffs seek to prove a pattern or practice of losses, emotional pain, suffering,
invidious class-based discrimination. See id. inconvenience, mental anguish, loss of
When successful, individual class members enjoyment of life, and other nonpecuniary
benefit from a presumption of equitable pay losses. § 1981a(b)(3). The act also allows
(i.e., back pay), their entitlement to which is punitive damages if the employer discriminated
with malice or with reckless indifference to the
5
federally protected rights of an aggrieved
(...continued) individual. § 1981a(b)(1)(2). Damages are
sufficient to establish a prima facie case . . . .” capped at $300,000 per plaintiff. See §
Cooper v. Fed. Reserve Bank, 467 U.S. 867, 875-
1981a(b)(3). Finally, in all cases in which a
76 (1984).
plaintiff seeks compensatory and punitive dam-
6
See, e.g., Richardson v. Byrd, 709 F.2d 1016 ages, either party may demand a jury. See §
(5th Cir. 1983); Robinson v. Union Carbide 1981a(c).
Corp., 538 F.2d 652 (5th Cir. 1976); Pettway v.
Am. Cast Iron Pipe Co., 494 F.2d 211 (5th Cir.
1974).
4
C. (2) there be questions of law or fact
Under FED. R. CIV. P. 23, the various cate- common to the class;
gories of class actions, with their divers
requirements, represent a balance struck in (3) the claims or defenses of the
each case between the need and efficiency of a representative parties be typical of the
class action and the interests of class members claims or defenses of the class; and
to pursue their claims separately or not at all.7
Class actions are categorized according to the (4) the representative parties will fairly
nature or effect of the relief sought. and adequately protect the interests of
the class.
Relevant to this case are the rules
governing rule 23(b)(2) and (b)(3) classes. Rule 23(a); accord Amchem, 521 U.S. at 613.
The rule 23(b)(2) class action was intended for
cases in which broad, class-wide injunctive or 1.
declaratory relief is necessary. See Holmes v. A class must be so numerous that “joinder
Cont’l Can Co., 706 F.2d 1144, 1155 n.8 of all members is impracticable.” Rule 23-
(11th Cir. 1983). The rule 23(b)(3) class (a)(1). To meet this requirement, the class
action exists to dispose of all other cases in representatives need show only that it is
which a class action would be “convenient and difficult or inconvenient to join all members of
desirable,” including those involving large- the class. See Phillips v. Joint Legislative
scale, complex litigation for money damages. Comm., 637 F.2d 1014, 1022 (5th Cir. Unit A
Amchem, 521 U.S. at 516.8 Pairing the Feb. 1981). Defendants do not challenge the
respective rule 23 categories with specific numerosity of the class.
kinds of relief reflects a concerted effort to
respect the variety among class-member 2.
interests, which often depends on the natures The test for commonality is met “where
of the injuries alleged and relief sought. there is at least one issue, the resolution of
which will affect all or a significant number of
D. the putative class members. Lightbourn v.
The four prerequisites of Rule 23(a) are County of El Paso, 118 F.3d 421, 426 (5th
that Cir. 1997). While the commonality hurdle is
not particularly high, a plaintiff must go be-
(1) the class be so numerous that joinder yond merely describing issues at the highest
of all members is impracticable; level of generality.9 In Mullen v. Treasure
9
See, e.g., Gen. Tel. Co. v. Falcon, 457 U.S.
7 147 (1982) (“We cannot disagree with the
See Amchem Prods., Inc. v. Windsor, 521
U.S. 591 (1997); United States Parole Comm’n v. proposition underlying the across-the-board
Geraghty, 445 U.S. 388 (1980). ruleSSthat racial discrimination is by definition
class discrimination. But the allegation that such
8
See also Penson v. Terminal Transp. Co., 634 discrimination has occurred neither determines
F.2d 989, 993 (5th Cir. Unit B Jan. 1981) (citing whether a class action may be maintained in
rule 23 (advisory committee notes)). (continued...)
5
Chest Casino, 186 F.3d 620 (5th Cir. 1999), evaluation policy: the defect being both that it
commonality was present, because the putative had a disparat e impact and that it was
class members would assert claims for employed with discriminatory intent. 11
negligence under the Jones Act and for Although these are broad claims, they surpass
operating an unseaworthy vessel. The court the low threshold of commonality. Because
found that the common issues pertaining to the there is at least one issue the resolution of
theories of liabilitySSi.e., the class members’ which will affect all or a significant number of
status as Jones Act seamen, the negligence of class membersSSwhether the policy has a
Treasure Chest, and the unseaworthiness of disparate impact on black employeesSSthe
the CasinoSSwere independently sufficient to commonality test is met.12
establish commonality.10
3.
In Allison v. Citgo Petroleum Corp., 151 Like the test for commonality, the test for
F.3d 402, 408 (5th Cir. 1998), the court, con- typicality is not demanding. It “focuses on the
fronting a class of roughly one thousand per-
sons, who alleged similar causes of action as
these plaintiffs (disparate treatment and 11
The plaintiffs do not argue that the policy
impact) and sought similar remedies was adopted with overall discriminatory intent.
(injunction compensatory and punitive Had they done so, their disparate treatment claim
damages) noted, without challenge, that the would have been significantly less complex. We
class met the rule 23 requirements. The note, without adopting, that at least one court had
similarities between the Allison plaintiffs and held that class certification under a disparate
the current plaintiffs strongly suggest that the treatment theory requires an allegation that the
granting of discretion was motivated by
district court did not abuse its discretion.
discriminatory intent. See Reap v. Cont’l Cas.
Co., 199 F.R.D. 536 (D.N.J. 2001) (disallowing
Plaintiffs allege that Star used a defective certification under a disparate treatment theory in
the absence of a specific allegation that the
company intended to use the policy to
9
(...continued) discriminate).
accordance with Rule 23 nor defines the class that
may be certified.”). Plaintiffs argue that the policy was employed in
certain individual cases to discriminate.
10
The dissent charges that “[t]oday’s decision Additionally, at least three of the named plaintiffs
and Allison cannot be reconciled with Mullen.” have testified that the PMP was fair and not
Mullen was decided after Allison. Under our rule discriminatory toward them. Although some might
of orderliness, the earlier decision controls in the see this as a minor challenge to the “adequacy” of
event of inconsistency. Teague v. City of Flower these named plaintiffs, such testimony undermines
Mound, Tex., 179 F.3d 377, 383 (5th Cir. 1999). a claim that the policy was adopted with
Both we and the Mullen panel are and were bound discriminatory intent. Of course, Star still could
by the holdings in Allison, which, in any event, are have adopted the policy with such an intent, but
sound. It is apparent that the dissent’s real com- certain supervisors opted not to discriminate.
plaint is with Allison, which is now well es- Plaintiffs have not made this claim, however.
tablished law in this circuit after we declined to
12
reconsider it en banc. See Allison, 151 F.3d at 434 The test does not appear to require
(denying rehearing en banc). predomination, just commonality.
6
similarity between the named plaintiffs’ legal members,14 and several of the named plaintiffs
and remedial theories and the theories of those have claimed that the PMP was applied fairly
whom they purport to represent,” Lightbourn, to them.
118 F.3d at 426, and is satisfied when the res-
olution of common questions affects all or a Star points to Gen. Tel. Co. v. Falcon, 457
substantial number of class members, Shipes, U.S. 147 (1982), in which the Court
987 F.2d at 315. It is not necessary that each decertified a class after deciding that the
class member suffer the same degree of harm. named plaintiff, who claimed to suffer from an
Here, plaintiffs assert similar claims: They do intentional act of discrimination, sought to
not argue that one was trespassed against represent a class that proceeded on a disparate
while another was the object of discrimination. impact theory.15 The Court held that the
The class purports to consist of similarly- individual and class claims should have been
situated black employees who were exposed to tried separately, because the “evidentiary ap-
the same policies. That the time period of proaches to the individual and class claims
exposure may differ, or that some were less were entirely different.” Id. at 159. Com-
affected by the policy, would not necessarily bining the two claims would not advance “the
prevent a finding of typicality. It might, efficiency and economy of litigation which is a
however, affect other considerations, such as principal purpose of the [class action] pro-
damage levels or predominance. cedure.” Id. (quoting Am. Pipe & Constr. Co.
v. Utah, 414 U.S. 538, 553 (1974)).
4.
Differences between named plaintiffs and Because several of the named plaintiffs
class members render the named plaintiffs in-
adequate representatives only where those dif-
ferences create conflicts between the named 14
This type of challenge seems to fail where
plaintiffs’ and the class members’ interests.13 both promotional and hiring discrimination is
Star challenges the district court’s adequacy alleged. In those cases, the interests of the
determination on the basis that some of the supervisors are co-extensive with those of the other
class members have supervised other class employees. See Rossini v. Ogilvy & Mater, Inc.,
798 F.2d 590 (2d Cir. 1986). Even so, we assume
the supervisors will argue that they did not act with
13
See Jenkins, 782 F.2d at 472 (considering, in discriminatory intent toward others when applying
evaluating adequate representation requirement, the PMP. Again, this difference means that unless
whether named plaintiffs have “an insufficient plaintiffs prove that Star adopted the program with
stake in the outcome or interests antagonistic to the specific-discriminatory intent, any disparate
unnamed members”); see also Mullen, 186 F.3d at treatment claims will depend on proving specific
626 (noting that while the differences described by acts by specific supervisors.
defendant might create variances in the ways that
15
the named plaintiffs and class members prove The district court found that the named
causation and damagesSSa lifelong non-smoker plaintiff had been discriminated against in
may have less difficulty in proving that the casino’s promotion, but not hiring, while the class had been
conditions caused her asthma than will a smoker, discriminated against in hiring, but not promotion.
whose claim is thus subject to a defense of This converse relationship was the source of the
contributory negligenceSSthey did not affect the Court’s disagreement with the certification
alignment of their interests). decision. Gen. Tel., 457 U.S. at 152-59.
7
assert that they always have received good The comparative nature of the
marks on their PMP’s, it seems at first glance predomination inquiry means that seemingly
that General Telephone should apply. Chief minor differences between or among causes of
Justice Burger’s separate opinion tempers such action or damages sought can produce
application, however: He notes that in dramatically different results. For instance, if
General Telephone there was no allegation the plaintiffs had sought only injunctive and
that those who made the hiring decisions were declaratory relief, this case could have been
the same persons who made the promotion certified under rule 23(b)(2); there would have
decisions. Id. at 162 n.* Our case differs; the been no money damages to predominate. It is
named plaintiffs’ claim that Star, at the also plain that the presence of any amount of
organizational level, engaged in discriminatory money damages does not result in a per se
practices is equivalent to the allegation finding of predomination. Finally, considering
described by Chief Justice Burger. Up to this Allison and rule 23(b)(2)’s formulation, the in-
point, we find no abuse of discretion. stant claims could not have been certified un-
der that paragraph, because compensatory and
E. punitive damages predominate over injunc-
Certification under rule 23(b)(2) requires tive/declaratory relief.
plaintiffs to show that “the party opposing the
class has acted or refused to act on grounds Before addressing the issues relevant to the
generally applicable to the class, thereby mak- rule 23(b)(3) certification, two points deserve
ing appropriate final injunctive relief or attention. First, we address Star’s protestation
corresponding declaratory relief with respect that injunctive relief is not available because
to the class as a whole.” Rule 23(b)(2). This Star is no longer a going concern. Even
includes a requirement that claims for though Star has been reorganized and
injunctive relief predominate over claims for reconstituted among new partners under a new
monetary relief. Id. (advisory committee name (“Motiva”), this fact alone does not
notes). Injunctive relief predominates where block an injunction against practices that have
the monetary relief is “incidental”16 to the a disparate impact on black employees in the
injunctive relief, but does not predominate current organization. To see the corporate
where the monetary relief depends on the change as a bar to enjoining a discriminatory
varying circumstances and merits of each practice would create an end-run around the
individual’s case, making it less of a group statute.17
remedy. Allison, 151 F.3d at 410-13.
Second, contrary to the defendants’
protestations, we have allowed and even have
required notice in rule 23 (b)(2) class actions
16 in which equitable monetary claims were at
By “incidental,” we mean that “damages that
flow directly from liability to the class as a whole
stake. See Johnson v. Gen. Motors Corp., 598
on the claims forming the basis of the injunctive or
declaratory relief. . . . Ideally, incidental damages
17
should be only those to which the class members See NLRB v. Fabsteel Co., 587 F.2d 689 (5th
automatically would be entitled once liability to the Cir. 1978) (requiring a successor to reinstate a
class (or subclass) as a whole is established.” group of twenty-two strikers whom its predecessor
Allison, 151 F.3d at 415 (citations omitted). had fired illegally.).
8
F.2d 432, 438 (5th Cir. 1979). Additionally, members and the issues individual to them.
Allison recognized that providing rule 23(b)(2) This analysis remains unchanged whether a
class members with the procedural safeguards class is certified under one or more sections of
of notice and opt-out can permit civil rights rule 23(b). The inquiry’s constancy serves as
class actions to proceed under that rule. Id. at an important limitation on the use of
418. Therefore, the district court did not bifurcation by preventing a district court from
abuse its discretion when it granted the manufacturing predominance through the
plaintiffs an opt-out procedure under rule “nimble use” of rule 23(c)(4). Castano v. Am.
23(b). Tobacco Co., 84 F.3d 734, 745 n.21 (5th Cir.
1996).
F.
Rule 23(b)(3) permits certification of a Therefore, the cause of action, as a whole,
class action otherwise meeting the must satisfy rule 23(b)(3)’s predominance re-
requirements of rule 23(a) where quirement. Id. Once that requirement is met,
rule 23(c)(4) is available to sever the common
the court finds that the questions of law issues for a class trial.18 To read the rule not
or fact common to the members of the
class predominate over any questions
18
affecting only individual members, and This “as a whole” requirement suggests some
that the class action is superior to other interesting permutations. Any change in the
methods for a fair and efficient composition of liability issues or damages sought
adjudication of the controversy. The would require a new accounting to determine
whether common or individual issues predominate.
matters pertinent to the findings include:
For example, a disparate impact claimSSa non-
(A) the interests of the members of the individualized claim SS would serve as
class in individually controlling counterweight to the individual inquiries necessary
prosecution or defense of separate to determine compensatory or punitive damages.
actions; (B) the extent and nature of any Another outcome would result if the plaintiffs had
litigation concerning the controversy not requested punitive damages.
already commenced by or against
members of the class; (C) concentrating Because the predominance test is sensitive to
the litigation of the claims in a particular each variance in legal theories or remedies sought,
forum; (D) the difficulties likely to be it prevents the establishment of a per se rule that
encountered in management of a class would prohibit title VII claims’ being tried as class
action. actions. We reject defendants’ characterization of
Allison as establishing such a per se rule. See id.Rule 23(b)(3). The two main inquiries are (citing In re N. Dist. of Cal. Dalkon Shield IUD
Prods. Liability Litig., 693 F.2d 847, 856 (9th Cir.
whether common issues predominate over in-
1982) (balancing severed issues against the
dividual issues and whether the class action is remaining individual issues); Jenkins v. Raymark
a superior adjudicatory scheme. Indus., Inc., 109 F.R.D 269, 278 (E.D. Tex. 1985)
(comparing state-of-the-art defense to individual
1. issues of exposure and degree of injury in a class
The predominance inquiry involves a com- action certified only on the common issue of state-
parison of the issues common among the class of-the-art defense), aff’d, 782 F.2d 468 (5th Cir.
(continued...)
9
as a housekeeping rule, but instead as allowing Ford Motor Co., 189 F.R.D. 383 (N.D. Ill.
a court to pare issues repeatedly until pre- 1999), in which the court, after acknowledging
domination is achieved, would obliterate rule that a sexual harassment claim, by nature, is
23(b)(3)’s predominance requirement, highly individualized, certified the class under
resulting in automatic certification in every rule 23(b)(2) and (3). Warnell is inapposite on
case in which any common issue exists, a the issue of compensatory damages, for that
result the drafters of the rule could not have court focused on the legal standards that
intended. govern sexual harassment liability. Reference
to Warnell does help, however, to demonstrate
With this limitation in mind, we apply the the necessity of considering liability and dam-
predominance test to the instant facts. We ages issues separately during the predominance
first consider the nature of compensatory dam- inquiry.
ages, borrowing from Allison:
Plaintiffs’ reliance on Warnell as a means of
The very nature of these damages, avoiding Allison is misplaced. Warnell does
compensating plaintiffs for emotional not engage Allison until it discusses cer-
and other intangible injuries, necessarily tification under rule 23(b)(2), and then only to
implicates the subjective differences of pronounce that the holding regarding whether
each plaintiff’s circumstances; they are compensatory damages are incidental to in-
an individual, not class-wide, remedy. junctive relief is dictum. See Warnell, 189
The amount of compensatory damages F.R.D. at 389. Moreover, Warnell’s
to which any individual class member characterization of Allison’s language has been
might be entitled cannot be calculated by superseded in its own circuit. In Lemon v.
objective standards. Furthermore, by Int’l Union of Operating Eng’rs, 216 F.3d
requiring individualized proof of 577 (7th Cir. 2000), the court, relying on
discrimination and actual injury to each Allison, vacated a rule 23(b)(2) class
class member, compensatory damages certification where the class had requested
introduce new and substantial legal and compensatory damages, reasoning that the
factual issues. damages were not incidental to the injunctive
relief requested. Lemon, 216 F.3d at 577. By
Allison, 151 F.3d at 417. Compensatory dam- doing so, the Lemon court overruled Warnell.
ages, then, must be placed on the “individual”
side of the equation, counseling against a find- We next consider whether punitive
ing of predominance. To do otherwise would damages require an individual inquiry. First,
allow a class action to “degenerate in practice punitive damages are not available for
into multiple lawsuits separately tried. Casta- disparate impact claims. In Kolstad v. Am.
no, 84 F.3d at 745 n.19 (citing rule 23 Dental Ass’n, 527 U.S. 526, 534 (1999), the
(advisory committee notes)). Court emphasized that there must be malice or
reckless indifference that is directed at the fed-
Plaintiffs, however, point to Warnell v. erally-protected rights of an aggrieved
individual. Id. Specifically, the Court, id. at
534-35, considered whether, for punitive
18
(...continued) damages, there must be egregious misconduct
1986).
10
(in addition to the mere existence of cited Patterson for the proposition that
discriminatory intent). In deciding that “intent “recovery of compensatory and punitive
determines whether remedies are open,” the damages in title VII cases requires
Court highlighted the subjectivity necessary for individualized and independent proof of injury
liability. Id. at 535-36. to, and the means by which discrimination was
inflicted upon, each class member.” Allison,
Punitive damages have not been assessed 151 F.3d. at 419. Next in line was Kolstad,
merely on a finding that the defendant engaged discussed supra.
in a pattern or practice of discrimination. Such
a finding establishes only that there has been Finally, it is helpful to consider Hardin v.
general harm to the group and that injunctive Caterpillar, Inc., 227 F.3d 268 (5th Cir.
relief is appropriate. See Price Waterhouse v. 2000), in which this court faced the question
Hopkins, 490 U.S. 228, 266, (1989) whether a district court had erred in refusing
(O’Connor, J., concurring in the judgment). to submit an issue of punitive damages to the
The Court’s precedent supports the view that jury. The court granted a new trial after
an individualized inquiry is necessary to determining that the punitive damages issue
determine liability for punitive damages in the could not be tried alone, because the difficulty
title VII context, at least where, as here, there of doing so inhered in the very nature of the
are a series of decisions made by various jury’s decisionmaking:
personnel.
A jury deciding whether to award
Further support comes from this circuit’s punitive damages and their amount
caselaw. In Patterson v. P.H.P. Healthcare responds to the evidence of intentional
Corp., 90 F.3d 938, 940 (5th Cir. 1996), a title acts essential here to the underlying
VII case, we held that compensatory and finding of liability. But intentional acts
punitive damages no longer could be presumed span a range of intensity, purpose, and
from a mere violation of a plaintiff’s rights; a foreseeability, a range that oscillates
degree of specificity is required to support a with the perceived level of emotional
damage award. Our subsequent jurisprudence injury and its appropriate compensation.
is worth review. Many legal systems reflect this linkage
of actual and punitive damages in
In Deffenbaugh-Williams v. Wal-Mart locating caps for punitive awards. It is
Stores, Inc., 156 F.3d 581 (5th Cir. 1998), we no answer that liability and damages
initially receded from that part of Patterson here come in distinct legal capsules,
that had discussed vicarious liability. Defen- because it is equally true that their
baugh-Williams, however, was vacated for re- expression in a verdict is a meld, a
hearing en banc and was reinstated in part by phenomenon providing essential anchors
the en banc court, which, notably, did not and focus to the open-ended character
reinstate the discussion of punitive damages. of punitive damages.
See Deffenbaugh-Williams v. Wal-Mart
Stores, Inc., 182 F.3d 333 (5th Cir. 1999) (en Id. at 272. The court remarked that it was not
banc). Before this court decided Defenbaugh- deciding that issues of intent, of compensatory
Williams en banc, we decided Allison, which damages, and of punitive damages are
inseparable as a matter of law in all cases. See
11
id. The difference can be appreciated by
considering the following: A supervisor
The gravamen of Hardin seems to be that announces to the workforce that at 5:00 that
although there is no bright line, it is only in evening, each white employee will be laid off.
unlikely situations that compensatory and pun- This act is singular, and it can be assumed that
itive damages will not be intertwined. The the defendant acted with the same level of in-
court’s description of the various factors sug- tent as to each white employee.20 In contrast,
gests that an individual inquiry is necessary to the requisite intent can be gleaned only from
resolve punitive damages in cases involving the actions of individual supervisors applying
discrimination; Hardin offers hearty language the policy. Thus, the punitive damage inquiry
supporting Patterson’s principles. is placed on the “individual issue” side of the
predominance equation, keeping in mind that
Additionally, language in Allison suggests punitive damages are available only for the
that if punitive damages ever are available in a disparate treatment claim.21
discrimination suit on a class-wide basis,
without individualized proof, the instant alle- Plaintiffs point to two asbestos cases22 to
gations do not meet the requirements: support their claim that punitive damages can
Plaintiffs do not allege that the entire class is be determined on a class-wide basis. In those
subjected to the same discriminatory act or mass-tort cases, this circuit approved the use
same series of acts that would justify punitive
damages. Rather, here as in Allison, the
19
plaintiffs challenge broad policies and practices (...continued)
that were applied in a non-standard way. The plaintiffs will have suffered damage from each of
named plaintiffs cannot hope to show, except the alleged policies in the same manner, or perhaps
by individual proof, that the policies as applied even suffered damage from the same number of
in each instance occurred with the required policies. These factors place the award of punitive
damages outside the realm in which multipliers
level of “malice or reckless indifference to the
might be appropriate.
federally-protected rights of the aggrieved
individual.”19 20
Naturally, compensatory damages still would
require proof on an individual basis.
19 21
To the extent that the district court contended In his well-written dissent, Judge Reavley
that the common issue was the existence of charges that in the wake of this opinion, “there can
discriminatory practices, such a contention does be no class action where the class members seek
not demand the conclusion that every act was com- individual personal damages beyond those
mitted with the requisite intent to award punitive incidental to a claim for equitable relief.” The
damages. In fact, in light of testimony by some of above hypothetical shows the flaw in that criticism;
the named plaintiffsSSwho said they received good the dissent does not address it. Nor does it address
PMP marksSSthe claim cannot be that the PMP the basic framework of our analysis, which is that
was, in each case, applied with the necessary the predominance inquiry must consider the
intent. Add to this the complication that multiple variations in theories of liability and the variations
policies are condemned. in proof of damages for each plaintiff.
22
There also can be little doubt that not all Jenkins and In re Fibreboard, 893 F.3d 706(continued...) (5th Cir. 1990).
12
of a multiplier to determine the punitive The district court’s observation spoke to
damages amount. We do not revisit those whether the grounds for liability were similar,
holdings, which are binding circuit precedent; but that the plaintiffs’ liability cases are similar
instead, we rely on Kolstad’s language and the does not alter the nature of the damage in-
statutory requirement that the defendants’ in- quiry, save the example provided above. Were
tent be directed against an aggrieved these plaintiffs identicallySSas opposed to
individual.23 similarlySSsituated, a court might be able to
forego individual damage inquiries; but that is
The district court also attempted to not the case.24
distinguish the instant plaintiffs from the
Allison plaintiffs by claiming that the former Another concern with the district court’s
group is more homogeneous than the latter. approach to distinguishing the plaintiff sets is
The obstacle to this approach is that it fails to that the Allison court specifically rejected the
recognize that the relevant homogeneity existence of a plant-wide discriminatory prac-
regards the damages sought. tice as an “overarching issue” that would
counterbalance the individual inquiry necessary
In Allison, the individual nature of the dam- to determine compensatory and punitive
age proof overwhelmed the common issues. damages. Allison, 151 F.3d at 420. The dis-
trict court departs directly from Allison on this
23
point. Just as in Allison, the plaintiffs’ claims
The dissent argues that in adhering to Allison, for compensatory and punitive damages will
we “fail to follow” controlling circuit precedent,” focus almost entirely on facts and issues spe-
i.e., Jenkins. In fact, we are bound to apply both
cific to individuals rather than to the class as a
Jenkins and Allison. The Allison court took full
whole.
account of Jenkins, citing it several times, so we
are informed not only by Jenkins but by Allison’s
reading of Jenkins. 2.
The superiority inquiry looks to see wheth-
We also are at a loss to understand why we er the class action is truly a more efficient
should ignore “language” in the intervening Su- means of resolving the legal issues. The class
preme Court decision in Kolstad, which, as we action suit was designed to improve judicial
have said, emphasized the statutory language in the economy. See id. at 410. Based on the cause
1991 amendment to the effect that punitive dam- of action involved here, our inquiry is
ages depend on “malice or . . . reckless
indifference to the . . . rights of an aggrieved
24
individual.” Kolstad, 527 U.S. at 534 (quoting 42 Even when considering damages, we must
U.S.C. § 1981a(b)(1)) (Supreme Court’s keep in mind that the instant liability issues are not
emphasis). Judge Reavley’s insistence that we ones as to which the proof involves the “same
should adopt, as binding, his broad reading of event”; instead, they are cases involving the actions
Jenkins, even in the wake of Kolstad, runs afoul of of different actors. If Star had adopted the PMP
the maxim that “the rule of orderliness has little with the specific intent to discriminate, the
persuasive force when the prior panel decision at necessary proof would be potentially much more
issue conflicts with a Supreme Court case to which common to each plaintiff. This would provide
the subsequent panel decision is faithful.” support for a rule 23(b)(3) certification and
Kennedy v. Tangipahoa Parish Library, 224 F.3d perhaps could be another example of a
359, 370 n.13 (5th Cir. 2000). counterweight to the individual-damage inquiry.
13
constrained by the Seventh Amendment.25 factual issues necessary to resolve that claim.
See Beacon Theatres, Inc. v. Westover, 359
Title VII forbids compensatory and punitive U.S. 500, 510-11 (1959). The Seventh
damages for disparate impact claims, see § Amendment also requires submission to a jury
1981a(a)(1), limiting to the pattern or practice of all factual issues common to legal and
claim the Seventh Amendment right to a jury equitable claims, for decision on the legal
trial, see § 1981a(c).26 Once the right to a jury claims before a final court determination of the
attaches to a claim, however, it extends to all equitable claims.27 Thus, under § 1981a, the
right to a jury extends to all factual issues
necessary to determine liability on the pattern
25 or practice claim and the quantum of
This analysis closely tracks our opinion in
Allison.
compensatory and punitive damages. The
inseparability of the plaintiffs’ disparate treat-
26
In a supplemental letter filed pursuant to ment and disparate impact claims, on the one
FED. R. APP. P. 28(j), plaintiffs call our attention to hand, from their specific remedy requests, on
Cooper Indus., Inc., v. Leatherman Tool Group, the other, thus presents a difficult hurdle for
Inc.,121 S. Ct. 1678 (2001), which was issued class certification.28
after oral argument in this case. In Cooper, which
is not a titleVII case, the Court held that appellate Because the same employment policies and
courts should apply a de novo standard when re- practices are challenged under both claims,
viewing district court’s determinations of the con- there are overlapping issues. First, an essential
stitutionality of a punitive damage award. factual element of both claims is a finding that
the challenged employment practice caused
The Court contrasted the nature of actual and
each class member to suffer an adverse
punitive damages, stating that the former presents
questions of historical predictive fact, while the employment action. To resolve either claim,
latter is “not really a ‘fact’ ‘tried’ by the jury.” Id. the trier of fact must determine whether each
at 1686. (citation omitted). This distinction led the
Court to determine that appellate review of whether
a punitive damage award is consistent with due 27
See Roscello v. Southwest Airlines Co., 726
process does not implicate Seventh Amendment F.2d 217, 221 (5th Cir. 1984) (citing Dairy Queen,
concerns. Id. at 1686-87. Inc. v. Wood, 369 U.S. 469, 479 (1962)).
28
Absent Congress’s 1991 grant of a right to jury The dissent relies on excerpts from the leg-
trial for punitive damages under title VII, Cooper islative history of the 1991 amendments to suggest
might support the placement of punitive damages that they were “enacted to provide additional
on the common-issue side of the equation. Nothing remedies for victims of discrimination by larger
in Cooper suggests, however, that the Court was employers.” We avoid normative comments on the
invalidating the Civil Rights Act of 1991. purpose of the amendments and focus, instead, on
Accordingly, Cooper does not limit the ability of the text of the statute and the caselaw interpreting
Congress to provide, by statute, the right to a jury it, avoiding speculation on whether Congress had
in cases in which the Seventh Amendment does not in mind any restrictive effect on the availability of
otherwise require it. Additionally, Hardin, 227 class actions. Instead, we abide by Allison, which
F.3d at 272, explains that it is the interrelatedness states that “[i]n the class action context, the
of compensatory and punitive damages that changes to Title VII are not inconsequential.”
requires that they be determined together. Allison, 151 F.3d at 410 (footnote omitted).
14
class member was even in a position to be pact, the defendants must establish that the
affected by the challenged employment “challenged practice is job-related for the posi-
practice (e.g., whether each member applied tion in question and consistent with business
for an open job). Furthermore, as explained in necessity.” 42 U.S.C. § 2000e-2(k)(1)(A)(I).
Segar v. Smith, 738 F.2d 1249, 1268-70 (D.C. A tight weave exists between these theories,
Cir. 1984), significant overlap of factual issues making it difficult to conceive of a challenged
is almost inevitable whenever disparate impact practice that is job-related and a business ne-
and pattern or practice claims are joined in the cessity, and yet not a l egitimate
same action: nondiscriminatory reason for an adverse
employment action taken pursuant to that
[T]he employer’s effort to rebut the pat- practice.29
tern or practice claim by articulating a
legitimate nondiscriminatory explanation In Allison, we upheld the decision not to
may have the effect of putting before the certify a bifurcated class where the district
court all of the elements of a traditional court would have to decide the disparate im-
disparat e impact case. By its pact claim before the disparate treatment
explanation of an observed disparity the claims. The district court aptly noted that to
employer will typically pinpoint an em- reach any equitable or incidental monetary re-
ployment practice (or practices) having lief, it would have to hold a class action bench
a disparate impact on a protected class. trial before trying any aspects of the pattern or
And to rebut plaintiffs’ case the practice claim to the jury, necessarily running
employer will typically be required to in- afoul of the Seventh Amendment. Allison,
troduce evidence showing that the 151 F.3d at 425 (citing Roscello, 726 F.2d at
employment pract ice in fact caused the 221). “Nor could [the equitable issues] be ad-
observed disparity. In this situation, vanced in a subsequent class action without
between the plaintiffs’ prima facie show- being barred by res judicata and collateral
ing of disparity and the defendant’s re- estoppel.” Id. (citations omitted).30
buttal explanation of the disparity, the
essential elements of a disparate impact
case will have been placed before the 29
Both of these issues are questions of fact, see,
trier of fact. e.g., St. Mary’s Honor Ctr. v. Hicks, 509 U.S.
502, 524 (1993); Wards Cove Packing Co. v.
Similarly, the business necessity defense to Atonio, 490 U.S. 642, 660 (1989), common to both
disparate impact claims and the legitimate claims, see Allison, 151 F.3d at 424.
nondiscriminatory reason defense to disparate 30
treatment claims are not “so distinct and sep- See also Lemon, 216 F.3d at 582 (noting, in
a case of divided certification, that the Seventh
arable” from one another that they may be
Amendment requires a court to adjudicate the
considered separately by multiple factfinders damages claims first, “even if adjudication of these
without violating the Seventh Amendment. claims decides the equitable claims as well”).
Gasoline Prods. Co. v. Champlin Refining Plaintiffs make much of language in Lemon and
Co., 283 U.S. 494 (1931). To rebut the plain- Jefferson v. Ingersoll Int’l Inc., 195 F.3d 894 (7th
tiffs’ claim that any one of the challenged em- Cir. 1999), regarding the possibility of bifurcating
ployment practices resulted in a disparate im- claims under rule 23(b)(2) and (3). They fail to
(continued...)
15
Here, the district court attempted to avoid issues. To the contrary, it is a fact-intensive
this problem by determining that “[t]he inquiry of a medium-sized class.
Seventh Amendment will not be violated in
this case because all claims will be tried to a The district court offered several
jury before any final court determination of the countervailing considerations when it stated
equitable claims is made.” While possibly that, in addition to there being the benefit of
avoiding the Seventh Amendment issue, this judicial economy, the plaintiffs would benefit
course of action creates an insurmountable from a Teamsters approach, rather than being
superiority obstacle. forced to prove intentional discrimination via
McDonnell Douglas.31 The court was
To meet the requirements of the Seventh convinced that, without certification, there
Amendment, one jury may have to hear all the would be unnecessary duplication of effort,
issues regarding the pattern and practice claim. increased litigation costs, and consumption of
This same jury would have to det ermine the judicial resources.32 The court also felt that
quantum of compensatory and punitive
damages. See Hardin, 227 F.3d at 272. This
would require an enormous amount of time, 31
Plaintiffs argue that in their individual cases,
potentially empaneling a single jury for a one- they would not be allowed to use proof of a
year period. This situation is not one in which “pattern and practice” of discrimination. They cite
the bifurcation plan certified “discrete liability” authority from other circuits.
The issue, however, appears to be open in this
circuit. We do not resolve it but note that the
30
(...continued) Supreme Court has recognized the critical
take note of three obstacles to those cases’ distinction between pattern or practice claims and
application here. individual discrimination claims as well, albeit in a
different context:
First, in Jefferson the court assumed that the
requirements of rule 23 were otherwise met. Sec- The crucial difference between an
ond, Jefferson was only a pattern and practice suit, individual’s claim of discrimination and a
with no disparate impact claims. The suit also was class action alleging a general pattern or
concerned with whether a claim could be tried practice of discrimination is manifest. The
under rule 23(b)(2) where compensatory and inquiry regarding an individual’s claim is
punitive damages were available. The court agreed the reason for a particular employment
(but perhaps with less intensity) with the Allison decision, while at the liability stage of a pat-
court that the 1991 changes to the statute tilted the tern-or-practice trial the focus often will not
balance away from rule 23(b)(2), because to be be on individual hiring decisions, but on a
certified under that provision, monetary damages pattern of discriminatory decision-making.
would have to be incidental. Jefferson, 195 F.3d at
898-99. Third, after acknowledging that the Cooper, 467 U.S. at 876 (quotation marks omitted)
Seventh Circuit had adopted Allison’s reasoning (holding that a successful individual claim cannot,
regarding whether the requested monetary damages on its own, support a pattern or practice claim).
(compensatory and punitive) were incidental to the
32
requested injunctive relief, the Lemon court Although the court did not use the precise
remanded for the district court to consider whether phrase “judicial cr isis,” even if it were worried
the class could be certified under rule 23(b)(3). (continued...)
16
timid, though wronged, plaintiffs who might Finally, the “most compelling rationale for
not sue alone would have their claims brought finding superiority in a class actionSSthe
should their be a class option. The court twice existence of a negative value suitSSis missing
remarks that subclasses may be employed to in this case. See Castano, 84 F.3d at 748.
resolve manageability problems. Such a re- The relatively substantial value of these claims
mark seems to underestimate the logistical de- and the availability of attorneys’ fees eliminate
mands created by the right to jury trial coupled financial barriers that might deter individuals
with the individual inquiries. To repair the from pursuing claims. See id. Although a
Seventh Amendment problem, the court negative value suit is not a prerequisite to class
created a superiority problem.33 certification, its absence is a significant
detraction from the superiority of the class
A second superiority obstacle flows from action device. Based on these several
our predominance inquiry. The predominance limitations, the district court abused its
of individual-specific issues relating to the discretion when it found the class action
plaintiffs’ claims for compensatory and format to be superior.
punitive damages in turn detracts from the
superiority of the class action device in En toto, the plaintiffs attempt to avoid
resolving these claims.34 These manageability decertification by arguing that the common,
problems are exacerbated by the facts of this umbrella issue regarding the existence of plant-
case.35 wide, racially-discriminatory practices or
policies at the Star locations justifies rule
23(b)(3) class certification. This argument,
however, fails to appreciate the overwhelming
32
(...continued) number of individual-specific issues, as to both
about a crisis the court may not make a superiority the theories of recovery and the damages
determination based on the speculation that 200 sought. Moreover, it fails to provide a basis
independent cases will be pursued. Castano, 84
from which to distinguish Allison. The district
F.3d 734 (5th Cir. 1996).
court applied an incorrect legal standard in
33
This issue may not necessarily arise in all title granting rule 23(b)(3) certification.
VII cases, but it will likely occur where, as here,
plaintiffs allege multiple theories, either party G.
demands a jury trial, and plaintiffs seek both Defendants claim that Castano requires that
compensatory and punitive damages. the district court detail a litigation plan. This
is an overstatement. In Castano, we criticized
34
See Allison, 151 F.3d at 420 (explaining that the district court for certifying a class in the
the greater the number of individual issues there absence of any knowledge of how an addic-
are, the less likely superiority can be established). tion-as-injury case actually would be tried.
35
For instance, Texaco claims that the job-
Castano, 84 F.3d at 745. Castano did not
posting policy actually changed during the class establish a general rule; rather, it disallowed
period. This means that groups of plaintiffs po- certification where the district court had
tentially will have suffered harm from different confronted a claim involving an enormously
policies, reducing the commonality element for the complicated (and immature) mass tort with no
liability issues related to the job-posting policy track record of trials from which the district
claim.
17
court could draw the information necessary to only when it ‘ends the litigation on the merits
make the predominance and superiority and leaves nothing for the court to do but
analysis required by rule 23. See id. at 747. execute the judgment.’” United States v.
Castano merely requires district courts to ap- Garner, 749 F.2d 281, 285 (5th Cir. 1985)
preciate the legal theories applicable in a par- (quoting Firestone Tire & Rubber Co. v.
ticular case, not to recite standard Risjord, 449 U.S. 368, 373 (1981)). “The
management strategies for common suits. purpose behind [the final judgment rule] is to
avoid piecemeal appeals, which in turn
This case is both different from and similar conserves ‘judicial energy’ and may help
to Castano. Its difference lies in the fact that eliminate delay.” Sherri A.D. v. Kirby, 975
employment discrimination cases are not new- F.2d 193, 201 (5th Cir. 1992) (citation
fangled. Its similarity lies in the fact that the omitted).
district court might have been able to describe
a management plan that would resolve the su- One of the exceptions to the final judgment
periority challenges presented in this case. It rule is the collateral order doctrine, announced
did not do so, however. This omission is a in Cohen v. Beneficial Indus. Loan Corp., 337
lost opportunity, not a defect. U.S. 541 (1949). “The collateral order
doctrine establishes that certain decisions of
H. the district court are final in effect although
Rule 23(f) states: they do not dispose of the litigation.” Davis v.
E. Baton Rouge Parish Sch. Bd., 78 F.3d 920,
A court of appeals may in its discretion 925 (5th Cir. 1996). Under this doctrine,
permit an appeal from an order of a dis- some orders may be appealed despite the ab-
trict court granting or denying class ac- sence of final judgment if they (1) are
tion certification under this rule if conclusive, (2) resolve important questions
application is made to it within ten days that are separate from the merits, and (3) are
after entry of the order. An appeal does effectively unreviewable on appeal from the
not stay proceedings in the district court final judgment in the underlying action.36 This
unless the district judge or the court of rule does not properly apply to the
appeals so orders. circumstances of this case.
The plaintiffs argue that Texaco’s challenge to Without turning to the merits of the court’s
the district court’s equitable tolling of the equitable tolling decision, we note that if this
statute of limitations is an impermissible in- issue comes up for review in a subsequent ap-
terlocutory appeal. peal, it is the plaintiffs’ burden to demonstrate
Rule 23(f) is narrowly drafted and is not
intended to serve as an end-run around the
final judgment rule. “[U]nder Rule 23(f), a
party may appeal only the issue of class
certification; no other issues may be raised.” 36
See In re Grand Jury Subpoena, 190 F.3d
Bertulli v. Indep. Ass’n of Cont’l Pilots, 242 375, 381 (5th Cir. 1999) (quoting Cunningham v.
F.3d 290 (5th Cir. 2001). “[A]n order is final Hamilton County, 527 U.S. 198 (1999)), cert.
denied, 529 U.S. 1062 (2000).
18
that equitable tolling was appropriate.37 Star employees were told by counsel in the
Additionally, equitable tolling applies only in Roberts action that they were included; at least
“rare and exceptional circumstances.” Davis one brief in the Roberts case contended that
v. Johnson, 158 F.3d 806, 811 (5th Cir. 1998). Star employees were part of the Roberts class.
Neither a plaintiff’s unfamiliarity with the legal Star, however, never was made a defendant.
process nor his lack of representation during
the applicable filing period merits equitable Nevertheless, the district court determined
tolling. Barrow v. New Orleans S.S. Ass’n, that the current action against Star can be
932 F.2d 473, 478 (5th Cir. 1991). treated, for limitations purposes, as if it is
“adding” a previously-notified defendant to the
The district court’s reference to FED. R. “original pleading” in Roberts. Otherwise, the
CIV. P. 15(c)(3) is somewhat perplexing.38 pleading in this case serves as the “original
pleading” and cannot relate back to anything
that is time-barred. It appears, then, that the
37
See Hood v. Sears, Roebuck & Co., 168 F.3d district court allowed misled non-plaintiffs to
231, 232 (5th Cir. 1999) (stating that claimant file and relate back a new cause of action to a
bears the burden in title VII cases). non-defendant of a previous (and at some
level, separate) action.
38
Rule 15(c) states:
I.
(c) Relation Back of Amendments. An Several of the defendants claim that the
amendment of a pleading relates back to the class should not have been certified as to them
date of the original pleading when
because they had neither an “employment re-
lationship” nor an employment contract with
...
the plaintiffs. In light of our decision that the
(2) the claim or defense asserted in the class is to be decertified, it is sufficient for this
amended pleading arose out of the conduct, appeal that at least one appellant was properly
transaction, or occurrence set forth or at- before this court.
tempted to be set forth in the original plead-
ing, or REVERSED and REMANDED.
(3) the amendment changes the party or the
naming of the party against whom a claim is
asserted if the foregoing provision (2) is
satisfied and, within the period provided by
Rule 4(m) for service of the summons and ENDRECORD
complaint, the party to be brought in by
amendment (A) has received such notice of
the institution of the action that the party
will not be prejudiced in maintaining a de-
fense on the merits, and (B) knew or should
have known that, but for a mistake
concerning the identity of the proper party,
38
the action would have been brought against (...continued)
(continued...) the party.
19
REAVLEY, Circuit Judge, dissenting:
My esteemed colleagues reverse the class action certification because, they say, the district
court applied an incorrect legal standard in granting the Rule 23(b)(3) certification. I can find
no legal error in that court’s excellent memorandum opinion published at 88 F. Supp.2d 663,
and produced after full briefing and a three-day hearing, and following more than three years
of pretrial activity. I would affirm.
The fault is said to be the lack of predominance of the class-wide discriminatory pattern
claim over individual damage claims and the lack of superiority or efficiency of a class action
proceeding over individual trials. The district court explained, at pages 680-83, why the claim
of the 200 salaried black employees, a homogenous group who suffered similar damages from
an employer’s alleged policy of intentional discrimination, predominated. And the court then
explained why the class action would be far superior to individual trials in fair and efficient
adjudication, the latter path tying up the court for at least 200 weeks. One wonders where
these two circuit judges have acquired the expertise to fault this experienced trial judge on the
management of his trials. They concede that this decision is one for his discretion.
Actually, though purporting to recognize “the essentially factual basis of the certification
inquiry,” the majority pays little attention to the factual particulars of the case and does not
address any erroneous finding in concluding that an abuse of discretion has been committed.
This opinion does much more than override a district court’s judgment in a specific case. It
does indeed address an error of law, and that error is seen as the granting of certification of
a class where its members seek individual damages. The Fifth Circuit rule of law, if this
opinion stands, is that there can be no class action where the class members seek individual
personal damages beyond those incidental to a claim for equitable relief. The very same
considerations and rule would apply whatever the nature of the common claim. In this
respect, Rule 23 applies to Title VII as amended in 1991 as it does to any other claim. That
changes Rule 23(b)(3) and departs from precedent as well as the advisory committee’s note
which states that “(b)(3) encompasses those cases in which a class action would achieve
economies of time, effort, and expense, and promote uniformity of decision as to persons
similarly situated, without sacrificing procedural fairness or bringing about other undesirable
results.”39
Twenty-four years ago the Supreme Court prescribed a different rule and model for the
class action where the class claims a pattern or practice of discrimination. International
Brotherhood of Teamsters v. United States.40 The trial proceeds in two or more stages. At
the first stage, the plaintiffs’ “burden is to demonstrate that unlawful discrimination has been
a regular procedure or policy followed by an employer or group of employers.”41 If the
plaintiffs seek individual relief as victims of that practice, the case moves to the next stage to
determine the consequences to the individual, where the class members are entitled to a
39
FED. R. CIV. P. 23 advisory committee’s note (1966 Amendment).
40
431 U.S. 324 (1977).
41
Id. at 360.
21
presumption that the employer had discriminated against them.42
I.
It may be that this decision, along with Allison v. Citgo Petroleum Corp.,43 will, at this
time, be treated only as a Title VII exception to Rule 23. These opinions point to the 1991
amendment as radically changing, or forbidding, class actions in Title VII cases. That is an
inexplicable position, because the amendment did nothing more than allow legal damages for
claimants; and that factor had been no bar to class actions in employment cases brought under
42 U.S.C. § 1981. But if this is Fifth Circuit law, only Title VII class actions for equitable
relief (including back pay) remain. However, if employees are barred from a Rule 23(b)(3)
class action to obtain legal damages, what is the consequence of and to a class action under
Rule 23(b)(2)? Would members of the class encounter an objection of splitting their damages
(between back pay and consequential damages) in their individual actions?44 If so, they may
42
See id. at 362; see also Lee v. Washington County Bd. of Educ., 625 F.2d 1235, 1239 (5th Cir. 1980)
(“Once purposeful discrimination against a class is proved, a presumption of an entitlement to back pay and
individual injunctive relief arises with respect to members of that class.”); Davis v. Board of Sch. Comm’rs,
600 F.2d 470, 474 (5th Cir. 1979) on rehearing, 616 F.2d 893 (1980); Turner v. Texas Instruments, Inc., 555
F.2d 1251, 1255 n.1 (5th Cir. 1977).
43
151 F.3d 402 (5th Cir. 1998).
44
As a general proposition, of course, if the elements of res judicata are met, the doctrine bars all claims
that were or could have been brought in an earlier action. See United States v. Shanbaum, 10 F.3d 305, 310
(5th Cir. 1994) (recognizing that “claim preclusion prohibits either party from raising any claim or defense in
the later action that was or could have been raised in support of or opposition to the cause of action asserted
in the prior action”). This general principle extends to class actions. See Penson v. Terminal Transport Co.,
634 F.2d 989, 994, 996 (5th Cir. 1981) (noting “the advent of the ‘hybrid’ Rule 23(b)(2) class action in which
individual monetary relief for class members, typically back pay, is sought in addition to classwide injunctive
or declaratory relief,” and recognizing that “[a] judgment or consent decree entered in a class action can bind
the absent class member even though the member had filed a claim or instituted a personal suit before the
decision in the class action”). However, Rule 23(c)(4) provides that class actions may be limited to particular
(continued...)
22
or may not choose to remain in the (b)(2) class. The notice provision of Rule 23(c)(2) does
not apply to a (b)(2) action, but surely these employees need to be informed of the problem.
Even if there is no problem for the member of a (b)(2) class obtaining equitable relief and
then pursuing legal damages in an individual action, should the employees not be informed
of the fact and limits of relief in the class action? This situation raises questions of
numerousness and commonality under Rule 23(a). If, after notice to the class members,
simultaneous individual suits for legal damages were allowed, perhaps the class action could
proceed. That legal rigmarole might please my colleagues but certainly not the trial court and
those plaintiffs forced to endure the expense and delay of individual trials.
Moreover, Congress did not intend to foreclose the benefits of class action treatment to
injured parties by the Civil Rights Act of 1991. The purposes of the Act were “first, to
provide monetary remedies for victims of intentional employment discrimination to
compensate them for resulting injuries and to provide more effective deterrence; and second,
to respond to the Supreme Court’s recent decisions by restoring federal civil rights protections
44
(...continued)
issues, and courts might recognize that individual suits for compensatory damages should not be barred by a
judgment in a related class action, if the court hearing the class action concluded that compensatory damages
were not amenable to resolution in a class action, and chose to hear only claims for equitable relief. Cf. D-1
Enters., Inc. v. Commercial State Bank, 864 F.2d 36, 38 (5th Cir. 1989) (“Essential to the application of the
doctrine of res judicata is the principle that the previously unlitigated claims to be precluded could and should
have been brought in the earlier litigation.”); Bogard v. Cook, 586 F.2d 399, 408-09 (5th Cir. 1978) (holding
that class action seeking equitable relief did not bar subsequent individual suit for damages where class action
notice did not alert class members to possibility that they could seek individual damages and inclusion of
individual damage claims would have made class action unmanageable).
23
against employment discrimination.”45
Note that the expansion of remedies in the Civil Rights Act of 1991 to include
compensatory and punitive damages only applies to employers with more than fourteen
employees.46 The Act targets larger employers, yet our court interprets it to protect large
employers from the formidable plaintiffs’ tool of Rule 23. If one doubts that the class action
is an important tool to plaintiffs seeking redress for employment discrimination, witness the
recent Coca-Cola settlement of an employee class action alleging race discrimination.47
Earlier settlements of an employee class action suit against Texaco, which the present suit
followed, and one against Mitsubishi, further attest to the value of the class action to plaintiffs
in employment discrimination suits.48 Because Congress chose to increase the remedies
available to Title VII plaintiffs, our court would put an end to the substantial settlements
available to Title VII plaintiffs though the class action device.
The result the majority reaches is all the more anomalous given the origins of the current
Rule 23. The rule was rewritten in 1966, and subpart (b)(2) “was added . . . primarily to
45
H.R. Rep. No. 102-40(I), at 14 (1991), reprinted in 1991 U.S.C.C.A.N. 549, 552.
46
42 U.S.C. § 1981a(b)(3).
47
See Betsy McKay, Coca-Cola Agrees to Settle Bias Suit for $192.5 Million, WALL ST. J., November
17, 2000, at A3.
48
See Darryl Van Duch, Following Trend, Coke Brings in Bias Monitors, NEW YORK L. J., June 14, 2001,
at 5 (discussing $176.1 million Texaco settlement, $34 million Mitsubishi settlement, and $192.5 million Coca-
Cola settlement).
24
facilitate the bringing of class actions in the civil rights area.”49 Again, if Rule 23 in its
current form was written to accommodate civil rights suits, and if the Civil Rights Act of 1991
was enacted to provide additional remedies for victims of discrimination by larger employers,
the very employers that a class action would target, I find it strange indeed that our court
would interpret the Act to divest such victims of the class action remedy.
Today’s decision and Allison cannot be reconciled with Mullen v. Treasure Chest Casino,
LLC.50 In Mullen, we affirmed a district court order certifying, under Rule 23(b)(3), a class
consisting of 100 to 150 crew members aboard a casino ship who allegedly suffered
respiratory illnesses caused by a defective ventilation system aboard the ship. Even though
we recognized that individualized proof of causation, damages, and contributory negligence
would be necessary for each class member, we held that the predominance requirement of
23(b)(3) was met, since the common issues of seaman status, vessel status, negligence, and
seaworthiness met the predominance requirement of Rule 23(b)(3).51 We approved a class
certification order where the district court planned to try common issues in a class trial, and
individual issues of causation, damages and comparative negligence in a second phase of
trials.52
Other circuits have agreed with the district court in the pending case that equitable claims
49
7A CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 1775 (2d ed. 1986).
50
186 F.3d 620 (5th Cir. 1999), cert. denied, 528 U.S. 1159 (2000)
51
Id. at 626-27.
52
Id. at 623.
25
can be certified under Rule 23(b)(2) and legal claims for compensatory and punitive damages
can be certified under Rule 23(b)(3).53 In my view, the district court committed no legal
errors in reaching its decision.
II.
The matter of punitive damages presents a particular respect in which the majority here,
as well as the majority in Allison, fail to follow controlling circuit precedent. In Jenkins v.
Raymark Industries., Inc.,54 this court held that punitive damages is a common question for
class action resolution. Under the Jenkins bifurcated trial plan, common issues were to be
tried by a class jury, and individual issues of causation, actual damages, and comparative fault
were to be in later trials.55 Jenkins has not been overruled by any en banc decision of this
court or any subsequent Supreme Court decision. The Supreme Court has explained that the
“imposition of punitive damages is an expression of . . . moral condemnation.”56 That
decision is better made by addressing the harm, not necessarily the precise dollar count, done
to the class.
The majority describes Jenkins as “binding circuit precedent,” but regards it as not
53
See Jefferson v. Ingersoll Int’l, Inc., 195 F.3d 894, 898 (7th Cir. 1999); Eubanks v. Billington, 110 F.3d
87, 96 (D.C. Cir. 1997).
54
782 F.2d 468 (5th Cir. 1986).
55
Id. at 471.
56
Cooper Indus. v. Leatherman Tool Group, Inc., 121 S. Ct. 1678, 1683 (2001).
26
controlling because of “language” in Kolstad v. American Dental Ass’n,57 and “the statutory
requirement that the defendants’ intent be directed against an aggrieved individual.” Again,
I am at a loss to find anything about Title VII and the amendments of 1991 that make Title
VII particularly ill-suited to class action treatment. The “statutory requirement” on which the
majority relies appears to be 42 U.S.C. § 1981a(b)(1), which provides that punitive damages
may be recovered if the defendant engaged in discriminatory conduct “with malice or with
reckless indifference to the federally protected rights of an aggrieved individual.” This
provision simply sets out the mens rea requirement for the recovery of punitive damages. To
read this language to prohibit a single, class-wide award of punitive damages is wholly
unwarranted under the wording of the statute itself and, as discussed above, a bizarre
consequence for a statute intended to expand the remedies and protections available to
employees under the civil rights laws.
As for Kolstad, the Supreme Court did not there say anything to reject the notion that a
single punitive damage award can, in appropriate cases, be made by a jury sitting in a class
action dispute. Kolstad did not address this question. Kolstad holds that an employer can be
assessed punitive damages for the acts of a managerial agent acting in the scope of his
employment, but not where the discriminatory employment decisions of managerial agents
“are contrary to the employer’s good-faith efforts to comply with Title VII.”58 When faced
with evidence of discriminatory acts of its managerial agents, an employer’s defense that it
57
527 U.S. 526 (1999).
58
Kolstad, 527 U.S. at 545 (internal quotation marks omitted).
27
engaged in a good-faith effort to comply with Title VII is particularly well-suited to class or
subclass determination. The Court describes this defense as “whether the [defendant] had
been making good faith efforts to enforce an antidiscrimination policy.”59 Whether an
employer has made a good faith effort to enforce an antidiscrimination “policy,” almost by
definition, is a question common to all class members’ cases where class action requirements
are otherwise present, and only heightens the commonality of the claims of class members.
As discussed above, this court has recognized that personal injury cases are sometimes
suitable for class action treatment. The availability of compensatory and punitive damages
to Title VII plaintiffs, by virtue of the Civil Rights Act of 1991, make Title VII cases all the
more similar to personal injury cases, and I fail to see any meaningful basis for the court to
create a “Title VII exception” to Rule 23. If anything, the congressional purpose of
expanding the protections and remedies available to Title VII plaintiffs which motivated the
passage of the Civil Rights Act of 1991 weighs against the recognition of such an exception.
And the common issues of federal law presented in Title VII cases make Title VII a strange
body of law to exempt from the class action device. Unlike mass tort cases whose class
members may come from different states, Title VII cases are not plagued by the complexities
of applying the laws of different states to different class members, a central failing of the class
59
Id. at 546.
28
certification in the tobacco class action we decertified.60
I would follow precedent, adhere to the abuse of discretion standard, and affirm.
60
Castano v. American Tobacco Co., 84 F.3d 734, 741-44, 747 (5th Cir. 1996).
29