Gеorge McREYNOLDS, et al., on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., Defendant-Appellee.
No. 11-3639.
United States Court of Appeals, Seventh Circuit.
Argued Jan. 13, 2012. Decided Feb. 24, 2012.
672 F.3d 482
In short, we find no abuse of discretion. While BP claims “the case should remain in federal court because the district judge was familiar with both the facts and the law of the case and the parties have undertaken discovery, these considerations are not adequate to make us ‘second-guess’ the district court‘s decision to rеlinquish jurisdiction.”2 Kennedy, 140 F.3d at 728.
AFFIRMED.
Linda Debra Friedman (argued), Senior Attorney, Stowell & Friedman, Chicago, IL, for Plaintiffs-Appellants.
Timothy S. Bishop (argued), Stephen M. Shapiro, Attorneys, Mayer Brown LLP, Chicago, IL, Jared R. Friedmann, Attorney, Weil, Gotshal & Manges LLP, New York, NY, for Defendant-Appellee.
POSNER, Circuit Judge.
The plaintiffs have filed a class action suit that charges Merrill Lynch with racial discrimination in employment in violation of Title VII of the Civil Rights Act of 1964 and
The district court denied certification, and the plaintiffs asked this court for leave to appeal the denial. A motions panel granted leave, but the defendant argues that the panel erred—that the appeal is untimely. We bеgin with that question.
But
The question of timeliness may seem to be about jurisdiction, since most deadlines for appeals from a district court have been held to be jurisdictional. But as we noted recently in In re IFC Credit Corp., 663 F.3d 315, 319-20 (7th Cir.2011), the Supreme Court has been moving toward a definition of the subject-matter jurisdiction of the federal courts that includes all cases that these cоurts are “competent,” in the sense of legally empowered, to decide. This implies that deadlines for appealing are not jurisdictional, since they regulate the movement upward through the judicial hierarchy of litigation that by definition is within federal jurisdiction. Yet appeal deadlines either found in statutes or adopted by courts by direction of a statute continue to be treated as jurisdictional—though not all of them; the Supreme Court recently rejected such a “bright line” rule in favor of requiring a “clear indication” that the deadline was intended by Congress to be jurisdictional. Henderson v. Shinseki, — U.S. —, 131 S.Ct. 1197, 1203, 179 L.Ed.2d 159 (2011). (The power of Congress to impose such limits on the jurisdiction of the federal courts is not questioned.) But because no “clear indication” is to be found in the pertinent statutory texts, see, e.g.,
What we take away from this formula is that if the Court has traditionally treated a particular statutory deadline as jurisdictional it will go on doing so, id. at 1203-06; John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 134, 128 S.Ct. 750, 169 L.Ed.2d 591 (2008); Bowles v. Russell, 551 U.S. 205, 209-10 and n. 2, 127 S.Ct. 2360, 168 L.Ed.2d 96 (2007); In re Caterbone, 640 F.3d 108, 111-13 (3d Cir.2011), even though doing so doesn‘t comport with the new “competence” standard. Deadlines for appealing are just a type of stаtute of limitations, as acknowledged in John R. Sand & Gravel v. United States, supra, 552 U.S. at 133, 128 S.Ct. 750, and statutes of limitations ordinarily are affirmative defenses rather than jurisdictional bars. A deadline for bringing or appealing a federal case presupposes that the case is within the competence of federal courts to decide.
We declined in Asher v. Baxter Int‘l Inc., 505 F.3d 736, 741 (7th Cir.2007), to rule on whether the deadline in
But suppose our understanding of the evolving Supreme Court doctrine is wrong, and the deadline in
Rather, the plaintiffs’ argument is that their 14 days to seek leave to appeal ran anew from the denial of their amended motion for class certification. The defendant points out that a deadline for appealing cannot be extended by a motion for reconsideration of a previous appealable order, Asher v. Baxter Int‘l Inc., supra, 505 F.3d at 739-40; Gary v. Sheahan, 188 F.3d 891 (7th Cir.1999); Jenkins v. BellSouth Corp., 491 F.3d 1288, 1290-92 (11th Cir. 2007); McNamara v. Felderhof, 410 F.3d 277, 280-81 and n. 8 (5th Cir.2005), unless the motion is made within the time allowed for taking the appeal, Blair v. Equifax Check Services, Inc., supra, 181 F.3d at 837, and this rule applies to appeals under
But it doesn‘t follow that the failure to take a timely appeal from one interlocutory order operates as a forfeiture, jurisdictional or otherwise, of the right to appeal a subsequent order. For the later motion may not be, either in form or, more important, in substance, a motion to reconsider the previous denial. A rule limiting parties to one interlоcutory appeal from a grant or denial of class certification would disserve
The fact that the appellate court has a discretionary jurisdiction over
Dicta in the Tenth Circuit‘s opinion in Carpenter v. Boeing Co., supra, go beyond the unexceptionable proposition that merely presenting “new arguments” does not change a motion for reconsideration of a grant or denial of class certification into a motion that if denied is appealable under
A court of appeals is never obliged to engage in “contorted thinking” about a
The basis of the plaintiffs’ renewed motion for class certification in the present case was the Supreme Court‘s decision in Wal-Mart Stores, Inc. v. Dukes, — U.S. —, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), handed down a month earlier. That was an important development in the law governing сlass certification in employment discrimination cases—possibly a milestone. It may seem a perverse basis for a renewed motion for class certification, since the Supreme Court reversed a grant of certification in what the defendant in our case insists is a case just like this one. But the district judge, though he again denied certification, didn‘t think the
Wal-Mart holds that if employment discrimination is practiced by the employing company‘s local managers, exercising discretion granted them by top management (granted them as a matter of necessity, in Wal-Mart‘s case, because the company has 1.4 million U.S. employees), rather than implementing a uniform policy established by top management to govern the local managers, a class action by more than a million current and former employees is unmanageable; the incidents of discrimination complained of dо not present a common issue that could be resolved efficiently in a single proceeding.
The district judge thought this case like Wal-Mart because Merrill Lynch, accused of discriminating against 700 black brokers currently or formerly employed by it, delegates discretion over decisions that influence the compensation of all the company‘s 15,000 brokers (“Financial Advisors” is their official title) to 135 “Complex Directors.” Each of the Complex Directors supervises several of the company‘s 600 branch offices, and within each branch office the brokers exercise a good deal of autonomy, though only within a framework established by the company.
Two elements of that framework are challenged: the company‘s “teaming” policy and its “account distribution” policy. The teaming policy permits brokers in the same office to form teams. They are not required to form or join teams, and many prefer to work by themselves. But many others prefer to work as part of a team. Team members share clients, and the aim in forming or joining a team is to gain access to additional clients, or if one is already rich in clients to share some of them with brokers who have complementary skills that will secure the clients’ loyalty and maybe persuade them to invest more with Merrill Lynch. As we said, there are lone wolves, but there is no doubt that for many brokers team membership is a plus; certainly the plaintiffs think so.
The teams are formed by brokers, and once formed a team decides whom to admit as a new member. Complex Directors and branch-office managers do not select the team‘s members.
Account distributions are transfers of customers’ accounts when a broker leaves Merrill Lynch and his clients’ accounts must therefore be transferred to other brokers. Accounts are transferred within
The Complex Directors, as well as the branch-office managers, have a measure of discretion with regard to teaming and account distribution; they can veto teams and can supplement the company criteria for distributions. And to the extent that these regional and local managers exercise discretion regarding the compensation of the brokers whom they supervise, the case is indeed like Wal-Mart. But the exercise оf that discretion is influenced by the two company-wide policies at issue: authorization to brokers, rather than managers, to form and staff teams; and basing account distributions on the past success of the brokers who are competing for the transfers. Furthermore, team participation and account distribution can affect a broker‘s performance evaluation, which under company policy influences the broker‘s pay and promotion. The plaintiffs argue that these company-wide policies exacerbate racial discrimination by brokers.
The teams, they say, are little fraternities (our term but their meaning), and as in fraternities the brokers choose as team members people who are like themselves. If they are white, they, or some of them anyway, are more comfortable teaming with other white brokers. Obviously they have their eyes on the bottom line; they will join a team only if they think it will result in their getting paid more, and they would doubtless ask a superstar broker to join their team regardless of his or her race. But there is bound to be uncertainty about who will be effective in bringing and keeping shared clients; and when there is uncertainty people tend to base decisions on emotions and preconceptions, for want of objectivе criteria.
Suppose a police department authorizes each police officer to select an officer junior to him to be his partner. And suppose it turns out that male police officers never select female officers as their partners and white officers never select black officers as their partners. There would be no intentional discrimination at the departmental level, but the practice of allowing police officers to choose their partners could be challenged as enabling sexual and racial discrimination—as having in the jargon of discrimination law a “dispаrate impact” on a protected group—and if a discriminatory effect was proved, then to avoid an adverse judgment the department would have to prove that the policy was essential to the department‘s mission.
Merrill Lynch‘s broker teams are formed by brokers, not managers, just as in our hypothetical example police officers’ partners are chosen by police officers, not supervisors. If the teaming policy сauses racial discrimination and is not justified by business necessity, then it violates Title VII as “disparate impact” employment discrimination—and whether it causes racial discrimination and whether it nonetheless is justified by business necessity are issues common to the entire class and therefore appropriate for class-wide determination.
And likewise with regard to account distributions: if as a result of racial prefer-
There is no indication that the corporate level of Merrill Lynch (or its parent, Bank of America) wants to discriminate against black brokers. Probably it just wants to maximize profits. But in a disparate impact case the presence or absence of discriminatory intent is irrelevant; and permitting brokers to form their own teams and prescribing criteria for account distributions that favor the already successful—those who may owe their success to having been invited to join a succеssful or promising team—are practices of Merrill Lynch, rather than practices that local managers can choose or not at their whim. Therefore challenging those policies in a class action is not forbidden by the Wal-Mart decision; rather that decision helps (as the district judge sensed) to show on which side of the line that separates a company-wide practice from an exercise of discretion by local managers this case falls.
Echoing the district judge, the defendant‘s brief states that “any discrimination here would result from local, highly-individualized implementation of policies rather than the policies themsеlves.” That is too stark a dichotomy. Assume that with no company-wide policy on teaming or account distribution, but instead delegation to local management of the decision whether to allow teaming and the criteria for account distribution, there would be racial discrimination by brokers or local managers, like the discrimination alleged in Wal-Mart. But assume further that company-wide policies authorizing broker-initiated teaming, and basing account distributions on past success, increase the amount of discrimination. The incremental causal effect (overlooked by the district judge) of those company-wide policies—which is the alleged disparate impact—could be most efficiently determined on a class-wide basis.
We are not suggesting that there is in fact racial discrimination at any level within Merrill Lynch, or that management‘s teaming and account distribution policies have a racial effect. The fact that black brokers have on average lower earnings than white brokers may have different causes altogether. The only issue at this stage is whether the plaintiffs’ claim of disparate impact is most efficiently determined on a class-wide basis rather than in 700 individual lawsuits.
The district judge exaggerated the impact on the feasibility and desirability of class action treatment of the fact that the exercise of discretion at the local level is undoubtedly a factor in the differential success of brokers, even if not a factor that overwhelms the effect of the corporate policies on teaming and on account distributions. Obviously a single proceeding,
As said in Mejdrech v. Met-Coil Systems Corp., 319 F.3d 910, 911 (7th Cir. 2003),
class action treatment is appropriate and is permitted by
Rule 23 when the judicial economy from consolidation of separate claims outweighs any concern with possible inaccuracies from their being lumped together in a single proceeding for decision by a single judge or jury. Often, and as it seems to us here, these competing considerations can be reconciled in a “mass tort” case by carving at the joints of the parties’ dispute. If there are genuinely common issues, issues identical across all the claimants, issues moreover the accuracy of the resolution of which is unlikely to be enhanced by repeated proceedings, then it makes good sense, especially when the class is large, to resolve those issues in one fell swoop while leaving the remaining, claimant-specific issues to individual follow-on proceedings.
The kicker is whether “the accuracy of the resolution” would be “unlikely to be enhanced by repeated proceedings.” If resisting a class action requires betting one‘s company on a single jury verdict, a defendant may be forced to settle; and this is an argument against definitively resolving an issue in a single case if enormous consequences ride on that resolution. In re Bridgestone/Firestone, Inc., 288 F.3d 1012, 1020 (7th Cir.2002); In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1299-1300 (7th Cir.1995); contra, Klay v. Humana, Inc., 382 F.3d 1241, 1274 (11th Cir.2004). But Merrill Lynch is in no danger of being destroyed by a binding class-wide determination that it has committed disparate impact discrimination against 700 brokers, although an erroneous injunction against its teaming and account distribution policies could disadvantage it in competition with brokerage firms that employ similar policies—though we have no information on whether others do.
The Mejdrech decision, and Bridgestone/Firestone and Rhone-Poulenc more fully, discuss the danger that resolving an issue common to hundreds of different claimants in a single proceeding may make too much turn on the decision of a single, fallible judge or jury. The alternative is multiple proceedings before different triers of fact, from which a consensus might emerge; a larger sample provides a more robust basis for an inference. But that is an argument for separate trials on pecuniary relief, and the only issue of relief at present is whether to allow the plaintiffs to seek class-wide injunctive relief. There isn‘t any feasible method—certainly none has been proposed in this case—for withholding injunctive relief until a series of separate injunctive actions has yielded a consensus for or against the plaintiffs.
We have trouble seeing the downside of the limited class action treatment that we think would be appropriate in this case, and we conclude that the district judge erred in deciding to the contrary (with evident misgivings, however). The denial of class certification under
REVERSED.