Robinson v. Metro-North Commuter R.R. Co.Robinson v. Metro-North Commuter R.R. Co.
For the reasons set forth below, the judgment is vacated and the district court is instructed to certify plaintiffs’ disparate impact claim for
Alan L. Fuchsberg, The Jacob D. Fuchsberg Law Firm, New York, Ny, for Plaintiffs-Appellants.
Myron D. Rumeld, Proskauer Rose, Llp, New York, Ny, for Defendant-Appellee.
Wendy R. Fleishman, Lieff, Cabraser, Heimann & Bernstein, Llp (Coalition of Labor Union Women), New York, Ny; Barbara R. Arnwine (Lawyers’ Committee for Civil Rights Under Law), Washington, Dc; Antonia Hernandez (Mexican American Legal Defеnse and Educational Fund), Los Angeles, Ca; Karen K. Narasaki (National Asian Pacific American Legal Consortium), Washington, Dc; Dennis C. Hayes (National Association for the Advancement of Colored People), Baltimore, Md; Paula A. Brantner (National Employment Lawyers Association), San Francisco, Ca; Marcia D. Greenberger (National Women‘s Law Center), Washington, Dc; Brad Seligman (Impact Fund), Berkeley, Ca; for Amici Curiae on behalf of Plaintiffs-Appellants.
Ann Elizabeth Reesman, McGuiness Norris & Williams (Equal Employment Advisory Council), Washington, Dc; for Amicus Curiae on behalf of Defendant-Appellee.
Before: Walker, Chief Judge, Calabresi and Pooler, Circuit Judges.
John M. Walker, Jr., Chief Judge.
Plaintiffs-appellants (the “Class Plaintiffs“) appeal from a September 29, 2000 judgment of the United States District Court for the Southern District of New York (Jed S. Rakoff, District Judge) that denied Class Plaintiffs’ motions for class certification and bifurcation, and that directed entry of judgment in favor of defendant-appellee Metro-North Commuter Railroad (“Metro-North“). See Robinson v. Metro-North Commuter R.R., 197 F.R.D. 85 (S.D.N.Y. 2000) (“Robinson II“).
The district court‘s judgment dismissing the action is vacated. On remand, the district court is instructed to certify the Class Plaintiffs’ disparate imрact claim for
BACKGROUND
A. The Allegations
The background of this case is substantially detailed in Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 286-90 (2d Cir. 1999) (“Caridad“) (reversing the denial of class certification, see Robinson v. Metro-North Commuter R.R., 175 F.R.D. 46 (S.D.N.Y. 1997) (“Robinson I“)). Only those facts relevant to this appeal are recited below.
The Class Plaintiffs are present and former Metro-North employees who are African American. They bring this putative class action against defendant Metro-North on behalf of “all African-American employees of Metro-North for the period from 1985 through 1996--an estimated 1,300 persons.” Caridad, 191 F.3d at 286. Metro-North is a public benefit corporation responsible for providing commuter rail transportation between New York City and its northern suburbs. It has approximately 5,700 employees in 220 different ocсupations spread over 37 departments.
The Class Plaintiffs assert both pattern-or-practice disparate treatment and disparate impact claims pursuant to Title VII of the Civil Rights Act of 1964, as amended,
B. The Earlier Appeal
In August 1997, the district court denied an earlier request for class certification because it held that the Class Plaintiffs had failed to satisfy the prerequisites for a сlass action set out in
“The commonality requirement is met if plaintiffs’ grievances share a common question of law or of fact.” Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997) (per curiam). Typicality “requires that the claims of the class representatives be typical of those of the class, and is satisfied when each class member‘s claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant‘s liability.” Id. (internal quotation marks omitted).
Central to the district court‘s finding that the Class Plaintiffs had failed to demonstrate commonality and typicality were the following: (1) Metro-North satisfied the district court that the “plaintiffs’ statistics are inadequate to carry their burden of establishing commonality as to the company-wide class” because “they fail to take account of the fact that different Metro-North positions have materially different individual rates of discipline and of promotion associated with them;” and (2) Metro-North‘s “overdelegation” of promotion and discipline аuthority to supervisors is not sufficient to make out a pattern or practice of racial discrimination. Robinson I, 175 F.R.D. at 48-49. We disagreed and held that: (1) the “`statistical dueling‘” between the Class Plaintiffs and Metro-North was “not relevant to the certification determination,” and that the Class Plaintiffs’ statistical report, “in conjunction with the anecdotal evidence, satisfie[d] the Class Plaintiffs’ burden of demonstrating” commonality and typicality; and (2) the delegation of discretionary authority to supervisors for discipline and promotion constitutes a policy or practice sufficient to satisfy the commonality requirement. Caridad, 191 F.3d at 292-93.2 The case was remanded for the district court to consider “whether the requirements of
C. The District Court‘s Ruling After Remand
Following remand, the Class Plaintiffs moved in the district court for (b)(2) class certifications of both the pattern-or-practice disparate treatment claim and the disparate impact claim. See
The district court denied the motions. Relying on the Fifth Circuit‘s recent decision in Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (5th Cir. 1998), the district court reasoned that (b)(2) certification of the entire pattern-or-practice disparate treatment claim was inappropriate because the individualized compensatory damage issues would predominate over the class-wide equitable relief question, see Robinson II, 197 F.R.D. at 87-88. Central to the district court‘s conclusion was its belief that
determination of the damages suffered by individual members of the class would require individualized proof and proceedings to determine whether each such member suffered intentional discrimination on the part of his or her department manager, what injuries each such member thereby suffered, what individualized damages were appropriate to redress such injuries, etc.
Id. at 88. “[The] multiple individual determinations of damages for the numerous members of the class,” the district court concluded, “would overwhelm classwide injunctive issues, from both the standpoint of the individual plaintiffs and the standpoint of the Court.” Id.
With respect to the Class Plaintiffs’ alternative request that the pattern-or-practice claim be bifurcated and the liability stage certified for class treatment as a (b)(2) class, the district court reasoned that “the[] individual determinations will overwhelm the liability phase of any trial nearly as much as they would overwhelm any damages phase, once again rendering class action treatment inappropriate under
The district court did not set forth a basis for denying (b)(2) certification of the disparate impact claim.
DISCUSSION
At the outset, we observe that this appeal does not involve consideration of the merits of the case. See, e.g., Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974). Rather, it concerns whether the district court abused its discretion in denying class certification. See Sirota v. Solitron Devices, Inc., 673 F.2d 566, 570-72 (2d Cir. 1982). And, in particular, it requires us to consider how the passage of the Civil Rights Act of 1991 (“the 1991 Act“), see Pub. L. No. 102-166, 105 Stat. 1071, affected the class certification analysis in employee discrimination cases. See generally Daniel F. Piar, The Uncertain Future of Title VII Class Actions After the Civil Rights Act of 1991, 2001 BYU L. Rev. 305. As we discuss below, contrary to both Metro-North‘s arguments on appeal and the Fifth Circuit‘s recent decision in Allison, we find that the changes made by the 1991 Act are not fatal to class treatment of employment discrimination claims. But see Allison, 151 F.3d at 409-10.
To understand why, it is first necessary to consider the changes brought about by the 1991 Act and to review the elements and evidentiary requirements for pattern-or-practice disparate treatment claims and disparate impact claims.
I. THE 1991 ACT AND TITLE VII CLAIMS GENERALLY
A. The 1991 Act
Prior to the passage of the 1991 Act, a plaintiff seeking a monetary award for disparate treatment3 and disparate impact claims under Title VII could recover only back pay and front pay. Because back pay and front pay have historically been recognized as equitable relief under Title VII, neither party was entitled to a jury trial; both disparate treatment and disparate impact claims were tried to the bench. See, e.g., Lehman v. Nakshian, 453 U.S. 156, 164 (1981); Lincoln v. Bd. of Rеgents of Univ. Sys. of Ga., 697 F.2d 928, 934 (11th Cir. 1983); Moore v. Sun Oil Co. of Pa., 636 F.2d 154, 156 (6th Cir. 1980); Slack v. Havens, 522 F.2d 1091, 1094 (9th Cir. 1975); see also Pollard v. E.I. du Pont de Nemours & Co., 121 S. Ct. 1946, 1951-52 (2001) (holding that front pay is an equitable remedy). But see Setser v. Novack Inv. Co., 638 F.2d 1137, 1142 (8th Cir.) (holding that back pay is a legal remedy for which the right to a jury trial exists), vacated in part on other grounds, 657 F.2d 962 (8th Cir. 1981) (en banc).
The 1991 Act enhanced Title VII‘s remedial scheme for disparate treatment claims. In addition to back pay and front pay, it authorized the recovery of compensatory and punitive damages in disparate treatment disputes, see
B. Proving Title VII Claims
1. Pattern-or-Practice Disparate Treatment Claims
Pattern-or-practice disparate treatment claims focus on allegations of widespread acts of intentional discrimination against individuals. To succeed on a pattern-or-practice claim, plaintiffs must prove more than sporadic acts of discrimination; rather, they must establish that intentional discrimination was the defendant‘s “standard operating procedure.” Int‘l Bhd. of Teamsters v. United States, 431 U.S. 324, 336 (1977).
Generally, a pattern-or-practice suit is divided into two phases: liability and remedial.4 See id. at 360-62. At the liability stage, the plaintiffs must produce sufficient evidence to establish a prima facie case of a policy, pattern, or practice of intentional discrimination against the protected group. See id. at 360. “Plaintiffs have typically depended upon two kinds of circumstantial evidence to establish the existence of a policy, pattern, or practice of intentional discrimination: (1) statistical evidence aimed at establishing the defendant‘s past treatment of the protected group, and (2) testimony from protected class members detailing specific instances of discrimination.”5 1 Arthur Larson et al., Employment Discrimination § 9.03[1], at 9-18 (2d ed. 2001); see Mozee v. Am. Commercial Marine Serv. Co., 940 F.2d 1036, 1051 (7th Cir. 1991).
Statistics alone can make out a prima facie case of discrimination if the statistics reveal “a gross disparity in [the] treatment of workers based on race.” Lopez v. Laborers Int‘l Union, Local No. 18, 987 F.2d 1210, 1214 (5th Cir. 1993) (internal quotation marks omitted); see also Ardrey v. United Parcel Serv., 798 F.2d 679, 684 (4th Cir. 1986) (“Since strong statistical evidence, without anecdotal evidence, may in some cases form a prima facie case, a defendant‘s successful rebuttal of each alleged instance of discrimination weakens, but does not defeat, a plaintiff‘s class claim. Neither statistical nor anecdotal evidence is automatically entitled to reverence to the exclusion of the other.“).
If the plaintiffs satisfy this prima facie requirement, “[t]he burden [of production] then shifts to the employer to defeat [it]... by demonstrating that the [plaintiffs‘] proof is either inaccurate or insignificant.” Teamsters, 431 U.S. at 360.
Three basic avenues of attack are open to the defendant challenging the plaintiff[s‘] statistics, namely assault on the source, accuracy, or probative force. The defendant can present its own statistical summary treatment of the protected class and try to convince the fact finder that these numbers present a more accurate, complete, or relevant picture than the plaintiff[s]’ statistical showing. Or the defendant can present anecdotal and other non-statistical evidence tending to rebut the inference of discrimination. The prudent defendant will follow all three routes if possible, presenting its own version of the numbers game, attempting tо undermine the plaintiff[s]’ version with specific attacks on [the] validity of the plaintiff[s]’ statistics, and garnering non-statistical evidentiary support as well.
Larson, supra, § 9.03[2], at 9-23 to 9-24 (footnote omitted).
Once the defendant introduces evidence satisfying this burden of production, the trier of fact then must consider the evidence introduced by both sides to determine whether the plaintiffs have established by a preponderance of the evidence that the defendant engaged in a pattern or practice of intentional discrimination. See Teamsters, 431 U.S. at 336. Should the plaintiffs prove a pattern or practice of discrimination, the court may proceed to fashion class-wide injunctive relief. See id. at 361; Dillon v. Coles, 746 F.2d 998, 1004 (3d Cir. 1984).
If individual relief such as back pay, front pay, or compensatory recovery is sought in addition to class-wide injunctive relief, the court must conduct the “remedial” phase. Class members enter this second phase with a presumption in their favor “that any particular employment decision, during the period in which the discriminatory policy was in force, was made in pursuit of that policy.” Teamsters, 431 U.S. at 362.
The effect of thе presumption from the liability stage is to substantially lessen each class member‘s evidentiary burden relative to that which would be required if the employee were proceeding separately with an individual disparate treatment claim under the McDonnell Douglas framework. Cf. Texas Dep‘t of Cmty. Affairs v. Burdine, 450 U.S. 248 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Rather than having to make out a prima facie case of discrimination and prove that the employer‘s asserted business justification is merely a pretext for discrimination, see, e.g., Scarlett v. Seaboard Coast Line R.R. Co., 676 F.2d 1043, 1053 (5th Cir. 1982), a class member at the remedial stage of a pattern-or-practice claim need only show that he or she suffered an adverse employment decision “and therefore was a potential victim of the proved [class-wide] discrimination.” Teamsters, 431 U.S. at 362. The burden of persuasion then shifts to “the employer to demonstrate that the individual [was subjected to the adverse employment decision] for lawful reasons.” Id.
If the employer is unable to establish a lawful reason for an adverse employment action, the employee is entitled to individualized equitable relief, which may include back pay and front pay. Class members who seek compensatory damages in addition to individualized equitable relief must then prove that the discrimination caused them “emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, [or] other non-pecuniary losses.”
2. Disparate Impact Claims
Like pattern-or-practice disparate treatment claims, disparate impact claims “are attacks on the systemic results of employment practices.” Segar v. Smith, 738 F.2d 1249, 1267 (D.C. Cir. 1984). However, where the inquiry in a pattern-or-practice disparate treatment claim is focused on determining the existence of discriminatory intent, disparate impact claims are concerned with whether employment policies or practices that are neutral on their face and were not intended to discriminate have nevertheless had a disparate effect on the protected group. See Griggs v. Duke Power Co., 401 U.S. 424, 432 (1971) (stating that an employer‘s “good intent” is irrelevant to a disparate impact claim). “The doctrine seeks the removal of employment obstacles, not required by business necessity, which create built-in headwinds and freeze out protected groups from job opportunities and advancement.” EEOC v. Joe‘s Stone Crab, Inc., 220 F.3d 1263, 1274 (11th Cir. 2000) (internal quotation marks omitted).
Disparate impact claims involve three stages of proof. The first is the prima facie showing of disparate impact. It requires plaintiffs to establish by a preponderance of the evidence that the employer “uses a particular employment practice that causes a disparate impact on the basis of race, color, religion, sex, or national origin.”
As with the liability phase of a pattern-or-practice disparate treatment claim, statistical proof almost always occupies center stage in a prima facie showing of a disparate impact claim. See Hill v. Miss. State Employment Serv., 918 F.2d 1233, 1238 (5th Cir. 1990) (per curiam); Rose v. Wells Fargo & Co., 902 F.2d 1417, 1424 (9th Cir. 1990). See generally 2 Larson, supra, §§ 22.01 to 22.10, at 22-1 to 22-78. The statistics must reveal that the “disparity is `substantial’ or `significant.‘” Bouman v. Block, 940 F.2d 1211, 1225 (9th Cir. 1991) (quoting Clady v. County of L.A., 770 F.2d 1421, 1428 (9th Cir. 1985)); see EEOC v. Joint Apprenticeship Comm., 186 F.3d 110, 117 (2d Cir. 1999). Moreover, the statistics must be of a kind and degree sufficient to reveal a causal relationship between the challenged practice and the disparity. See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 994 (1988); Mems v. City of St. Paul, 224 F.3d 735, 740 (8th Cir. 2000).
If the plaintiffs succeed in their prima facie showing, the burden of persuasion then shifts to the employer to demonstrate one of two things. The first option is to challenge the plaintiffs’ statistical proof. This may be done by introducing evidence to show that either no statistically significant disparity in fact exists or the challenged practice did not cause the disparity. See, e.g., In re Employment Discrimination Litig., 198 F.3d 1305, 1313 (11th Cir. 1999). To successfully contest the plaintiffs’ statistical evidence, however, the employer has to convince the factfinder that its “numerical picture is more accurate, valid, or reliable than the plaintiff[s]’ evidence.” 2 Larson, supra, § 23.02, аt 23-3. If the employer is able to do so, it prevails and the case ends.
Assuming the employer is unable to successfully contest the plaintiffs’ statistics, a second route is for the employer to demonstrate that the challenged practice or policy is “job related for the position in question and consistent with business necessity.”
If the employer fails to demonstrate a business justification for the policy or practice, see
Should the plaintiffs succeed in establishing a Title VII disparate impact violation, the court may order prospective class-wide injunctive relief. See In re Employment Discrimination Litig., 198 F.3d at 1315. Still, in order for an employee to obtain individual relief (e.g., back or front pay), an inquiry similar to the remedial stage of a pattern-or-practice disparate treatment claim is generally required.6 See 2 Larson, supra, § 31.02, at 31-4. Each class member must show that he or she was among those adversely affected by the challenged policy or practice. If this showing is made, the class member is entitled to individual relief unless the employer in turn can establish by a preponderance of the evidence that a legitimate non-discriminatory reason existed for the particular adverse action. See, e.g., Stephen v. PGA Sheraton Resort, Ltd., 873 F.2d 276, 279 (11th Cir. 1989).
II. STANDARD OF REVIEW
District courts are afforded substantial leeway in deciding issues of class certification. A class-certification decision will “only be overturned if it constitutеs an abuse of discretion.” Lundquist v. Sec. Pac. Auto. Fin. Servs. Corp., 993 F.2d 11, 14 (2d Cir. 1993) (per curiam) (citation and internal quotation marks omitted). “However, the failure to follow the proper legal standards in certifying a class... is an abuse of discretion.” Blyden v. Mancusi, 186 F.3d 252, 269 (2d Cir. 1999) (citation and internal quotation marks omitted) (alterations in original). And, our deference is “noticeably less” when a district court “has denied class status than when it has certified a class.” Caridad, 191 F.3d at 291 (quoting Lundquist, 993 F.2d at 14).
Having now set forth the elements and evidentiary requirements for Title VII claims and our standard of review for the denial of class certification, we turn to the Class Plaintiffs’ contentions on appeal.
III. CERTIFICATION OF THE PATTERN-OR-PRACTICE CLAIM
With respect to the district court‘s denial of class certification of the pattern-or-practice disparate treatment claim, the Class Plaintiffs argue that the court abused its discretion (1) by applying an erroneous standard to decide whether to certify the claim under Rule 23(b)(2) or, alternatively, (2) in failing to sever and certify under Rule 23(b)(2) at least the liability phase of the claim.7
A. Claim Certification
The Class Plaintiffs contend that the district court utilized an unduly stringent standard in refusing (b)(2) certification of the pattern-or-praсtice claim. We agree.
1. Standards for Assessing Predominance: A Bright-line or Ad Hoc Approach?
The (b)(2) class action is intended for cases where broad, class-wide injunctive or declaratory relief is necessary to redress a group-wide injury. The text of
This subdivision is intended to reach situations where a party has taken action or refused to take action with respect to a class, and final relief of an injunctive nature or of a corresponding declaratory nature, settling the legality of the behavior with respect to the class as a whole, is appropriate.... The subdivision does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages.
To date, our circuit precedent has provided no guidance to lower courts faced with assessing whether “final relief relates... predominantly to money damages” to preclude (b)(2) class treatment. See Eisen v. Carlisle & Jacquelin, 391 F.2d 555, 564 (2d Cir. 1968) (“Subsection (b)(2)... is only applicable where the relief sought is exclusively or predominantly injunctive or declaratory.“), vacated on other grounds, 417 U.S. 156 (1974). Without a clear standard discernible from either the text of
[I]n any such action in which both injunctive and monetary relief [are] sought, the inherently individualized nature of the determination of damages... render[s] it predominant, and thereby make[s] class action status under
Rule 23(b)(2) inappropriate, except in those rare incidences in which the request for monetary relief [is] wholly “incidental” to the requested injunctive relief.
Robinson II, 197 F.R.D. at 87. The district court went on to state that incidental damages
should at least be capable of computation by means of objective standards and not dependent in any significant way on the intangible, subjective differences of each class member‘s circumstances. Liability for incidental damages should not require additional hearings to resolve the disparate merits of each individual‘s case; it should neither introduce new and substantial legal or factual issues, nor entail complex individualized determinations.
Id. at 88 (quoting Allison, 151 F.3d at 415).
By limiting (b)(2) certification to claims involving no more than incidental damages, the standard utilized by the district court forecloses (b)(2) class certification of all claims that include compensatory damages (or punitive damages) even if the class-wide injunctive relief is the “form of relief in which the plaintiffs are primarily interested.” Hoffman v. Honda of Am. Mfg., Inc., 191 F.R.D. 530, 535-36 (S.D. Ohio 1999); see Allison, 151 F.3d at 429 (Dennis, J., dissenting) (stating that “the majority decrees that if compensatory or punitive damages are prayed for, the case is automatically classified as `predominantly’ related to money damages and therefore not certifiable under (b)(2)“). This bright-line prohibition follows from the fact that “[t]he very nature of [compensatory] damages, compensating plaintiffs for emotional and other intangible injuries, necessarily implicates the subjective differences of each plaintiff‘s circumstances....” Allison, 151 F.3d at 417; see, e.g., Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d 1228, 1239 (11th Cir. 2000), cert. denied, 121 S. Ct. 1354 (2001). By definition, howеver, incidental damages must be susceptible to “computation by means of objective standards and not dependent in any significant way on the [class members‘] intangible, subjective differences,” which compensatory damages clearly are. Robinson II, 197 F.R.D. at 88 (quoting Allison, 151 F.3d at 415); see Smith v. Texaco, Inc., 263 F.3d 394, 408-09 (5th Cir. 2001) (“[C]onsidering Allison and rule 23(b)(2)‘s formulation, the instant claims could not have been certified under that paragraph, because compensatory and punitive damages predominate over injunctive/declaratory relief.” (emphasis added)).
Thus, the question we must decide is whether this bright-line bar to (b)(2) class treatment of all claims for compensatory damages and other non-incidental damages (e.g., punitive damages) is appropriate. For the reasons we discuss below, we believe that it is not and therefore decline to adopt the incidental damages approach set out by the Fifth Circuit in Allison and followed by the district court below. Rather, we hold that when presented with a motion for (b)(2) class certification of a claim seeking both injunctive relief and non-incidental monetary damages, a district court must “consider[] the evidence presented at a class certification hearing and the arguments of counsel,” and then assess whether (b)(2) certification is appropriate in light of “the relative importance of the remedies sought, given all of the facts and circumstances of the case.” Hoffman, 191 F.R.D. at 536. The district court may allow (b)(2) certification if it finds in its “informed, sound judicial discretion” that (1) “the positive weight or value [to the plaintiffs] of the injunctive or declaratory relief sought is predominant even though compensatory or punitive damages are also claimed,” Allison, 151 F.3d at 430 (Dennis, J., dissenting), and (2) class treatment would be efficient and manageable, thereby achieving an appreciable measure of judicial economy.
Although the assessment of whether injunctive or declaratory relief predominates will require an ad hoc balancing that will vary from case to case, before allowing (b)(2) certification a district court should, at a minimum, satisfy itself of the following: (1) even in the absence of a possible monetary recovery, reasonable plaintiffs would bring the suit to obtain the injunctive or declaratory relief sought; and (2) the injunctive оr declaratory relief sought would be both reasonably necessary and appropriate were the plaintiffs to succeed on the merits. Insignificant or sham requests for injunctive relief should not provide cover for (b)(2) certification of claims that are brought essentially for monetary recovery. See, e.g., In re Sch. Asbestos Litig., 789 F.2d 996, 1008 (3d Cir. 1986).
2. Considerations Supporting the Ad Hoc Approach
Several considerations inform our decision to adopt this ad hoc approach over the incidental damages standard with its absolute bar to claims seeking compensatory and punitive damages.
Foremost among these is the fact that
Additionally, we find that an ad hoc approach satisfies the very concerns that have led other courts to adopt the incidental damages standard--specifically, (1) achieving judicial efficiency, and (2) ensuring due process for absent class members. See Allison, 151 F.3d at 414-15. With respect to the former concern, permitting district courts to assess issues of judicial economy and class manageability on a case-by-case basis is superior to the one-size-fits-all approach of the incidental damages standard. As for the latter concern, as we discuss below, options other than the adoption of the incidental damages approach exist to eradicate the due process risks posed by (b)(2) class certification of claims for damages. Cf., Robinson v. Sears, Roebuck & Co., 111 F. Supp. 2d 1101, 1126 (E.D. Ark. 2000).
Where class-wide injunctive or declaratory relief is sought in a (b)(2) class action for an alleged group harm, there is a presumption of cohesion and unity betweеn absent class members and the class representatives such that adequate representation will generally safeguard absent class members’ interests and thereby satisfy the strictures of due process. See, e.g., Johnson v. Gen. Motors Corp., 598 F.2d 432, 437 (5th Cir. 1979) (“When only [non-monetary] equitable relief is sought in a[] [class] action involving a cohesive plaintiff group such as a class of black employees at an assembly plant, the due process interests of absent members will usually be safeguarded by adequate representation alone.“). This presumption of cohesion and unity continues where incidental damages are also sought because entitlement to such damages does not vary based on the subjective considerations of each class member‘s claim, but “flow[s] directly from a finding of liability on the... claims for class-wide injunctive and declaratory relief.” Allison, 151 F.3d at 416.
In contrast, where non-incidental monetary relief such as compensatory damages are involved, due process may require the enhanced procedural protections of notice and opt out for absent class members. This is because entitlement to non-incidental damages may vary among class members depending on the circumstances and merits of each claim.9 The presumption of class homogeneity and cohesion falters, and thus, adequate representation alone may prove insufficient to protect absent class members interests. See, e.g., Lemon v. Int‘l Union of Operating Eng‘rs, 216 F.3d 577, 580 (7th Cir. 2000); Jefferson v. Ingersoll Int‘l Inc., 195 F.3d 894, 897 (7th Cir. 1999); Johnson, 598 F.2d at 438; see also Ortiz v. Fibreboard Corp., 527 U.S. 815, 846 (1999); Thomas v. Albright, 139 F.3d 227, 236 (D.C. Cir. 1998). Absent class members may therefore need notice that their claims are being pursued in the class action and the opportunity either to opt out and pursue their claims separately or to intervene, should they conclude such active participation would better protect their individual interests.
However, certification of a claim for non-incidental damages under
To recap, we hold that the district court erred in applying the incidental damages standard to deny the Class Plaintiffs’ request for (b)(2) certification of the pattern-or-practice disparate treatment claim. On remand, the district court should reconsider the propriety of (b)(2) certification in light of the standard that we adopt in this opinion. However, because we recognize that, even under the discretionary standard we endorse, the district court may still conclude that (b)(2) certification of the entire pattern-or-practice disparate treatment claim is inappropriate, we turn to consider the Class Plaintiffs’ alternate contention that the district court erred in denying partial certification of the claim.
B. Partial Certification
The Class Plaintiffs argue that the district court erred in refusing to bifurcate the pattern-or-practice claim and certify the liability stage of the claim for (b)(2) class treatment. See
Here, litigating the pattern-or-practice liability phase for the class as a whole would both reduce the range of issues in dispute and promote judicial economy. For example, if the class should succeed and, even assuming that the remedial stage is ultimately resolved on a non-class basis, the issues and evidence relevant to these individual adjudications would be substantially narrowed:
By proving that the defendant engaged in a pattern or practice of discrimination, not only is the plaintiff class‘s eligibility for appropriate prospective relief established, a prima facie case with regard to the remedial phase of the suit, in which relief for individuals is considered, is also made out. Thus, the court presumes that the employer unlawfully discriminated against individual class members. In pattern or practice cases, however, the presumption shifts to the employer not only the burden of production, but also the burden of persuading the trier of fact that it is more likely than not that the employer did not unlawfully discriminate against the individual. Craik v. Minn. State Univ. Bd., 731 F.2d 465, 470 (8th Cir. 1984) (internal citation omitted). If, on the other hand, Metro-North succeeds at the liability stage, the question of whether it engaged in a pattern or practice of intentional discrimination that injured its African-American employees would be completely and finally determined, thereby eliminating entirely the need for a remedial stage inquiry on behalf of each class member.
In denying partial certification, the district court apparently did not appreciate these potential benefits because the court had misapprehended the nature of the proof required at the liability stage. Specifically, the district court believed that “discriminatory acts of particular department managers in particular individuаl situations” would have to be tried and that this would “overwhelm the liability phase.” Robinson II, 197 F.R.D. at 88.
However, as we have discussed, see supra Part I(B)(1), the liability phase is largely preoccupied with class-wide statistical evidence directed at establishing an overall pattern or practice of intentional discrimination. See Allison, 151 F.3d at 434 (Dennis, J., dissenting). To the extent that evidence regarding specific instances of alleged discrimination is relevant during the liability stage, it simply provides “texture” to the statistics. Such anecdotal evidence is not introduced to establish that the particular instances of discrimination actually occurred nor that the particular employees were in fact victims of discrimination. See Price Waterhouse v. Hopkins, 490 U.S. 228, 244-45 n.10 (1989), superseded by statute on other grounds. Indeed, to ensure that the liability phase remains manageable, the district court may limit the anecdotal evidence as it deems appropriate. See
Accordingly, we hold that the district court abused its discretion in not certifying the liability stage of the pattern-or-practice disparate treatment claim for (b)(2) class treatment.12
IV. CERTIFICATION OF THE DISPARATE IMPACT CLAIM
The Class Plaintiffs contend that the district court abused its discretion in declining to certify the disparate impact claim for (b)(2) class treatment. Here again, we agree.
In considering the propriety of the district court‘s decision to deny (b)(2) certification, we are mindful that, prior to the enactment of the Civil Rights Act of 1991, Title VII discrimination claims seeking both injunctive and equitable monetary relief, like the disparate impact claim here, were routinely certified as (b)(2) classes. See, e.g., Eubanks, 110 F.3d at 92; Probe v. State Teachers’ Ret. Sys., 780 F.2d 776, 780 (9th Cir. 1986); Holmes, 706 F.2d at 1152; Alexander v. Aero Lodge No. 735, 565 F.2d 1364, 1372 (6th Cir. 1977), superseded by statute on other grounds; Sperry Rand Corp. v. Larson, 554 F.2d 868, 875 (8th Cir. 1977); Rich v. Martin Marietta Corp., 522 F.2d 333, 341-42 (10th Cir. 1975); Wetzel v. Liberty Mut. Ins. Co., 508 F.2d 239, 250-51 (3d Cir. 1975); Pettway v. Am. Cast Iron Pipe Co., 494 F.2d 211, 256-57 (5th Cir. 1974); 5 Newberg & Conte, supra, § 24.115, at 24-381 to 24-383 & n.930; see also Allison, 151 F.3d at 415 (observing that “back pay could be sought in a (b)(2) class action because, as an equitable remedy similar to other forms of affirmative injunctive relief permitted in (b)(2) class actions, it was an integral component of Title VII‘s ‘make whole’ remedial scheme“).
Given that the 1991 Act did not alter the general remedial structure of disparate impact claims, we think it plain that (b)(2) certification of disparate impact claims seeking both injunctive and equitable monetary relief remains appropriate.
Metro-North argues that in the instant case we should depart from this general practice because (b)(2) class cеrtification of the disparate impact claim would violate the
The
We believe Class Plaintiffs’ opportunity to proceed to a jury trial first on the liability phase of the pattern-or-practice claim avoids the possibility of an infringement of the trial-by-jury guarantee. Should the Class Plaintiffs prevail at the liability stage of the pattern-or-practice claim, the court can order class-wide injunctive relief and proceed to the remedial phase. Trial of the disparate impact claim could then be put off until the remedial phase is resolved, thus ensuring that any overlapping factual issues between the two claims will have first been tried to a jury in accordance with the Seventh Amendment. If, however, the Class Plaintiffs should prove unsuccessful at the liability stage with respect to the pattern-or-practice disparate treatment claim, the district court can proceed with a bench trial of the disparate impact claim, relying on answers to special interrogatories from the pattern-or-practice jury for any common factual issues.14
V. ADEQUACY OF REPRESENTATION
As a final challenge to class certification, Metro-North argues that the Class Plaintiffs are unlikely to “fairly and adequately protect the interests of the class” as required by Rule 23(a)(4). See
Two factors generally inform whether class representatives satisfy the Rule 23(a)(4) requirement: “(1) absence of conflict and (2) assurance of vigorous prosecution.” 1 Newberg & Conte, supra, § 3.22, at 3-126; cf. Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625-26 (1997) (“[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members.” (internal quotation marks omitted) (alterations in original)). Metro-North does not contend that a conflict exists between the Class Plaintiffs and the putative class. Rather, it argues that the Class Plaintiffs may lack an incentive to vigorously pursue the individual relief phases of the claims.
Metro-North bases this contention on the fact that, as part of a settlement and stipulation with Metro-North, the Class Plaintiffs agreed only to “participate as named plaintiffs and/or class representatives . . . in support of the class claims and/or [to] receive any class-wide injunctive relief,” “but not [to seek] individual relief of any kind,” including monetary relief. Robinson II, 197 F.R.D. at 89-90. Metro-North argues that “[e]ven if some or all of the remaining [Class] Plaintiffs [are] suitable represеntatives for purposes of prosecuting the claims for liability, they plainly [are] unsuited to serve as representatives for class claims for monetary relief, since none of them [are] entitled to any additional monetary relief.” The district court agreed with Metro-North, reasoning that “[t]he net effect [of the settlement and stipulation] is that the [Class Plaintiffs] . . . have little or no continued interest in pursuing damages on behalf of their fellow class members.” Id. at 90.
We think it significant that Metro-North has not suggested, nor did the district court find, that the Class Plaintiffs are inadequate representatives to pursue class-wide injunctive relief. Indeed, the settlement stipulation makes clear that the Class Plaintiffs stand to benefit from any class-wide injunctive relief that may be ordered. The Class Plaintiffs, therefore, plainly have an interest in fairly and vigorously pursuing the liability stage of the pattern-or-practice claim and the class-wide aspects of the disparate impact claim because the successful prosecution of one of these portions is a prerequisite for the issuance of class-wide injunctive relief.
Metro-North‘s contention that the Class Plaintiffs may thereafter fail to “vigorously” pursue the individual relief stages is both speculative and premature, and, we believe, is an insufficient basis for rejecting class certification at this juncture. Rather, the preferable course is for the district court to revisit the question of the Class Plaintiffs’ “fitness” to represent the class if and when the individual-relief stages of the claims occur. Then, if the district court deems it appropriate, it can direct that class members who are entitled to seek individual relief be named as additional class representatives. See Heit v. Van Ochten, 126 F. Supp. 2d 487, 494-95 (W.D. Mich. 2001); In re Copley Pharm., Inc., 161 F.R.D. 456, 468 (D. Wyo. 1995); see also
VI. ADDITIONAL OBSERVATIONS
Some additional observations are warranted. First, the district court retains discretion to modify the certification structure on remand as warranted by the progression of the case. See generally Federal Judicial Center, Manual for Complex Litigation § 20.13, at 14-15 (3d ed. 1995). This includes the discretion to sub-class the claims by department or othеrwise. See Marisol A., 126 F.3d at 379 (“Rule 23 gives the district court flexibility to certify subclasses as the case progresses and as the nature of the proof to be developed at trial becomes clear.“). Indeed, the Class Plaintiffs’ attorney conceded at oral argument that this may prove necessary.
Second, we emphasize again that today‘s decision does not relate to the underlying merits of the class claims, as to which we express no opinion.15
CONCLUSION
We vacate the district court‘s judgment dismissing the Class Plaintiffs’ suit. The district court is instructed to certify the disparate impact claim under Rule 23(b)(2). The district court is also instructed to reconsider the propriety of certifying the entire pattern-or-practice disparate treatment claim in light of the standard set out herein. If the court determines in its discretion that (b)(2) certification of the entire claim is still inappropriate, then the district court shall bifurcate the pattern-or-practice claim and certify the liability stage under Rule 23(b)(2).
Each side to bear its own costs for this appeal.
Notes
When faced with the question in Allison, the Fifth Circuit rejected (b)(3) certification of the liability phase. The Allison court reached this conclusion after applying the (b)(3) predominance requirement to the pattern-or-practice claim “as a whole” and finding that the “individual-specific issues” predominated. Allison, 151 F.3d at 421; see Smith, 263 F.3d at 409-10. The court‘s strict application of the (b)(3) predominance inquiry to the entire pattern-or-practice claim was based on a footnote in Castano v. Am. Tobacco Co., 84 F.3d 734 (5th Cir. 1996), that stated: “The proper interpretation of the interaction between subdivisions (b)(3) and (c)(4) is that a cause of action, as a whole, must satisfy the predominance requirement of (b)(3) and that (c)(4) is a housekeeping rule that allows courts to sever the common issues for a class triаl.” Id. at 745 n.21.
Although we do not decide the question, we note that it would be an issue of first impression in this circuit and caution that an alternative understanding of the interaction of (b)(3) and (c)(4) to that set forth in Castano has been advanced elsewhere. See, e.g., Valentino v. Carter-Wallace, Inc., 97 F.3d 1227, 1234 (9th Cir. 1996) (“Even if the common questions do not predominate over the individual questions so that class certification of the entire action is warranted, Rule 23 authorizes the district court in appropriate cases to isolate the common issues under Rule 23(c)(4)(A) and proceed with class treatment of these particular issues.“); In re Tetracycline Cases, 107 F.R.D. 719, 727 (W.D. Mo. 1985) (“[T]he appropriate meaning of Rule 23(b)‘s predominance requirement, as applied in the context of a partial class certification request under Rule 23(c)(4)(A), is simply that the issues covered by the request be such that their resolution (as a class matter) will materially advance a disposition of the litigation as a whole.“).
Trying a bifurcated claim before separate juries does not run afoul of the
calls for sound case management, not [outright] avoidance of the procedure. . . . First, the court needs to carefully define the roles of the two juries so that the first jury does not decide issues within the prerogative of the second jury. Second, the court must carefully craft the verdict form for the first jury so that the second jury knows what has been decided already. If the first jury makes sufficiently detailed findings, those findings are then akin to instructions for the second jury to follow.
Steven S. Gensler, Bifurcation Unbound, 75 Wash. L. Rev. 705, 736-37 (2000) (footnotes omitted); see Simon v. Philip Morris Inc., 200 F.R.D. 21, 36 (E.D.N.Y. 2001) (noting that “different issues can be submitted to different juries as long as they are not presented in a way that causes juror confusion or uncertainty“); Patrick Woolley, Mass Tort Litigation and the Seventh Amendment Reexamination Clause, 83 Iowa L. Rev. 499 (1998). See generally Crane v. Consol. Rail Corp., 731 F.2d 1042, 1049-50 (2d Cir. 1984) (Friendly, J.) (discussing the use of special interrogatories to insulate various elements of a cause of action).
The existence of common factual issues is to be distinguished from the existence of overlapping evidence. For purposes of the Seventh Amendment, the question is whether factual issues overlap, thus requiring one trier-of-fact to decide a disputed issue that must be decided by a subsequent jury, not whether the two fact-finders will merely have to consider similar evidence in deciding distinct issues.
Id. at 423 n.21 (citing Ala. v. Blue Bird Body Co., 573 F.2d 309, 318-19 (5th Cir. 1978)) (emphases in original).