281 F.3d 477 | 5th Cir. | 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 F ED . R. tion claims made against Texaco, Inc. (“Tex- C IV . 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 environment for black employees. [3] The claims tion orders that Star and Texaco appealed. 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
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- served disparities, see Johnson v. Uncle Ben’s, II. Inc., 965 F.2d 1363, 1367 (5th Cir. 1992), and
A.
must present a systemic analysis of those A district court maintains substantial employment practices to establish their case, see discretion in determining whether to certify a Black Fire Fighters Ass’n v. City of Dallas, 905 class. See Jenkins v. Raymark Indus., Inc. , 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 F.2d 760, 763 (5th Cir. 1983). Nonetheless, [5] The disparate treatment model is based on section 703(a)(1) of title VII, 42 U.S.C. § 2000e- “[a] district court by definition abuses its
2(a)(1), which provides that it is an unlawful em- discretion when it makes an error of law.” ployment practice “to discriminate against any Koon v. United States , 518 U.S. 81, 99-100 individual with respect to his compensation, terms, (1996). Whether the court applied the correct conditions, or privileges of employment” because legal standard is a question subject to de novo 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 impact [4] and systemic disparate treatment [5] ; plaintiff’s qualifications. See McDonnell Douglas
Corp. v. Green, 411 U.S. 792 (1973). 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 N EWBERG & C ONTE , N EWBERG sporadic occurrence. See Teamsters , 431 U.S. ON C LASS A CTIONS §§ 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 federally protected rights of an aggrieved [5] (...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- ages, either party may demand a jury. See § [6] See, e.g., Richardson v. Byrd, 709 F.2d 1016 1981a(c). (5th Cir. 1983); Robinson v. Union Carbide Corp., 538 F.2d 652 (5th Cir. 1976); Pettway v. Am. Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974).
C. (2) there be questions of law or fact Under F ED . R. C IV . 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 level of generality. [9] In Mullen v. Treasure of all members is impracticable;
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 intent. [11] class members would assert claims for employed with discriminatory 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 liability SS i.e., the class members’ which will affect all or a significant number of status as Jones Act seamen, the negligence of class members SS whether the policy has a Treasure Chest, and the unseaworthiness of disparate impact on black employees SS the commonality test is met. [12] the Casino SS were independently sufficient to 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. Had they done so, their disparate treatment claim (injunction compensatory and punitive
would have been significantly less complex. We damages) noted, without challenge, that the note, without adopting, that at least one court had class met the rule 23 requirements. The held that class certification under a disparate similarities between the Allison plaintiffs and treatment theory requires an allegation that the the current plaintiffs strongly suggest 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] The test does not appear to require reconsider it en banc. See Allison , 151 F.3d at 434 (denying rehearing en banc). predomination, just commonality. members, [14] and several of the named plaintiffs similarity between the named plaintiffs’ legal 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 impact theory. [15] The Court held that the while another was the object of discrimination. 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”); s ee 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 district court found that the named the named plaintiffs and class members prove causation and damages SS a 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 negligence SS they did not affect the Court’s disagreement with the certification alignment of their interests). decision. Gen. Tel. , 457 U.S. at 152-59. 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 statute. [17] individual’s case, making it less of a group 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 in which equitable monetary claims were at [16] By “incidental,” we mean that “damages that stake. See Johnson v. Gen. Motors Corp., 598 flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief. . . . Ideally, incidental damages [17] See NLRB v. Fabsteel Co. , 587 F.2d 689 (5th should be only those to which the class members 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.). 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 issues for a class trial. [18] To read the rule not the court finds that the questions of law or fact common to the members of the class predominate over any questions [18] This “as a whole” requirement suggests some affecting only individual members, and interesting permutations. Any change in the that the class action is superior to other composition of liability issues or damages sought methods for a fair and efficient would require a new accounting to determine adjudication of the controversy. The whether common or individual issues predominate. matters pertinent to the findings include: For example, a disparate impact claim SS a 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, it prevents the establishment of a per se rule that forum; (D) the difficulties likely to be
would prohibit title VII claims’ being tried as class encountered in management of a class actions. We reject defendants’ characterization of action. Allison as establishing such a per se rule. See id. (citing In re N. Dist. of Cal. Dalkon Shield IUD
Rule 23(b)(3). The two main inquiries are 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...) 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
(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 Id. at 272 . The court remarked that it was not Stores, Inc. , 182 F.3d 333 (5th Cir. 1999) (en deciding that issues of intent, of compensatory banc). Before this court decided Defenbaugh- damages, and of punitive damages are Williams en banc, we decided Allison , which
inseparable as a matter of law in all cases. See 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- tent as to each white employee. [20] In contrast, court’s description of the various factors sug- 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 disparate treatment claim. [21] that if punitive damages ever are available in a discrimination suit on a class-wide basis, Plaintiffs point to two asbestos cases [22] to without individualized proof, the instant alle- 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] (...continued) plaintiffs challenge broad policies and practices plaintiffs will have suffered damage from each of that were applied in a non-standard way. The the alleged policies in the same manner, or perhaps named plaintiffs cannot hope to show, except even suffered damage from the same number of by individual proof, that the policies as applied policies. These factors place the award of punitive in each instance occurred with the required 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. 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 identically SS as opposed to individual. [23] similarly SS situated, a court might be able to
forego individual damage inquiries; but that is not the case. [24] The district court also attempted to 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 point. Just as in Allison , the plaintiffs’ claims [23] 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
2. reading of Jenkins . The superiority inquiry looks to see wheth- er the class action is truly a more efficient We also are at a loss to understand why we means of resolving the legal issues. The class should ignore “language” in the intervening Su- 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 individual .” Kolstad , 527 U.S. at 534 (quoting 42 [24] 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. 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 equitable claims. [27] Thus, under § 1981a, the attaches to a claim, however, it extends to all
right to a jury extends to all factual issues necessary to determine liability on the pattern or practice claim and the quantum of [25] This analysis closely tracks our opinion in compensatory and punitive damages. The Allison . inseparability of the plaintiffs’ disparate treat- ment and disparate impact claims, on the one [26] In a supplemental letter filed pursuant to hand, from their specific remedy requests, on F ED . R. A PP . P. 28(j), plaintiffs call our attention to the other, thus presents a difficult hurdle for Cooper Indus., Inc., v. Leatherman Tool Group,
class certification. [28] Inc. ,121 S. Ct. 1678 (2001), which was issued 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 employment action. To resolve either claim, questions of historical predictive fact, while the the trier of fact must determine whether each latter is “not really a ‘fact’ ‘tried’ by the jury.” Id. 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] The dissent relies on excerpts from the leg- Absent Congress’s 1991 grant of a right to jury 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). 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 practice. [29] [T]he employer’s effort to rebut the pat- 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 estoppel.” Id. (citations omitted). [30] ing of disparity and the defendant’s re- 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. Atonio, 490 U.S. 642, 660 (1989), common to both Similarly, the business necessity defense to claims, see Allison , 151 F.3d at 424. disparate impact claims and the legitimate nondiscriminatory reason defense to disparate [30] See also Lemon, 216 F.3d at 582 (noting, in treatment claims are not “so distinct and sep- 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...) 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 judicial resources. [32] The court also felt that This same jury would have to det ermine the 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 “pattern and practice” of discrimination. They cite year period. This situation is not one in which
authority from other circuits. the bifurcation plan certified “discrete liability” 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] Although the court did not use the precise requested injunctive relief, the Lemon court 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...) 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 action SS the should their be a class option. The court twice existence of a negative value suit SS is 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 granting rule 23(b)(3) certification. [33] This issue may not necessarily arise in all title VII cases, but it will likely occur where, as here,
G.
plaintiffs allege multiple theories, either party Defendants claim that Castano requires that demands a jury trial, and plaintiffs seek both 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. Castano , 84 F.3d at 745. Castano did not [35] For instance, Texaco claims that the job- establish a general rule; rather, it disallowed posting policy actually changed during the class certification where the district court had period. This means that groups of plaintiffs po- confronted a claim involving an enormously tentially will have suffered harm from different complicated (and immature) mass tort with no policies, reducing the commonality element for the track record of trials from which the district liability issues related to the job-posting policy claim. 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 final judgment in the underlying action. [36] This not stay proceedings in the district court 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). 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 F ED . R. “original pleading” in Roberts . Otherwise, the C IV . 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 district court allowed misled non-plaintiffs to [37] See Hood v. Sears, Roebuck & Co., 168 F.3d file and relate back a new cause of action to a 231, 232 (5th Cir. 1999) (stating that claimant non-defendant of a previous (and at some bears the burden in title VII cases). 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 class is to be decertified, it is sufficient for this
(2) the claim or defense asserted in the appeal that at least one appellant was properly amended pleading arose out of the conduct, before this court. transaction, or occurrence set forth or at- 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] (...continued) the action would have been brought against
(continued...) the party. 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 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 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 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 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 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 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 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 certification in the tobacco class action we decertified. [60]
I would follow precedent, adhere to the abuse of discretion standard, and affirm.
NOTES
[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.
[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 procedure SS the 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. 324 employee” 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...)
[9] See, e.g. , Gen. Tel. Co. v. Falcon , 457 U.S. 147 (1982) (“We cannot disagree with the
[7] See Amchem Prods., Inc. v. Windsor, 521 proposition underlying the across-the-board U.S. 591 (1997); United States Parole Comm’n v. rule SS that racial discrimination is by definition Geraghty, 445 U.S. 388 (1980). 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...)
[18] (...continued) damages, there must be egregious misconduct 1986).
[19] To the extent that the district court contended
[21] 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 plaintiffs SS who said they received good the dissent does not address it. Nor does it address PMP marks SS the 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] Jenkins and In re Fibreboard , 893 F.3d 706 There also can be little doubt that not all (continued...) (5th Cir. 1990).
[39] F ED . R. C IV . P. 23 advisory committee’s note (1966 Amendment).
[40] 431 U.S. 324 (1977).
[41] Id. at 360.
[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...)
[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).
[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 , W ALL S T . J., November 17, 2000, at A3.
[48] See Darryl Van Duch, Following Trend, Coke Brings in Bias Monitors , N EW Y ORK L. J., June 14, 2001, at 5 (discussing $176.1 million Texaco settlement, $34 million Mitsubishi settlement, and $192.5 million Coca- Cola settlement).
[49] 7A C HARLES A LAN W RIGHT ET AL ., F EDERAL P RACTICE AND P ROCEDURE § 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.
[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).
[57] 527 U.S. 526 (1999).
[58] Kolstad, 527 U.S. at 545 (internal quotation marks omitted).
[59] Id. at 546.
[60] Castano v. American Tobacco Co., 84 F.3d 734, 741-44, 747 (5th Cir. 1996).
