DEFENDING A CLASS ACTION

Transcription

1 American Bar Association Annual Meeting 1999 Section of Labor and Employment Law DEFENDING A CLASS ACTION C. Geoffrey Weirich, Esq. Maureen E. O Neill, Esq. Paul, Hastings, Janofsky& Walker LLP Atlanta, Georgia August 10, 1999

2 DEFENDING A CLASS ACTION I. Introduction A. Trend of increasing employment discrimination class action filings: Year Number of Employment Discrimination Class Actions Filed 1/ B. More cases in the headlines and public attention focused on discrimination in the workplace significant exposure to employers 1. Texaco (race): $176.1 million 2. Shoney s (race): $134.5 million 3. Lucky Stores (gender): $ million 4. Home Depot (gender): $ 87.5 million 5. Publix (gender): $81.5 million 6. Mitsubishi (sexual harassment): $34 million 1/ See Report of the Director, Administrative Office of the United States Courts (portions of which were reprinted in Richard T. Seymour, Trends in Fair Employment Litigation, Midwinter Meeting of the Committee on Equal Employment Opportunity, Section of Labor and Employment Law, American Bar Association, March 25, 1998, p. 3.) 1

3 II. Class Actions Generally A. Rule 23 Class Actions 1. Title VII, 1981, ADA 2. Rule 23(a) requirements: a. numerosity b. commonality c. typicality d. adequacy of representation 3. Rule 23(b) requirements: a. Rule 23(b)(2): the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or b. Rule 23(b)(3): the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. B. Opt-In Class Actions 1. FLSA, ADEA, FMLA 2. Subject to 16(b) of the FLSA 3. Only statutory criterion is that the representative plaintiffs must be similarly situated C. EEOC Pattern and Practice Cases 1. Need not satisfy Rule 23 or 16(b) 2

4 2. Pattern and practice suits are authorized by 707(e) and brought under 706(f) 3. ADEA and Equal Pay Act collective actions can be brought under 16(c) and 17 of the FLSA, but are not subject to opt-in provisions applicable to private suits III. Organizing the Defense Team A. Create team with experts on various aspects of the case B. The Law: 1. Class certification law 2. Law regarding relevant defenses a. Statute of limitations b. Continuing violations c. Administrative prerequisites d. Bona fide seniority system e. Business necessity f. Statistics C. The Facts: 1. The employer s policies, practices, and procedures 2. The plaintiffs claims, and those of their witnesses D. Statistics: 1. Developing and understanding the statistics 2. Statistical discovery: 3

5 a. database discovery b. expert depositions E. Discovery: 1. Written discovery: offensive 2. Written discovery: defensive 3. Depositions of plaintiffs and their witnesses 4. Defending depositions of 30(b)(6) witnesses 5. Defending depositions of company fact witnesses F. Opposing Class Certification IV. Early Factual Development A. Understand the Employer 1. Corporate structure and organization as it relates to the practices challenged by plaintiffs a. How is the company organized? b. What are its functions? c. What are jobs in each functional area? d. Union(s)? (1) Learn the relevant provisions of the applicable collective bargaining agreements: hiring, job assignments, promotions, transfers, discipline, discharge, benefits (2) Are the terms of the contract followed without exception? Any side agreements? 4

6 (3) Grievance and alternative dispute resolution mechanisms? e. Centralized vs. localized control 2. Decisionmaking (1) Operations (2) Human Resources a. Who are the decision-makers? For what decisions? b. How are decisions made? (1) Hiring (2) Transfers and lateral moves (3) Promotions how are candidates nominated and selected: (a) (b) (c) within hourly positions to management or salaried positions within management or salaried positions (4) Discipline (5) Discharges (6) Performance reviews (7) Compensation (8) Training c. How do decision-making procedures differ across units of the company? (a) No difference at all centralized practices 5

7 (b) (c) (d) Differs by functional area or division Differs by geographical area Differs by facility d. How have decision-making procedures differed over time during the limitations period? e. Important Policies & Procedures (1) EEO policies and procedures (2) Anti-harassment policies and procedures (3) Complaints intake and investigation (4) Training procedures EEO and diversity training f. Documents: Collection and Retention (1) What documents are generated during decision-making and selection processes? (a) (b) (c) (d) (e) (f) applications interviews performance reviews surveys job requests/postings investigative files (2) What documents contain or reflect policies, practices, procedures? (3) Where are documents kept? 6

8 (4) What are retention practices? g. Electronic Data (1) What data is kept electronically? (2) For how long? (3) In what format? B. Understand the Plaintiffs and Their Case 1. What are plaintiffs challenging? a. Disparate treatment vs. adverse impact b. Subjective decision-making c. Channeling d. Glass ceilings/walls e. Lack of posting or other job information tap on the shoulder f. Disparate application of collective bargaining agreements g. Hostile environment 2. Investigate the named plaintiffs and their identified witnesses a. Review company documents b. Interview company witnesses 3. Begin preparing for plaintiffs depositions 4. Begin preparing for their witnesses depositions C. Understand the Numbers 7

9 1. Begin preliminary statistical analysis 2. Consulting expert vs. testifying expert maintain the distinction during early investigation V. Communicating with Putative Class Members A. Before the Class Action Complaint is Filed: 1. Generally, employers are free to communicate with potential class members before a class complaint is filed. 2. The company may use these communications in an attempt to survey employee interests or preferences, to remedy alleged grievances, to obtain releases from liability, to discuss settlement offers with individual class members, or to obtain information for the defense of the case. B. After Filing of the Class Action Complaint, but Before Class Certification: 1. Communications through discovery a. The normal discovery process is available for communications with named plaintiffs and potential class members to gather evidence to oppose class certification. b. Of course, discovery can be an expensive, time consuming, and sometimes ineffective method of investigating the class allegations. 2. Communications through ex parte contact with unrepresented putative class members a. Some courts have local rules prohibiting or limiting such communications. b. A blanket prohibition on all communications with putative class members before class certification, in the absence of specific findings warranting such a prohibition, has been held unconstitutional. Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981) ( an order limiting communications between parties and potential class members should be based on a clear record and specific findings 8

10 that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties ). c. Before class certification, communications with putative class members generally are not barred by the ethical prohibitions on communications with parties represented by counsel. Winfield v. St. Joe Paper Co., 20 Fair Empl. Prac. Cas. (BNA) 1093, 1977 WL (N.D. Fla. 1977) (allowing defense counsel to contact members of proposed class of employees to obtain pertinent information before certification, and finding that the requirements of DR7-104(a)(1) do not apply to putative class members who did not retain counsel to represent them before class certification). d. As a general rule, defense counsel may continue to communicate with putative class members to investigate claims and gather evidence after the class action complaint is filed, as long as they do not make misleading statements and do not attempt to convince putative class members to opt out of the class or dissuade them from participating in the class action. See Manual for Complex Litigation (Third) (1995); 3 Newberg on Class Action If the defendant is misleading, coercive, or threatening in these communications, the court may impose restrictions on future communications, corrective notices, or sanctions. See generally 3 Newberg on Class Actions e. Courts have held that it is appropriate for a defendant employer to interview its employees ex parte when certain safeguards are met, such as: (1) the employees are advised that the interviewer is an attorney representing the defendant; (2) the interviewer informs the employee that he or she is investigating the facts in order to defend the case; (3) the interview is voluntary; (4) the interviewer informs the employee that a refusal to talk will not result in adverse action and that willingness to talk will not lead to any benefits. Babbitt v. Albertson s, C , 1993 U.S. Dist. Lexis (N.D. Cal. Jan. 28, 1993). f. Employers should be cautious in communicating with unrepresented putative class members outside the context of settlement discussions, investigations of allegations, and the ordinary course of business. Communications aimed at discouraging participation in the class action as a party or a witness 9

11 should not be undertaken. See Hampton Hardware, Inc. v. Cotter & Co., 156 F.R.D. 630 (N.D. Tex. 1994) (prohibiting defendant from engaging in further communications with putative class members after the defendants president contacted putative class members on three separate occasions to warn them not to join the class action); Rossini v. Ogilvy & Mather, Inc., 798 F.2d 590 (2d Cir. 1972) (lower court s order limiting communications with putative class members was not an abuse of discretion because the court issued the order after finding evidence of specific abuse). g. Named Plaintiffs and Class Representatives: Any communication regarding the lawsuit with a named class representative or represented witness should go through counsel. See Blanchard v. Edgemark Financial Corp., 175 F.R.D. 293, 1997 WL (N.D. Ill. 1997) (holding that defendants violated ethical rule prohibiting contact with a represented party when it negotiated settlement with class representative without permission of class counsel or court approval). But an employer may continue to deal with its employees in the ordinary course of business regarding operational issues, even if they are named plaintiffs. C. After Class Certification: 1. Once a class is certified, the rules governing communications apply as though each class member is a client of class counsel. Therefore, communications with class members after class certification are prohibited by ethical rules that forbid contact with represented parties. See, e.g.: a. Impervious Paint Industries, Inc. v. Ashland Oil, 508 F. Supp. 720 (W.D. Ky. 1981), appeal dismissed without opinion, 659 F.2d 1081 (6 th Cir. 1981) (communications by employer during the opt-out period, which advised class members that participation in suit would require them to submit to onerous legal proceedings, and which resulted in an extraordinary percentage of opt-outs, were prohibited and required corrective notice and a new opt-out period); b. Tedesco v. Mishkin, 629 F. Supp (S.D.N.Y. 1986) (issuing an order prohibiting further communications to class members after class certification, after finding that a letter was sent to class members containing materially false and misleading statements); 10

12 c. Haffer v. Temple Univ., 115 F.R.D. 506 (E.D. Pa. 1987) (in a class action regarding alleged discrimination in the university s intercollegiate athletic program, the court ordered corrective notice and imposed sanctions after the university distributed a memo that urged coaches and staff not to condemn the university as long as they were still employed by it, and which contained false and misleading statements designed to urge class members not to meet with class counsel). 2. However, communications with class members in the ordinary course of business may be permissible even after class certification. See, e.g., High v. Braniff Airways, Inc., 20 FR Serv. 2d 439 (W.D. Tex. 1975) (court entered a protective order after class certification allowing employer to send personnel questionnaire relating to day-to-day operations, but prohibiting defendant s counsel from reviewing the responses). 3. Courts may require curative notice if the defendant treads too closely to the line. See, e.g., Shores v. Publix Super Markets, Inc., No CIV-T-25(E), 1996 WL (M.D. Fla. Nov. 25, 1996), order vacated by Shores v. Publix Super Markets, Inc., No CIV-T-25(E), 1997 WL (M.D. Fla. Jan. 27, 1997). VI. Formulating a Discovery Plan A. Bifurcation 1. Class discovery from merits discovery 2. Liability discovery from damages discovery B. Length of discovery period(s) C. Scope of discovery 1. Time 2. Geography 3. Operational entities: 11

13 a. subsidiaries b. divisions, districts, etc. c. franchisees 4. Employee groups: a. hourly vs. salaried b. union vs. non-union 5. Claims at issue D. Components of discovery 1. Depositions: a. Plaintiffs and their witnesses b. Company fact witnesses c. 30(b)(6) witnesses d. Experts: Plaintiffs and Defendant s 2. Written Discovery a. Class-related discovery b. Discovery to individual plaintiffs c. Third party discovery d. Expert reports VII. Opposing Class Certification A. Develop a strategy to oppose class certification: Law + Facts + Statistics B. Legal Arguments: 12

14 1. Standing a. As a threshold matter, the court must assess whether plaintiffs have standing, in the constitutional sense, to assert the purported class claims. See Griffin v. Dugger, 823 F.2d 1476 (11 th Cir. 1987). b. Each class claim plaintiffs attempt to assert must be analyzed separately, and a claim cannot be asserted on behalf of [the] class unless at least one named plaintiff has suffered the injury that gives rise to that claim. Griffin v. Dugger, 823 F.2d 1476, 1483 (11 th Cir. 1987). c. A named plaintiff complaining of a particular employment practice, e.g., discriminatory discharge, cannot assert claims on behalf of the putative class concerning other employment practices as to which he or she has not been personally injured. See Vuyanich v. Republic Nat. Bank of Dallas, 723 F.2d 1195 (5 th Cir. 1984) (plaintiffs with hiring and termination claims lacked standing to assert compensation, promotion, placement, and maternity practices claims on behalf of class). 2. Applicable administrative prerequisites a. At least one named plaintiff must have filed a timely EEOC charge alleging class allegations. See Jones v. Firestone Tire & Rubber Co., 977 F.2d 527 (11 th Cir. 1992); Grayson v. K Mart Corp., 79 F.3d 1086 (11 th Cir. 1996); Griffin v. Dugger, 823 F.2d 1476 (11 th Cir. 1987); Oatis v. Crown Zellerbach Corp., 398 F.2d 496 (5 th Cir. 1968). b. For non-filing plaintiffs to rely on the charge of a filing plaintiff, the individual claims of the filing and non-filing plaintiffs must have arisen out of similar discriminatory treatment in the same time frame. Jones v. Firestone, 977 F.2d at Statute of Limitations a. In Title VII cases, the classwide liability period is established using the earliest timely filed EEOC charge that contains class allegations similar to those asserted on behalf of the class. 13

15 b. In 1981 cases, there are three ways to calculate the limitations period using state personal injury statutes of limitations: (1) the statute of the forum state; (2) the statute of the state most connected with the action; or (3) the statutes of the state(s) in which the claims arose (i.e., potentially different limitations period for each state in which class members are located). c. Where it would result in a longer limitations period, plaintiffs have attempted to argue (with only limited success), that the uniform federal four-year statute of limitations contained in 28 U.S.C should apply to 1981 cases. 4. Rule 23(a) a. Numerosity (1) Usually not disputed (2) Consider arguing that numerosity refers to the number of potentially aggrieved persons, not the number of persons in the class. Use statistical shortfalls or surpluses to identify this number. But see Boykin v. Georgia-Pacific Corp., 706 F.2d 1384 (5 th Cir. 1983) (court held that all 317 members of the class had a stake in the failure-to-promote claim because it was impossible to identify the 20 additional persons who would have been promoted but for the discrimination that occurred). b. Commonality (1) Plaintiffs bear burden to enumerate specific questions of law or fact common to the class. General Tel. Co. v. Falcon, 457 U.S. 147 (1982). If broad allegations of discrimination are the only common denominator, commonality requirement is not satisfied. Wheeler v. City of Columbus, 703 F.2d 853 (5 th Cir. 1983); Zapata v. IBP, Inc., 167 F.R.D. 147 (D. Kan. 1996). (2) Where plaintiffs and putative class members are in different facilities, supervised by different managers, doing different 14

16 jobs, and/or subject to different practices, lack of commonality may be found. See, e.g.: (a) Zachery v. Texaco Exploration and Production, Inc., 185 F.R.D. 230 (W.D. Tex. 1999) (no commonality where facilities were geographically widespread and employment decisions were subject to autonomous local control); (b) Abrams v. Kelsey-Seybold Med. Group, Inc., 1997 WL (S.D. Tex. Nov. 18, 1997) ( [a] class may not be based on discrimination occurring in different departments, involving different decision makers ); (c) Appleton v. Deloitte & Touche L.L.P., 168 F.R.D. 221 (M.D. Tenn. 1996) (no commonality where employment decisions were made locally, and criteria tended to vary from one office to another); (d) Lumpkin v. E.I. Du Pont de Nemours & Co., 161 F.R.D. 480 (M.D. Ga. 1995) (no commonality where plaintiffs were employed in different departments, supervised by different people, work different shifts and are at different levels within the company hierarchy); (e) Allen v. City of Chicago, 828 F. Supp. 543 (N.D. Ill. 1993) (no commonality where each of the city s departments determined which employees would be affected by reorganization). (3) Falcon footnote 15: leaves open the door for certification of a broad class where commonality is satisfied through significant proof that an employer operated under a general policy of discrimination... if the discrimination manifested itself... in the same general fashion, such as through entirely subjective decisionmaking processes. 15

17 (a) (b) To defeat application of footnote 15, focus on objective elements of decisionmaking processes, and lack of significant proof of disparities. See Vuyanich v. Republic Nat l Bank, 723 F.2d 1195 (5 th Cir. 1984) (reliance on two objective inputs in hiring decisions (education and experience) defeated application of footnote 15 exception); Abrams, 1997 WL (employer defeated allegation of entirely subjective hiring decisions by showing that it used written objective job qualifications); Appleton v. Deloitte & Touche, 168 F.R.D. 221 (M.D. Tenn. 1996) ( [i]n applying Footnote 15, the courts have required plaintiffs to show that a defendant s decisionmaking process is entirely subjective before permitting an across the board attack). c. Typicality (1) Typicality exists when the plaintiff will necessarily prove the bulk of each class member s claim by proving his or her own claim. (2) Typicality will not be found where the claims are factspecific or highly individualized. See, e.g.: (a) (b) Roby v. St. Louis Southwestern Ry. Co., 775 F.2d 959 (8 th Cir. 1985) (claims of plaintiffs discharged for rules violations not typical of claims of class members discharged for other reasons); Gorence v. Eagle Food Centers, Inc., 1994 WL (N.D. Ill. 1994) (plaintiffs claims regarding compensation, demotion, and promotion were not typical of class claims as each claim was factspecific); (c) Reyes v. Walt Disney World Co., 176 F.R.D. 654 (M.D. Fla. 1998) (no typicality where the claim of 16

18 d. Adequacy of Representation each plaintiff and putative class member subject to unique circumstances). (1) Adequacy of Class Counsel C The plaintiffs attorneys must be qualified, experienced and generally able to conduct the proposed litigation. Griffin v. Carlin, 755 F.2d 1516 (11 th Cir. 1985). (2) Conflicts of Interest (a) (b) (c) Conflicts can exist where differently situated plaintiffs and class members are interested in different remedies. Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997). Conflicts can exist when supervisors and their subordinates are members of the same class. See Wagner v. Taylor, 836 F.2d 578 (D.C. Cir. 1987); Appleton, 168 F.R.D. at 223. Conflicts also may be demonstrated where plaintiffs assert discrimination based on multiple protected characteristics (e.g., race and sex). (3) Credibility and Integrity of Plaintiffs (a) (b) The representative plaintiffs must be honest and credible. See, e.g., Hall v. Burger King Corp., Trade Cas. (CCH) 70,042, at 69,149 (S.D. Fla. 1992) (plaintiffs lack of credibility and honesty was fatal to their representative status); Armour v. City of Anniston, 89 F.R.D. 331 (N.D. Ala. 1980) (plaintiff not adequate representative where she perjured herself), aff d, 654 F.2d 382 (5 th Cir. 1981); Savino v. Computer Credit, Inc., 164 F.3d 81 (2d Cir. 17

19 1998) (plaintiff s inconsistent accounts would create serious concerns as to his credibility at any trial and made him an inadequate class representative); Darvin v. International Harvester Co., 610 F. Supp. 255 (S.D.N.Y. 1985) (plaintiff was not appropriate class representative where his deposition testimony was inconsistent and reflected very poor memory of important facts); Kaplan v. Pomerantz, 132 F.R.D. 504 (N.D. Ill. 1990) (plaintiff fails adequacy requirement because of misleading deposition testimony). 5. Rule 23(b)(2) a. Certification under Rule 23(b)(2) is only appropriate where equitable relief is the predominant remedy sought. Rule 23(b)(2) certification is precluded where monetary relief is sought, unless such monetary relief is merely incidental to the requested injunctive or declaratory relief. b. In Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5 th Cir. 1998), suggestion for reh g en banc denied (5 th Cir. Oct. 2, 1998), the Fifth Circuit held that, where plaintiffs seek compensatory and punitive damages on behalf of a class, monetary relief cannot be considered merely incidental to equitable relief. Id. at 416. (1) The court explained when monetary damages are incidental to equitable relief: [S]uch damages should at least be capable of computation by means of objective standards and not dependent in any significant way on the intangible, subjective differences of each class member s circumstances. Liability for incidental damages should not require additional hearings to resolve the disparate merits of each individual s case; it should neither introduce new and substantial legal or factual issues, nor entail complex individualized determinations. Thus, incidental damages will, by definition, be more in the nature of a group remedy, consistent with the forms of relief intended for (b)(2) class actions. 18

20 (2) The court stated that, although Title VII cases were routinely afforded class action treatment prior to the Civil Rights Act of 1991, the availability of compensatory and punitive damages under that statute renders class certification inappropriate under Rule 23(b)(2) because those damages are not incidental. Those monetary damages do not flow naturally from the equitable relief, and cannot be ascertained on a class-wide or group basis. (3) Compensatory damages: The very nature of these damages, compensating plaintiffs for emotional and other intangible injuries, necessarily implicates the subjective differences of each plaintiff s circumstances; they are an individual, not class-wide remedy. Id. at 417. (4) Punitive damages: And because punitive damages must be reasonably related to the reprehensibility of the defendant s conduct and to the compensatory damages awarded to the plaintiffs [citations omitted], recovery of punitive damages must necessarily turn on the recovery of compensatory damages.... Moreover, being dependent on non-incidental compensatory damages, punitive damages are also nonincidental requiring proof of how discrimination was inflicted on each plaintiff, introducing new and substantial legal and factual issues, and not being capable of computation by reference to objective standards. Id. at 418. c. Cases following the reasoning of Allison with respect to Rule 23(b)(2): (1) Pre-Allison cases: (a) Griffin v. Home Depot, Inc., 168 F.R.D. 187 (E.D. La. 1996); (b) Zapata v. IBP, Inc., 167 F.R.D. 147 (D. Kan. 1996); (c) Abrams v. Kelsey-Seybold Med. Group, Inc., 1997 WL (S.D. Tex. 1997). 19

21 (2) Post-Allison cases: (a) (b) (c) (d) Israel v. Avis Rent-A-Car Systems, Inc., 185 F.R.D. 372 (S.D. Fla. 1999) (where plaintiffs in religious discrimination case sought special damages, general compensatory damages, nominal damages and punitive damages, certification under 23(b)(2) was inappropriate because monetary damages were significant portion of relief requested; however, court certified class under 23(b)(3)); Faulk v. Home Oil Co., 184 F.R.D. 645 (M.D. Ala. 1999) (claims for compensatory and punitive damages in race discrimination case rendered class certification under 23(b)(2) inappropriate); Pickett v. IBP, Inc., 182 F.R.D. 647 (M.D. Ala. 1998) (requested compensatory and punitive damages under the Packers and Stockyard Act were not incidental to equitable relief and class therefore could not be certified under 23(b)(2); court predicted that the Eleventh Circuit would follow Allison); Taylor v. Flagstar Bank, 181 F.R.D. 509 (M.D. Ala. 1998) (action seeking treble damages under the Real Estate Settlement Procedures Act could not be certified under Rule 23(b)(2)); (e) Woodell v. Proctor & Gamble Manuf. Co., 1998 WL (N.D. Tex. 1998) (where compensatory and punitive damages were sought in a product liability class action, monetary relief predominated and class could not be certified under 23(b)(2)). d. Can plaintiffs decline to seek compensatory and punitive damages in a Title VII case, in order to avoid the holding of Allison? (1) At least one court has held that plaintiffs may not simply forego monetary damages in order to avoid Allison and get 20

22 a 23(b)(2) class certified. Zachery v. Texaco Exploration and Production, Inc., 185 F.R.D. 230 (W.D. Tex. 1999). (a) (b) (c) The court in Zachery explained that the plaintiffs decision to waive compensatory and punitive damages would likely be binding on absentee class members through principles of res judicata or collateral estoppel. Moreover, the absentee class members had no clear right to opt out of the 23(b)(2) class, and thus had no means to preserve their own individual claims for compensatory and punitive damages. The court held that [t]he class members the Plaintiffs seek to represent must be given the opportunity to pursue intentional discrimination claims and seek monetary damages, and certifying this class may very well deny them just that chance. Id. at *14. Accordingly, class certification was denied. 6. Rule 23(b)(3) (2) Another court, however, permitted plaintiffs to pursue only equitable relief on behalf of a class. McClain v. Lufkin Industries, Inc., 1999 WL (E.D. Tex. 1999). The court certified a Rule 23(b)(2) class by severing plaintiffs individual claims for monetary relief from the class claims, which sought only injunctive relief. a. Predominance of common issues (1) The 23(b)(3) predominance inquiry, which focuses on the legal and factual questions surrounding each putative class member s claims, is far more demanding than Rule 23(a) s commonality requirement. Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999 (11 th Cir. 1998). (2) Both the Fifth and Eleventh Circuits have held recently that no predominant questions existed in disparate treatment 21

23 cases where an analysis of plaintiffs claims will require distinctly case-specific inquiries into the facts surrounding each alleged incident of discrimination. Motel 6, 130 F.3d at 1006; Allison, 151 F.3d at 420. (3) Both Motel 6 and Allison found that the only arguably common question that existed whether there existed a policy or practice of discrimination could not predominate as required by Rule 23(b)(3). Motel 6, 130 F.3d at 1006; Allison, 151 F.3d at 420. (4) Cases following the reasoning of Motel 6 and Allison with respect to the Rule 23(b)(3) predominance requirement: (a) (b) Jackson v. Motel 6 Multipurpose, Inc., 1998 WL (M.D. Fla. Mar. 31, 1998) (following the Eleventh Circuit s decision, the district court denied certification of the requested employee class hostile environment claims because the work environment will have to be evaluated on a site-by-site basis ); Kirkpatrick v. Fabri-Centers of America, Inc., No CIV-ORL-22, slip op. at 5-6 (M.D. Fla. Oct. 16, 1997) (the commonality of issues is far outweighed by the differences where resolution of the class disparate treatment claims would require the fact finder to analyze the individual circumstances of each plaintiff); (c) Zapata v. IBP, Inc., 167 F.R.D. 147 (D. Kan. 1996) (denying class certification because individualized damages determinations would predominate over any common issues). b. Superiority of class action device (1) The trial court must consider the manageability of the proposed class action at the class certification stage; the Court cannot postpone this fundamental Rule 23 determination. See Andrews v. American Tel. & Tel. Co., 95 F.3d 1014 (11 th Cir. 1996) (where manageability 22

24 problems were apparent at the class certification stage, class should not be certified on the assurance that a solution will later be found); Windham v. American Brands, Inc., 565 F.2d 59 (4 th Cir. 1977) (when serious problems appear at the class certification stage, a class should not be certified on the mere assurance that the parties will later find a solution); Butt v. Allegheny Pepsi-Cola Bottling Co., 116 F.R.D. 486 (E.D. Va. 1987) (declining to certify class simply based on plaintiffs promise to find solution to difficulty of calculating individual damages); Wilcox Dev. v. First Interstate Bank of Oregon, 97 F.R.D. 440 (D. Or. 1983) ( if the case necessitates individual proof of damages, the court should consider the length of court time which will be required to prove damages for each member of the class ); see also In re Hotel Telephone Charges, 500 F.2d 86 (9th Cir. 1974) (reversing district court s certification of class in part because the district court improperly postponed its consideration of whether common questions predominated over individual ones). (2) When plaintiffs seek compensatory and punitive damages, the proposed class action becomes unmanageable, because the determination of such damages will depend on the circumstances of each individual case and cannot be computed on a group-wide basis. See Allison, 151 F.3d at 419 ( the predominance of individual-specific issues relating to the plaintiffs claims for compensatory and punitive damages... detracts from the superiority of the class action device ); Zapata, 167 F.R.D. at 163 ( claims for compensatory damages unique to each individual greatly complicate management of a class ); Gorence, 1994 U.S. Dist. LEXIS (class action not superior when, given the personalized nature of the class claims, the court could be forced to hold a series of mini-trials to determine whether each class member suffered discrimination, as well as individualized damages ). (3) When the determination of each class member s damages cannot be proved by a mathematical or formula calculation, but instead requires individual proof of damages through a mini-trial before a jury, the case should not be certified as 23

25 C. Statistical Issues a class under Rule 23(b)(3). See McKnight v. Circuit City Stores, Inc., 168 F.R.D. 550 (E.D. Va. 1996) (bifurcation of class action, with separate juries hearing the individual class member claims, would prove to be no more expedient than the traditional handling of civil cases. ); Butt v. Allegheny Pepsi-Cola Bottling Co., 116 F.R.D. 486 (E.D. Va. 1987) (where case will be tried to a jury, and computation of damages would be a complex, highly individualized task, class certification would impose an intolerable burden on the judicial system). (4) The manageability problems in the damages phase are further exacerbated by the fact that each putative class member claim must be tried to a jury. Because the issues decided by the jury in the liability phase and the damages phase are inextricably interwoven, the same jury must hear both phases. See Allison, 151 F.3d at To have one jury sit long enough to hear every one of the thousands of putative class members individual claims would be prohibitively burdensome. See Castano v. American Tobacco Co., 84 F.3d 734 (5 th Cir. 1996) (vacating class action in mass tort action because one jury would have to hear the entire case, both liability and damages). (5) The concern over negative value suits is wholly absent in employment discrimination cases. The relatively substantial value of such claims (with a statutory maximum of $300,000 in damages, plus backpay, per plaintiff for Title VII claims, and no damages cap for 1981 claims), coupled with the availability of statutory attorneys fees, eliminate financial barriers that might make individual lawsuits unlikely or unfeasible. Allison, 151 F.3d at 420; see also Castano, 84 F.3d at 748 (where individual damages claims are high, punitive damages are available, and attorneys fees are awarded to prevailing party, class action device is not superior). 24

26 1. Courts will not look to the statistical merits of the case at the class certification stage. However, statistics will undoubtedly influence the class certification decision. 2. Try to get the court focused on how the statistics show the lack of commonality and typicality, rather than the bottom line merits of the case. See Rosenberg v. Univ. of Cincinnati, 654 F. Supp. 774, 780 (S.D. Ohio 1986) (aggregating all statistics from various departments into one barrel and concluding that within that whole, statistically significant differential existed failed to show a relevant common pattern and practice across all the various departments); Harris v. Marsh, 100 F.R.D. 315, 323 (E.D.N.C. 1983) (where defendants clearly and convincingly demonstrated the inadequacy of [plaintiffs ] statistical presentation, and have offered sets of statistics which argue compellingly that no class exists, plaintiffs failed to satisfy the elements of Rule 23(a)). 3. Encourage the court to follow Kumho Tire Co. v. Carmichael, No , 1999 WL (U.S. Mar. 23, 1999), and Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and require any statistical evidence presented by plaintiffs to be relevant and reliable. Cases examining the credibility of statistical evidence at the class certification stage include: a. In re Pepco Employment Litigation, 1992 U.S. Dist. LEXIS (D.D.C. 1992) (statistics used to support class certification must be credible and probative; court therefore conducted an in-depth analysis of the reliability of the parties statistics); b. Cullens v. Georgia Dep t of Transp., No MAC, 1985 WL 307 (M.D. Ga., Aug. 19, 1985) ( there are certain threshold criteria... statistics must meet before the court gives them credibility ); c. Hopewell v. University of Pittsburgh, 79 F.R.D. 689 (W.D. Pa. 1978) ( It is only proper that statistics be given the same rigorous analysis in a Rule 23 determination as would be given in the merits. The question here is not what the statistics prove, but what they mean. ). D. Evidentiary Submissions 1. Evidentiary hearing? 25

27 2. Declarations by company witnesses 3. Survey results? 4. Transcripts of depositions 5. Expert reports and declarations VIII. Appellate Options A. Rule 23(f) B. Mandamus C. Appeal after merits determination 26