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Recent Developments in Class Action Litigation of Federal Discrimination Claims

December 31, 1999

What is a class action?

In a class action lawsuit, one or more members of a group serve as representatives to prosecute claims on behalf of a larger group. Under the Federal Rules of Civil Procedure, a party may sue or be sued as a representative of a class if: (i) the class is so numerous that the inclusion of each class member individually is impracticable; (ii) there are questions of law or fact common to the class; (iii) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (iv) the representative parties will fairly and adequately protect the interests of the class. These four factors are often referred to as numerosity, commonality, typicality and adequacy.

Class actions are commenced when one party to a litigation files a motion with the trial court requesting permission (or certification) to proceed on behalf of a class, and the court, in its discretion, grants the motion and certifies a particular class (e.g., "all black applicants denied employment by the defendant employer between 1990 and 1997"). If the motion for class certification is denied, the party or parties may proceed as individually-named litigants.

Amendment of the federal rule regarding class action certification

Effective December 1, 1998, Federal Rule of Civil Procedure 23 - the federal rule governing the certification of class actions - was amended by the addition of subsection (f). Fed. R. Civ. P. 23(f) reads as follows:

(f) Appeals. A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.

Prior to this amendment, if a district court, at the outset of a litigation, erroneously granted class certification to a class of employees alleging discrimination, the employer generally could not appeal that ruling until after the trial was concluded. Defending a class action lawsuit is far more complicated and costly than a case involving individual plaintiffs. Moreover, class action litigation tends to attract a significant amount of negative publicity to the defendant employer, and plaintiffs' attorneys are often willing to litigate as class action cases they would otherwise not pursue because the value of an individual claim would not be worth the cost of litigation. Thus, the opportunity to appeal the class certification only after trial was of little comfort to employers forced to litigate against a class of plaintiffs which could only be decertified on appeal at the end of the case. In fact, faced with the prohibitive cost of defending a class action discrimination case, many employers in the past were essentially forced to settle, a particularly bitter pill for employers to swallow in cases in which plaintiff class should never have been certified by the district court in the first place.

Thus, the recent addition of subsection (f) to Federal Rule of Civil Procedure 23 will likely benefit employers because it provides a mechanism for correcting a district court's mistaken certification of a class before the employer incurs the burden and expense associated with trying a case as a class action. Of course, the amendment also poses a risk for employers who successfully oppose a motion for class certification: the plaintiff(s) can appeal the denial of class certification before trial, potentially landing the employer back where it started: facing the prospect of defending a class action litigation.

Two courts conclude that Title VII plaintiffs who seek monetary damages may not proceed as a class

The federal Civil Rights Act of 1991 gave plaintiffs in Title VII actions the right to recover compensatory and punitive damages, and to a jury trial. Proof of damages in discrimination actions is usually very individualized; it requires a showing of the particular harm perpetrated on each plaintiff; the particular ill physical and psychological effects of that harm on each plaintiff; and each plaintiff's efforts to mitigate those damages. As explained above, a class may only be certified pursuant to Fed. R. Civ. P. if the requirements of commonality and typicality are met. In opposing plaintiffs' motions for class certification in Title VII actions, employers have begun seizing on the apparent inconsistency between the individualized inquiry necessary to determine appropriate monetary damages and the commonality needed to justify class certification.

This argument has recently persuaded several courts to deny motions for class certification in employment discrimination cases. In Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998), for example, the Fifth Circuit affirmed a district court's denial of class certification to a proposed class of several thousand black employees and job applicants who sought both injunctive relief and monetary damages under Title VII. The appellate court reasoned that class certification was appropriate only in cases in which the relief sought was predominantly injunctive in nature, and where the only monetary damages sought were those which followed automatically from a finding of liability and which were capable of computation by reference solely to objective measures, without requiring individual proofs. The court concluded that the lower court had properly denied class certification because each member of the proposed class would require a mini-trial to determine the kind of discrimination that particular plaintiff was subjected to, and the nature and extent of physical and emotional harm that plaintiff suffered as a consequence of the discrimination.

A similar conclusion was reached more recently in Faulk v. Home Oil Co., Inc., 186 F.R.D. 660 (M.D. Ala. 1999). In Faulk, the court acknowledged that the Allison decision discussed above did not establish a per se rule that all proposed classes which seek to recover monetary damages are uncertifiable. However, applying the principles established in Allison, the court denied plaintiff's motion for class certification, finding that: "[e]ntitlement to recovery on the plaintiffs' claims for compensatory and punitive damages will come not from a finding of liability of the common issues, but from individualized proof of actual injury…the plaintiffs' claims will require distinctly case-specific inquiries into the facts surrounding each alleged incident of discrimination." Id. at 664.

Allison and Faulk signal a new, seemingly pro-employer trend in class action discrimination litigation. Assuming other courts follow suit, employers seeking to avoid litigating against a class may well benefit from the proposed class's prayer for monetary relief, since the individualized inquiry necessary to establish entitlement to compensatory and punitive damages may well result in denial of class certification.

Numerous courts grant class certification despite the fact that the plaintiffs seek to recover monetary damages under Title VII

In Carter v. West Publishing Co., No. 97-2537-Civ-T-26A, 1999 WL 376502 (M.D. Fla. May 20, 1999), the court certified a class of approximately 150 female employees who alleged that they were denied the opportunity to participate in West's employee stock ownership program, in violation of Title VII and the Equal Pay Act. Plaintiffs sought to recover both compensatory and punitive damages. They were precluded from seeking injunctive relief because a corporate merger that occurred after the timeframe relevant to the case resulted in the cessation of the allegedly discriminatory conduct (that is, the sale of the company stock to select employees).

The court based its decision to certify the class on the facts that plaintiffs did not assert claims based on discrimination in hiring or promotion, and that the case did not focus on the factual issues regarding the various employment histories or job descriptions of the class members. The court found that, "West's failure to offer stock to the plaintiffs, some former and some current employees, presents similar discriminatory treatment or discriminatory impact." Id. at *4. The court noted in passing the Allison decision, but essentially refused to apply its holding, in part because Allison involved more than 1,000 potential class members, whereas Carter involved only 144, making the latter case a more manageable class action. The court also expressed its view, without elaboration, that Allison did not create a bright-line rule denying class certification in every Title VII case in which the plaintiffs seek to recover monetary damages.

The plaintiffs in Colorado Cross-Disability Coalition v. Taco Bell Corp., 184 F.R.D.354 (D. Colo. 1999), alleged that Taco Bell, a place of public accommodation, violated the Americans With Disabilities Act ("ADA") by not designing queue lines that allowed wheelchair and scooter-bound disabled persons to wait in line with other non-disabled patrons to order food. Plaintiffs sought an injunction requiring Taco Bell to comply with the ADA, and they sought $50 in damages (the minimum damages provided for by the Colorado State anti-discrimination law) for each instance of discrimination. The court concluded that class certification was appropriate where, as in the case before it, "a class of persons sharing a common disability complains of the identical architectural barrier based on the same alleged violations of law." Id. at 359. In granting the plaintiffs' motion for class certification, the court also relied on the fact that the relief sought was predominantly injunctive, and that each potential class member's claim for damages was identical to the others.

In Battle v. White Cap, Inc., No. 97 C 4830, 1999 WL 199594 (N.D. Ill. Mar. 31, 1999), black current and former employees filed a lawsuit alleging race discrimination under 42 U.S.C. § 1981 and Title VII, and they sought to proceed on behalf of a class of black employees. Plaintiffs alleged specifically that their employer disciplined black employees more severely than similarly-situated non-Black employees. The court certified plaintiffs' proposed class, finding sufficient commonality in the plaintiffs' claims insofar as the employer's disciplinary policy was administered at the direction of the Human Resources Director or his representative.

It is noteworthy that the court in Battle did not discuss -- or even mention -- the relief plaintiffs sought. Thus, the court avoided entirely the question raised by Allison -- whether a class can be certified under Title VII if the plaintiffs seek monetary damages.

In Caridad v. Metro-North Commuter Railroad, 191 F.3d 283 (2d Cir. 1999), the Second Circuit Court of Appeals -- which has federal appellate jurisdiction over New York and Connecticut -- reversed the district court's denial of class certification to a group of black current and former employees who sued for race discrimination under Title VII. Similar to the plaintiffs in Battle, the plaintiffs in Caridad challenged their employer's decisions with respect to discipline and promotion; more specifically, they took issue with the employer's delegation to supervisors of the authority to determine employee discipline and promotions, alleging that supervisors exercised their discretion in such matters in a racially discriminatory manner. Thus, plaintiffs argued, Metro-North's policy of giving supervisors discretion in these areas had a disparate impact on black employees. The proposed class consisted of all African-American employees of Metro-North from 1985 through 1996, or roughly 1,300 people.

The Second Circuit concluded that the significant statistical disparity plaintiffs presented between the disciplining and promotion of black and non-black employees demonstrated commonality and typicality sufficient to justify class certification. The court remanded the matter to the district court for reconsideration of whether the plaintiffs met all the requirements for class certification. As in Battle, the court in Caridad did not address the issue of damages, and thus, neither explicitly adopted nor rejected the proposition in Allison that class certification is not generally appropriate in Title VII cases in which monetary damages are sought.

Finally, Ford Motor Co. now faces the prospect of defending a sexual harassment case filed on behalf of a class including approximately 850 female employees at Ford's Chicago manufacturing facility, thanks to the granting of plaintiff's motion for class certification in Warnell v. Ford Motor Co., No. 98 C 1503, 98 C 5287, 1999 WL 967518 (N.D. Ill. 1999). The plaintiffs in Warnell alleged that they had been subjected to a hostile and abusive work environment, that Ford's procedures for investigating sexual harassment complaints were inadequate, and that the company does not consistently and effectively discipline harassers.

Ford argued without success that class certification was inappropriate because of the inherently individualized nature of sexual harassment claims. The court disagreed, explaining that class certification was appropriate because "substantially similar comments and other behaviors are alleged here and proof with respect to liability for the various specific instances will be much the same." Id. at *3. The court also gave short shrift to Ford's argument that class certification was inappropriate because each potential class member would be required to establish that her work environment was subjectively hostile; that is, that each plaintiff felt harassed by the conduct to which she was subjected. To this, the court responded tartly that Ford had not suggested that the plaintiffs had enjoyed the "campaign of harassment against them," or that each woman would be required to proffer "further evidence that she finds it subjectively hostile to be called [vulgar epithets], named in pornographic graffiti, groped without her consent, subjected to other similar conduct that the plaintiffs here allege is widespread and pervasive at Ford's plants. Ford may of course introduce evidence that specific women felt otherwise." Id. at *4.

Nor was the court dissuaded from granting class certification by plaintiff's prayer for relief, which sought an injunction as well as compensatory and punitive damages. The court did acknowledge the Fifth Circuit's decision in Allison, but declined to follow it, citing the Carter decision discussed above. The court concluded that variances as to individual damages need not defeat class certification, and it found that plaintiffs' prayer for damages was merely incidental to their application for injunctive relief.


The number of employment discrimination class action lawsuits has decreased dramatically in recent years. The Bureau of National Affairs has reported that 1,174 such cases were filed in federal court in 1976, as compared to only 79 in 1997. It seems likely that class action litigation will remain, at least for the next few years, at a relatively low level in discrimination cases due to the Allison and Faulk line of cases regarding the incompatibility of class action litigation with monetary damage claims, and the amendment of Rule 23 to permit immediate appeals of class certification decisions. However, the negative publicity that employers tend to attract as a consequence of class action litigation, together with the prohibitive cost of defending such a case, makes the prospect of class action discrimination lawsuits no less troubling for employers.