A new Rule 23 decision caught our eye this week - the ruling in July v. Board of School Commissioners, No. 11-CV-0539, 2013 U.S. Dist. LEXIS 74500 (S.D. Ala. May 28, 2013). This decision to deny class certification matters because it shows how plaintiffs’ continuing attempts to use (abuse?) the rule authorizing mandatory (non-opt-out) class actions for what is clearly non-injunctive relief under Rule 23(b)(2) are being shut down by courts more and more after Wal-Mart v. Dukes, 131 S. Ct. 2541 (2011). It also matters because it underscores how employment decisions often are made in ways that do not to meet the predominance requirement of Rule 23(b)(3). Our blog readers should definitely take the time to review this one and keep it in mind when facing a class certification motion.
In July, the named plaintiffs were seven African-American associate principals employed by the school district in Mobile County, Alabama. They sought to certify a class on disparate impact and pattern or practice grounds, based on allegations that African-American assistant principals were assigned to act as principals only in predominantly African-American schools, while White principals were assigned to so act in predominantly White schools. 2013 U.S. Dist. LEXIS 74500, at *1-2. They sought class certification under Rule 23 seeking injunctive and declaratory relief to stop the practice, and also back pay, front pay, offers of promotion, and compensatory damages. Id. at *2.
The Court first considered the plaintiffs’ request for certification under 23(b)(2). It denied the request for two reasons. First, the Court found that the defendant’s argument that all employment decisions were made “on the basis of factors other than” race -- one of the defenses it is entitled to under the burden-shifting framework of Int’l Brotherhood of Teamsters v. United States, 431 U.S. 324, (1977) -- “dooms the plaintiffs’ request for certification under Rule 23(b)(2).” Id. at *10. This was so because individualized evidence would be required to try that defense, and Rule 23 (b)(2) envisions all-at-once relief. Second, the assistant principals sought compensatory damages, which by their nature are individual -- e.g., a claim of emotional distress requires an assessment of each person’s emotional response to the discrimination.
The Court then took a deep dive into the Rule 23 (b)(3) requirements and also found the plaintiffs’ proof lacking. Not only would each class member have to establish that they applied for a position and was denied it (or would have, but for the Board’s discriminatory action), but also the Board had the right to rebut the allegation with proof that positions were not offered for lawful reasons. Id. at 14. This defeats predominance because “the Court would have to make a number of individual determinations in deciding which of the minority employees were the actual victims of the company’s discriminatory practices.” Id. at *14-15 (quoting Teamsters, 431 U.S. at 371-72 ).
The Court ultimately concluded that this would be no small task -- in fact the judge wrote, “As this case reflects, certification of a Title VII pattern or practice class action under Rule 23(b)(3) is extremely problematic.” Id. at 27-28. It then concluded that the plaintiffs’ disparate impact class theory must not be certified for the same reasons -- legitimate, non-discriminatory reasons offered in rebuttal by the employer are simply too individualized.
As we have pointed out here before, we do not believe that workplace class actions are dead after Wal-Mart v. Dukes. Reading this case reminds us, however, that in fact, based on longstanding Supreme Court precedent, they should have been much harder to sustain a long, long time ago.