IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 01-80241 MARY BECK, et al., Plaintiffs-Appellees, v. THE BOEING COMPANY, et al., Defendants-Appellants. On Appeal from the United States District Court for the Western District of Washington Brief of the Equal Employment Opportunity Commission in Support of the Plaintiffs-Appellees NICHOLAS M. INZEO Acting Deputy General Counsel PHILIP B. SKLOVER Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY Senior Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W. Washington, D.C. 20507 STATEMENT OF INTEREST The Equal Employment Opportunity Commission (“Commission”) is the agency entrusted with the enforcement of Title VII of the Civil Rights Act of 1964, 42 U.S.C. 2000e et seq. This cases raises an issue of recurring significance in the federal courts: the impact of the Civil Rights Act of 1991, which makes compensatory and punitive damages available in Title VII cases, on class certification in Title VII cases. Compare Robinson v. Metro-North Commuter R.R., 267 F.3d 147,162-65 (2d Cir. 2001) (rejecting the imposition of a “bright-line rule that bars Fed. R. Civ. P. 23(b)(2) class treatment of all claims for compensatory damages and other non-incidental damages (e.g., punitive damages)”), cert.denied, 122 S. Ct. 1349 (2002) with Lemon v. Int'l Union of Operating Engrs., Local No. 139, AFL-CIO, 216 F.3d 577, 581-82 (7th Cir. 2000) (although the availability of compensatory and punitive damages under the Civil Rights Act of 1991 renders class certification problematic under Fed. R. Civ. P. 23(b)(2), certification may still be proper under Fed. R. Civ. P. 23(b)(3)); and Allison v. Citgo Petroleum Corp., 151 F.3d 402, 434 (5th Cir. 1998) (holding that it would be improper for a district court to certify the entire case, including claims for compensatory and punitive damages, under Fed. R. Civ. P. 23(b)(2), but leaving open the possibility that district courts retained the discretion “to bifurcate liability issues that are common to the class and to certify for class determination those discreet [sic] liability issues”). Because of the importance of this issue to the effective enforcement of Title VII, the Commission, pursuant to F.R.A.P. 29(a), offers its views to the Court. The Commission's interest in this case flows principally from the important role that the class action device plays in Title VII litigation, a role that is jeopardized by the types of broad arguments advanced by Boeing and its amici, the Chamber of Commerce and the EEAC. It has long been recognized that “the private right of action is an essential means of obtaining judicial enforcement of Title VII.” Alexander v. Gardner-Denver Co.. 415 U.S. 36, 45 (1974). Class actions play a particularly vital role in the private enforcement of Title VII. Class actions “are powerful stimuli to enforce Title VII,” providing for the “‘removal of artificial, arbitrary, and unnecessary barriers to employment when the barriers operate invidiously to discriminate on the basis of racial or otherwise impermissible classification.'” Wetzel v. Liberty Mut. Ins. Co., 508 F.2d 239, 254 (3d Cir. 1975),. Class actions “are the cutting edge sword which Congress has fashioned to fight a major enemy to continuing progress, strength, and solidarity in our nation, discrimination in employment.” Id. That the Commission also has enforcement authority under Title VII does not diminish the importance of the private class action to the effective enforcement of statute. The Commission has broad authority to attack widespread patterns of discrimination. See General Tel. Co. v. EEOC, 446 U.S. 318, 324 (1980) (ruling that the Commission's authority to bring a “class-based” suit “is in no way dependent upon Rule 23,” which has “no application” to a Commission suit). Private suits, however, still play an “‘essential'” role in the “‘judicial enforcement of Title VII.'” Id. at 332-33. The Commission does not (and cannot) bring all Title VII suits challenging unlawful acts of employment discrimination. In particular, it does not (and cannot) bring all Title VII suits challenging systemic, class-wide discrimination. Maintaining a viable private class action procedure is critical to the effective enforcement of Title VII. See Hon. Robert L. Carter, The Federal Rules of Civil Procedure as a Vindicator of Civil Rights, 137 U. PENN. L. REV. 2179, 2185 n.30 (1989) (noting congressional recognition of the fact that “‘effective enforcement of Federal Civil Rights statutes . . . depends largely on the efforts of private citizens,'” because “[a]lthough some agencies of the United States have civil rights responsibilities, their authority and resources are limited”).<1> STATEMENT OF THE ISSUES 1. Whether, by virtue of the enactment of the Civil Rights Act of 1991, individual claims for damages predominate over the class-based claim for injunctive relief, thus rendering class certification inappropriate, as a matter of law, under Fed.R.Civ.P. 23(b)(2). 2. Whether punitive damages can be awarded on a classwide basis, thus vitiating the need for full-blown individualized damages hearings with respect to each member of the putative class. STATEMENT OF THE CASE The plaintiffs filed this action on February 25, 2000. Order on Motion for Class Certification (Oct. 19, 2001) at 2. The action was filed “on behalf of female employees of the defendants at their facilities in the Puget Sound area, Wichita, Tulsa, Southern California, and St. Louis.” Id. The plaintiff-class claimed to have been denied “‘based on their gender, desirable job assignments, promotional opportunities, management positions, training, equal pay, overtime, tenure, comparable retention ratings, bonuses and other benefits and conditions of employment.'” Id. In granting class certification, the district court limited the class to female employees who worked at the Boeing facility in the Puget Sound area. at 7-8. The court certified the class with respect to injunctive relief for gender discrimination in compensation/overtime and promotion but, with respect to punitive damages, limited the certification to the plaintiff's claims of compensation/overtime discrimination. Id. at 3. Having narrowed the scope of the plaintiff's proposed class, the court rejected Boeing's broad arguments against certification of any kind. Boeing argued that certification was not proper under Fed.R. Civ. P. 23(b)(2) because that prong of Rule 23 requires that the predominant relief sought be injunctive and declaratory,<2> a finding that cannot be made in cases of this nature, according to Boeing, because “the potential size of the class and the concomitant possibility of massive punitive damages render the request for any monetary award more than ‘incidental' or ‘secondary.'” Id. at 12. Boeing further argued that “punitive damages cannot be awarded without an endless litany of fact-specific inquiries into the circumstance of each individual class member, thus defeating the efficiencies which the class action mechanism was intended to create.” Id. a 12-13. The court responded that “Defendants do not cite to any precedent in support of the position that the predominance of one form of relief over the other is measured by the amount of monetary damages which could conceivably result from a judgment in favor of plaintiffs.” Id. at 13. “Nor,” in the court's view, “is this an argument which appeals to logic.” Id. The court “prefer[red] to to take the term ‘predominant' at face value and inquire whether, in light of all the evidence (statistical and anecdotal) received and the arguments advanced, the plaintiffs would have brought suit to obtain injunctive relief which they seek even if they could not obtain a monetary remedy.” Id. The court also rejected Boeing' argument that “certifying a class in this matter need result in a parade of countless individual plaintiffs explaining the circumstances of their complaints.” Id. The court stressed that “Plaintiffs' theory of the case is premised on their ability to prove that, at the highest levels of the corporation, Boeing knew that systemic gender-based discrimination was occurring and did nothing (or did not do enough) to put an end to it. Liability will hinge on that proof and the punitive damages assessed against defendants (if any) will flow from that finding. Id. In the court's view, “there is nothing about plaintiffs' request for punitive damages which disqualifies their case from certification under 23(b)(2).” Id. Lastly, the court addressed Boeing's argument that “the unavailability of notice and opt-out provisions in [Rule 23(b)(2)] will work an injustice to absent class members who wish to pursue their own remedies againt defendants.” Id. The court responded to this concern by invoking its “power to fashion orders and selectively certify portions of the case in such a manner as to afford the maximum amount of due process and achieve the goals of equity and efficiency for which the class action mechanism was created.” Id. Specifically, the court chose to certify “the liability phase of the class action litigation pursuant to Rule 23(b)(2),” and “[t]o the extent that notice and opt-out provisions are appropriate in this litigation, they will be provided via the Court's discretionary powers and a separate certification of the damages phase of the trial under Rule 23(b)(3).” Id. at 14. The court noted that, under Rule 23(b)(3), a court may certify a class where it 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.'” Id. (quoting Fed. R. Civ. P. 23(b)(2)). The court recited “the elements for the analysis under 23(b)(3)” as follows: “‘(A) the interest of the members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.'” Order on Motion for Class Certification (Oct. 19, 2001) at 14. The court ruled, “[r]egarding the first element,. . . that the interest of the class members in controlling the prosecution of separate actions is minimal – contrary to defendants' arguments.” Id. The court found that “these are in fact just the kind of ‘negative value' lawsuits which these plaintiffs (many of whom are of limited means) would be unable to pursue on their own, i.e., the cost of prosecuting them would likely exceed the potential income to any prospective attorney.” Id. The court acknowledged “the ‘possibility' of substantial recovery of punitive damages but stated that it could not “ignore the realities of choosing to litigate an individual claim against a resource-heavy organization such as defendants'”. Id. The court found that “most of these women would not pursue their claims individually and thus have little or no interest in ‘controlling the prosecution . . . of separate actions.” Id. at 15. Next, the court determined that the second element of the provision was satisfied insomuch as “Plaintiffs maintain (and defendants do not assert otherwise) that no other gender discrimination litigation is pending.” Id. The court opined that, “having chosen to limit the class to Puget Sound area female employees, ‘the desirability . . . of concentrating the litigation of the claims in this particular forum' is self-evident.” Id. The court chose to combine its discussion of the final element in the (b)(3) analysis (‘the difficulties likely to be encountered in the management of a class action') with the second consideration of the provision itself: the finding of whether “‘a class action is superior to other available methods for the fair and efficient adjudication of the controversy.'” Id. The court took note of Boeing's position that the “‘damages assessments in pattern and practice employment discrimination cases necessarily involve predominantly individual rather than predominantly classwide issues of law and fact.'” Id. The court ruled, however, that such “‘individualized hearings' are not required in all Title VII class actions” and that a court may, “in order to avoid a quagmire of hypothetical judgments or the strain of a multitude of separate fact-finding, use a classwide formula for a determination of damages.” Id. at 16. The court stated its intent to “certify the class for the liability phase of the trial under Rule 23(b)(2) and the punitive damages phase under Rule 23(b)(3).” Id. at 17. The court clarified that “the case will be tried to a single jury which will hear the evidence and make its determination regarding liability and damages in two phases.” Id. at 18. At phase I, “the liability phase, plaintiffs will introduce statistical evidence and experts to establish their claims of system-wide discrimination; some anecdotal evidence will also be permitted on this issue. If the jury returns a finding of liability, the Court will address the issues of declaratory and injunctive relief at this phase.” Id. at 17. At phase II, “the jury will determine the issue of punitive damages on a classwide basis, based on their findings in Phase I and a classwide formula to be determined.” Id. ARGUMENT THE CLASS ACTION PROCEDURE HAS PLAYED A PROMINENT HISTORIC ROLE IN TITLE VII LITIGATION. The class action device exists, in large part, to vindicate the interests of civil rights plaintiffs. “[A] Title VII action is particularly fit for (b)(2) treatment, and the drafters of Rule 23 specifically contemplated that suits against discriminatory hiring and promotion policies would be appropriately maintained under (b)(2).” Wetzel,508 F.2d at 2505(citing Advisory Committee Notes, Fed. R. Civ. P. 23(b)(2)). In keeping with this understanding, there is a long history in the law of routinely certifying Title VII classes under Rule 23(b)(2) in cases where the Rule 23(a) prerequisites are met. See Wetzel, 508 F.2d at 250-51;. 7A C. WRIGHT, A. MILLER, & M.K.KANE, FEDERAL PRACTICE AND PROCEDURE § 1776, at 495-96 (1986)(collecting cases). This Court, in particular, has recognized the applicability of Rule 23(b)(2) to Title VII actions. See Probe v. State Teachers' Retirement Sys., 780 F.2d 776, 780 (9th Cir. 1986), THE 1991 CRA DOES NOT DETRACT FROM THE USE OF THE CLASS ACTION PROCEDURE. Boeing claims that this pro-class action hegemony was shattered by the enactment of the 1991 CRA. Boeing Pet. at 1 (urging that the “ground rules changed” in 1991, when “Congress added compensatory and punitive damages, and jury trials to the arsenal of Title VII plaintiffs”); see also EEAC/Chamber of Commerce Br. at 10 (arguing that “the fundamental changes the 1991 Civil Rights Act made in Title VII make case law regarding class certification before the Act inapplicable now”). Boeing raises three discrete points with respect to the impact of the 1991 CRA. First, Boeing suggests that the addition of compensatory and punitive damages has altered the predominance inquiry of Rule 23(b)(2), making it impossible to conclude that monetary damages are incidental to the claim for classwide injunctive relief. Second, Boeing contends that individualized hearings are required with respect to the claims for punitive damages because “when Congress added punitive damages to Title VII, it specified that those damages would be available only if the plaintiff could prove, not only intentional discrimination, but also that the defendant acted with “‘malice or with reckless indifference to the federally protected rights of an aggrieved individual.'” Boeing Br. at 19 (quoting 42 U.S.C. 1981a(b)(1) (emphasis added by Boeing). Third, Boeing asserts that, post 1991-CRA, the class action procedure produces an inevitable conflict with the Seventh Amendment's Re-examination Clause. Boeing Br. at 27. None of Boeing's arguments has merit. The fact that the 1991 CRA added to the monetary relief available in Title VII cases does not affect the certification of Title VII class actions under Rule 23(b)(2). Substantial monetary relief (e.g., back pay) has long been available in Title VII cases. Courts, nonetheless, certified Title VII classes under Rule 23(b)(2). This Court, in particular, ruled that “[c]lass actions certified under Rule 23(b)(2) are not limited to actions requesting only injunctive or declaratory relief, but may include cases that also seek monetary damages.” Probe, 780 F.2d at 780. The mere fact that additional damages are now available in Title VII cases does not, as a matter of law, alter the predominance determination. Indeed, as the district court observed, there is no “precedent in support of the position that the predominance of one form of relief over another is measured by the amount of monetary damages which could conceivably result from a judgment in favor of plaintiffs.” Order on Motion for Class Certification (Oct. 19, 2001) at 13 (adding that such an argument does not appeal to “logic”). Nor does it bear upon the predominance inquiry that back pay, in contrast to compensatory and punitive damages, is a form of equitable relief. The critical point is not the legal or equitable nature of the relief sought but the fact that, in the Title VII scheme, monetary relief (of whatever type) is incidental to Title VII's primary goal –- the elimination of discrimination. See Ford Motor Co. v. EEOC, 458 U.S. 219, 230 (1982) (Title VII's “primary goal is to end discrimination, while its secondary, fallback purpose is to compensate the victim for their injuries.”). Although monetary relief furthers Title VII's “primary goal” by providing the “spur or catalyst” for employers to eliminate discriminatory practices, Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-18 (1975), monetary relief, in the Title VII context, is just that, a means to an end, not the end itself. This is not to say that monetary relief is not important –- it is. It provides the necessary incentive for private claimants to initiate legal action and, in turn, when awarded, provides a powerful deterrent to future discrimination. Cf. EEOC v. Waffle House, Inc., 122 S. Ct. 754, 765 n.11 (2002) (“If injunctive relief were the only relief available, an employee who signed an arbitration agreement would have little incentive to file a charge with the EEOC”). But its importance in the Title VII scheme is subservient to the broader goal of rooting out unlawful discrimination, the very thing that is accomplished by a classwide finding of liability. The liability determination drives Title VII litigation. Because claims under Title VII involve the “vindication of a major public interest,” Franks v. Bowman Transp. Co., 424 U.S. 747, 778 n.40 (1976), merely establishing the existence of unlawful conduct serves important public policies. See McKennon v. Nashville Banner Publ'g Co., 115 S. Ct. 879, 885 (1995). Title VII is not a mere tort-based scheme, where the quest for monetary damages predominates. Title VII actions exist mainly to eradicate unlawful employment practices. The 1991 CRA did not alter that paradigm. The history of the 1991 CRA demonstrates that Congress intended Title VII's equitable remedies to retain their predominant role in the enforcement of the statute. The damages provisions of the 1991 CRA were the subject of substantial congressional debate. There was criticism, in particular, that the new Act would "jettison" Title VII's "existing remedial and conciliatory mechanisms . . . in favor of compensatory and punitive damages." H.R. Rep. No. 40(I), 102nd Cong. 1st Sess., 73, reprinted in, 1991 U.S.C.C.A.N. 549, 611. In responding to these criticisms, the House Committee assured that "expanding Title VII's remedial scheme to permit recovery of damages in cases of intentional discrimination would [not] 'scuttle' any of the statute's existing remedial or conciliation procedures." Id. Stressing that the "damage remedies added by [the Act] are in addition to the equitable remedies . . . already available under Title VII," id. at 74 n.71, U.S.C.C.A.N. at 612 n.71, the Committee reaffirmed that the Title VII litigant acts "as a 'private attorney general' to vindicate the precious rights secured by that statute." Id. at 47, U.S.C.C.A.N. at 585. The Committee intoned that a broad injunctive power was still necessary to carry out Title VII's principal objective: "'root[ing] out discriminatory practices'" and opening "'formerly closed avenues of opportunity to women and minorities.'" Id. (stating that such relief was appropriate regardless of the availability of monetary damages). This history confirms that Title VII's primary goal continues to be the "'elimination of discrimination in the workplace,'" McKennon, 115 S. Ct. at 884, to which the award of monetary damages plays an important, but subservient role. See Kolstad v. American Dental Ass'n, 119 S. Ct. 2118, 2129 (1999) (even after the 1991 CRA, the primary objective of Title VII “‘is not to provide redress, but to avoid harm'”). These views are reflected in the text of the 1991 CRA. First and foremost, Congress placed statutory caps on the award of compensatory and punitive damages. See 42 U.S.C. 1981a(b)(3). This prevented Title VII from becoming a runaway tort statute, while, nonetheless, providing the “additional remedies” necessary “to deter unlawful harassment and intentional discrimination in the workplace.” Sec.2(1), Pub. L. 102-166, 105 Stat. 1071 (1991). Congress also underscored the independent significance of the liability finding by authorizing the award of injunctive relief in those cases where monetary damages are not available because the employer would have “taken the same action in the absence of the impermissible motivating factor.” See 42 U.S.C. 2000e-5(g). The 1991 CRA, while taking the important step of adding claims for compensatory and punitive damages to Title VII's remedial arsenal, did not transform Title VII from a statute concerned essentially with eradicating discrimination to one concerned essentially with providing monetary compensation to victims. Boeing's next argument, that the 1991 CRA imposes a requirement of individualized hearings for the award of compensatory or punitive damages, thereby rendering class treatment inappropriate, fares no better. There has always been an individualized element to damages in Title VII cases; that did not stop courts from certifying class actions. In many cases, courts adapted to the class action context, the bifurcated procedure for pattern or practice cases adopted in Teamsters v. United States, 431 U.S. 324 (1977). Under the Teamsters model, the case is bifurcated and tried in two Stages. At Stage I, the liability stage, the plaintiffs must demonstrate that “the class has been subjected to unlawful discriminatory practices. The plaintiffs are not required at Stage I to offer evidence “that each person for whom it will ultimately seek relief was a victim of the employer's discriminatory policy.” Id. at 360. Upon a finding of classwide liability, the court, at “Stage II,” settles the issues of individual relief for the class members. Id. at 361. The individualized nature of the Stage II proeedings does not detract from the central focus of the suit: the systemic discrimination against the class as a whole. In some cases, e.g.,“when discrimination has so percolated through an employment system that any attempt to reconstruct individual employment histories would drag the court into a ‘quagmire of hypothetical judgments,'” courts have devised methods for taking into account the individual circumstances of the claimants without requiring full-blown individualized hearings for each class member. Segar v. Smith, 738 F.2d 1249, 1291 (D.C. Cir. 1984) (quoting Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 260 (5th Cir. 1974)). This has often been done through the use of statistical models and classwide formulas that provided for a claimant-specific distribution of monetary damages. See, e.g., Domingo v. New England Fish Co. 727 F.2d 1429, 1444-45 (9th Cir. 1984). Punitive damages, in particular, lend themselves to class-wide determination. Punitive damages are not designed to compensate the individual victim. They are designed instead to punish the wrongdoer and to deter future discrimination. See Newport v. Fact Concerts, Inc., 453 U.S. 247, 266-67 (1981) (“Punitive damages by definition are not intended to compensate the injured party, but rather to punish the tortfeasor . . . and to deter him and others from similar extreme conduct.”). If a plaintiff-class demonstrates that an employer has engaged in a pattern or practice of discrimination and, in so doing, acted with a “‘reckless or callous indifference to the federally protected rights of others,'” Kolstad, 119 S. Ct. at 2125, it has done all it needs to do to justify an award of punitive damages. The employer's only recourse at that point is to attempt to demonstrate that the class-wide discrimination was contrary to employer's good-faith efforts to comply with Title VII. Id. at 2129. With punitive damages, the focus is not on the harm to the individual; it is on the employer's conduct. So long as a reasonable method for apportioning the punitive damages to the individual class members can be devised, the employer has received all the protection that it is due. In arguing to the contrary, Boeing relies heavily on a single term in the 1991 CRA —- “aggrieved individual.” That single term, however, does not render class treatment inappropriate for punitive damage claims. First, similar terms are found throughout Title VII. See 42 U.S.C. 2000e2(a)(1)(“unlawful employment practice for an employer to fail or refuse to hire any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin”) (emphasis added); 42 U.S.C. 2000e-5(b) (“Whenever a charge is filed by or on behalf of a person claiming to be aggrieved, or by a member of the Commission, alleging that an employer . . . has engaged in an unlawful employment practice, the Commission shall serve notice of such a charge . . . on such employer”); 42 U.S.C. 2000e-5(f)(1) (“If a charge filed with the Commission . . . is dismissed by the Commission, or, if within one hundred and eighty days from the filing of such charge[,]. . . the Commission has not filed a civil action under this section [or has not] entered into a conciliation agreement to which the person aggrieved is a party, the Commission . . . shall so notify the person aggrieved and within ninety days after the giving of such notice a civil action may be brought against the respondent by the person claiming to be aggrieved). These terms have never been construed to preclude the use of class action procedures. Further, Boeing's interpretation of the term “aggrieved individual” robs the term of all context. The statute merely provides that “[a] complaining party may recover punitive damages under this section against a respondent (other than a government, government agency or political subdivision) if the complaining party demonstrates that the respondent engaged in a discriminatory practice or discriminatory practices with malice or reckless indifference to the federally protected rights of an aggrieved individual.” 42 U.S.C. 1981a(b)(1). It says nothing about how one acquires the status of an “aggrieved individual” (whether, for example, it must occur in an individual action, as opposed to a class action). There is no reason that one's status as an “aggrieved individual” cannot be determined under a class action procedure. Indeed, there are strong indications that Congress intended the damages provisions of the 1991 CRA to apply to collective actions. The 1991 CRA provides that the amount of compensatory and punitive damages may not exceed the applicable statutory cap “for each complaining party.” The “each complaining party” language was added by an amendment, jointly sponsored by Senators Kennedy and Hatch, late in the congressional debates. The amendment was introduced to clarify that “[t]he amount of damages that a victim can recover should not depend on whether that victim files her own lawsuit or joins with other similarly situated victims in a single case.” 137 Cong. Rec. S 15471 (daily ed. Oct. 30., 1991) (remarks of Sen. Kennedy). This history shows that the damages provisions were designed to facilitate the award of compensatory and punitive damages in collective actions (by ensuring that each named claimant or class member is eligible for damages up to the level of the statutory cap). Boeing's Seventh Amendment argument is rooted in the principle that “‘the right to a jury trial in federal civil cases, conferred by the Seventh Amendment, is a right to have justiciable issues determined by the first jury impaneled to hear them . . . and not re-examined by another finder of fact.'” Boeing Br. at 27. It is true that the 1991 CRA brought the Seventh Amendment into the picture by establishing a right to recover legal(compensatory and punitive) damages and authorizing either party, in a case where such damages are sought, to “demand a trial by jury.” 42 U.S.C. 1981a(c)(1). This raises the specter that a second jury, called upon to rule on an individual's claim for compensatory or punitive damages will re-examine a factual point resolved by the liability jury, thus running afoul of the Seventh Amendment. But it is just that – a “specter;” there is no inevitable collision with the Seventh Amendment. In this case, for example, the district court ordered that a single jury be impaneled to hear both Phases I and II of the case. Thus, there is no risk that successive juries, at Phase II of the case, will re-examine any fact found by the Phase I jury.<3> Even in cases where separate damage juries are impaneled, any collision with the Seventh Amendment can be avoided. Under the Teamsters model, for example, there is little risk that factual issues resolved by the Stage I jury will be reexamined at some later stage. The issue at Stage I of the Teamsters model is whether the employer has engaged in a pattern or practice of discrimination. The inquiry at Stage II is entirely separate, focusing on each individual's entitlement to damages for the classwide finding of liability made at Stage I. If additional juries had to be impaneled to pass upon the Stage II damages issues, they could readily do so without reconsidering any factual issue resolved at Stage I. See Allison v. Citgo Petroleum Corp., 151 F.3d 402, 433-34 (5th Cir. 1998) (Dennis, J., dissenting) (no Seventh Amendment violation in this context because “the issues to be decided in the two stages . . . are separate and distinct and the second jury will not reexamine issues decided by the first jury”). It is not uncommon in federal practice for a second jury to be called upon to decide a damages issue not resolved by a liability jury. It occurs, for example, anytime a trial court erroneously decides not to submit the punitive damages issue to the liability jury and that decision is reviewed by a court of appeals, which reverses the district court and orders a new trial on punitive damages. It is not possible at that point to recomprise the liability jury, so a new jury must be impaneled. Courts, in that context, do not throw up their hands and say, “we can't give the claimant his day in court on punitive damages because there's a chance that the second jury will re-examine a fact found by the liability jury.” Courts, instead, require the second jury to accept as true all factual findings necessarily subsumed within the first jury's verdict. See generally Los Angeles Police Protective League v. Gates, 995 F.3d 1469, 1473 (9th Cir. 1993). This is sometimes done by instructing the second jury on the facts explicitly or implicitly found by the liability jury. See Robertson Oil Co. v. Phillips Petroleum Co., 930 F.2d 1342, 1344-45 (8th Cir. 1991)). That same approach can be followed in this context. The 1991 CRA was passed “to provide additional protections against unlawful discrimination.” Sec. 2(3), Pub. L. 102-166, 105 Stat. 1071 (1991). The damages provisions, in particular, were adopted “to deter unlawful harassment and intentional discrimination in the workplace.” Id. Sec. 2(1). Nothing in the text or history of the Act indicates that Congress intended to limit the well-established use of the class action procedure in Title VII actions. Quite to the contrary, the Act was designed to ‘expand[] the scope of relevant civil rights statutes in order to provide adequate protection to victims of discrimination.” Id. Sec. 3(4). Boeing's take on the 1991 CRA, if accepted, would prohibit the use of the class action procedure, in any case in which the plaintiffs add claims for compensatory and punitive damages to their claim for class-wide injunctive relief. It would mean that Rule 23(b)(2), adopted with the precise purpose of facilitating the use of class actions in the civil rights field, would be nullified as an enforcement tool in Title VII cases unless the plaintiffs were willing to forgo any claim for compensatory and punitive damages (which, in turn, would nullify the damages provisions of the 1991 CRA in class actions). There is nothing to indicate that Congress intended to limit the damages provisions of the 1991 CRA to individual (non-class) disparate treatment claims. Nor can it be reasonably inferred that, by its enactment of the 1991 CRA, Congress intended to repeal Rule 23(b)(2) as it applies to Title VII class actions. See Rodriguez v. United States, 480 U.S. 522, 524 (1987) (repeals of statutes by implication not found absent “‘clear and manifest'” evidence of an intent to repeal). The 1991 CRA in no way detracts from the continued use of Rule 23(b)(2) in Title VII cases. See Griffin v. Home Depot, 70 FEP Cases 1678, 1680 (E.D. La. 1996) (stating that a finding “that the 1991 amendments” preclude the possibility of class certification under Rule 23(b)(2) “is not supported by the legislative history of the amendments nor logical in light of Congress' intent”). III. BOEING'S ARGUMENTS, IF ACCEPTED, WOULD VIRTUALLY EXTINGUISH THE USE OF THE CLASS ACTION PROCEDURE IN TITLE VII DISPARATE TREATMENT CASES. It is telling that Boeing's arguments are framed as a series of absolutes, directed less to the district court's exercise of discretion in this case than to the question whether, as a matter of law, class actions retain their viability in the Title VII context. Boeing, for example, does not take exception to the district court's finding that the class, as limited to the Puget Sound area, meets the Rule 23(a) prerequisites to class certification. Boeing, instead, rests its case on a parade of legalisms that Boeing derives from its reading of Rule 23(b), the 1991 CRA, and the Constitution. To begin with, Boeing, argues that a claim of punitive damages will “generally” defeat any claim for class certification under Rule 23(b)(2) because punitive damages cannot be considered “incidental” to the class-wide claim for broad injunctive relief. Boeing Br. at 31-32.<4> This argument, if accepted, would effectively put an end, in the disparate treatment context, to the Rule 23(b)(2) Title VII class action, a procedural tool that has proved invaluable in rooting out patterns of invidious discrimination. A district court judge would be without the discretion to certify a class under Rule 23(b)(2), where that class seeks to root out pervasive discrimination by asking for broad injunctive relief and punitive damages for the class members. Boeing does not stop at Rule 23(b)(2). It also constructs an even broader argument that would slam the door on any remaining possibility that a court could exercise its discretion, in this context, to certify a class. Specifically, Boeing argues that individualized hearings are required on the damages issues as a matter of statutory prescription and due process and that, with such individualized hearings, class certification cannot be proper under Rule 23(b)(3) because it would not be superior to other forms of litigation. Boeing Br. at 18-22, 36-38. This is a classic whipsaw argument, one that would severely tie the hands of district courts seeking to exercise their discretionary authority to certify Title VII class actions under Rule 23(b)(3).<5> And, as it turns out, neither prong of this argument has merit. First, there is no requirement of individualized hearings. As discussed above, formulaic approaches and other short-hand methods permit consideration of individual circumstances without the need for full-blown individualized hearings. Nothing in the 1991 CRA, moreover, requires individualized hearings. Finally, there is no due process problem because the harm suffered by the individual can be determined without resort to individualized hearings. That point aside, Boeing's reliance upon BMW of North America v. Gore, 517 U..S. 559 (1996), for the proposition that the Constitution demands “‘a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that actually has occurred,'” Boeing Br. at 24-25 (quoting Gore, 517 U.S. at 581) (emphasis added by Boeing), is misplaced. In Gore, the Supreme Court formulated a constitutional standard for assessing the reasonableness of a punitive damages award. The Court was confronted with a massive award of punitive damages, based upon an ill-defined state tort standard. See id. at 574(stressing that the defendant did not receive “fair notice” of the “severity of the penalty”). In that context, the Supreme Court crafted a standard for determining the reasonableness of a punitive award. That standard, although citing “the degree of reprehensibility of the defendant's conduct” as the “most important indicium of the reasonableness of a punitive damages award,” also suggested the need for some proportionality between the punitive award and the actual harm caused by the defendant's conduct. Id. at 575,580-82. This feature of the Gore standard has no place in the analysis of an award of punitive damages under the 1991 CRA, where Congress enunciated a clear standard for the award of punitive damages and imposed caps on the amount of damages, thereby ensuring “that the punitive damages are reasonable in their amount and rational in light of their purpose to punish what has occurred and to deter its repetition.” Pacific Mut. Ins. Co. v. Haslip, 99 U.S. 1, 21 (1991). There is no need, in this statutory context, for determining the reasonableness of a punitive award by reference to the amount of compensatory damages or back pay awarded a claimant. See, e.g., Cush-Crawford v. Adchem Corp., 271 F.3d 352, 357 (2d Cir. 2001) (agreeing with the Commission's argument, as amicus curiae, that “[a]n award of actual or nominal damages is not a prerequisite for an award of punitive damages in Title VII cases” because “[t]o the extent that courts [have] worried [in other contexts] about unleashing juries to award limitless punitive damages in cases where no harm occurred, this concern is eliminated by the imposition of the statutory caps.”). That said, even with individualized hearings of the kind contemplated by the Teamsters model, which are not in any event required in this case, a class action is still superior to other forms of litigation. Under the Teamsters model, a finding of classwide liability (at Stage I) supports the issuance of an injunction and establishes a presumption of class membership and entitlement to damages. 431 U.S. at 359 n.45, 361-62. Each claimant does not have to start from scratch, seeking to prove discrimination under the McDonnell Douglas framework. Even with its proliferation of individual damage issues (at Stage II), a Teamsters-based class action is a far more efficient way to dispose of a case involving allegations of systemic discrimination. CONCLUSION The district court's certification order does not raise any constitutional concerns. Nor does it stray beyond the proper boundaries of Rule 23. The order, instead, strikes a fair balance between the demands of Rule 23 and the rights established by the 1991 CRA. Respectfully Submitted, NICHOLAS M. INZEO Acting Deputy General Counsel PHILIP B. SKLOVER Associate General Counsel LORRAINE C. DAVIS Assistant General Counsel ROBERT J. GREGORY Senior Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION 1801 L Street, N.W. Washington, D.C. 20507 June 19, 2002 202-63-4059 1 In this case, moreover, at least some of the arguments advanced by Boeing transcend the particulars of Rule 23 and, thus, threaten to hamstring the Commission in the exercise of its pattern or practice authority under Title VII, 42 U.S.C. 2000e-6. See infra at pp.27-30. 2 Rule 23 (b)(2) provides for class certification where “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.” The Advisory Committee Notes to Rule 23 state that “the subdivision does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages. Fed. R. Civ. P. 23, Advisory Committee Notes, 1966 Amendment, Subdivision (b)(2). 3 Boeing argues, nonetheless, that the “district court's trial plan unconstitutionally invades the province of the jury by leaving the jury with “no role in determining who will get punitive damages and in what amount .” Boeing Br. at 25-26. This ignores the fact, however, that the jury itself determines Boeing's culpability for punitive damages. The jury, moreover, could well be assigned the task of setting the formula by which the amount of punitive damages is determined. This is entirely in keeping with the Seventh Amendment's command that “‘punitive damages should be left to the discretion of the jury'.” Id. (quoting Cooper Indus. v. Leatherman Tool Group, 532 U.S. 424, 437 n.10 (2001). 4 For this argument, Boeing relies largely on the Fifth Circuit's decision in Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998). The Allison decision, of course, which prompted a spirited dissent from Judge Dennis, is not binding on this Court. Boeing, moreover, ignores the fact that the Allison court, at the rehearing stage, appended a paragraph to its decision, suggesting that district courts retained the discretion “to bifurcate liability issues that are common to the class and to certify those discreet [sic] liability isssues.” Id. at 434. That is what the district court did in this case. 5 It is no answer to this to say that the class could simply drop its claim for punitive damages. This is unrealistic and unfair to the claimants, who should not be forced to choose between the advantages of the class action procedure and the rights afforded by the 1991 CRA. More to the point, it would severely undermine the enforcement of Title VII to force claimants – in direct contravention of congressional intent -- to either abandon the class action procedure, which has played a vital role in rooting out patterns of discrimination, or forfeit any claim for punitive damages, which “may often have a greater impact on the behavior of other employers than the threat of an injunction.” EEOC v. Waffle House, Inc., 122 S. Ct. at 765.