Matthews Smith, John Comeaux, John Lumpkins, Kenneth Ford, Darlene Greene v. Texzco 00-40337 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _____________________ No. 00-40337 _____________________ MATTHEWS SMITH, JOHN COMEAUX, JOHN LUMPKINS, KENNETH FORD, DARLENE GREENE, ET AL., Plaintiffs-Appellees, v. TEXACO, INC., ARAMCO SERVICES CO., SAUDI REFINING, INC., SHELL OIL CO., STAR ENTERPRISE, TEXACO REFINING & MARKETING, INC., TEXACO REFINING & MARKETING EAST INC., Defendants-Appellants. _______________________________________________ On Appeal from the United States District Court for the Eastern District of Texas _______________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS ________________________________________________ C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel ROBERT J. GREGORY Senior Attorney BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W. Washington, D.C. 20507 (202) 663-4721 TABLE OF CONTENTS Page(s) TABLE OF AUTHORITIES STATEMENT OF INTEREST 1 STATEMENT OF THE ISSUES 2 STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings 2 2. Statement of Facts 3 3. District Court's Decision 5 ARGUMENT I. ALLISON DID NOT DIVEST THE DISTRICT COURT OF ITS TRADITIONAL "WIDE DISCRETION" TO GRANT CLASS CERTIFICATION IN TITLE VII RACE DISCRIMINATION CASES EVEN WHERE DAMAGES ARE SOUGHT 9 II. THE AMERICAN PIPE TOLLING RULE APPLIES TO CLASS ACTIONS FILED PROMPTLY AFTER PLAINTIFFS LEARN THEY HAVE BEEN EXCLUDED FROM A PREVIOUSLY-FILED CLASS SUIT. 21 CONCLUSION 28 CERTIFICATE OF COMPLIANCE CERTIFICATE OF SERVICE TABLE OF AUTHORITIES CASES Page(s) Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998) 1, 7-8, 9, 12, 14-20 American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) 5-6, 21-28 Andrews v. Orr, 851 F.2d 146 (6th Cir. 1988) 25, 26 Basch v. Ground Round, 139 F.3d 6 (1st Cir. 1998) 25, 26 Beacon Theatres v. Westover, 359 U.S. 500 (1959) 12 Calderon v. Presidio Valley Farmers Ass'n, 863 F.2d 384 (5th Cir. 1989) 27 Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996) 16, 18 Celestine v. Citgo Petroleum Corp., 165 F.R.D. 463 (W.D. La. 1995), aff'd, 151 F.3d 402 (5th Cir. 1998) 14-15 Crawford v. Equifax Payment Services, 201 F.3d 877 (7th Cir. 2000) 24 Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983) 21-26 Dairy Queen v. Wood, 369 U.S. 469 (1962) 17 Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) 21 Eubanks v. Billington, 110 F.3d 87 (D.C. Cir. 1997) 11 Hadra v. Herman Blum Consulting Engineers, 632 F.2d 1242 (5th Cir. 1980) 13 Holmes v. Continental Can Co., 706 F.2d 1144 (11th Cir. 1983) 20-21 Jefferson v. Ingersoll International, 195 F.3d 894 (7th Cir. 1999) 11, 13, 18 Jenkins v. Raymark Industries, 782 F.2d 468 (5th Cir. 1986) 9, 11, 12, 13, 18, 19 Jenkins v. United Gas Corp., 400 F.2d 28 (5th Cir. 1968) 24-25 Kolstad v. American Dental Ass'n, 119 S. Ct. 2118 (1999) 12 Korwek v. Hunt, 827 F.2d 874 (2d Cir. 1987) 27 Lemon v. Local 139, IUOE, 216 F.3d 577 (7th Cir. 2000) 11 Mullen v. Treasure Chest Casino, 186 F.3d 620 (5th Cir. 1999) 12, 17, 18, 19 Munoz v. Orr, 200 F.3d 291 (5th Cir. 2000) 17 Nix v. Grand Lodge of the IAMAW, 479 F.2d 382 (5th Cir. 1973) 16 Oatis v. Crown Zellerbach Corp., 398 F.2d 496 (5th Cir. 1968) 26 Ortiz v. Fibreboard Corp., 119 S. Ct. 2295 (1999) 11 Parker v. Local 1466, 642 F.2d 104 (5th Cir. 1981) 19 Pederson v. Louisiana State University, 213 F.3d 858 (5th Cir. 2000) 9, 18-19 Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974) 17 Pickett v. Iowa Beef Processors, 209 F.3d 1276 (11th Cir. 2000) 21 Roberts v. Texaco, Inc., 979 F. Supp. 185 (S.D.N.Y. 1997) 4 Salazar-Calderon v. Presidio Valley Farmers Ass'n, 765 F.2d 1334 (5th Cir. 1985) 26, 27 Shipes v. Trinity Industries, 987 F.2d 311 (5th Cir. 1993) 19 Trief v. Dun & Bradstreet Corp., 144 F.R.D. 193 (S.D.N.Y. 1992) 23, 27 United Airlines v. McDonald, 432 U.S. 385 (1977) 23 Warnell v. Ford Motor Co., 189 F.R.D. 383 (N.D. Ill. 1999) 12 Watson v. Fort Worth Bank & Trust, 487 U.S. 997 (1988) 17 Watson v. Shell Oil Co., 979 F.2d 1014 (5th Cir. 1992) 16, 18 Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239 (3d Cir. 1975) 20 CONSTITUTIONAL PROVISIONS, STATUTES AND RULES U.S. CONSTITUTION, amendment VII 7, 12-13, 14, 17 The Civil Rights Act of 1991, Pub. L. 102-66, 105 Stat. 1071 (1991) 8, 10-13 42 U.S.C. § 1981 2 42 U.S.C. § 1981a 10, 17 Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., passim Federal Rule of Civil Procedure 23 passim Rule 23(a) 6 Rule 23(b)(2) 6-7, 9, 10-21 Rule 23(b)(3) 7-8, 9, 11-21 Rule 23(c) 16 Rule 23(f) 2, 21 Federal Rule of Civil Procedure 42 15 OTHER AUTHORITY Charles Wright, Arthur Miller & Mary Kay Kane, FEDERAL PRACTICE AND PROCEDURE (2d ed. 1986) 10IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT ____________________ No. 00-40337 ____________________ MATTHEWS SMITH, JOHN COMEAUX, JOHN LUMPKINS, KENNETH FORD, DARLENE GREENE, ET AL., Plaintiffs-Appellees, v. TEXACO, INC., ARAMCO SERVICES CO., SAUDI REFINING, INC., SHELL OIL CO., STAR ENTERPRISE, TEXACO REFINING & MARKETING, INC., TEXACO REFINING & MARKETING EAST INC., Defendants-Appellants. _______________________________________________ On Appeal from the United States District Court for the Eastern District of Texas _______________________________________________ BRIEF OF THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION AS AMICUS CURIAE IN SUPPORT OF PLAINTIFFS ________________________________________________ STATEMENT OF INTEREST The Equal Employment Opportunity Commission is charged with the enforcement of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., and other federal fair employment statutes. This case raises important issues concerning the continued availability of class actions as a Title VII enforcement tool. The district court, in an exercise of its discretion, certified a class of African-American employees, finding that their claims of systemic race discrimination could properly be litigated as a class action. Defendants argue, however, that Allison v. Citgo Petroleum Corp., 151 F.3d 402 (5th Cir. 1998), precludes class certification in all Title VII suits where damages are sought. Because class actions are critical to effective enforcement of the law, we offer our views for the Court's consideration. STATEMENT OF THE ISSUES 1. Whether Allison v. Citgo precludes class certification where the district court determines, in an exercise of its discretion, that class treatment of the plaintiffs' claims of racial discrimination is both viable and superior to other means of adjudicating these claims. 2. Whether the American Pipe tolling rule applies to a class action filed promptly after plaintiffs learn that they and other putative class members have been excluded from a previously-filed class action. STATEMENT OF THE CASE 1. Nature of the Case and Course of Proceedings This is a Rule 23(f) appeal from an order certifying a class of African-American professional, managerial and supervisory employees at a subsidiary of Texaco. After obtaining an order enjoining the removal and destruction of documents, plaintiffs filed an amended complaint against Texaco and Star Enterprise, alleging systemic race discrimination in promotion, pay and performance appraisals, as well as retaliation, under Title VII and 42 U.S.C. § 1981. Docket entry number ("R.") 77. Additional plaintiffs and defendants were later added. In July 1998, plaintiffs moved for class certification. R. 141. On March 7, 2000, following extensive briefing and a hearing, the district court granted plaintiffs' motion. R. 294 ("Mem."). On April 6, 2000, this Court granted defendants' petition for interlocutory review of the class certification order. R. 302. 2. Statement of Facts Star Enterprise was created in 1989 as a joint venture partnership of Saudi Refining, a wholly-owned subsidiary of Aramco Services, and Texaco Refining and Marketing (East), an indirect subsidiary of Texaco. Mem. 1, 3. At the time this suit was filed, Star manufactured and distributed petroleum products. Plaintiffs allege that the bulk of Star's assets, along with its employees and employment policies, came from Texaco and that Texaco used Star as a "training ground for Texaco employees." Mem. 3-4. According to plaintiffs, employees and records transferred freely between Star and Texaco, and tenure with both companies was considered in determining seniority. Id. at 4. In 1999, Star was dissolved and its assets transferred to three new partnerships co-owned by Texaco, Saudi and Shell Oil. Id. In 1994, Texaco employees brought a class action against Texaco in New York ("Roberts" action), alleging racial discrimination in promotion, pay and other matters from 1991 until the present. Mem. 2. Although the suit named only Texaco as a defendant, the proposed class encompassed employees of Texaco and its subsidiaries. Matthews Smith and other Star employees knew about the suit and believed that they were members of the Roberts class. Mem. 11 n.3. Smith, for example, had regular contact with Roberts class counsel and received copies of some pleadings. One of these pleadings, the class certification motion, contained a footnote reiterating that plaintiffs took the position that "'Texaco' includes the employees of Star Enterprise, a joint venture, 50% owned by Texaco" and that it was "appropriate that the Class include Star Enterprise employees, because they are subject to the same systems . . . as are Texaco's other employees." R. 145 (Certification Motion, Ex.A-1). Roberts was settled in November 1997. Under the terms of the settlement agreement, Star employees were excluded from the class. Mem. 11 n.3 (settlement class included employees of Texaco and subsidiaries in which Texaco owned more than 50% interest). Id. The district court in Roberts, which had not previously ruled on the certification motion, approved the settlement. See Roberts v. Texaco, 979 F. Supp. 185 (S.D.N.Y. 1997). Star employees learned they would be ineligible to participate in the settlement in November 1996. Mem. 11 n.3. Soon thereafter, Smith and others filed class-based charges with EEOC and brought suit on behalf of themselves and a class of approximately 200 African-American managerial, professional and supervisory salaried employees at Star.<1> Plaintiffs complained of systemic race discrimination in promotion, pay and performance evaluations, as well as retaliation, at Star from 1991 until the present, and challenged these practices under disparate impact and intentional discrimination theories. R. 276 (6th Amended Complaint). Plaintiffs then moved for class certification. 3. District Court's Decision In ruling on the motion, the district court initially held that the suit was timely. While limitations ordinarily would have run on the earliest claims, the court noted that, under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), "the period of time between the beginning of the proposed class action and the denial [of certification] is tolled for all putative class members and any subsequent individual lawsuits they may wish to bring." Mem. 8. Applying that rule, the court concluded that limitations were tolled from the time the Roberts action was filed until plaintiffs were definitively excluded from that class. Mem. 11. The court recognized that tolling typically applies only to subsequent individual suits, rather than class actions. This restriction is intended to prevent plaintiffs "from engaging in endless rounds of litigation" over the propriety of proceeding as a class, after certification is denied. Mem. 9-11. The court concluded, however, that neither the restriction nor its rationale applies to this case for two reasons. First, plaintiffs "were not simply bringing multiple class actions in scattered districts in an effort to find at least one district court willing to accept their class certification argument." Rather, they were "seeking to protect rights they legitimately thought would be part of the Roberts settlement." Id. at 10. Second, a "definitive substantive decision on class certification" was never reached in Roberts. Id. Accordingly, the court held that plaintiffs could bring this suit as a class action, relying on the tolling principles of American Pipe. The court also held that plaintiffs' EEOC charges, filed after they learned of their exclusion from the Roberts class, would be "deemed timely" since they had "relied on the earlier filing of the Roberts plaintiffs to protect their interests." Id. at 12-13. Turning to the class issues, the court first found that the class satisfied the requirements of Rule 23(a): numerosity, typicality, commonality and adequacy of representation. Mem. 15-25. As for Rule 23(b), the court determined that plaintiffs' claims for equitable relief could be certified under Rule 23(b)(2). Id. at 28. The court reasoned that, since plaintiffs allege that "defendants' facially neutral employment policies demonstrate a statistically significant pattern of discrimination," those allegations, if true, suggest that defendants "acted on grounds generally applicable to the class," as required by (b)(2). Id. at 27-28. Although not mandated, the court also ordered that class members receive notice and an opportunity to opt out of the suit. Id. at 28. The court rejected arguments that the damage claims preclude Rule 23(b)(2) certification under Allison v. Citgo. Mem. 26-27. The court agreed that, under Allison, only "incidental" damages may be awarded in a (b)(2) action and that the damage claims here were "not incidental to the claims for injunctive relief." Id. at 25-26. The court concluded, however, that Allison did not rule out certifying only the equitable claims under 23(b)(2). The court added that this would not violate the Seventh Amendment as long as all claims, legal and equitable, were tried to a jury before the court resolved the equitable claims. Id. at 27. The court then certified the damage claims under Rule 23(b)(3), which requires that class claims "predominate over individual claims" and that a class action be "superior" to other methods of adjudicating the claims. Id. at 28, 34. Rejecting arguments that Allison would preclude class certification, the court explained that the Allison court upheld the denial of class certification there because the district court had found, in its discretion, that individual issues would predominate. Id. at 29. In contrast, the court concluded, here, "there are many issues which are common to the class" -- such as "whether the defendants engage in specific policies and procedures" that "adversely affect[] African-American salaried employees." Id. The court added that the smaller class here is generally "a much more homogeneous group who have suffered similar damages." Mem. 29-30. The court stated, "Allison was primarily concerned with detailing the changes the Civil Rights Act of 1991 has had on class actions." Id. at 31. The court reasoned that Congress passed the 1991 Act to "broaden" Title VII's remedies -- to provide that "more than front pay and back pay [would be] available to those who had been subjected to [discrimination] and that juries, rather than judges would decide such cases. Id. The court stressed that nothing in either Allison or the 1991 Act suggests that the Act, which was enacted "to eradicate discrimination -- not to present barriers" to persons attempting to enforce their rights, "ended class actions in racial discrimination suits." Id. at 32. Thus, the court held, "[c]lass actions are still permitted in racial discrimination cases when there are claims for money damages as long as all the requirements of 23(b) are met" -- as they are "when the class is one as discrete and homogenous as the one found here." Id. Finally, the court concluded "without reservation" that a class action would be "superior," within the meaning of Rule 23(b)(3). Mem. 33-34. The court reasoned that certification would "safeguard judicial economy by limiting duplicative litigation, and the plaintiffs [would] ensure uniform results for any absent class members." Id. at 34. The court also noted that the suit would "permit adjudication of possibly meritorious claims which otherwise might not be brought on behalf of African-American salaried employees who are unable or unwilling to sue their employer, a frightening task even for a brave employee." Id. Accordingly, the court held, after "careful and detailed review of the entire record," that "plaintiffs have met their burden of establishing all of the necessary requirements of Rule 23." Id. ARGUMENT I. ALLISON DID NOT DIVEST THE DISTRICT COURT OF ITS TRADITIONAL "WIDE DISCRETION" TO GRANT CLASS CERTIFICATION IN TITLE VII RACE DISCRIMINATION CASES EVEN WHERE DAMAGES ARE SOUGHT. The district court reasonably determined that this Title VII race discrimination suit may proceed as a hybrid class action, under Rule 23(b)(2) and (3), notwithstanding the pleas for damages and a jury trial. As this Court has repeatedly recognized, district courts have "wide discretion" in deciding certification issues. Assuming proper legal standards are applied, their decisions in this highly fact-specific matter are entitled to great deference. See generally Allison, 151 F.3d 402; see also Pederson v. Louisiana State Univ., 213 F.3d 858, 866 (5th Cir. 2000); Jenkins v. Raymark Indus., 782 F.2d 468, 471 (5th Cir. 1986). Here, the district court applied the appropriate standards and held, based on the specific facts before it, that plaintiffs' race discrimination claims should be certified for class treatment. While defendants disagree with this decision, it clearly does not constitute an abuse of discretion. Class actions have historically been a common -- even a preferred -- means of vindicating rights under Title VII. A typical Title VII class case challenges employment practices that allegedly adversely affect the class, based on their race or other protected factors, and seeks to enjoin the challenged practices as well as obtain individual relief for class members. At least until 1991, such claims fit neatly into Rule 23(b)(2), which 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 [or] declaratory relief with respect to the class as a whole." Indeed, the subsection was added to Rule 23 primarily to facilitate enforcement of civil rights statutes such as Title VII. See, e.g., Charles Wright, Arthur Miller & Mary Kay Kane, FEDERAL PRACTICE AND PROCEDURE §§ 1775-76 (2d ed. 1986). Suits were tried in bifurcated proceedings, with liability decided in phase I and relief, if any, determined in phase II. Passage of the Civil Rights Act of 1991, Pub. L. 102-66, 105 Stat. 1071 (1991), which added damages and jury trials to the existing equitable remedies for intentional discrimination, see 42 U.S.C. § 1981a, impacted class certification in Title VII cases. Most importantly, because class members need not receive notice and an opportunity to opt out of the class under Rule 23(b)(2), reliance on the literal terms of that subsection raises due process concerns.<2> See Ortiz v. Fibreboard Corp., 119 S. Ct. 2295, 2314-15 (1999) (suggesting that class members are entitled to notice and opt-out opportunity in damages actions). To address these concerns, courts have endorsed the concept of "hybrid" certification, certifying equitable claims under 23(b)(2) and legal claims under 23(b)(3). See, e.g., Jefferson v. Ingersoll Int'l, 195 F.3d 894, 898 (7th Cir. 1999); Eubanks v. Billington, 110 F.3d 87, 96 (D.C. Cir. 1997) (court may order notice under (b)(2) or adopt hybrid approach); accord Lemon v. Local 139, IUOE, 216 F.3d 577, 581-82 (7th Cir. 2000). This achieves "both consistent treatment of class-wide equitable relief and an opportunity for each affected person to exercise control over the damages aspects" of the suit. Jefferson, 195 F.3d at 898. Notice and an opt-out opportunity are compulsory under Rule 23(b)(3). See Rule 23(c)(2). Certification under Rule 23(b)(3) requires a finding that legal or factual questions common to the class predominate over questions affecting only individual members, and that a class action is superior to other methods of resolving the controversy. See Jenkins, 782 F.2d 468 ("common issues must constitute a significant part of the individual cases"). This standard is normally met, however, in systemic discrimination suits where issues relating to liability (and punitive damages) constitute a significant part of every member's case.<3> Warnell v. Ford Motor Co., 189 F.R.D. 383, 387 (N.D. Ill. 1999). The 1991 Act also affects the structure of the trial since the availability of juries raises Seventh Amendment considerations. The Seventh Amendment provides: "No fact tried by a jury shall be otherwise re-examined by any Court . . . ." Thus, in bifurcated proceedings, if multiple factfinders are contemplated, care must be taken to ensure that subsequent juries do not revisit facts decided by an earlier jury, and the jury must decide all facts pertinent to both legal and equitable issues before the court resolves the equitable claims. See, e.g., Beacon Theatres v. Westover, 359 U.S. 500 (1959); Mullen v. Treasure Chest Casino, 186 F.3d 620, 628-29 (5th Cir. 1999) (permitting use of bifurcation in class tort action where these precautions were taken); Jefferson, 195 F.3d at 898 (hybrid certification will not violate Seventh Amendment as long as damage claims are tried first); cf. Hadra v. Herman Blum Consulting Eng'rs, 632 F.2d 1242, 1245 (5th Cir. 1980) (upholding grant of new trial for only damages upon finding that issues relating to liability and damages were separable). Here, the district court carefully considered and applied these legal standards in weighing whether to certify the class. The court concluded that the claims were suitable for class treatment because plaintiffs were alleging that defendants either intentionally or unintentionally maintained racially discriminatory employment practices that similarly affected all members of the class because of their race. The court also concluded that the class was relatively homogeneous and had suffered similar harm. Finding, however, that the damages claims were not incidental to the claims for equitable relief, the court certified the equitable claims under Rule 23(b)(2) and the legal claims under 23(b)(3), in accordance with Jefferson. The court concluded that proof of the alleged systemic discrimination would predominate over individual relief issues, and that class treatment of the common issues was "clearly superior to the alternative of repeating, hundreds of times over, the litigation of [these issues] with . . . days of the same witnesses, exhibits and issues from trial to trial," Jenkins, 782 F.2d at 473. For due process reasons, the court also ordered notice and an opt-out opportunity. Finally, the court ruled that legal issues would be resolved before equitable ones, in keeping with the Seventh Amendment. Particularly given the substantial deference due district courts in these matters, this thorough and well-reasoned decision should be sustained. Disregarding the deferential standard of review, defendants challenge the decision on numerous grounds. Fundamentally, they complain that certification is improper, as a matter of law, in light of this Court's decision in Allison, 151 F.3d 402. These arguments -- which were considered and rejected by the district court -- flow from a basic misunderstanding of Allison. In Allison, a divided panel of this Court upheld the district court's refusal to certify a Title VII suit under Rule 23(b)(2) or (b)(3). The proposed class included over 1000 applicants and employees -- members of six different unions at two locations; plaintiffs sought injunctive, declaratory and monetary relief for alleged discrimination in hiring, pay, training, testing and hostile work environment. The court concluded, based on those specific facts, that certification was inappropriate because individual issues relating to damages would dominate the trial, and a class action would be inefficient and unmanageable. Celestine v. Citgo Petroleum Corp., 165 F.R.D. 463, 467-71 (W.D. La. 1995), aff'd, 151 F.3d 402 (5th Cir. 1998). Instead, the court chose to consolidate the over 130 plaintiffs' claims, along with later-filed suits. Id. at 472. This Court held on rehearing that the decision to "utilize consolidation under rule 42 rather than class certification under rule 23" was not an abuse of discretion. 151 F.3d at 434 n.*. Defendants interpret Allison as divesting the district court of its traditional discretion by precluding class certification as a matter of law in employment discrimination suits where damages are sought. See, e.g., Star Br. 8 (Allison mandates that such suits may not be certified). Nothing could be further from the truth. Throughout the decision, the Court emphasized that "the district court maintains substantial discretion in determining whether to certify a class action," adding that this "deferential standard" recognizes the "essentially factual basis of the certification inquiry and of the district court's inherent power to manage and control pending litigation." 151 F.3d at 408; see also id. at 416 ("complex cases cannot be run from the tower of the appellate court"). Moreover, although defendants ignore this caveat, the Court explicitly clarified that it was "not called upon to decide whether the district court would have abused its discretion if it had elected to bifurcate liability issues that are common to the class and to certify for class determination those [discrete] liability issues." Id. at 434 n.* The decision therefore simply does not bar class certification in Title VII actions such as this.<4> In the alternative, defendants argue that Allison precludes certification of this suit as a (b)(2) or hybrid (b)(2)/(b)(3) class action. They contend that (b)(2) is inapplicable because the claims for damages "necessarily predominate" over any other claims. Star Br. 13. However, the district court addressed this matter by certifying only the claims for equitable relief under Rule 23(b)(2). Rule 23(c)(4)(A) expressly authorizes such rulings: actions may be "maintained as a class action with respect to particular issues." See also, e.g., Nix v. Grand Lodge of the IAMAW, 479 F.2d 382, 385 (5th Cir. 1973) (noting with approval that "court has the power under subdivision (c)(4)(A) . . . to confine the class action aspects of a case to those issues pertaining to the injunction and allow damages to be tried separately" or under Rule 23(b)(3)). Moreover, many of the issues pertain to the disparate impact claims.<5> Since there are no damages or juries for such claims, 42 U.S.C. § 1981a(a)(1), they are appropriate for class treatment to the same extent they were before 1991, particularly where, as here, Seventh Amendment concerns have been addressed.<6> The decision therefore does not constitute an abuse of the court's discretion.<7> As for a hybrid (b)(2)/(b)(3) action, we note initially that Allison did not discuss hybrid certification apart from the particular facts of that case. See, e.g., 151 F.3d at 418-20. Rather, the Court simply recognized that it is not an option where, as in Allison, the district court determines that the suit cannot be certified under Rule 23(b)(3) because of the multiplicity and complexity of individual issues. Id. The district court reached the contrary determination on the facts in this case, and that decision -- like the district court's in Allison -- is entitled to deference. Compare, e.g., Jefferson, 195 F.3d at 898.<8> Defendants claim, however, that under Allison, "no employment- discrimination claim can be certified under rule 23(b)(3) where, as here, the plaintiffs seek compensatory and punitive damages because as a matter of law the issues related to those damages predominate over any common issues." Texaco Br. 29 (original emphasis). That is simply wrong. Allison cannot have held that claims for damages preclude class certification because this Court has long permitted certification in suits where legal damages are sought. See, e.g., Pederson, 213 F.3d at 884 (Title IX); Mullen, 186 F.3d at 626-29 (negligence, workplace injury); Jenkins, 782 F.2d at 471-72 (asbestos/product liability case); see also, e.g., Watson v. Shell Oil Co., 979 F.2d 1014, 1019-23 (5th Cir. 1992) (tort case); Parker v. Local 1466, 642 F.2d 104, 107 (5th Cir. 1981) (LMRDA). Indeed, a major focus of the class proceedings in Jenkins concerned the propriety of punitive damages and the amount, if any, of such an award. See 782 F.2d 468. While defendants limit their per se rule to "employment-discrimination claims," they point to nothing -- and there is nothing -- that justifies requiring that race discrimination claims meet more stringent procedural standards than tort or other statutory claims. Finally, defendants argue that certification is improper because this Court upheld the district court's refusal to certify a class in Allison and, they claim, this case is substantially similar to Allison. Texaco Br. 21. The district court, however, reasonably concluded that Allison is factually and legally distinguishable. Specifically, Allison was a giant hodge-podge of claims and parties -- hiring as well as hostile work environment, applicants as well as employees; the court concluded that the suit would be unmanageable as a class action and that class treatment was inferior to other means of adjudication. In contrast, the claims in this case are essentially garden-variety Title VII systemic discrimination claims, and the proposed class, the court determined, is significantly smaller and more homogenous than in Allison. Under these circumstances, the court reasonably concluded that class treatment is appropriate. Cf. Shipes v. Trinity Indus., 987 F.2d 311, 316 (5th Cir. 1993) (certification is not improper even though employees work at two locations since allegation is that employer, through "white supervisors," used "same subjective criteria in making personnel decisions" in both locations). While defendants may disagree with this assessment, "reasonable differences in judgment are part and parcel of the substantial discretion district courts maintain over certification of class issues." Allison, 151 F.3d at 418. Defendants cannot show that the decision constitutes an abuse of discretion. As the district court here recognized, class actions play a vital role in the private enforcement of Title VII by facilitating attacks on broad patterns of workplace discrimination. See, e.g., Wetzel v. Liberty Mutual Ins. Co., 508 F.2d 239, 254 (3d Cir. 1975) (such actions are "the cutting edge of the Title VII sword which Congress has fashioned" to fight race discrimination -- "a major enemy to continuing progress, strength, and solidarity in our nation"). It is inconceivable that this Court would bar use of the class action device in race discrimination cases -- particularly since it permits the device in similar cases in other contexts -- merely because Congress chose to strengthen Title VII by providing additional remedies and jury trials. Cf. Holmes v. Continental Can Co., 706 F.2d 1144, 1152 (11th Cir. 1983) (stressing court's "conviction that Title VII and [Rule 23] should be construed so as to further the strong public policy in eradicating all vestiges of racial discrimination in employment"). Defendants offer no justification -- nor is there one -- for treating Title VII suits less favorably than other types of cases. We therefore urge this Court to reject defendants' efforts to impose a categorical ban on class actions in Title VII cases and hold that the district court acted well within its discretion in granting class certification in this case.<9> II. THE AMERICAN PIPE TOLLING RULE APPLIES TO CLASS ACTIONS FILED PROMPTLY AFTER PLAINTIFFS LEARN THEY HAVE BEEN EXCLUDED FROM A PREVIOUSLY-FILED CLASS SUIT. The district court correctly held that this suit was timely filed. Under the tolling principles of American Pipe and Crown, Cork & Seal Co. v. Parker, 462 U.S. 345 (1983), limitations were tolled during the pendency of the Roberts class action and, because tolling cannot logically be limited to subsequent individual actions in the circumstances of this case, the court properly extended the rule to the filing of this class action. In American Pipe, the Supreme Court held that "commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class." 414 U.S. at 553-54. The Court then concluded that because limitations are tolled while a class certification motion is pending, if the motion is denied, any putative class member may timely move to intervene in the action. In Crown, Cork, a Title VII suit, the Court extended this rule to cases where putative class members choose to file their own suits, rather than intervene, once certification is denied. 462 U.S. at 354. In both situations, the Court concluded, any other result would frustrate the purposes of the class action procedure -- efficiency and economy of litigation. Unless they could rely on the filing of the class action to toll limitations on their private claims, class members "would be induced" to file separate suits or intervention motions simply "to protect themselves against the possibility that certification would be denied" -- "precisely the multiplicity of activity which Rule 23 was designed to avoid." American Pipe, 414 U.S. at 551-53; Crown, Cork, 462 U.S. at 349-50. The Court also noted that the rule is consistent with the policies underlying statutory limitation periods -- ensuring fairness to defendants by putting them on notice of adverse claims and preventing plaintiffs from sleeping on their rights. American Pipe, 414 U.S. at 554-55; Crown, Cork, 462 U.S. at 352-53. This is because once a class action is filed, defendants can determine, within the applicable limitations period, both the subject matter and the size of the prospective litigation, and class members who take no action while suit is pending cannot be accused of sleeping on their rights. Applying these same principles here, the district court correctly held that tolling preserved the present class action just as it would individual suits filed by each class member. Star employees -- the group covered by this suit -- were encompassed in the original Roberts class certification motion and were excluded from the class only during settlement negotiations. As was true in American Pipe and Crown, Cork, unless Star employees and other identifiable groups within a class could rely on the filing of the class action to toll limitations on their claims, they would be induced to file separate class actions merely to protect their rights -- "precisely the multiplicity of activity which Rule 23 was designed to avoid." Nor would applying the tolling rule undermine the purposes of the applicable limitations period: Star had notice of the putative class members by reason of the arguments in Roberts, and plaintiffs cannot be said to have slept on their rights since they filed suit promptly after learning of their exclusion from the Roberts class. Under a straightforward application of American Pipe, any of the plaintiffs could have intervened in Roberts and sought to represent a subclass of Star employees. See Trief v. Dun & Bradstreet Corp., 144 F.R.D. 193, 202-03 (S.D.N.Y. 1992) (allowing individual to intervene and represent otherwise unrepresented class members in pending class suit). Cf. United Airlines v. McDonald, 432 U.S. 385, 394-95 & n.15 (1977) (American Pipe permits plaintiff to intervene and represent other putative class members in appealing denial of class certification). Just as the Supreme Court rejected a similar distinction between intervention and a separate suit in Crown, Cork, 462 U.S. at 350 (rejecting argument that American Pipe should apply only to intervention, rather than also to filing of separate suit), it should not matter that the plaintiffs chose to bring a separate suit in this case. Moreover, there are sound policy reasons for permitting plaintiffs in these circumstances to bring a separate class action. Any other result would simply encourage defendants to pick off and settle with some of the class, knowing that the remaining members could at most file individual actions thereafter. Cf. Crawford v. Equifax Payment Servs., 201 F.3d 877, 882 (7th Cir. 2000) (rejecting proposed settlement of class action as "substantively troubling" where named plaintiff and his attorney "were paid handsomely to go away" and class members received nothing). By analogy, courts have consistently held that settlement of the named plaintiff's individual claim does not moot a related class claim since, unless the class claim could continue, defendants would be encouraged to pick off the named plaintiff cheaply and avoid addressing the alleged class-wide discrimination. See, e.g., Jenkins v. United Gas Corp., 400 F.2d 28, 33-34 (5th Cir. 1968) (reasoning that if employer could moot class action merely by offering named plaintiff the individual relief requested, "employer [c]ould devise such a resist-and-withdraw tactic as a means of continuing its former ways"). There are, of course, situations where plaintiffs should be precluded from bringing successive class actions in reliance on the American Pipe tolling rule. Courts have held that tolling does not apply where, for example, plaintiffs attempt to file and refile for certification of what is effectively the same class, thereby "perpetually tolling the statute of limitations as to all potential litigants, regardless of how many times a court declines to certify the class." Basch v. Ground Round, 139 F.3d 6, 11 (1st Cir. 1998). See also, e.g., Andrews v. Orr, 851 F.2d 146, 148 & n.1 (6th Cir. 1988) (where certification motion was initially denied in prior action and suit was then settled while second motion was pending, district court properly refused to permit class-wide relief for "precisely the same class" as was previously denied certification). In such cases, the "policies -- respect for Rule 23 and considerations of judicial economy -- which animated the Crown, Cork and American Pipe tolling rules dictate that the tolling rules . . . not permit plaintiffs to stretch out limitations periods by bringing successive class actions." Basch, 139 F.3d at 9-11. Here, however, there has been no such abuse. As the district court recognized, plaintiffs are simply attempting to protect rights they legitimately thought would be covered by the Roberts action. In contrast to cases such as Basch and Andrews, plaintiffs are not attempting to certify the same class but instead, effectively, a subclass of the original Roberts class -- and no court has ever determined that the class they seek to certify is inappropriate. Under these circumstances, therefore, this Court should find that the district court reasonably extended the tolling rule to this class action. Star's brief invites the Court to hold that, as a matter of law, tolling is limited to intervention or the filing of individual actions -- the specific facts of American Pipe and Crown, Cork. Star Br. 50-55.<10> Crown, Cork, however, rejected a similar attempt by defendants to limit tolling to interventions, based on the facts of American Pipe, noting that the case should not be read "so narrowly." 462 U.S. at 350. The Court suggested that, because the purposes underlying American Pipe were applicable in other contexts, the rule should be extended to such cases. As authority for its blanket bar, Star relies on Salazar-Calderon v. Presidio Valley Farmers Ass'n, 765 F.2d 1334, 1351 (5th Cir. 1985), which rejected an argument that "putative class members may piggyback one class action onto another and thus toll the statute of limitations indefinitely." In Salazar, plaintiffs were attempting to certify the same class that had already been denied certification by another court. See 765 F.2d at 1350. The case thus illustrates that tolling is inappropriate in that context. However, Salazar did not, in fact, hold that a second class action is necessarily improper. On the contrary, the Court suggested that on remand the district court could certify a class of those plaintiffs who had timely filed suit following the original denial of class certification. See id.; see also Calderon v. Presidio Valley Farmers Ass'n, 863 F.2d 384, 390 (5th Cir. 1989) (upholding certification decision on remand of Salazar). Star also cites Korwek v. Hunt, 827 F.2d 874, 875 (2d Cir. 1987). However, the Korwek court identified the issue as whether American Pipe "permit[s] the filing by putative class members of a subsequent class action nearly identical in scope to the original class action which was denied certification" based on a finding that the proposed class was inappropriate. Id. at 876, 878. Thus, Korwek's refusal to apply American Pipe simply confirms that tolling does not apply where plaintiffs are attempting to certify the same class twice. See Trief, 144 F.R.D. 193 (Korwek is limited to situations where plaintiffs attempt to file "subsequent class action nearly identical in scope to the original class action which was denied certification"). Defendants cite no other authority for their crabbed interpretation of American Pipe. We therefore urge this Court to affirm the district court's determination that the suit is timely and appropriate for class treatment. CONCLUSION For the foregoing reasons, the judgment of the district court should be reversed and the case should be remanded to the district court for further proceedings. Respectfully submitted, C. GREGORY STEWART General Counsel PHILIP B. SKLOVER Associate General Counsel ROBERT J. GREGORY Senior Attorney ______________________________ BARBARA L. SLOAN Attorney EQUAL EMPLOYMENT OPPORTUNITY COMMISSION Office of General Counsel 1801 L Street, N.W. Washington, D.C. 20507 (202) 663-4721 CERTIFICATE OF COMPLIANCE Pursuant to 5th Circuit Rules 32.2.7(b)-(c), I certify that the textual portion of this brief was prepared in monospaced (nonproportionally spaced) typeface using Courier New 12 point font, and that, exclusive of the exempted portions, contains 6,748 words, as determined by the Corel Word Perfect 8 word counting program. I understand that a material misrepresentation in completing this certificate or circumvention of the type-volume limits in 5th Circuit Rule 32.2.7 may result in the Court's striking the brief and imposing sanctions against me. ________________________________ Barbara L. Sloan CERTIFICATE OF SERVICE I hereby certify that two copies of the foregoing Brief of the Equal Employment Opportunity Commission as Amicus Curiae, along with one copy of the brief on disk, were sent this 18th day of August, 2000, by first-class mail, postage pre-paid, to: L. Chris Butler V. Scott Kneese Shell Oil Company BRACEWELL & PATTERSON 4834 One Shell Plaza South Tower Pennzoil Place Houston, TX 77002 711 Louisiana Street, Suite 2900 Houston, TX 77002 Stephen F. Fink Robert E. Meadows THOMPSON & KNIGHT GARDERE, WYNNE, SEWELL & RIGGS 1700 Pacific Avenue, 1000 Louisiana, Suite 3400 Suite 3300 Houston, TX 77002 Dallas, TX 75201 Dewey J. Gonsoulin James E. Payne MEHAFFY & WEBER PROVOST & UMPHREY LAW FIRM 2615 Calder, Suite 800 490 Park Street Beaumont, TX 77702 P.O. Box 4903 Houston, TX 77704 _______________________________ 1 Although the proposed class also included "hourly individuals who have tried to obtain salary positions," the court excluded this group when it certified the class. Mem. 15. 2 These protections are not required under Rule 23(b)(2) because the class is presumed to be "cohesive" and, practically speaking, an injunction would affect absent class members even if they attempted to opt out. See Jefferson v. Ingersoll Int'l, 195 F.3d 894, 898 (7th Cir. 1999). 3 Allison suggests that both punitive and compensatory damages should be decided in phase II of a bifurcated trial because they require an "individualized" assessment of each class member's injury. 151 F.3d at 419. In fact, however, punitive damages, like injunctive relief, relate more closely to the enforcement, rather than make-whole, purposes of Title VII and, so, may be decided in phase I. The focus of the inquiry is the employer's mental state -- malice or reckless indifference. Kolstad v. American Dental Ass'n, 119 S. Ct. 2118, 2124-26 (1999). To the extent a jury determines that the employer engaged in systemic discrimination, that same jury could easily also determine whether the employer acted with malice or reckless disregard of employees' federally protected rights. Moreover, and significantly, this Court has explicitly held that punitive damages may be decided by a phase I jury. See, e.g., Jenkins, 782 F.2d at 473-75 (phase I jury may decide punitive damages issues in asbestos class action). 4 Star compares the order here with the order in Castano v. American Tobacco Co., 84 F.3d 734 (5th Cir. 1996), complaining that, as in Castano, the court has not yet specified -- at this preliminary stage -- exactly how the trial will work. The analogy is inapt. This suit raises no particular novel issues. Cf. Watson v. Shell Oil Co., 979 F.2d 1014, 1020 (5th Cir. 1992) (upholding certification even though court did not "fill in" broad outlines of trial plan). In Castano, in contrast, the court intended to try nationwide class action of smoking-related injuries. The suit involved millions of potential victims, nine causes of action under 50 state laws and untested theories of liability. Under those circumstances, this Court demanded specificity. 5 Texaco asserts, without authority, that the disparate impact claims cannot be certified under Rule 23(b)(2) because they challenge subjective employment practices. Texaco Br. 23-25. On the contrary, in a suit involving subjective practices, this Court recently reaffirmed that "[d]isparate impact claims may be brought by . . . a class." Munoz v. Orr, 200 F.3d 291, 299 (5th Cir. 2000). Texaco's true quarrel is with the Supreme Court's holding that disparate impact theory may be used to challenge subjective employment practices, Watson v. Fort Worth Bank & Trust, 487 U.S. 997 (1988), rather than with (b)(2) certification. 6 Defendants argue generally that class treatment of these systemic claims would raise "significant Seventh Amendment problems." Star Br. 23. Any such "problems" are clearly surmountable. The Seventh Amendment does not prohibit bifurcation of trials, for example, "as long as the judge does not divide issues between separate trials in such a way that the same issue is reexamined by different juries." Mullen, 186 F.3d at 628. Similarly, equitable and legal issues may be tried in one action as long as legal claims are decided before determination of the equitable claims. Dairy Queen v. Wood, 369 U.S. 469, 479 (1962). The district court confirmed that these requirements would be met. In any event, such "problems" are not unique to class actions. On the contrary, they could also arise if the claims of the over 80 plaintiffs and any later intervenors were tried in a consolidated action, as the district court in Allison proposed. 7 Defendants also challenge (b)(2) certification on the ground that, since Star has been reconstituted as other entities, injunctive relief is impossible. That is, we presume, why successorship liability is an issue in the case. In any event, a (b)(2) action may continue even if defendants' conduct has obviated the need for injunctive relief. See, e.g., Pettway v. American Cast Iron Pipe Co., 494 F.2d 211, 257 (5th Cir. 1974). 8 Defendants also argue that certification is improper because this is not a "negative value" suit -- that is, one where each member's damages are not high enough to pursue in individual actions. This Court has commented that the "most compelling rationale for finding superiority in a [(b)(3)] class action" is "the existence of a negative value suit." See, e.g., Allison, 151 F.3d at 420; Castano, 84 F.3d at 748. While that may militate in favor of certification in a particular case, however, it clearly is not a prerequisite. The Court recently upheld certification of a class of injured employees in Mullen, 186 F.3d 620, for example, where, if plaintiffs won, damages would be more than negligible. In any event, this case is primarily a (b)(2) action; only the damage claims under certified under (b)(3). 9 Defendants also seek reversal on the merits of plaintiffs' suit. These arguments are not appropriate on a Rule 23(f) appeal, which is limited to issues relating to the "granting or denying of class action certification." See Pickett v. Iowa Beef Processors, 209 F.3d 1276, 1279 (11th Cir. 2000); cf. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177 (1974) (court should not consider underlying merits of suit in deciding class certification). 10 Star also contends that tolling does not apply to the filing of an EEOC charge. That is simply wrong. See Andrews, 851 F.2d at 149 ("limitations period for filing individual administrative complaints was tolled during the pendency of the earlier class action"). Under the single-filing rule, putative class members may rely on the valid charge of one aggrieved person. See Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 498 (5th Cir. 1968) ("It would be wasteful, if not vain, for numerous employees, all with the same grievance to have to process many identical complaints with EEOC").