th2H4JI06DBy: Gerald L. Maatman, Jr. and John S. Marrese

Seyfarth Synopsis:  African American pipefitters filed a class action against their labor union based on its allegedly discriminatory system for referring jobs to union members.  Despite the fact that third-party employers retained sole discretion in deciding whether to hire a union referral, the U.S. District Court for the Northern District of Illinois found that such discretion, and the individual hiring determinations resulting therefrom, did not destroy commonality for the claims of the class members.  The Court based its conclusion on the notion that the union’s job referral system was “the first allegedly discriminatory step that tainted the entire job assignment and hiring process.”  The ruling is an important one for employers on discrimination liability for policies delegating decision-making authority to local managers or third parties.


In Porter et al. v. Pipefitters Ass’n Local Union 597, No. 12-CV-9844 (N.D. Ill. Sept. 20, 2016), a group of African American pipefitters filed a class action against their labor union, alleging racial discrimination in the union’s job referral system.  Under the system, while third-party employers retained sole discretion in the ultimate decision to hire a union referral, union members were supposed to obtain employment based on race-neutral factors like length of time spent waiting for a job and having the requisite skills.  However, Plaintiffs alleged that the union’s policies enabled employers to circumvent the system and hire union members directly, which resulted in white members disproportionately obtaining employment over African American members.

In granting Plaintiffs’ motion and certifying a class, Judge Sara Ellis of the U.S. District Court for the Northern District of Illinois rejected the union’s argument that individual issues relating to the hiring decisions of third-party employers precluded a finding of commonality.  The union’s referral system, which enabled employers to circumvent race-neutral criteria for hiring, was “the first allegedly discriminatory step that tainted the entire job assignment and hiring process” and “allowed and endorsed” discrimination.  Plaintiffs could prove the discriminatory nature of the policy across the class with statistical evidence.

The ruling is significant in that it limits the impact of Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), wherein the U.S. Supreme Court found that an employer’s policy of giving discretion to local managers in employment decisions destroyed commonality among employees’ discrimination claims.

Case Background

In Porter, Plaintiffs filed a class action lawsuit against their union based on its allegedly discriminatory system for referring jobs with third-party employers to Union members.  Id. at 1.  Plaintiffs alleged that the Union’s policies enabled employers to bypass the race-neutral referral system negotiated and hire Union members directly.  According to Plaintiffs, this resulted in African American members receiving fewer work hours than their white counterparts.  Id.

The Union’s job referral system had a history of discriminating against African Americans.  In 1990, a jury found that rather than operate, as negotiated, a system by which members received jobs on a first-come, first-serve basis, the Union actually operated a word-of-mouth referral system disproportionately favoring whites.  Id. at 2-3.  Based on the jury’s finding, the Court issued a consent decree requiring the Union to assign jobs from an out-of-work list on a first-on, first-off basis.  Id. at 3-4.  However, employers retained sole discretion in deciding whether to hire referrals.  Id. at 4.  In addition, written exceptions to the system allowed employers to circumvent the out-of-work list and continue to hire Union members directly.  Id.  In 1996, the court terminated the consent decree.  Id. at 5.  Evidence showed that, by 2004, less than 20% of jobs were filled from the out-of-work list.  Id.

In 2004-2005, the Union negotiated a new job referral system whereby members could either find employment directly with an employer or find employment through the out-of-work list.  Id.  While the Union implemented quotas to ensure appropriate levels of hiring from the out-of-work list, evidence showed those quotas were not met.  Id. at 5-6.

Based on the above, Plaintiffs alleged discrimination in violation of Title VII of the Civil Rights Act of 1964 and 42 U.S.C. § 1981 as well as breach of the union’s duty of fair representation under the Labor Management Relations Act of 1947.  Id. at 1. Plaintiffs moved to certify a class of current and former African American members of the Union who had faced and continued to face such violations.  Id.

The Decision

Judge Ellis certified a class of current and former African American members of the union pursuant to Rule 23(b)(3) to recover money damages.  The Court withheld ruling on certification of a class under Rule 23(b)(2) for injunctive relief.

The Court’s Analysis Under Rule 23(a)

The Court’s analysis under Rule 23(a) focused on Plaintiffs’ showing of “commonality,” which required Plaintiffs to identify an issue central to all class members’ claims that the Court could decide “in one stroke” for the entire class.  Id. at 12 (internal quotations and citations omitted).  The Court explained that challenging the existence of a discriminatory policy may provide commonality, depending on the degree of discretion involved in the policy’s application.  Id. at 12-13  Relying in particular on the U.S. Supreme Court opinion in Wal-Mart along with recent Seventh Circuit precedent, the Court opined that commonality is absent where the policy is “highly discretionary and plaintiffs do not identify a common way in which defendants exercise that discretion.”  Id. at 13.  However, if plaintiffs show that a defendant enforces the policy at the corporate level and the policy affects class members in a common manner, some discretion by employees or third parties in actually applying the policy will not necessarily defeat commonality.  Id. at 13.

Based on those principles, the Court ruled that Plaintiffs had shown commonality based on the existence of the union’s job referral system, which “allowed,” “endorsed,” and “exacerbated” discrimination against African American pipefitters.  Id. at 14-15.  The Court rejected the union’s contention that the independent hiring decisions of third-party employers destroyed commonality.  Indeed, such discretion did “not matter because Plaintiffs challenge [the union]’s overarching policies, which influenced the entire job assignment and hiring process.” Id. at 15 (citation omitted).  Such policies were “the first allegedly discriminatory step that tainted the entire job assignment and hiring process.”  Id.

In addition, the Court found that Plaintiffs had easily satisfied the remaining requirements of numerosity, typicality, and adequacy of representation under Rule 23(a).  Id. at 11-12, 17-19.

The Court’s Analysis Under Rule 23(b)

Having found Plaintiffs satisfied Rule 23(a), the Court addressed whether Plaintiffs had satisfied Rule 23(b)(2) for certification of an injunctive relief class and Rule 23(b)(3) for monetary relief.

The Court explained that Rule 23(b)(2) allows certification of an injunctive relief class where the defendant “has acted or refused to act on grounds that apply generally to the class” such that the Court can appropriately  fashion relief for the class as a whole.  Id. at 20 (quoting Fed. R. Civ. P. 23(b)(2)).  Injunctive relief is not appropriate if a court must make individual determinations to fashion relief for individual class members.  Id.  Plaintiffs’ proposed injunctive relief — a ban on the current job referral system and implementation of a new system — “appear[ed] proper.”  Id.  However, because Plaintiffs did not appear to be current members of the Union and, thus, would not suffer the Union’s policies going forward, they had no basis to request injunctive relief.  Id. at 20-21.  Accordingly, the Court reserved ruling on certification under 23(b)(2) to allow Plaintiffs to show that they were current Union members or to substitute someone who is a current member.  Id. at 22.

The Court next addressed whether Plaintiffs satisfied the “predominance” and “superiority” requirements under Rule 23(b)(3). In particular, class certification is proper if “questions of law or fact common to class members predominate over any questions affecting only individual members, and . . . a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”  Id. (quoting Fed. R. Civ. P. 23(b)(3)).

The Court determined that Plaintiffs can satisfy Rule 23(b)(3)’s predominance requirement by showing that “common questions [among class members] represent a significant aspect of a case” and can be proved by common evidence.  Id. at 22-23. Plaintiffs argued that they could demonstrate the discriminatory impact of the job referral system on all class members by using statistical evidence adduced by its expert.  Id. at 23.  The union argued that predominance did not exist because: (a) Plaintiffs’ statistical evidence was “unrepresentative, inaccurate, [and would only] undermine” Plaintiffs’ claims; and (b) the union did not have a uniform policy because third-party employers made hiring decisions.  Id.  The Court agreed with Plaintiffs, finding that the Union’s arguments only underscored the predominance of common issues because, even if the Union was correct, the claims of the entire class would fail together.  Id. at 24.

The Court also found that Plaintiffs had shown the “superiority” of a class action under the circumstances because it “would be more efficient than proceeding with hundreds of individual suits” challenging the same job referral system.  Id. at 24.  As such, the Court certified a class of current and former African American Union members to seek monetary relief under Rule 23(b)(3).

Implication For Employers

Jude Ellis’ decision is decidedly friendly for Plaintiffs. Based on the ruling in Porter, even after Wal-Mart Stores, Inc. v. Dukes, an employer may be held liable for the discretionary decisions of local managers or third parties if those decisions are discriminatory and the product of an employer’s policy which “allowed” or “exacerbated” the discrimination.  Such a policy can provide the “glue” to hold together a class action where the independent decisions of local managers or third parties would otherwise destroy it.  While the facts in Porter — namely, that a predecessor of the challenged policy had been found discriminatory by a jury — may limit its impact, employers would be wise to monitor policies giving lower level employees decision-making authority to ensure such policies are not allowing or contributing to a pattern of discrimination.

Washington-westernBy Laura Maechtlen and Julie G. Yap

In Rollins v. Traylor Brothers, Case No. 14-CV-1414 (W.D. Wash. Jan. 21, 2016),  Judge John Coughenour of the U.S. District Court for the Western District of Washington certified the claims of a class of workers alleging claims of discrimination under both disparate impact and disparate treatment liability theories. Id. at 6-12, 18. The Court also approved plaintiffs’ request to proceed through a two-stage trial process, whereby if plaintiffs established a discriminatory policy or disparate impact during stage one, “each class member would be awarded a rebuttable inference that all class members were victims of defendants’ allegedly discriminatory practices and/or suffered a disparate impact” in stage two. Id. at 16.

The Court’s order serves as another reminder that, even after Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), judges may still certify a discrimination class action based on subjective decision-making, at least when presented with the types of facts before the Court in this case.

Case Background

In Rollins, defendants were contractors for the Sound Transit “University Link” light-rail projects, which included making hiring and firing decisions for laborers the Union dispatched to the Project. In response to “allegations of discrimination and harassment” by black laborers, Sound Transit hired an investigator and statistician, who made findings and prepared a report concluding that the defendants’ “subjective decision-making had a disparate impact on black laborers.” Id. at 2. Specifically, the statistician concluded that black laborers dispatched to defendants’ site had a “threefold higher risk” of not being hired or of being terminated and that, on average, white and Hispanic laborers worked twice as many hours a week as black laborers. Id. Notably, while it expressly disavowed relying on the report’s ultimate conclusion, the Court referenced the report and its factual findings throughout the decision.

The District Court’s Certification Decision

To certify the class, the Court first undertook its own modifications to the class definition. The Court rejected plaintiffs’ proposed “class of laborers of African-American decent with dark skin and/or appearing African American” — a description the Court noted that one of the named plaintiffs may not fit. Instead, the Court defined the class as “laborers who identify as black or believe that Defendants perceived them as black.” Id. at 4. Similarly, the Court also rejected as potentially ambiguous plaintiffs’ inclusion of laborers “who were dismissed shortly after being hired, dismissed after working only a few shifts, and/or otherwise treated unfairly.” Id. Rather, the Court, on its own initiative, reformulated the description to include laborers who “were not hired after being dispatched, were hired but later terminated, and or believe they were otherwise treated unfairly.” Id.

The Court’s certification decision focused a substantial amount of its analysis on findings supporting commonality. Specifically, the Court concluded that substantial anecdotal and statistical evidence supported both disparate treatment and disparate impact theories of liability.  For example, the Court detailed a number of racially insensitive and derogatory comments made by supervisors tasked with hiring and firing decisions. The Court also noted instances that could be interpreted as retaliation for complaining about unfair treatment. The Court also highlighted the statistical disparity between terminations and hours worked by black laborers and white laborers. The Court rejected defendants’ contention that black laborers were simply less qualified, comparing the statistics at defendants’ site to that of related project site run by a different contractor utilizing the same Union dispatch process where the racial disparities were substantially less. Accordingly, based on what the Court described as “substantial anecdotal and statistical evidence that site-wide discrimination affected employment decisions,” the Court concluded that plaintiffs established common questions of liability relating to the specific project site. Id. at 9, 11.

In certifying the class, the Court also rejected defendants’ administrative exhaustion argument.  Defendants argued that plaintiffs could not bring claims under a disparate impact theory because this theory was not alleged in any of the prerequisite EEOC charges. The Court concluded, however, that plaintiffs’ disparate impact theory was not procedurally barred because it “could reasonably be expected to grow out of the charge of discrimination.” Id. at 13. The Court emphasized that in this case, both the disparate treatment and disparate impact theories were “connected to Defendants’ alleged failure to institute policies to guide their managers’ discretionary decision-making,” and thus, “it would be reasonable to expect that EEOC investigators would look into Defendants’ job assignment, discipline, and termination policies” that the plaintiffs contended support the disparate impact theory. Id.

The District Court’s Trial Plan

Finally, the Court approved plaintiff’s bifurcated trial plan. In stage one, plaintiffs would bear the burden of establishing liability, by a preponderance of the evidence, on their disparate treatment and disparate impact claims, as well as the availability of punitive damages. The Court noted that “if successful on these claims, Plaintiffs would be awarded a rebuttable inference that all class members were victims of Defendants’ allegedly discriminatory practices and/or suffered a disparate impact from its neutral employment policies.” Id. at 16. In stage two, the Court noted that it would hold individual hearings before a separate jury, in which each individual class member would need to show that “he suffered an adverse employment decision or was adversely affected by a challenged policy or practice.”  The burden would then shift to defendants to show that any such adverse action was taken for legitimate reasons or to raise any other applicable affirmative defenses.

Implications For Employers

The Court’s decision highlights that, despite the hurdles to certifying class actions alleging discrimination under Title VII after Wal-Mart, courts may be willing to certify class actions where the action is defined to a specific job location and where the plaintiffs can bring forth “substantial” statistical and anecdotal evidence.

However, the Court’s decision still leaves ambiguity regarding how a trial of such claims can proceed. While the Court laid out the general procedures for the bifurcated trial, the Court emphasized that it had not determined “the exact details of how trial will proceed.” Id. at 17-18.  Accordingly, the Court ordered further briefing on the issue. Id. at 18. As such, despite the Court’s extensive order, there are still open questions regarding how this matter will be tried in a manner that comports with due process. We will continue to follow developments as the parties file their briefs and keep our readers informed.

Seal_of_the_U_S__District_Court_for_the_Northern_District_of_TexasBy Gerald L. Maatman Jr. and Christina M. Janice

In an order recently issued in James Robinson III, et al. v. General Motors Company, et al., Case No. 15-CV-158-Y (N.D. Tex. Oct. 21, 2015), Judge Terry R. Means of the U.S. District Court for the Northern District of Texas denied class certification to two employees of General Motors Company (“GM”), who sought to represent a nationwide class of employees seeking unpaid leave to observe religious holy days. The Court further granted GM’s motion to dismiss the class action complaint, but granted Plaintiffs leave to file an amended complaint.

This case is instructive for employers defending class actions and dealing with requests for religious accommodation in the workplace.

Case Background

In 2008, two employees of GM’s Arlington, Texas facility began making requests for unpaid leave to observe their respective religious holy days. GM employee James Robinson, III (“Robinson”) alleged that he requested and received unpaid leave for religious holy days, including Saturdays. Id. at 1 – 2. GM employee Chris Scruggs (“Scruggs”) alleged that he requested but was denied unpaid leave for religious holy days until GM began granting his requests for unpaid leave in 2010. Id. at 2. The two plaintiffs are of different faith communities; Robinson a member of the Seventh Day Sabbatarian community of Tyler Sabbath Fellowship, and Scruggs a member of Messianic Jewish Beth Yeshua Congregation. Id. at 1 – 2.

Plaintiffs alleged that in 2013 GM began denying Robinson’s requests for unpaid leave to observe holy days and, once Robinson’s attorney identified Scruggs as another employee being denied similar unpaid leave, that GM resumed denial of Scruggs’ requests for unpaid leave to observe holy days. Id. Plaintiffs filed their class action complaint against GM in March 2015, alleging that GM violated Title VII of the Civil Rights Act of 1964 by denying them the religious accommodation of unpaid leave to observe their respective holy days, despite the availability of volunteers to cover their shifts. The lawsuit demanded damages and a class-wide injunction ordering GM to allow unpaid leave on holy days, to inquire about the availability of volunteer coverage, and to seek no-cost methods of allowing religious leave. Id. at 2 – 3.

Plaintiffs sought certification of a class of “all General Motors workers within the United States subject to the 2011 UAW-GM National Agreement and who may seek unpaid leave for a holy day because of a religious belief.” Id. at 5. GM opposed the motion by arguing that the class that Plaintiffs purported to represent constituted an impermissible “hypothetical – – i.e., the possibility that GM employees may seek unpaid religious leave at some time the future,” and would require individualized inquiries not suited for class treatment. Id. (emphasis in original.)

The Court’s Decision

Finding that the Plaintiffs’ class definition “includes any GM employees who might request unpaid religious leave in the future,” the Court determined that the class was not adequately defined or ascertainable. Id. at 6. (emphasis in original.)  Noting that in this case the Court would be required to evaluate each class member’s religion, that religion’s holy days, and the days each member requested for leave, the Court determined that Plaintiffs failed to identify common questions of law or fact applicable to the class, and further failed to prove numerosity. Id. at 6, n. 1. The Court further observed that “[c]lass relief is most appropriate where the issues in the case turn on questions of law or fact ‘applicable in the same manner to each member of the class’” Id. (internal citations omitted).  The Court’s order, however, allows Plaintiffs until November 23, 2015, to file an amended complaint, and the opportunity to propose a definition of a more ascertainable class. Id. at 7.

Implications For Employers   

Religious accommodation under Title VII requires employers to engage in factual inquiries to determine if a requested accommodation is appropriate under Title VII or similar state law. For this reason, and as illustrated by the ruling in Robinson, these individualized factual inquiries precluded class-wide treatment of religious accommodation claims. Carefully articulating neutral policies and managing to consistent procedures for investigating and responding to requests for religious accommodation best enable employers both to respond to the needs of an increasingly diverse workforce, and to develop internal business records that may help avoid costly litigation.

200px-Ballroom_svgBy Gerald L. Maatman Jr. and Howard M. Wexler

In a case we previously blogged about here where the Court refused to grant Plaintiffs’ request for equitable tolling on their claims under the Equal Pay Act (“EPA”), Magistrate Judge Michael Dolinger recently issued a decision granting Plaintiffs’ motion for conditional certification of a collective action under the EPA to cover past/current female Sales Representatives who were employed between 2009 and 2014. The decision serves a primer as to the standard that courts in the Second Circuit utilize in deciding conditional certification motions brought under the Fair Labor Standards Act (and the EPA, which was enacted as an amendment to the FLSA).

Background To The Case

Eleven current/former female employees brought individual and class claims under the EPA and Title VII alleging disparate pay based on their gender in July of 2012. Id. at 1.  Ten of the Plaintiffs’ subsequently filed a motion for conditional certification of their EPA claims, as well as a proposed form of notice to be sent to potential opt-in plaintiffs. Id. 2

The Court’s Decision

The Court began by explaining the “two step method” adopted by the Second Circuit in deciding conditional certification motions under the FLSA (and EPA).  Id.  First, per that standard, Plaintiffs must make a “modest factual showing” that they and the potential opt-in plaintiffs, “together were victims of a common policy or plan that violated the law.”  Id. at 3.  If conditional certification is granted at the “first step,” then, following discovery, the Court – at the second step – will make a decision based “on a fuller record” as to whether the collective action may go forward by determining whether the plaintiffs who have opted-in are in fact “similarly situated” to the named plaintiffs.  Id.  The action may be decertified if the record reveals that the opt-in plaintiffs are not similarly situated to the named plaintiffs. Id.

In discussing the quantum of proof that must be established at “first step,” the Court noted that while the standard is a modest one, “unsupported assertions” of similarly situated employees are not enough. Id. at 4.

With respect to the pending motion, the Court reviewed certain pre-motion document production as well as an expert report offered by Plaintiffs, which allegedly demonstrated “a statistically significant difference between the pay of male and female Sales Representatives.” Id. at 4.  Plaintiffs also presented a list of comparators for each named Plaintiff, which they argues as proof of the pay disparity between male/female Sales Representatives.  Id.

Based on this evidence, the Court held that Plaintiffs met their modest burden.  The Court, however, was sure to note that it was neither resolving any factual disputes nor deciding any substantive issues.  To this end, the Court noted that “Plaintiffs’ own assertions of discrimination are conclusory…” Id. at 11.  However, the Court held that what Plaintiffs presented to the Court was enough to satisfy their stage one burden, even though Defendant came forward with evidence rebuking many of Plaintiffs’ assertions as such merit-based determinations are not appropriate at this juncture of the case.  Id. at 14-15.

Implication For Employers

Although the Court granted Plaintiffs’ motion for conditional certification, it is clear that even at this early juncture of the case, the record was developed through some limited discovery concerning the basis of Plaintiffs’ claims, as well as expert reports from both sides.  Given the increasing number of EPA lawsuits, Plaintiffs are increasingly “jumping the gun” and trying to obtain conditional certification before any discovery has even taken place.  This decision should be used as employers facing such “shot gun” motions to demonstrate why it is appropriate for courts to allow discovery, even limited discovery, to take place prior to an employer having to fend off a conditional certification motion as it will help crystalize the issues for the Court given that the requisite showing, while “modest” cannot be met by mere unsupported assertions.

School desk with pencil and appleBy Christopher M. Cascino and Gerald L. Maatman, Jr.

In Chicago Teachers Union, Local No. 1, American Federation of Teachers, AFL-CIO v. Bd. of Educ. of the City of Chicago, Case No. 14-2843 (7th Cir. Aug. 7, 2015), the U.S. Court of Appeals for the Seventh Circuit reversed a district court decision we discussed previously here and certified the discrimination claims of a class of African-American Chicago teachers. The case is significant for employers in that the Seventh Circuit, as it previously did in McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482 (7th Cir. 2012), a case we discussed here, again certified a class even though the final alleged discriminatory decisions were based on subjective decisions by multiple decision-makers. In addition, the Seventh Circuit further limited Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and held that, even where the legality of final employment decisions cannot be decided on a class-wide basis because of individualized exercise of discretion, there are circumstances where the legality of intermediate decisions preceding the final alleged unlawful employment decision can nonetheless be decided on a class-wide basis.

Background Of The Case

Under the Illinois School Code, schools may be subject to a “turnaround” if they have been on probation for at least one year and have failed to make adequate progress in correcting deficiencies. In a turnaround, the Board of Education takes control of the school and removes all staff. Affected teachers and para-professionals are either placed in a reassignment pool or a substitution pool with different rights to salary and other benefits depending on their tenure status and job position.

In 2011, the Board began considering which schools should be turned around in 2012. There were three steps in this process. The process started with an initial list of 226 schools eligible for turnaround because they had been on probation for one year and had failed to make adequate progress in correcting deficiencies. That list was reduced to 74 schools based on composite standardized test scores and graduation rates. Subsequently, in the third step, a qualitative “in-depth investigation process” began for the remaining 74 schools. This involved school visits, additional data collection, and meetings with a variety of school representatives and community members. No written policy applied to the final turnaround decision. Some of the factors considered were: the academic culture of the school, whether quality instruction was being provided, the quality of the leadership, and the academic trends of the school.

After reviewing the information, several Chicago Public Schools officials decided to recommend that 10 schools should be turned around. The Board subsequently agreed. The schools were located exclusively on the south and west sides of Chicago. The total percentage of African-American tenured teachers at the 10 schools selected for turnaround was approximately 51%, while the total percentage of African-American tenured teachers in the entire Chicago public school system was only 25%.

The Chicago Teachers Union and three African-American tenured teachers brought a class action lawsuit against the Chicago Board of Education alleging that the board’s decision to turn around the 10 Chicago public schools was racially discriminatory. Plaintiff sought to certify a class consisting of all African-American teachers or para-professionals in any school subjected to the 2012 turnarounds. The U.S. District Court for the Northern District of Illinois denied class certification, and the Plaintiffs appealed.

The Seventh Circuit’s Decision

The Seventh Circuit began its analysis by noting that one of the purposes of class action litigation is to avoid repeated litigation of the same issues. Chicago Teachers Union, at 8. Then pointing out that the question on appeal was whether there were common issues of law or fact common to the class, the Seventh Circuit addressed the Board’s argument that, given that the third step in the turnaround decision-making process was qualitative and subjective, there was a lack of commonality under Wal-Mart. Id. at 12.

The Seventh Circuit reasoned that the first flaw in this argument was that it skipped to the third step of the decision-making process. It pointed out that the first two steps of the process were “clearly-objective steps.” Id. at 13. The Seventh Circuit opined that these first two steps could have resulted in disparate impact discrimination against African-Americans regardless of what happened at the third step. Id. For example, it hypothesized that, after the first two steps, it could be the case that all schools remaining under consideration for turnaround had 100% African-American teaching staffs, and that the first two steps would thus have had a disparate impact on African-Americans regardless of the third step. Id. The Seventh Circuit therefore found that the question of whether the first two objective steps had a disparate impact could be decided on a class-wide basis. Id. at 14.

The Seventh Circuit concluded that this result followed from its prior decision in McReynolds.  In McReynolds, the Seventh Circuit certified the disparate impact claims of a class of African-Americans even though the employment decisions at issue were made at the discretion of 165 separate individuals because two company-wide policies allegedly caused the 165 individuals to exercise their discretion in a common way that caused discrimination. Id. at 15-16. In Chicago Teachers Union, the Seventh Circuit held that McReynolds demonstrated “that a company-wide practice is appropriate for class challenge even where some decisions in the chain of acts challenged as discriminatory can be exercised by local managers with discretion[,] at least where the class at issue is affected in a common manner[,]” and that under this principle certification of a class to determine the disparate impact of the first two steps of the turnaround decision-making process was appropriate. Id. at 17-18.

The Seventh Circuit went on to consider whether a class could be certified to determine whether the third step of the decision-making process was discriminatory. It found that, despite the fact the Board “describe[d] numerous factors considered in the various schools” during the third step, “they could be boiled down to” 10 factors, including factors like “school culture” and “parent and community input.” Id. at 19-20. It found the fact that there were 10 factors that made the “case worlds away from that in Wal-Mart where a court could have no way of knowing why each of the thousands of individual managers made distinct decisions.” Id. at 22. It did so even though there were cases where only one of the 10 factors was determinative in deciding to turnaround a school.  Id.

The Seventh Circuit also emphasized the fact that there was one decision-making body that was “of one mind, using one process.” Id. at 23. It distinguished this situation from Wal-Mart, where there were “myriad actions of individual managers.” Id. It concluded that “[d]ecisions by myriad low-level managers are different than decisions made by . . . few concentrated top-level managers,” and thus that certification of claims based on the third stage of the decision-making process was appropriate. Id. at 23-24.

The Seventh Circuit also reaffirmed McReynolds’ holding that a class should be certified where liability can be determined on a class-wide basis even though individual trials as to damages would be needed. Id. at 32-33.

Implications For Employers

Plaintiffs’ class action lawyers will likely cite to this case as further support in their McReynolds-based arguments for class certification. Of particular concern to employers might be the fact that the Seventh Circuit found that decisions based on consideration of 10 non-enumerated factors – including factors like “school culture” that are far from objectively measurable – are the type of decisions that can support certification of a discrimination class action.  Moreover, this case provides an additional tool that plaintiffs’ lawyers are likely to use to try to certify classes where employment decisions are made in multiple stages. They will likely try to certify classes even where final decisions were highly individualized and discretionary by arguing that earlier steps leading to the final decision were uniformly applied and discriminatory. Employers should be on the lookout for how successful these attempts are in future litigation.

gavel on white backgroundBy William David and Laura J. Maechtlen

As we reported here to our loyal blog readers, in April 2014, the Ninth Circuit overturned an order denying class certification of age discrimination claims filed by a group of police officers in Stockwell v. City & Cnty. of San Francisco , 749 F.3d 1107 (9th Cir. 2014). On remand, the officers filed a third motion for class certification, and Judge Phyllis Hamilton of the U.S. District Court for the Northern District of California recently issued an order, denying (again) the officers bid for certification.


To recap, traditionally, the City filled its investigative positions by promoting police officers over the age of 40 who took and passed a “Q-35” exam. In 2005, the SFPD abandoned use of the Q-35 exam in favor of a new “Q-50” Sergeant’s exam. Following the change, the City began assigning investigative duties to newly promoted Sergeants who had taken the Q-50 exam, rather than to Assistant Inspectors promoted from the Q-35 list. Plaintiffs alleged that the practice of filling investigative positions from the Q-50 list had a substantial adverse impact on officers over the age of 40.

Throughout this case, plaintiffs asserted two causes of action for age discrimination — one under California’s Fair Employment and Housing Act (FEHA), the other under the federal Age Discrimination in Employment Act (ADEA). The FEHA claim was asserted by five named representative plaintiffs on behalf of a putative class, and the ADEA claim was asserted by the same five plaintiffs in their individual capacities, as well as by 25 additional individual plaintiffs. Plaintiffs sought class certification under Rule 23(b)(3) on their FEHA claim only.

On two occasions, the Court denied the plaintiffs’ bid for class certification. On the second occasion, the Court denied certification because it found that the plaintiffs did not satisfy the commonality requirement under Rule 23(a). As mentioned earlier, the Ninth Circuit overturned this decision, suggesting that the district court judge overreached by going too far in its analysis of the merits. Instead, the Ninth Circuit found that the commonality prong was met simply because “the officers are challenging a single policy they contend has adversely affected them”, and remanded the case to consider whether the putative class satisfied the requirements of Rule 23(b)(3) for class certification.

The Recent District Court Decision

On remand, the Court evaluated whether plaintiffs met the requirements under Rule 23(b)(3).  The Court also reviewed plaintiffs’ claim for class certification under Rule 23(a) with the Ninth’s Circuit’s guidance in mind. Plaintiffs also presented the Court with additional points for consideration.  In their third motion seeking class certification, the plaintiffs acknowledged that even if the City had never undertaken the allegedly discriminatory hiring practice (i.e., making promotions to investigative positions from the Q-50 list), only 55 individuals from the Q-35 list could have been promoted. In light of this information, plaintiffs made two alternative arguments.  First, they argued that the damages from the 55 “but-for” promotions should be aggregated and divided pro rata among the 133 putative members.  Second, plaintiffs argued that the Court could certify a class of only 55 individuals by using the 55 highest-ranked officers on the Q-35 list. The Court then reviewed plaintiffs’ third motion for class certification for the two proposed classes of 133 and 55 under Rules 23(a) and 23(b)(3).

The Court found that plaintiffs satisfied all certification requirements under Rule 23(a). However, plaintiffs also needed to satisfy the Rule 23(b)(3) requirements for class certification. Rule 23(b)(3) requires plaintiffs to establish that questions of law or fact common to the class predominate, and that a class action is superior to other methods available for adjudicating the controversy at issue. Upon review, the Court denied plaintiffs’ third motion for class certification because it found that the plaintiffs did not satisfy either the “predominance” or “superiority” requirements under Rule 23(b)(3) for either of the proposed classes.


To support their argument for certification of a liability-only class of 133, plaintiffs primarily relied on Houser v. Pritzker, 28 F.Supp. 3d 222 (S.D.N.Y. 2014), which certified a class for liability purposes, but not for damages purposes. Houser expressly found that a damages class cannot be certified under Rule 23(b)(3) and certified a liability-only class only because the plaintiffs moved for such a class under Rule 23(b)(2). In denying certification in Stockwell, the Court differentiated Houser by indicating that the plaintiffs sought certification under Rule 23(b)(3) and did not invoke Rule 23(b)(2) as a basis for their motion. Further, the Court reasoned that because plaintiffs admitted that only 55 of the 133 proposed class members would have been promoted in the “but-for” scenario, the majority of the class would be made up of individuals with no claim for relief.

Next, the Court analyzed the class of 55 under the predominance test which requires that plaintiffs show that the proposed class of 55 actually suffered a common injury and that damages from the injury are measurable on a class-wide basis through the use of a common methodology. Under the first prong of the test, the Court inquired whether the proposed class of 55 actually suffered a common injury– that is, whether each of them would have been promoted but-for the City’s allegedly discriminatory policy. The Court found that the entire proposed class of 55 did not suffer a common injury for two reasons. First, based on plaintiffs’ admission, not every one of the 55 highest-ranked Q-35 officers would have been promoted to the 55 investigative positions that were filled during the last class period. Instead, at best, the Q-35 evidence suggested only that most of the 55 highest-ranked individuals would have eventually received a promotion. Second, the Court held that plaintiffs provided no basis for determining the size of the “band” from which the 55 promotions would have been made.

Under the second prong of the test, the Court expressed concern that plaintiffs’ claims would require individualized proof at trial rather than proof common to the class because the class members may have differing amounts of damages. As the defendant pointed out, some class members have taken the Q-50 exam and some even received Q-50 promotions, which would limit their recovery in this case.


The Court held that plaintiffs did not satisfy the superiority analysis, either. Unlike the predominance prong, the Court did not separate its analysis of both proposed classes here because it found no material difference in the outcome of its analyses of the two classes. In making its ruling, the Court noted that the current complaint includes 5 representative plaintiffs and 25 additional individual named plaintiffs, all of whom assert an ADEA claim. It further noted that plaintiffs sought certification of a FEHA-only class, which even if granted, would leave 30 ADEA claims to be individually litigated, all based on the same facts that underlie the FEHA claim. The Court also found that the plaintiffs failed to provide any explanation as to how the individual claims would be litigated alongside the class claim.  Id. at 38.

Implications for Employers

Though the Court denied class certification on remand, the Ninth Circuit’s decision still stands. Employers can expect plaintiffs to continue to challenge the Wal-Mart decision by arguing that courts have abused their discretion by delving too far into the merits of Rule 23 requirements. The extent to which courts can consider the merits is likely to continue to take shape as district courts evaluate more cases involving Rule 23 class certifications following the Ninth Circuit’s ruling in Stockwell.

9th-circuitBy Christopher M. Cascino and Gerald L. Maatman, Jr.

In Baker v. Microsoft Corp., No. 12-35946, 2015 U.S. App. LEXIS 4317 (9th Cir. Mar. 18, 2015), the U.S. Court of Appeals for the Ninth Circuit considered whether to adopt a rule creating a principle of comity between different federal district courts under which denial of class certification in one district court would create a rebuttable presumption in other district courts that denial of class certification was the correct result.  While the Ninth Circuit did not decide the issue explicitly in this non-workplace class action, employers nonetheless can use this proposed principle when attempting to defeat class or collective action certification bids in federal court where similar class or collective actions brought in other federal district courts have been denied certification.

Case Background

The plaintiffs brought a putative class action against Microsoft, claiming that Microsoft’s Xbox had a design defect.  Id. at 3-4.  Microsoft moved to dismiss the class allegations, and the district court granted that motion.  Id. at 3.

The district court found that a putative class action had been filed against Microsoft in another district court with claims similar to those in the Baker action.  Id.  The district court then decided to apply the principle of comity between federal district courts as adopted by the American Law Institute in 2010.  Id. at 10.  Under this principle of comity, “a prior denial of class certification on the same subject matter by a different district court judge [is] given a rebuttable presumption of correctness.”  Id.  Finding that the Baker plaintiffs had not overcome this rebuttable presumption of correctness, the district court dismissed the class allegations.  Id. Plaintiffs subsequently appealed.

Ninth Circuit’s Opinion

The Ninth Circuit did not decide whether the principle of comity should apply to class actions filed in different federal courts.  Rather, the Ninth Circuit found that the prior putative class action on which the district court relied used a legal standard that had been overruled by the Ninth Circuit.  Id. at *20-21.  It thus found that the district court’s decision was erroneous regardless of whether the comity principle were valid.  Id. at 21.

In a concurring opinion, Judge Carlos T. Bea persuasively argued that the Ninth Circuit should adopt the principle of comity rather than leaving the question for another day.  Id. at 22.  Judge Bea reasoned that “whether or not the class is certified is usually the most important ruling in such a case; once a class is certified, plaintiffs who brought claims of even dubious validity can extract an ‘in terrorem’ settlement from innocent defendants who fear the massive losses they face upon an adverse jury verdict.”  Id. at 31 (citing AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1752 (2011)).  He pointed out that “[i]n light of the minimal costs of filing a class complaint, an obvious strategy suggests itself: keep filing the class action complaint with different named plaintiffs until some judge, somewhere, grants the motion to certify.  So long as such a decision is reached while the plaintiffs who have not yet filed are numerous enough to justify class treatment, the plaintiffs will have a certified class that they can use to extract an in terrorem settlement.”  Id. at 32.

Balancing this concern against Smith v. Bayer Corp., 131 S.Ct. 2368 (2011), in which the Supreme Court held that individuals who are not before a district court cannot be bound by its judgment, Judge Bea asserted that there was a need to create a rule that would provide district courts “a way to clear their dockets of questionable successive class certification requests, while ensuring that putative class members who have unearthed new evidence or new law in favor of certification, or clear error in the earlier ruling, not be foreclosed by the failed efforts of their predecessors.”  Id. at 34.  He therefore proposed adopting a rule whereby there would be “a presumption of correctness to earlier denials of certification that can be rebutted by a showing of changed factual or legal circumstances, or earlier clear error.”  Id.  Judge Bea then applied this rule and held that the district court erred in dismissing the class claims in Baker because there had been a change in the law after the case the district court in Baker relied upon was decided.  Id. at 36.

Implications For Employers

While not a workplace class action, this ruling provides employers with a potential argument to combat successive class or collective actions.  Even though the principle of comity between different federal district courts has not yet been adopted – or rejected – by the federal circuits, it has been adopted by the American Law Institute and endorsed by Judge Bea of the Ninth Circuit.  In addition, Judge Bea’s excellent analysis of why comity should be adopted should prove helpful for employers crafting their own arguments encouraging courts apply the principle.  With this argument now available, we expect the issue to be decided in one of the federal courts of appeal in the near future.  Stay tuned.

southern district new yorkBy Gerald L. Maatman, Jr. and Gina R. Merrill

In 2010, three women filed a class action suit against Goldman Sachs accusing it of gender bias and a “corporate culture” that allegedly favored men over women in determining pay and promotions.  After protracted battles over whether Goldman could compel individual arbitration and then over the scope of discovery, the issue of class certification was finally presented to the Court.  This week, in Chen-Oster, et al. v. Goldman Sachs, Case No. 10 Civ. 6950 (S.D.N.Y. Mar. 10, 2015), Magistrate Judge James C. Francis of the U.S. District Court for the Southern District of New York issued a report and recommendation response to plaintiffs’ motion and recommended that class certification be denied in its entirety.

We previously blogged about this case here, here, and here. Given the importance of the class certification ruling, it is a “must read” for corporate counsel facing employment discrimination class action litigation.


Plaintiffs are current and former female Associates and Vice Presidents in three divisions of Goldman Sachs who alleged claims of gender discrimination under both disparate impact and disparate treatment theories. Plaintiffs sought to certify a class for injunctive and declaratory relief pursuant to Rule 23(b)(2) and for monetary damages under Rule 23(b)(3), and in the alternative, Plaintiffs sought to certify a class for the sole purpose of establishing liability under Rule 23(c)(4). The primary employment practices under scrutiny were the employer’s 360-review process and an evaluation tool called “manager quartiling,” in which the manager of the business unit ranks each of his or her employees by placing them in one of five quartiles.

The Report and Recommendation

The most surprising aspect of Magistrate Judge Francis’s report – which recommends denying class certification altogether – is his statement that “ . . . I would recommend that the plaintiff class be certified pursuant to Rules 23(b)(2) and 23(c)(4) in order to obtain a final determination as to the allegedly discriminatory impact of the Goldman Sachs’ employee evaluation process.” Id. at 45.

So, why didn’t he?

The answer lies in the law of the case doctrine. The opening clause of that same statement reads, “But for the fact that the law of the case doctrine dissuades me from revisiting the appropriateness of injunctive relief ….” Id. In other words, Magistrate Judge Francis denied certification as to an injunctive relief class because he felt constrained by an earlier decision in the lawsuit. That decision, issued by Judge Leonard Sand, held that because the named plaintiffs were not current employees, the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes , 131 S. Ct. 2541 (2011), obligated a finding that injunctive relief was unavailable. See Chen-Oster v. Goldman, Sachs & Co., 877 F. Supp. 2d 113, 121 (S.D.N.Y. 2012). Three subsequent decisions in the Southern District of New York have declined to follow Judge Sand’s holding, but the ruling has not been overturned, and Magistrate Judge Francis stated that “I am not writing on a clean slate; Judge Sand’s determination is entitled to deference as law of the case.” Id. at 36.

With respect to the Rule 23(b)(3) monetary damages class, Magistrate Judge Francis found that even though the requirements of Rule 23(a) were met, Plaintiffs could not meet the predominance requirement because individualized issues overwhelmed common ones. Id. at 40-44. He therefore recommended denial of the class under that Rule.

Implications for Employers

Assuming Plaintiffs challenge the ruling and file Rule 72 objections and even if the District Court were to adopt the report of the Magistrate Judge, the decision would provide limited authority for other employers seeking to defend against injunctive relief classes because of the report’s heavy reliance on the law of the case doctrine. However, with respect to a monetary damages class, the report is a useful reminder that individual causation and damages issues are often the key to defeating class certification; its holding is a very strong rebuke to theories of the plaintiffs’ class action bar seeking to impose extensive monetary liability through Rule 23(b)(3).

Second-Circuit-Court-of-Appeals-SealBy Gerald L. Maatman Jr. and Howard M. Wexler

On March 4, 2015, the U.S. Court of Appeals for the Second Circuit reversed a District Court’s decision to certify a class action against Nextel Communications, Inc. (“Nextel”) in Johnson, et al v. Nextel Communications, Inc., et. al., 2015 U.S. App. LEXIS 3470 (2d Cir. Mar. 4, 2015), which we previously blogged about here. In Johnson, the District Court certified a class action – pursuant to Rule 23(c)(4) – relative to the claims of 587 employees of Nextel who allege that Nextel, and the former plaintiffs’ law firm representing the employees, engaged in various illegal acts against them by entering into a Dispute Resolution Settlement Agreement (“DSRA”) to resolve their employment discrimination claims. The ruling provides yet another interesting spin on Comcast Corp. v. Behrend, 131 S. Ct. 1426 (2013).

Background To The Case

In or around 2000, a law firm representing 587 employees (current and former) entered into a DRSA with Nextel to resolve various discrimination claims. Id. at 2. As a result of the DSRA, the law firm received $5.5 million in attorneys’ fees as well as an additional $2 million to act as consultants to Nextel on its employment practices. Id. In total, the 587 employees received less than half of the amount that their law firm received as part of the DRSA. Id. As a result, the employees filed two state court actions in Colorado, which resulted in a $1.2 million class-wide settlement against the law firm, with 39 employees opting-out of the settlement. Id.

Plaintiffs in Johnson – the 587 individuals whose claims against Nextel were resolved pursuant to the DRSA – sought to certify a proposed liability class against Nextel only as well as a sub-class made up of the 39 employees who-opted out of the Colorado settlements against their law former law firm. Id. at *3. The District Court granted this motion.

The Second Circuit’s Decision

The Second Circuit reversed the District Court and held that class certification was inappropriate because under Rule 23(b)(3), class-wide issues would not predominate, and individualized issues would “overwhelm” the case. The Second Circuit reasoned that Rule 23(b)(3)’s predominance requirement is more demanding than the Rule 23(a) commonality requirement, and that individual issues must be considered in deciding whether class issues outweigh issues involving individualized proof. The Second Circuit so ruled based on its reading on Comcast Corp.

Against this backdrop, the Second Circuit held that the District Court incorrectly held that New York law should apply in deciding whether the DRSA was enforceable. Id. at 11. Rather, the Second Circuit held that majority of the alleged wrongdoing took place outside of New York, where the individual employees resided, and “where he or she were promised representation.” Id.  As such, the Second Circuit held that “the state with the most significant relationship to plaintiffs’ claims is each individual state in which a class member resides and where he or she was promised representation.” Id.

Once the Second Circuit established that the substantive law of each class member’s state will applied, “the case for finding predominance of common issues and the superiority of trying this case as a class action diminishes to the vanishing point.” Id. at 11. These individualized inquiries associated with looking at the substantive law of each class member’s state “…are not collateral issues that could be determined in individual hearings after common questions are resolved for the class – they go to the heart of defendants’ liability for each class members’ alleged injury” and therefore warranted the denial of class certification. Id. The Second Circuited noted that “the specter of having to apply different substantive laws does not necessarily warrant refusing to certify a class…where as here, the variations in state law present ‘insuperable obstacles’ to determining liability based on common proof, such variations defeat the predominance of common issues and the superiority of trying the case as a class action.” Id. at 13.

Implications For Employers

Workplace class actions are being reshaped before our very eyes, as courts across the country apply new Supreme Court precedent. The application of Comcast to class certification in a variety of contexts is still developing in the law. The decision in Johnson adds to the ever growing post-Comcast appellate court decisions on Rule 23 certification and is a must read for employers caught in the crosshairs of high stakes, “bet the company” class action litigation, whether employment-related or otherwise.

By Timothy F. Haley

The U.S. Court of Appeal for the Sixth Circuit recently rejected the Defendant’s petition in In Re VHS of Michigan, Inc., dba Detroit Medical Center, No. 14-0107, 2015 U.S. App. LEXIS 1816 (6th Cir. Feb. 3, 2015), to appeal the order to certify a class estimated to exceed 20,000 registered nurses in a compensation suppression antitrust case. We have previously blogged on this case here, here, here, and here. Although short and not recommended for full-text publication, the opinion raises important issues related to the development of class certification law following the Supreme Court’s decision in Comcast Corp. v. Behrend, 133 S.Ct. 1426 (2013), and the extent to which class representatives may forgo potential damages available to the class in order to achieve class certification.

The District Court Proceedings

Plaintiffs brought a two count complaint alleging that eight hospitals in the Detroit Metropolitan Area unlawfully suppressed registered nurse compensation in violation of federal antitrust laws. In count one, Plaintiffs alleged that the hospitals unlawfully fixed registered nurse compensation in per se violation of Section 1 of the Sherman Act. In count two, Plaintiffs alleged that Defendants violated the Sherman Act under the rule of reason by exchanging wage and benefits information in a way that “softened” competition for registered nurse compensation. The District Court awarded Defendants summary judgment on the per se claim, but denied it on the rule of reason claim. It then granted the Plaintiffs’ motion for class certification. Thereafter, the Sixth Circuit ordered the District Court to reconsider its certification decision in light of Comcast. The District Court did so and concluded that Comcast did not call into question its prior certification decision. Id. at *3.

The Sixth Circuit’s Decision

Considering the petition, the Sixth Circuit rejected the Defendant’s argument that the District Court’s application of Comcast was an abuse of discretion. According to the Sixth Circuit, “Comcast applies where multiple theories of liability exist, those theories create separable anticompetitive effects, and the combined effects can result in aggregated damages.  … Where there is no chance of aggregated damages attributable to rejected liability theories, the Supreme Court’s concerns do not apply.” Id. at *5 (internal citations omitted). The Sixth Circuit agreed with the District Court that in this case the two theories of liability (per se and rule of reason) were mutually exclusive. The Court reasoned that if compensation had been fixed by the hospitals, then there was no wage and benefit competition to be “softened.”  Moreover, in the Sixth Circuit’s view the Plaintiffs’ expert’s damages calculation applied to either theory of liability and damages were not improperly aggregated. Thus, the concerns raised by Comcast did not apply. Id.

The Sixth Circuit went on to acknowledge that “after Comcast [a] class must be able to show that their damages stemmed from the defendant’s actions that created the legal liability.” Id. (internal quotation marks and citations omitted).  And it concluded that in this case the Plaintiffs had produced “sufficient evidence” that the damages stemmed from the information sharing that created the “softened” competition. It also agreed with the District Court that the expert’s damage model was adequate even though it understated the total damages from the “softened” competition. Id. at *6.

Based on this analysis, the Sixth Circuit held that the Defendant failed to show that it was likely to succeed in making the requisite “strong showing” that the District Court abused its discretion. It also concluded that none of the other factors that the Sixth Circuit considers when analyzing petitions to appeal weighed in favor of permitting the appeal in this case. Accordingly, it denied Defendant’s petition. Id. at *7.

Implications for Employers

Although not a detailed or lengthy opinion, there are several aspects of the decision that are potentially troubling. The Sixth Circuit clearly states that the Plaintiffs must “show” that the claimed damages were caused by the Defendant’s conduct that created the legal liability, and that Plaintiffs in this case had produced “sufficient evidence” on that issue.  But there is no discussion of what that evidence was or what constitutes “sufficient evidence” of causation at the class certification stage. In its decision reinstating class certification, the District Court expressly noted that Plaintiffs’ expert made “no attempt to marshal any evidence to demonstrate that either of the two antitrust violations alleged by Plaintiffs actually caused or contributed to the harm measured in his benchmark analysis[.]” It further noted that this absence of expert testimony left Plaintiffs with “thorny issues of proof” in establishing the requisite causal link between the alleged antitrust violations and the injury suffered by the plaintiff class. Cason-Merenda v. VHS of Michigan, Inc., Case No. 06-15601, 2014 U.S. Dist LEXIS 29447, at *20 n.5 (E.D. Mich. Mar. 7, 2014). Yet, according to both the District Court and the Sixth Circuit, the causation showing was adequate.

Second, the Sixth Circuit was untroubled by the fact that the damage model understated the total damages from the “softened” competition. Indeed, in the District Court’s decision initially certifying the class, it noted that the expert admitted that his damage model disfavored experienced nurses more than less experienced nurses. Cason-Merenda v. VHS of Michigan, Inc., Case No. 06-15601, 2013 U.S. Dist. LEXIS 131006, at *48 (E.D. Sept. 13, 2013). Yet, there were no questions raised about the amount of the understatement or whether utilizing such a damage model violated the class representatives’ fiduciary duty to the class. See Back Doctors Ltd. v. Metropolitan Property, 637 F.3d 827, 830 (7th Cir. 2011) (“Second, Back Doctors has a fiduciary duty to its fellow class members. A representative can’t throw away what could be a major component of the class’s recovery.”)

Finally, in denying the petition, the Sixth Circuit made no mention of the Defendant’s argument that the request for review should be accepted because the $1.7 billion potential damage figure would put extraordinary pressure on the Defendant to settle regardless of the merits of the case. Certainly, that is a lot of money to be ignored in this context.