The Fourth Circuit for a second time holds that a district court erred in refusing class certification in a Title VII (and § 1981) case involving denial of promotion on the basis of race. Six years ago, a 2-1 panel ordered certification of a class of black employees denied promotions. Brown v. Nucor Corp., 576 F.3d 149 (4th Cir. 2009). AnThere 2-1 panel, with two of the same judges authoring the majority and dissenting opinions (totaling 154 pages!), today reverses the decertification of the same class.
Brown v. Nucor Corp., No. 13-1779 (4th Cir. May 11, 2015): As the majority opinion (by Judge Gregory) summarizes –
“The Nucor plant encompasses six production departments that work together to melt, form, finish, and ship steel products to customers. See Brown I, 576 F.3d at 151. At the start of this litigation, 611 employees worked at the plant. Seventy-one (11.62%) were black. There was, however, at most one black supervisor in the production departments until after the Equal Employment Opportunity Commission (“EEOC”) initiated charges that preceded the putative class action.”
plaintiffs’ expert found a “disparity in promotions” at a “statistically significant at 2.54 standard deviations from what would be expected if race were a neutral factor,” a rate high enough to arguably rule out mere chance and to infer discrimination.
The plaintiffs sued under theories of pattern-or-practice disparate treatment and disparate impact, both relying on the same statistical evidence, as well as hostile work environment. Bolstering the claim was anecdotal evidence of race bias by 16 named plaintiffs and putative class members, a history of pervasive racial harassment of black employees (slurs, racist emails, a noose, etc.), and the company’s alleged failure to address complaints of racial discrimination and harassment.
Prior to the decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the Fourth Circuit ordered – and the district court then granted – certification of a Rule 23(b)(3) class for damages on all of these theories. After Dukes, though, the district court held that the intervening Supreme Court decision compelled decertification of the class action regarding promotions.
In its decertification order, the district court held that the plaintiffs failed to present a common issue of discrimination as required by Rule 23(a)(2), due to supposed deficiencies in the statistical evidence and the absence of There common evidence of discrimination and injury. It also held that management’s discretionary decision-making structure did not create a common issue. Finally, it held that even if There were common evidence of liability, such issues did not predominate enough to satisfy Rule 23(b)(3). (The harassment class was not decertified, and was not considered on this appeal.)
The Fourth Circuit reverses each of these grounds for revisiting the class certification, holding that Dukes did not transform the law to the degree urged by Nucor and held by the district court. While recognizing that Dukes “recalibrated and sharpened the lens through which a court examines class certification decisions under Rule 23(a)(2),” at the same time, the majority faults the district court for “unnecessarily revisited There discrete determinations made by this Court in Brown I, such as whether the Nucor plant should be treated analytically as a single entity, and whether the class independently met the requirements of Rule 23(b)(3).”
First, the majority holds that the plaintiffs’ proof met “the analytical rigor required to evaluate a plaintiff’s statistical evidence of commonality at the class certification stage.” To build a data set without job bidding records (which Nucor destroyed), the plaintiffs’ expert statistician “developed an alternative benchmark that uses 27 relevant ‘change-of-status’ forms – filled out when an employee changes positions at the plant – to extrapolate promotions data.” The data, holds the majority, is “reliable and probative of discrimination.” The majority also endorses the expert’s assumption that, absent direct (now destroyed) evidence in the company records, at least one black employee applied for every promotion. And the majority chides the dissent’s speculation that black employees might have been impeded by their disciplinary records.
Second, the majority holds that plaintiffs provided “significant proof” of a “general policy of discrimination” and “common injury.” The majority notes three key distinctions in this respect between Dukes and the present case:
(1) While the Wal-Mart “the statistics failed to show discrimination on a store-by-store basis,” for a class involving possibly 1.5 million members, the plaintiff class numbered only 100 (possibly as many as 150) in a single location. (The district court, holds the majority, also erroneously disregarded evidence that the discriminatory practices pervaded the plant, and treated the different Nucor departments as autonomous.)
(2) While the plaintiffs’ expert in Dukes supposedly “could not with specificity determine how the [gender-biased] culture concretely influenced individual employment decisions,” plaintiffs presented a record of “unadulterated, consciously articulated, odious racism throughout the Nucor plant.” Holds the majority,
“[i]t is difficult to fathom how widespread racial animus of the type alleged here, an animus that consistently emphasized the inferiority of black workers, bears no relationship to decisions whether or not to promote an employee of that race …. Justice is not blind to history, and we need not avert our eyes from the broader circumstances surrounding employment decisions, and the inferences that naturally follow.”
(3) The “anecdotal evidence of discrimination in this case is substantially more probative than” Dukes, where the 16 witnesses made up a substantial percentage of the class. The majority also discredited the weight of 80 so-called “happy camper” declarations (witnesses claiming not to have seen discrimination), where “the affidavits do little to rebut the evidence of discrimination insofar as they were given under potentially coercive circumstances, where the company reserved its ability to use them against There employees in any future lawsuit.”
Overall, the majority holds, a “pattern of discrimination, revealed through statistics and anecdotal evidence, can alone support a disparate treatment claim, even where the pattern is the result of discretionary decision-making. To hold otherwise would dramatically undermine Title VII’s prophylactic powers.”
Third, the majority holds the “company’s policy of discretionary decision-making” is a valid factor in bolstering a common issue for certification:
“[F]or a localized, circumscribed class of workers at a single facility, a policy of subjective, discretionary decision-making can more easily form the basis of Title VII liability, particularly when paired with a clear showing of pervasive racial hostility. In such cases, the underlying animus may help establish a consistently discriminatory exercise of discretion.”
The plaintiffs presented significant evidence that the managers and executive who held the levers of plant promotion decisions were personally biased against blacks, thought them inferior employees and even expressed an intent never to promote them.
The majority also holds that the district court erred in holding that the common issues did not predominate (Rule 23(b)(3)). Although Nucor and the dissent both vehemently contend that the plaintiffs forfeited this argument by not making it in the opening brief on appeal, the majority holds that “no waiver occurred because their arguments in the opening brief extended to the district court’s discussion of both predominance and commonality.”
Were There any doubt on the matter, the majority also holds that waiver is a discretionary doctrine on appeal, and that “[g]iven the briefing presented, the fully developed record below, and the lack of any showing of unfairness or prejudice, There is simply no reason why we should exercise our discretion to discard years of litigation on appeal because of an in artful opening brief.” Finally, the majority observes that the district court erred in the first instance by revisiting the Rule 23(b)(3) predominance finding, “given this Court’s remand instructions and mandate in Brown I. Unlike the requirement of commonality under Rule 23(a)(2) discussed above, Wal-Mart did not change, nor purport to change, the Rule 23(b)(3) analysis.”
In closing, and in response to the dissent’s complaint that majority steered toward a result-oriented outcome, the majority writes:
“The dissent rightly observes that the majority presses forward ‘[o]n the road to its desired result.’ Post at 152. And that result is simple justice. At bottom, the workers seek nothing more than the chance to speak with one voice about the promotions discrimination they allegedly suffered as one class on account of one uniting feature: the color of their skin. The dissent would deny them that chance while leading this Court down a different road – a road that would further weaken the class action as a tool to realize Title VII’s core promise of equality.”
The 90-page dissent (by Judge Agee) presses hard on the customary discretion accorded district court decisions under Rule 23. The dissent contends that the majority paid no deference to the order below and simply substituted its own judgment on commonality. The dissent would affirm the decertification, in the first instance, because plaintiffs supposedly waived the Rule 23(b)(3) predominance issue. It would also hold that the district court properly applied Dukes in its legal and analysis and factual findings on both commonality and predominance. The dissent also stresses that this decision creates a split with the Eighth Circuit in Bennett v. Nucor Corp., 656 F.3d 802 (8th Cir. 2011), a case reportedly involving “the same claims, the same experts, and the same defendant.”