Karla Carpenter, et al. v. The Boeing Company

Plaintiffs appeal from the district court's disposition of the employment-discrimination claims of female employees at the Boeing Company's Wichita, Kansas, facility. They have sought to bring class-action claims alleging several unlawful employment practices under both disparate-impact and disparate-treatment theories of discrimination. The two subclasses relevant to this appeal are a subclass of hourly female workers (the Hourly Subclass) and a subclass of salaried female workers (the Salaried Subclass). Before us now are both (1) the district court's summary judgment on the Hourly Subclass's disparate-impact claim relating to overtime assignments, certified by the district court as a final judgment under Fed. R. Civ. P. 54(b); and (2) several of the district court's class-certification decisions relating to both the Hourly and Salaried Subclasses, on which we provisionally granted interlocutory appeal under Fed. R. Civ. P. 23(f). Boeing has cross-appealed to challenge the district court's class certification of the Hourly Subclass's disparate-impact claim in the event that we reverse the district court's grant of summary judgment on that claim.

We affirm the district court's summary judgment because Plaintiffs' statistical evidence is not adequately based on data restricted to persons eligible for overtime assignments. This affirmance moots the cross-appeal. Also, we dismiss Plaintiffs' appeal of the district court's class-action decisions because they were not filed within 10 days of the district court's initial decision denying class certification. Finally, we reject the claims of three former class representatives who were stripped of that designation by the district court on the ground that they could not "fairly and adequately protect the interests of the class," Fed. R. Civ. P. 23(a)(4).

I. BACKGROUND

Title VII of the Civil Rights Act of 1964 prohibits, among other things, discrimination on the basis of sex. See 42 U.S.C. § 2000e-2(a). Two types of claims are recognized under Title VII: disparate treatment and disparate impact.

"Disparate treatment" . . . is the most easily understood type of discrimination. The employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin. Proof of discriminatory motive is critical, although it can in some situations be inferred from the mere fact of differences in treatment. . . .

Claims of disparate treatment may be distinguished from claims that stress "disparate impact." The latter involve employment practices that are facially neutral in their treatment of different groups but that in fact fall more harshly on one group than another and cannot be justified by business necessity. Proof of discriminatory motive . . . is not required under a disparate-impact theory. Either theory may, of course, be applied to a particular set of facts.

Int'l Bhd. of Teamsters v. United States, 431 U.S. 324, 335 n.15 (1977) (citations omitted). In a disparate-impact claim the plaintiff is challenging an employment practice that is "'fair in form, but discriminatory in operation.'" Bullington v. United Air Lines, Inc., 186 F.3d 1301, 1312 (10th Cir. 1999) (quoting Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971), overruled on other grounds by Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002). "[A] plaintiff may establish a prima facie case of disparate impact discrimination by showing that a specific identifiable employment practice or policy caused a significant disparate impact on a protected group." Id. (internal quotation marks omitted). This burden, which had been imposed by caselaw, see, e.g., Ortega v. Safeway Stores, Inc., 943 F.2d 1230, 1242 (10th Cir. 1991), was codified by statute in 1991. See 42 U.S.C. § 2000e-2(k); Civil Rights Act of 1991, Pub. L. No. 102-166, 105(a), 105 Stat. 1071, 1074-75. The 1991 statute departed from case law in several respects, but none are relevant here.

Discrimination suits are often filed as putative class actions. Whether a suit can proceed as a class action is governed by Fed. R. Civ. P. 23. Under that rule the district court must determine "at an early practicable time," Fed. R. Civ. P. 23(c)(1)(A), whether a suit (or a particular claim within a suit) satisfies the prerequisites of numerosity, commonality, typicality, and adequacy of representation, see id. 23(a), and falls within one of the categories of actions maintainable as class actions, see id. 23(b). We review de novo whether the district court applied the correct legal standard in its decision to grant or deny class certification; when the district court has applied the proper standard, the decision will be reversed only for abuse of discretion. See Shook v. El Paso County, 386 F.3d 963, 967-68 (10th Cir. 2004). The district court can modify or amend its class-certification determination at any time before final judgment in response to changing circumstances in the case. See Fed. R. Civ. P. 23(c)(1)(C).

In 2000, Plaintiffs, among others, filed a putative nation-wide class-action suit in the United States District Court for the Western District of Washington, alleging gender discrimination in a variety of Boeing's compensation practices. The district court, however, certified only a class of female employees working at Boeing's Washington facilities. In 2002 non-Washington plaintiffs filed suits in several states, including this suit in the District of Kansas.

Boeing's Wichita facility includes operations of three major business units: Boeing Commercial Airplanes, which is the largest group at the facility and is responsible for commercial production; the Wichita Development and Modification Center, which is responsible for the site's military business; and the Shared Services Group, which provides infrastructure support. According to the complaint, the Wichita facility is Boeing's largest manufacturing business. In December 2001 Boeing had approximately 16,700 employees in Kansas.

This appeal concerns Plaintiffs' Title VII claims alleging gender discrimination in Boeing's compensation and overtime policies. Nine of the Plaintiffs (the Carpenter Plaintiffs) seek to represent themselves and a class of similarly situated current and former female employees at Boeing's Wichita facility. The other three Plaintiffs (the Dean Plaintiffs) are members of the class but represent only themselves on appeal.

The Hourly Subclass's overtime claims were brought under both disparate-impact and disparate-treatment theories. The claims are based on the allegation that the discretion given to supervisors in assigning overtime resulted in women receiving consistently fewer overtime assignments than their male counterparts. In their disparate-treatment claim, they allege further that Boeing's failure to act upon knowledge of the denial of those assignments constituted intentional discrimination against its female employees. The Salaried Subclass made a disparate-impact claim that Boeing's company-wide practices for setting both starting salaries and raises systematically disadvantaged its female employees and a disparate-treatment claim that the company had failed to take action to correct the discriminatory impact since learning of it in 1995. Not at issue are other claims brought by the two subclasses and the claims of a putative subclass of female salaried engineers.

II. CLASS CERTIFICATION

There have been several class-certification proceedings before the district court in this case. The court's initial certification decision, on April 25, 2003, granted certification under Rule 23(b)(2) to both the Hourly and Salaried Subclasses on their disparate-impact claims. Certification was denied on all disparate-treatment claims. On February 24, 2004, following merits discovery, the court granted Boeing's motion to decertify the disparate-impact claim of the Salaried Subclass, leaving the overtime disparate-impact claim of the Hourly Subclass as the only claim certified for class-action treatment under Rule 23.

Plaintiffs filed a Renewed Motion for Class Certification (First Renewed Motion) on April 2, 2004, seeking recertification of the Salaried Subclass's disparate-impact claims. The court promptly denied the motion. Plaintiffs filed a Second Renewed Motion for Class Certification (Second Renewed Motion) on August 27, 2004, seeking certification of the disparate-treatment claims of both the Hourly and Salaried Subclasses and again asking for recertification of the Salaried Subclass's disparate-impact claim. The district court denied the motion on September 8, 2004.

Plaintiffs then filed with this court an application to appeal under Rule 23(f) the denial of their Second Renewed Motion as it related to the claims of the Salaried Subclass. Although Plaintiffs sought certification of the disparate-treatment claim of the Hourly Subclass in their Second Renewed Motion, they abandoned that issue on appeal. Despite asserting in the application that the relief sought was "leave to appeal the district court's decision denying Plaintiffs' Second Renewed Motion for Class Certification," Pet. for Permission to Appeal at 11, the application refers only to the claims of the Salaried Subclass and its arguments relate only to the certification determinations made with respect to that subclass. Therefore, we will address only the claims of the Salaried Subclass.

Boeing argues that Plaintiffs' application was untimely under Rule 23(f), and that we therefore lack jurisdiction to consider it. We provisionally granted the application pending briefing and argument on our jurisdiction and the merits of the appeal. Upon further consideration we dismiss the application as untimely and do not reach the merits of the appeal.

A. Fed. R. Civ. P. 23(f)

Rule 23 was amended in 1998 to add subsection (f), which permits interlocutory appeals of district court orders granting or denying class certification. It states:

A court of appeals may in its discretion permit an appeal from an order of a district court granting or denying class action certification under this rule if application is made to it within ten days after entry of the order. An appeal does not stay proceedings in the district court unless the district judge or the court of appeals so orders.

Fed. R. Civ. P. 23(f).

Interlocutory appeals have long been disfavored in the law, and properly so. They disrupt and delay the proceedings below. See 19 James Wm. Moore, Moore's Federal Practice § 201.10[1] (3d ed. 2006) ("The purposes of the final judgment rule are to avoid piecemeal litigation, to promote judicial efficiency, and to defer to the decisions of the trial court. Unfettered interlocutory appeals would disrupt both the trial and appellate processes."); 15A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3907, at 269 (2d ed. 1991) ("When courts attempt to explain the policies that underlie the final judgment rule, . . . [they] speak of 'efficiency,' protecting the role of the trial judge, and the need to avoid such evils as interference with the trial court, deciding unnecessary issues, and deliberate delay or harassment."). But sometimes countervailing considerations predominate. The consideration that led to adoption of subsection (f) is that a class-certification determination can force a resolution of the case that is independent of the merits. When class-action status is denied, the plaintiffs may need to abandon the case, or settle for a pittance, because the cost of continuing will far outweigh any potential recovery in the individual actions remaining. And when class-action status is granted, the defendant may be facing such enormous potential liability that a significant settlement becomes the only prudent course. As the Advisory Committee note puts it:

[S]everal concerns justify expansion of present opportunities to appeal. An order denying certification may confront the plaintiff with a situation in which the only sure path to appellate review is by proceeding to final judgment on the merits of an individual claim that, standing alone, is far smaller than the costs of litigation. An order granting certification, on the other hand, may force a defendant to settle rather than incur the costs of defending a class action and run the risk of potentially ruinous liability. These concerns can be met at low cost by establishing in the court of appeals a discretionary power to grant interlocutory review in cases that show appeal-worthy certification issues.

Fed. R. Civ. P. 23 advisory committee's note, 1998 Amendments, Subdivision (f).

But this opportunity for an interlocutory appeal is tightly confined. First, "[t]he court of appeals is given unfettered discretion whether to permit the appeal, akin to the discretion exercised by the Supreme Court in acting on a petition for certiorari." Id. And second, there is a short time limit--10 days--within which the aggrieved party can ask the court of appeals to exercise its discretion. See id. ("The 10-day period for seeking permission to appeal is designed to reduce the risk that attempted appeals will disrupt continuing proceedings."). Because this timeliness requirement is mandatory(1), we must first determine whether Plaintiffs satisfied it.

B. Timeliness

The district court denied Plaintiffs' Second Renewed Motion by order entered on September 8, 2004. Plaintiffs assert that their application filed on September 22, 2004, was timely because it was filed within 10 days of the district court's disposition. See Fed. R. Civ. P. 6(a) (computation of time); Beck v. Boeing Co., 320 F.3d 1021, 1022-23 (9th Cir. 2003) (Fed. R. Civ. P. 6(a) governs the timeliness of applications under Rule 23(f)). The validity of that assertion depends on whether the district court's denial was "an order . . . granting or denying class action certification." Fed. R. Civ. P. 23(f). Boeing contends that the district court's order was simply a refusal to reconsider its prior rulings denying certification to the Salaried Subclass and not itself an order appealable under Rule 23(f). We agree with Boeing.

In a sense, an order denying a motion to reconsider a decision on class certification is an "order . . . granting or denying class action certification." But that cannot be the sense in which the term is used in Rule 23(f), because that construction of the term would undermine the 10-day time limit for filing an application for review. One who failed to file an application in time could simply file a motion to reconsider; and when that is denied, the 10-day period would restart. See Gary v. Sheahan, 188 F.3d 891, 893 (7th Cir. 1999) ("Accepting an appeal from such a decision [leaving the class definition in place] would abandon the time limit for all practical purposes. That step would be both unauthorized and imprudent."); cf. McNamara, 410 F.3d at 281 ("[T]o hold that--no matter how styled--a motion under Rule 23(c) [to alter or amend a class-certification decision] is always distinct from a motion to reconsider would allow a party to subvert the ten-day time limit prescribed in Rule 23(f).").

One might argue, as Plaintiffs do, that this reasoning does not apply when the motion for reconsideration raises new arguments, based on new developments in the case. But the need to avoid causing delay and disruption to the district court proceedings cautions against an appellate court's engaging in detailed inspection and analysis of the record to determine how new an argument is and whether the underlying evidence was reasonably available when certification was originally litigated. Moreover, there can be little doubt that review of an order denying a motion for reconsideration would have to be limited to the new elements in the motion--the original order regarding certification must be presumed correct, or there would be a clear end run around the 10-day limit. Yet given the multifactor analysis that courts must apply in deciding the propriety of class certification, such a limited review would often require contorted thinking that exceeds the capacities of even appellate courts. How can an appellate court say that one particular new factor would require a different result regardless of how the district court weighed the factors presented originally? In stating that the new factor required a different result, the appellate court must engage in weighing the factors weighed by the district court in its original ruling but cannot know precisely how much weight the district court granted to each. In particular, what if the district court clearly erred in giving dispositive weight to one factor? How is the appellate court to ignore such error (in keeping with the presumption that the original decision was correct) even when it addresses a motion for reconsideration that raises only a rather inconsequential new factor? To be sure, we do review motions to reconsider in certain circumstances, such as denials of motions under Fed. R. Civ. P. 60(b). But the predicate for that review--for example, fraud or newly discovered evidence--is largely collateral to the merits of the decision. We are not inclined to adopt a construction of Rule 23(f) that would regularly require mental gymnastics just for the purpose of giving litigants a second bite at the interlocutory-appellate-review apple. We note that the very absence of a prompt appeal by the party aggrieved by the decision on certification suggests that the concerns justifying Rule 23(f) are, at the least, less significant in the particular case. If the decision whether or not to certify the class was truly outcome determinative, one would not expect the losing party to continue the litigation for months before launching a new challenge to the ruling. Any value in permitting a belated interlocutory appeal is overridden by the desirability of the district court's proceeding expeditiously.

We recognize that Rule 23(c)(1)(C) permits the district court to alter or amend a certification decision. And parties may suggest such changes as the factual record and legal theories develop. All we are saying is that there can be no Rule 23(f) appeal from the denial of such a suggestion. An order that leaves class-action status unchanged from what was determined by a prior order is not an order "granting or denying class action certification." Of course, when the district court accepts a suggestion and the certification decision is changed, the new order, to the extent it modifies the prior order, is indeed such an order and an interlocutory appeal under Rule 23(f) is permitted. See Gary, 188 F.3d at 893 ("[I]f in response to a belated motion for reconsideration the judge materially alters the decision, then the party aggrieved by the alteration may appeal within the normal time.").

In addition, we note the special case of motions to reconsider filed within 10 days of the district court's certification decision. The Supreme Court has long recognized that motions to reconsider toll the time for appeal when they are filed within the time for filing a notice of appeal. See United States v. Dieter, 429 U.S. 6, 8 & n.3 (1976) ("[T]he consistent practice in civil and criminal cases alike has been to treat timely petitions for rehearing as rendering the original judgment nonfinal for purposes of appeal for as long as the petition is pending."). This recognition stems from the clear advantage of providing the district court an opportunity to correct its own error, as long as doing so does not undermine the time limit for pursuing an appeal. We assume, without having to decide in this case, that such motions to reconsider would also toll the time limit in Rule 23(f). See, e.g., McNamara, 410 F.3d at 281 (recognizing the tolling effect of a timely motion to reconsider in the Rule 23(f) context).

The district court first denied certification of the Salaried Subclass's disparate-treatment claim on April 25, 2003. Plaintiffs did not exercise their right to file a Rule 23(f) petition within 10 days of that order. The district court's determination as to that claim has not changed in all the subsequent proceedings, so there has not been any other order "granting or denying class action certification" that would trigger another period for seeking interlocutory appeal. As for class certification of the Salaried Subclass's disparate-impact claim, the district court initially certified the class in its April 25, 2003, order, which Boeing did not appeal. On February 24, 2004, however, it granted Boeing's motion to decertify. At that juncture Plaintiffs could have sought our review under Rule 23(f), but they did not do so. Despite two attempts to have the district court recertify that claim, in both Plaintiffs' First Renewed Motion and their Second Renewed Motion, the district court's ruling on certification has not changed again. Therefore, neither of the orders denying those motions was an order granting or denying certification and neither triggered a new period for filing a Rule 23(f) application. Plaintiffs' Rule 23(f) application on September 22, 2004, must be dismissed as an untimely attempt to have us review the court's orders of April 25, 2003, and February 24, 2004. Any appeal of those certification decisions must await final judgment. See Gary, 188 F.3d at 892.

III. SUMMARY JUDGMENT

On February 24, 2004, the district court granted Boeing's motion for summary judgment on the disparate-impact claim of the Hourly Subclass. On August 11, 2004, the court certified that ruling as a final judgment, see Fed. R. Civ. P. 54(b), and Plaintiffs filed a timely appeal. Boeing filed a cross-appeal seeking decertification of this subclass should we reverse the summary-judgment ruling. Because we affirm the district court's grant of summary judgment, we need not address the cross-appeal.

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