N.D.Ill.: No class certification in sex bias case

An Illinois federal district court refused to certify a class of 1,700+ current and former Allstate Insurance managers alleging gender discrimination in pay.

The court held that the circumstances of the class members’ employment were too widely varied, and that plaintiffs’ evidence regarding commonality was too weak. The court found that much of the statistical and anecdotal evidence was relevant only to potential pay discrimination before the class period, and thus was not probative under Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618 (2007). The court also gave weight to declarations of managers who said they had not suffered discrimination. The court concluded that the case would require thousands of individual hearings to determine both liability and damages. Puffer v. Allstate Ins. Co., 2009 WL 136097 (N.D.Ill. Jan. 15, 2009) (No. 04-5764). By consent of the parties the case was assigned to Magistrate Judge Sidney Schenkier.

 

          Plaintiff Katherine Puffer was a long-time Allstate manager. She alleged that Allstate gave excessive discretion in determining pay and promotions to its male-dominated senior manager ranks, resulting in pervasive company-wide sex discrimination. The Ninth Circuit approved a similar class in Dukes v. Wal-Mart Stores, Inc., 509 F.3d 1168 (9th Cir. 2007), en banc petition pending. The district court here distinguishes that case in a footnote, saying that in Dukes there was “considerable, reliable statistical evidence of differential pay and promotions for female employees, as well as substantial evidence of Wal-Mart's centralized company culture and policies.” By contrast, the court said the evidence here was too weak to show commonality under F.R.C.P. 23(a)(2). The court’s wide-ranging – though happily unpublished – decision illustrates the hostility to class actions that has become prevalent in the Seventh Circuit. See, e.g., Thorogood v. Sears, Roebuck and Co., 547 F.3d 742 (7th Cir. 2008) (dicta disparaging class actions generally).

 

          The court found several flaws in Puffer’s evidence, including the widely varying responsibilities, supervisors, locations and pay grades of the proposed class members. In particular, the court stressed that Allstate supervisors across the country make decisions independently and inconsistently, making “apples to apples” comparisons impossible.

 

The court also stressed the weakness and variability of Puffer’s statistical evidence, and its focus on past pay disparities. The court greatly discounted the value of the pay statistics because they looked at the total pay differences by gender. The court said this approach “runs headlong into Ledbetter” – which held that the continuing pay disparities based on past discriminatory decisions do not violate the Civil Rights Act – because it takes into account disparities prior to the class period. (The court did not mention the legislation to overturn Ledbetter, which passed the House on January 9 and the Senate January 22 and would apply retroactively.) The court also stressed that pay differentials were much smaller when pre-class period disparities were ignored, and that wide variation in those differentials further undermined commonality.

 

          The court similarly discounted employee declarations indicating company-wide discrimination, saying that they were too varied and many related to pre-class period events. Many had too few details to be probative, the court said, while others merely highlighted differences in decisionmakers and forms of alleged discrimination. The court also found this evidence to be undermined by declarations, submitted by Allstate, of putative class members who said they did not suffer discrimination.

 

          The court also discounted expert testimony by an organizational sociologist regarding Allstate’s corporate culture. The court said that the expert’s testimony amounted to the conclusion that “subjective decisionmaking is inherently flawed,” a view inconsistent with the case law. Blise v. Antaramian, 409 F.3d 861 (7th Cir. 2005).

 

          The court also said Puffer was not typical of the class under R. 23(a)(3), because as a former Assistance Vice President she was differently situated from “the vast majority who never held an officer position and thus were not subject to the same considerations and decisionmakers” as Puffer.

 

          Finally, the court held that the class could not be certified either as one seeking injunctive relief under R. 23(b)(2) or one seeking damages under R. 23(b)(3), or as a hybrid of the two. The court said such hybrid classes are “discouraged” in the Seventh Circuit, see Arreola v. Godinez, 546 F.3d 788 (7th Cir. 2008). It also said that final relief in this case would relate primarily to money damages, and would require thousands of individual hearings to determine whether class members suffered discrimination and their damages. Puffer suggested that the discriminatory nature of Allstate’s corporate policies could still be determined on a class basis. The court rejected this idea, stating there would still need to be separate hearings to determine whether individuals suffered discrimination, and that this would not promote judicial economy and could result in unconstitutional relitigation of liability by different juries. See Andrews v. Chevy Chase Bank, 545 F.3d 570 (7th Cir. 2008); Matter of Rhone-Poulenc Rorer, 51 F.3d 1293, (7th Cir. 1995).

 

          Finally, the court said that in an employment discrimination case, class certification is not needed because most employees have sufficient financial incentive to litigate individually.