191 F.3d 283 (2nd Cir. 1999), 98-7825, Caridad v Metro-North Commuter R.R.

Docket Nº:Docket Nos. 98-7825, -7837, -7855, -7857
Citation:191 F.3d 283
Party Name:VERONICA CARIDAD, individually and on behalf of all others similarly situated, ET AL., Plaintiffs-Appellants, v. METRO-NORTH COMMUTER RAILROAD, Defendant-Appellee.
Case Date:July 30, 1999
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit

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191 F.3d 283 (2nd Cir. 1999)

VERONICA CARIDAD, individually and on behalf of all others similarly situated, ET AL., Plaintiffs-Appellants,



Docket Nos. 98-7825, -7837, -7855, -7857

United States Court of Appeals, Second Circuit

July 30, 1999

Argued: April 5, 1999

Appeal from the May 15, 1998, judgment, of the United States District Court for the Southern District of New York (Jed S. Rakoff, District Judge), denying class certification in Title VII suit alleging racial discrimination with regard to discipline and promotion, and dismissing Plaintiff Caridad's claim of sexual harassment.

Affirmed as to Caridad; reversed as to denial of class certification and remanded. Judge Walker dissents in part with a separate opinion, disagreeing with the class certification ruling.

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[Copyrighted Material Omitted]

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John R. Quinn, Bay Shore, N.Y. (Alan L. Fuchsberg, Andrew J. Carboy, Molly A. Hunter, Jacob D. Fuchsberg Law Firm, New York, N.Y.; Russell Adler, Law Student, St. John's University, on the brief), for plaintiffs-appellants.

Myron D. Rumfeld, New York, N.Y. (Gregory D. Wong, Proskauer Rose, New York, N.Y., on the brief), for defendant-appellee.

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Before: NEWMAN, WALKER, and SACK, Circuit Judges.

JON O. NEWMAN, Circuit Judge.

This appeal primarily concerns the commonality and typicality requirements of Rule 23(a) of the Federal Rules of Civil Procedure. The specific issue is whether these requirements can be met in a Title VII action where the members of the proposed class challenge the subjective components of company-wide policies and procedures governing employee discipline and promotion. This issue arises on an appeal by several of the named plaintiffs in a proposed class action against Metro-North Commuter Railroad ("Metro-North") from the May 15, 1998, judgment of the District Court for the Southern District of New York (Jed S. Rakoff, District Judge). The judgment incorporated a prior ruling denying the Class Plaintiffs' motion for certification of a proposed class consisting of current and former African-American employees of Metro-North, and dismissed all claims, subject to a stipulation preserving the rights of some of the Plaintiffs to appeal the class ruling. In addition, Veronica Caridad, one of the named Plaintiffs, appeals only from that part of the judgment dismissing her individual claim of sexual harassment.

We reverse the District Court's judgment to the extent that it denied class certification. The Plaintiffs are challenging the delegation to supervisors, pursuant to company-wide policies, of the authority to make subjective decisions regarding employee discipline and promotion; under these circumstances the requirements of Fed. R. Civ. P. 23(a) can be satisfied, and are satisfied in this case. We affirm the District Court's dismissal of Caridad's individual claim because Metro-North has satisfied the requirements recently articulated by the Supreme Court for an affirmative defense to Title VII liability.


I. Class Plaintiffs and Their Claims

The Class Plaintiffs are the named plaintiffs in two related actions consolidated by the District Court.1 The proposed class consists of all African-American employees of Metro-North for the period from 1985 through 1996--an estimated 1,300 persons.

The Class Plaintiffs allege that Metro-North's company-wide policies for employee discipline and promotion delegate to department supervisors substantial authority to make discretionary decisions about discipline and promotion that is exercised in a racially discriminatory manner and has a disparate impact on African-American employees. Following extensive discovery, the plaintiffs moved for class certification pursuant to Rule 23. In support of their allegations of systematic disparate treatment and disparate impact, the Plaintiffs submitted a report prepared by Dr. Harriet Zellner, the testimony of a sociologist, the testimony of Metro-North's own officers, and anecdotal evidence. Dr. Zellner's report was based on various multiple regression analyses performed on data files provided by Metro-North. In opposition to the motion for class certification, Metro-North submitted the report of Dr. David Evans, which attacked the methodology and conclusions of Dr. Zellner.

(a) Disciplinary Policy and Procedure

Pursuant to some sixteen collective bargaining agreements, Metro-North's disciplinary system, the "Progressive Disciplinary System" or "PDS," applies to all of the approximately 5,000 union employees at Metro-North, wherever employed in the company. Metro-North's Labor Relations Department oversees the PDS. In addition, Metro-North trains the PDS hearing officers in day-long sessions coordinated by the Labor Relations Department, and the hearing officers receive an official Metro-North Hearing Officers' Manual.

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Pursuant to the PDS, a supervisor or manager may bring "charges" against a union employee for misconduct, including violations of Metro-North's policies, procedures, and safety rules. Approximately 400 supervisors and managers have the authority to bring such charges. The charges are investigated by a hearing officer who is responsible for gathering evidence and presenting it at a hearing where the employee is represented by his or her union. A transcript of the hearing is presented to the charging supervisor, who determines what, if any, discipline to impose. Union employees may appeal any sanction pursuant to the procedures set forth in the collective bargaining agreements and the Railway Labor Act, 45 U.S.C. §§ 152 et seq. An assistant director of the Labor Relations Department conducts an initial review of the appeal, and a three-member Special Board of Adjustment, chaired by a neutral arbitrator, conducts the final review.

In a 1994 memorandum, Metro-North's Affirmative Action Director, Stephen Mitchell, voiced concern about the high percentage of disciplinary cases involving people of color. Also in 1994, because African-American and female employees in one department had complained of discrimination by their supervisor, Mitchell proposed that Metro-North review the disciplinary activities in that department from 1992 to 1993 to determine "if protected class employees have been unfairly disciplined."

Nineteen of the twenty-seven named Plaintiffs allege that they were unfairly disciplined because of their race.

(b) Promotion Policy

Metro-North's declared policy for filling management positions is to promote from within its own ranks. Between 60 and 80 percent of management positions are filled in this manner. The declared promotion policy requires the posting of all open management positions. The Personnel Department oversees posting of positions, receives and reviews applications, and maintains job title guidelines and pay structure. Although the Personnel Department assembles a list of qualified applicants, the manager of the department with a vacancy makes the final decision. The manager is directed to hire the most qualified candidate, but no other instructions are given.

Several of the named plaintiffs allege that these policies are not strictly adhered to; in particular, they allege that positions are not always posted and, even when they are, that it is well known who will receive the position before it is posted. Furthermore, some positions are filled through exceptions to the posting requirements, which the plaintiffs allege contribute to racial bias in promotions. In addition, approximately 200 union positions at Metro-North, which are viewed as positions that might facilitate promotion to a management position, are not governed by the formal promotion protocol. Hiring decisions in these positions -- labeled "partially excepted positions" and "agreement supervisors" -- are left entirely to the individual manager's discretion; the Personnel Department does not participate in the hiring process. The named Plaintiff Joseph Kimbro applied for and was denied promotion to the partially excepted position of chief crew dispatcher. He alleges that Metro-North promoted four White employees, whom Kimbro had trained and all with less experience than he had, to this position.

Historically, Metro-North has been predominantly male and White, and the company's employment statistics show that African-Americans are not well-represented in management positions or in those positions in the Metro-North workforce from which promotions to management are made. Internally produced reports that Metro-North submits to the Federal Transit Administration show underutilization of African-Americans in five of the eight job categories applicable to Metro-North. Most striking, African-Americans could be expected, based on census figures for the

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New York metropolitan area, to fill 58.8 percent of the skilled-craft jobs but in fact filled only 15 percent of such jobs.

(c) The Experts' Reports

Based on the results of numerous multiple regression analyses, the Class Plaintiffs' expert, Dr. Zellner, concluded that the "effect of being black on number of disciplinary charges over the 1990-to-1994 period was positive and highly significant statistically." Similarly, she concluded that the effect of being Black on the likelihood of being promoted from 1985-to-1994 was negative to a degree that was highly significant statistically. Dr. Zellner's analyses were run on eleven computer files provided by Metro-North -- one for each of the ten years from 1985 to 1994 (providing basic data such as job title, hire date, last promotion date, termination date, department, race, and sex) and one providing information on disciplinary proceedings. She describes how she attempted to...

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