231 F.3d 970 (5th Cir. 2000), 99-20627, Bolin v Sears Roebuck

Docket Nº:99-20627
Citation:231 F.3d 970
Party Name:THOMAS R. BOLIN; BILLIE F. BOLIN, Plaintiffs-Appellees, STANLEY PATTON; ELENA SMITH; RALPH FREEZE, Intervenor Plaintiffs-Appellees, v. SEARS, ROEBUCK & CO., Defendant-Appellant.
Case Date:October 27, 2000
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

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231 F.3d 970 (5th Cir. 2000)

THOMAS R. BOLIN; BILLIE F. BOLIN, Plaintiffs-Appellees,

STANLEY PATTON; ELENA SMITH; RALPH FREEZE, Intervenor Plaintiffs-Appellees,


SEARS, ROEBUCK & CO., Defendant-Appellant.

No. 99-20627

United States Court of Appeals, Fifth Circuit

October 27, 2000

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[Copyrighted Material Omitted]

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Appeal from the United States District Court For the Southern District of Texas



This interlocutory appeal under Rule 23(f) of the Federal Rules of Civil Procedure presents defendant Sears, Roebuck & Co.'s challenge to Rule 23(b)(2) certification of a class of bankrupt debtors alleging illegal post-bankruptcy collection practices by Sears. The Bolin plaintiffs raise a second issue: whether 28 U.S.C. § 1292(e), the enabling authority for Rule 23(f), is an unconstitutional delegation of Congress's power to confer jurisdiction on the lower federal courts. We uphold the constitutionality of § 1292(e). We also vacate the certification order and remand to the district court to consider the certification of the class under Rule 23(b)(3) or reformulation of the class.


The Bolin class consists of consumers who purchased merchandise from Sears on credit, subsequently declared bankruptcy, and thereafter either made payments to Sears regarding a claimed security interest or pre-bankruptcy debt, had property repossessed or garnished, or incurred costs in connection with Sears's collection efforts. The district court found that the class numbers more than one million people.

The plaintiffs contend that Sears employed numerous illegal practices to coerce payment of otherwise-discharged pre-bankruptcy debt, including the development of and reliance on a chart inflating the value of collateral; offers of new credit on extortionate terms; failure to file redemption and other repayment agreements; unwarranted assertions of security interests; abusive litigation practices, including contesting bankruptcy discharges and filing separate state court actions post-discharge; and making coercive and threatening communications to debtors, both orally and in writing.1 The suit seeks

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injunctive, declaratory, and monetary relief under a variety of theories, including the Bankruptcy Code,2 RICO,3 and the Truth in Lending Act.4 The case follows on the heels of a narrower class action in which debtors complained of violations of the Bankruptcy Code regarding reaffirmation agreements.5

The plaintiffs moved for certification, and the district court certified the class under Federal Rule of Civil Procedure 23(b)(2). Sears petitioned for and was granted interlocutory review under Rule 23(f). Sears attacks two aspects of the certification order: that the conduct alleged was generally applicable to the class and that the damage claims were incidental to the claims for injunctive relief. Bolin challenges our jurisdiction, arguing that the enabling authority for Rule 23(f) exceeds Congress's power to delegate its jurisdiction-granting authority to the federal courts.


We first address our jurisdiction. Bolin challenges the constitutionality of Federal Rule of Civil Procedure 23(f), which allows a court of appeals to permit interlocutory review of a district court's grant or denial of class action certification.6 Bolin argues that 28 U.S.C. § 1292(e), the authorizing authority for Rule 23(f), exceeds the scope of rulemaking power that Congress may permissibly delegate to the Supreme Court because only Congress, not the Court, may confer jurisdiction on the lower federal courts.

Section 12927 sets forth several specific instances in which the courts of appeals may hear interlocutory appeals, including of orders granting or refusing injunctions8 and orders that the district court finds present controlling questions of law and whose immediate appeal may materially advance the termination of the litigation.9 Section 1292(e) then provides:

The Supreme Court may prescribe rules, in accordance with section 2072 of this title, to provide for an appeal of an interlocutory decision to the courts of appeals that is not otherwise provided for under subsection (a), (b), (c), or (d).10

Rule 23(f) is promulgated pursuant to that authority.

The proposition that only Congress may confer jurisdiction on the lower federal courts is a basic constitutional principle.11 At the same time, Congress may delegate to the courts the power to regulate their own practice.12 The Supreme Court has upheld Congress's power to delegate to federal courts through the Rules Enabling Act the authority to make rules consistent with Congress's statutory mandates.13 The Court has broadly interpreted this rulemaking authority to encompass

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activities within the "central mission" of the judicial branch.14

Here, it is clear that Congress intended to allow the Supreme Court to make new rules for the availability of judicial review, including the defining of finality for purposes of appeal.15 The question is whether Congress's grant of authority to expand the circumstances in which interlocutory appeal is allowed constitutes a delegation of the power to confer jurisdiction, or rather rulemaking authority over the courts' own practices.

The Supreme Court has long fashioned various doctrines through case law and rules as to the timing of an appeal. For example, in 1949, the Court judicially created the Cohen doctrine, which allows a party to seek review of an order which finally determines an important claim of right separate from the merits of an action.16 The Court has also upheld Federal Rule of Civil Procedure 54(b), which allows a district court to certify a judgment as final if the underlying order disposes of fewer than all of the issues or parties in an action;17 the Court found the rule to be a valid exercise of its rulemaking authority and not contrary to 28 U.S.C. § 1291.18 Although both the Cohen doctrine and Rule 54(b) create an opportunity for appellate review where none was available before, these creations were deemed permissible rulemaking by the Court. Finally, the timing rules for appellate review are generally set forth by rule, not by statute.19

Thus, the Supreme Court may address the timing of appeals as interstitial rulemaking without affecting Congress's authority to determine the subject matter jurisdiction of the lower federal courts. Allowance for interlocutory appeal of a class certification order fits easily within this rubric. Even before the promulgation of Rule 23(f), parties could seek review of class certification orders through a writ of mandamus under the All Writs Act.20 Bolin would distinguish mandamus from appeal under Rule 23(f) because mandamus is granted only under extraordinary circumstances. We fail to see any constitutional significance, however, in the frequency with which a rule results in a grant of interlocutory appeal: either the Supreme Court may permit interlocutory appeal under certain circumstances, or it may not.

In sum, none of these rules, including Rule 23(f), affect the matters reviewable by the courts of appeals. They affect only when those courts may hear the appeals, an issue apart from the right to confer original jurisdiction on the lower federal courts. We thus hold that § 1292(e) is a permissible delegation of rulemaking authority within the judiciary's central mission.21

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We now address Sears's appeal of the grant of class certification, examining whether the certified class fits within the confines articulated under Rule 23(b)(2). To certify a class with respect to a claim, the district court must find that the putative class meets the requirements of Rule 23(a) and fits within one of the categories of 23(b). Sears does not challenge the district court's analysis under Rule 23(a); it contends only that certification under (b)(2) was an abuse of discretion.

The court may certify a class under Rule 23(b)(2) if "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole."22 The Advisory Committee Notes and our cases make clear that injunctive or declaratory relief is not "appropriate" when the "final relief relates exclusively or predominantly to money damages."23 Thus, Rule 23(b)(2) contains two requirements: (1) behavior generally applicable to the class as a whole; (2) injunctive relief predominates over damages sought.

Sears challenges the certification under both requirements.


Sears argues that the plaintiffs allege only various illegal acts of debt collection, not actions affecting the class as a whole. Plaintiffs allege a "pattern or practice" by Sears. Such a "pattern or practice" must consist of a uniform policy allegedly applied against the plaintiffs, not simply diverse acts in various circumstances.24 Certification is improper if the merits of the claim turns on the defendant's individual dealings with each plaintiff.

Here, while some of the challenged practices appear to present more of a uniform policy than others, several of the practices cited by Bolin, if proved, would present a case of conduct applicable to the class: Bolin alleges that the value chart, the credit offers, the practice of failing to file agreements with the bankruptcy court, and the form letters were promulgated by central authority and applied across the board. To the extent they are a centralized policy, they would be evidenced by Sears's policy manuals, customer accounts, and recovery records. These allegations are analogous to the reaffirmation filing issue in the prior class action, which Sears concedes was properly certified. Thus, the plaintiffs have alleged behavior generally applicable to the class.


Sears also argues...

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