In re Veneman

• Decision Date: 29 October 2002
• Docket Number: No. 02-5021.,02-5021.
• Parties: In re: Ann M. VENEMAN, Secretary of Agriculture, Petitioner.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 789

309 F.3d 789

In re: Ann M. VENEMAN, Secretary of Agriculture, Petitioner.

No. 02-5021.

United States Court of Appeals, District of Columbia Circuit.

Argued September 6, 2002.

Decided October 29, 2002.

Appeal from the United States District Court for the District of Columbia (No. 99cv03119).

Charles W. Scarborough, Attorney, U.S. Department of Justice, argued the cause for petitioner. With him on the briefs were Roscoe C. Howard, Jr., U.S. Attorney, and Robert M. Loeb, Attorney, U.S. Department of Justice.

Joseph M. Sellers argued the cause for respondents. With him on the brief were Suzette M. Malveaux, Alexander Pires, Jr., David Frantz, and Phillip L. Fraas.

Michael L. Foreman, Elaine R. Jones, Norman J. Chachkin, Paul M. Smith, Ian Heath Gershengorn, and John Dossett were on the brief for amici curiae in support of respondents.

Before: TATEL and GARLAND, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge:

Rule 23(b)(2) of the Federal Rules of Civil Procedure permits certification of class actions not "exclusively or predominantly [for] money damages." This petition for interlocutory review presents the following question: In a case involving requests for both monetary and equitable relief, may a district court certify a Rule 23(b)(2) class as to equitable relief only without first determining whether, looking at the complaint as a whole, plaintiffs' monetary claims predominate over their equitable claims? Although this issue is both unsettled and fundamental — factors that may justify interlocutory review pursuant to Rule 23(f) — we nevertheless deny the petition because the critical questions required to resolve it are entirely unbriefed and because we are satisfied that the issue will not escape appellate review.

I.

The United States Department of Agriculture administers several farm credit and benefit programs under the direction of its Farm Service Agency ("FSA"). See Consolidated Farm and Rural Development Act, 7 U.S.C. § 1921 et seq.; 7 C.F.R. § 2.42(28). Farmers seeking FSA loans or subsidies apply to local county committees made up of farmers elected by other farmers. Pigford v. Glickman, 206 F.3d 1212, 1214 (D.C.Cir.2000). If the county committee approves the application, the farmer receives the benefit. If the committee denies the application, the farmer may appeal to a state committee and then to a federal review board. Pigford v. Glickman, 182 F.R.D. 341, 343 (D.D.C.1998). Farmers believing that their applications have been denied on the basis of race can file complaints either directly with the FSA or with the Department. Id.

Alleging that the Department discriminated against them on the basis of race in its administration of these programs, seven Native-American farmers filed this action in the United States District Court for the District of Columbia on behalf of themselves and others similarly situated. The lawsuit followed the Department's release of a self-critical report that had been prompted by longstanding accusations of racial discrimination in the administration of agricultural programs. CIVIL RIGHTS ACTION TEAM, USDA, CIVIL RIGHTS AT THE UNITED STATES DEPARTMENT OF AGRICULTURE 2-3 (1997), available at http:// www.usda.gov/news/civil/cr_next.htm. Noting that "discrimination in program delivery... continues to exist to a large degree unabated," id. at 2, the report found significant disparities between the Department's treatment of minority and nonminority farmers, such as "lower participation and lower loan approval rates for minorities in most [agency] programs," and substantial inequalities in loan processing rates, including "disparities between nonminority loan processing and American Indian loan processing" in certain states, id. at 21. Since "complaints [were] processed slowly, if at all," id. at 25, farmers found "little relief" in the Department's complaint process, "which, if anything, often ma[de] matters worse," id. at 22. According to the report, Department officials did little to improve the Department's record of civil rights enforcement; indeed, "during the early and mid-1980's USDA leaders had effectively dismantled USDA's civil rights apparatus," and "numerous reorganizations" since that time had left "civil rights at USDA ... in a persistent state of chaos." Id. at 47 (internal quotation marks omitted). Minority farmers, the report concluded, "have lost significant amounts of land and potential farm income as a result of discrimination by [USDA] programs." Id. at 30.

Proceeding under the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691-1691f, the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), and Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq., the farmers, seeking both equitable and monetary relief, allege discrimination in the Department's handling of applications and in its failure to investigate and process their discrimination complaints. Four similar suits have been filed: An action on behalf of African-American and Latino farmers was dismissed, Williams v. Glickman, No. 95-1149 (D.D.C. filed June 16, 1995); another action brought by a class of African-American farmers has been settled, see Pigford v. Veneman, 292 F.3d 918 (D.C.Cir.2002); and actions on behalf of Latino farmers, Garcia v. Veneman, No. 00-2445 (D.D.C. filed Oct. 13, 2000), and female and other farmers alleging discrimination on the basis of age, sex, marital status, race, color, national origin, or religion, Love v. Veneman, No. 00-2502 (D.D.C. filed Oct. 19, 2000), remain pending in district court.

In a motion for judgment on the pleadings, or in the alternative for summary judgment, the Department argued (among other things) that the farmers' claims regarding its failure to process their complaints were actionable under neither the APA nor the ECOA. The district court denied the motion without prejudice, and the farmers moved to certify a class consisting of "[a]ll Native-American farmers and ranchers who believe that USDA discriminated against them on account of their race in their applications for, or USDA's administration of, USDA farm programs ... and who complained of that discrimination to the USDA."

Under the Federal Rules of Civil Procedure, a class can be certified if it meets Rule 23(a)'s four requirements — numerosity, commonality, typicality, and adequacy of representation — and if it falls into one of the three categories of class actions described in Rule 23(b). FED. R. CIV. P. 23(a), 23(b); Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 613-16, 117 S.Ct. 2231, 2244-46, 138 L.Ed.2d 689 (1997). Rules 23(b)(2) and (b)(3) — the two categories at issue in this case — have different requirements depending primarily on the nature of the relief sought. Rule 23(b)(2) certification is appropriate where plaintiffs seek declaratory or injunctive relief for class-wide injury. Such certification is particularly well-suited for civil rights actions where "a party is charged with discriminating unlawfully against a class." FED. R. CIV. P. 23(b)(2) advisory committee notes. According to the Advisory Committee Notes, however, (b)(2) certification is not proper where "the appropriate final relief relates exclusively or predominantly to money damages." Id.

In contrast to Rule 23(b)(2), class certification pursuant to Rule 23(b)(3) is appropriate even where plaintiffs seek only monetary damages so long as "questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and ... a class action is superior to other available methods for the fair and efficient adjudication of the controversy." FED. R. CIV. P. 23(b)(3). Certification pursuant to Rule 23(b)(3), however, comes with certain procedural requirements: Because members of a class seeking substantial monetary damages may have divergent interests, due process requires that putative class members receive notice and an opportunity to opt out. See FED. R. CIV. P. 23(c)(2); Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 165-66 (2d Cir.2001). By contrast, Rule 23(b)(2) imposes no similar requirements because a class seeking primarily equitable relief for a common injury is assumed to be a cohesive group with few conflicting interests, giving rise to a presumption that adequate representation alone provides sufficient procedural protection. See Robinson, 267 F.3d at 165 (noting the presumption that an adequate class representative in a (b)(2) action "will generally safeguard absent class members' interests and thereby satisfy the strictures of due process").

Seeking both equitable and monetary relief, the farmers asked the district court to certify a so-called "hybrid" class: a (b)(2) class for their equitable claims and a (b)(3) class for their monetary claims. In support of this request, the farmers relied on language in Eubanks v. Billington, 110 F.3d 87 (D.C.Cir.1997), which held that district courts may grant opt-out rights in (b)(2) class actions either by certifying a (b)(3) class as to claims for monetary relief or by exercising their discretion under Rule 23(d)(5) to allow opt-outs from the (b)(2) class. Id. at 96. The district court, however, certified only a (b)(2) class and — central to this case — instead of determining whether plaintiffs' monetary claims predominate over their equitable claims, the district court limited the class to pursuing equitable relief, explaining that it lacked a sufficiently developed factual record to rule on the appropriate treatment of the monetary claims. Keepseagle v. Veneman, No. 99-3119, mem. op. at 36 (D.D.C. Dec. 12, 2001). Also, the class the district court certified — all Native-American farmers and ranchers who filed discrimination complaints with the Department between January 1, 1981, and November 24, 1999 — was narrower than the one the farmers had sought. Keepseagle v. Veneman, mem. op. at 36.

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