Cross v. National Trust Life Ins. Co.

• Citation: 553 F.2d 1026
• Decision Date: 21 April 1977
• Docket Number: No. 76-1021,76-1021
• Parties: 14 Fair Empl.Prac.Cas. 1417, 14 Empl. Prac. Dec. P 7511 Aubrey J. CROSS and John Lee Parks, Plaintiffs-Appellants, v. NATIONAL TRUST LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1026

553 F.2d 1026

14 Fair Empl.Prac.Cas. 1417, 14 Empl. Prac.

Dec. P 7511

Aubrey J. CROSS and John Lee Parks, Plaintiffs-Appellants, v. NATIONAL TRUST LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 76-1021.

United States Court of Appeals Sixth Circuit.

Argued Feb. 15, 1977.

Decided April 21, 1977.

A. G. Burkhart, Jr., Memphis, Tenn., for plaintiffs-appellants.

Albert C. Harvey, Memphis, Tenn., for defendant-appellee.

Before EDWARDS and LIVELY, Circuit Judges, and TAYLOR, ^* District Judge.

LIVELY, Circuit Judge.

This is an appeal by the plaintiffs in two actions brought under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. which were consolidated for trial in the district court. The plaintiffs, who are Negroes, were employed by the defendant (National) as life insurance salesmen. Both were assigned to defendant's "Crump District" which comprises an area of Memphis in which virtually all of the residents are black and most are poor. Urban renewal activities have also affected the stability of the neighborhood. National is primarily engaged in issuing insurance policies with relatively small death benefits which require frequent (often weekly) premium payments. Each sales agent is assigned a specific area or route, referred to as a "debit," in which to solicit sales and make premium collections.

In their complaints, which are virtually identical, the plaintiffs sought to proceed in class actions under Rule 23(b)(2), Fed.R.Civ.P., describing the class to be represented as "Negro persons who are employed, or might be employed by National Trust Life Insurance Company at its home office located in Memphis, Tennessee, who have been and continue to be or might be adversely affected by the practices complained of herein." Each complaint alleged the existence of the four conditions which are the prerequisites to a class action set forth in Rule 23(a), Fed.R.Civ.P. ¹

After charging generally that National followed policies and practices which discriminated against the plaintiffs and members of the class they sought to represent on the basis of race with respect to compensation, terms, conditions and privileges of employment, the complaints specifically alleged 1) that National failed to provide proper and suitable debit routes for black employees; 2) that National refused to allow black agents to work on white debits and assigned blacks to slums and ghetto areas; 3) that National penalized black agents for failure to produce business comparable to that in prosperous white neighborhoods and brought pressure to force resignations through this and other discriminatory practices; 4) that National had established a promotion and seniority system designed to limit opportunities of black employees; and 5) that the lines of progression and methods of hiring were structured to discriminate against blacks. Declaratory and injunctive relief was sought, along with back pay and attorney fees.

The district court found that the defendant had discriminated against both plaintiffs in that Cross was caused to resign for racially motivated reasons and Parks was discharged for violation of a company rule which was not uniformly enforced against white employees. The court found that the immediate supervisor of the plaintiffs, Sam Thornton, was "ill equipped to manage black people at the time they were placed on his staff . . .." Back wages were awarded to both employees from the time they left their employment with National until "they were afforded the opportunity of employment with equal salary potential or equal status . . .." The plaintiff Parks was also awarded back pay for a portion of the time he was employed upon a finding that he was discriminatorily compensated. The plaintiff Cross did not seek reinstatement, and the court found from After the plaintiffs had completed their proof the defendant moved for a directed verdict "on the class action aspect" of the case. The district court granted the motion insofar as the plaintiffs sought to represent any class of employees other than "sales employees in the Crump District, and other districts of the defendant company in the City of Memphis," holding that they could not represent all blacks, females, clerical employees or janitorial employees. The court stated that there were issues to be resolved as to whether or not the case was an appropriate class action even limited as set out above. At the conclusion of the trial, the court made further oral rulings on the class action issues. It noted that evidence of the percentage of black employment and the nature of that employment had been presented, which might have made out a prima facie case of city-wide discrimination by National. It ruled, however, that plaintiffs were not appropriate representatives for any Negroes seeking employment with National, suggesting that the proof should have detailed the tests used and policies of the company, rather than "just generalities." The court stated that the plaintiffs could at most represent only black sales agents who were in the first group under Mr. Thornton, but that this class was not numerous enough to justify a class action. It also noted that at least one black sales agent had successfully handled his work under Thornton.

the evidence that Parks was not entitled to reinstatement.

The district court later filed written findings of fact and conclusions of law in which it held that neither plaintiff is an appropriate representative for a class action, "in the Crump District or in the defendant's operation." The court found that the requirements of Rule 23(a)(1) had not been met in that the evidence did not show a class so numerous that it would be impracticable to join its members. The court further found that the claims of the plaintiff are not typical of the claims of other members of the class as required by Rule 23(a)(3) and that the plaintiffs would not be proper representatives of the class under Rule 23(a)(4), which requires that "the representative parties will fairly and adequately protect the interests of the class." This finding appears to have been based primarily upon the fact that Cross did not request reinstatement and that Parks had testified that he would return only "in a favored status and not as an ordinary debit insurance agent which representation in the class would require." The court also declined the request for attorney fees.

The plaintiffs have appealed the back pay awards, which they maintain are inadequate, and denial of class action status and attorney fees. The defendant has not appealed from the holding that it discriminated against the plaintiffs in violation of Title VII or from the back pay awards.

THE CLASS ACTION RULING

A district court has broad discretion in determining whether a particular case may proceed as a class action so long as it applies the criteria of Rule 23 correctly. Johnson v. Georgia Highway Express, Inc.,417 F.2d 1122 (5th Cir. 1969). 3B Moore's Federal Practice, P 23.50 at 1104-05. The Third Circuit held in Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239, cert. denied, 421 U.S. 1011, 95 S.Ct. 2415, 44 L.Ed.2d 679 (1975), that the scope of review of a class action ruling is limited to determination of whether the mandatory requirements of Rule 23(a) have been met, and whether the district court has properly classified the type of class action sought to be maintained. There is no question of classification in the present case. The plaintiffs stated in their complaints that these were class actions described in Rule 23(b)(2), and they do not claim they were entitled to certification under any other classification. Thus, the issue for decision is whether the district court properly applied the criteria of Rule 23(a).

After carefully examining the evidence the court concludes that the judgment of the district court must be vacated. Though Parks attached conditions to his request for reinstatement, he did testify Since the district court's finding that the plaintiffs are not proper class representatives was based at least partly upon the finding that Cross did not desire reinstatement and Parks was not entitled to it, the entire ruling on the class action aspect of the case should be reexamined upon remand. In reconsidering its class action determination the district court should do so in light of several well established principles.

that he would accept an "equitable debit." In Title VII cases, where discrimination is found, ". . . (t)he injured party is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed." Albemarle Paper Co. v. Moody, 422 U.S. 405, 418-19, 95 S.Ct. 2362, 2372, 45 L.Ed.2d 280 (1975), quoting from Wicker v. Hoppock, 6 Wall. 94, 99, 18 L.Ed. 752 (1867). Parks may not dictate the conditions under which he should be offered reinstatement. No debit agent has a guaranteed income after his training period is completed, and Parks is not entitled to one. However, he cannot be "made whole" unless he is offered a debit on the same terms as such territories are offered to white agents.

With respect to the requirement of Rule 23(a)(1) that the members of the class be so numerous as to make joinder of all impracticable, this court has held that a class of only 35 identified members satisfied Rule 23(a)(1) where the class was described as including prospective employees. Afro American Patrolmen's League v. Duck, 503 F.2d 294, 298 ( 6 Cir., 1974). The description of the class sought to be represented by the plaintiffs in the present consolidated cases includes persons who "might...