Dalley v. Michigan Blue Cross/Blue Shield, Inc.

• Decision Date: 26 June 1985
• Docket Number: Civ. A. No. 75-71244,75-70510.
• Citation: 612 F. Supp. 1444
• Parties: Carolyn DALLEY, et al., Plaintiffs, v. MICHIGAN BLUE CROSS/BLUE SHIELD, INC., a Michigan corporation, Defendant. and Susan MULLICAN, et al., Plaintiffs, v. MICHIGAN BLUE CROSS/BLUE SHIELD, INC., a Michigan corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

612 F. Supp. 1444

Carolyn DALLEY, et al., Plaintiffs, v. MICHIGAN BLUE CROSS/BLUE SHIELD, INC., a Michigan corporation, Defendant. and Susan MULLICAN, et al., Plaintiffs, v. MICHIGAN BLUE CROSS/BLUE SHIELD, INC., a Michigan corporation, Defendant.

Civ. A. Nos. 75-71244, 75-70510.

United States District Court, E.D. Michigan, S.D.

June 26, 1985.

Ronald J. Reosti, Detroit, Mich., for plaintiffs.

Thomas G. Kienbaum, Detroit, Mich., for defendant.

MEMORANDUM OPINION AND ORDER

PHILIP PRATT, District Judge.

This opinion contains the court's findings of fact and conclusions of law on the merits of these consolidated cases. For the reasons stated below, the court finds that based upon the evidence the plaintiffs are entitled to 1.5 million dollars as a monetary award.

Under the terms of the consent judgment entered heretofore, the defendant Michigan Blue Cross/Blue Shield did not nor does not admit it engaged in discriminatory policies or practices. Further, the parties agreed that this court was not to make any determination that discrimination did, in fact, occur. Rather the court's role was confined to the evaluation of the statistical evidence and whether that evidence, which comprises the trial record in this case, warranted an award of damages of no less than $1,500,000, and no more than $4,500,000. Thus, it should be clearly understood that the findings below are not intended nor should they be construed to constitute a finding of discrimination, nor, on the other hand, a finding that there was no discrimination.

I. BACKGROUND

The above entitled consolidated class action cases charge that the defendant, Michigan Blue Cross/Blue Shield, Incorporated ("BCBSM"), a Michigan corporation, discriminated against women in initial placement and promotion practices between the years 1972 and 1982. The class is comprised of female employees in Management, Administrative and Technical ("MATs") or "exempt" positions in various divisions of the defendant. As certified, the class consists of approximately 4,300 women.

As is not unusual in class actions alleging discriminatory practices, progress was laborious and tedious. However, because of the unique settlement agreement reached by the parties and memorialized in a Consent Judgment entered by this court, only a brief recital of the procedural history need be recounted, and that only for the purposes of providing the context within which this memorandum is to be viewed.

The cases were instituted in 1975 and alleged discriminatory practices to the disadvantage of women in every facet of defendant's employment policies and practices from initial hiring through discharge — or, as frequently characterized, "across the board" discrimination. The jurisdictional bases were the Equal Pay Act, 29 U.S.C. § 206, and Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq.¹

The "across the board" approach necessarily contemplated several thousand employees in both "exempt" and "non-exempt" positions.² Lacking pre-suit, hard facts regarding the internal workings of the defendant with regard to employment policies and practices, as opposed to anecdotal information, pre-trial discovery was an arduous task. The problem for both sides, was exacerbated by not only the sheer size of the undertaking, but also because of some significant developments. For example, in 1975, Blue Cross and Blue Shield, which had been separate entities, merged into a single corporation, and there was an amalgamation of personnel, records and policies; the introduction of the Hay System of job classifications and salary ranges; the refinement of the "across the board" charges to discrete claims; the honing of the class and the identification of appropriate representatives; legal developments concerning the viability of wage claims under the Equal Pay Act vis-a-vis Title VII wage claims; the advent of computerization of personnel records with its attendant problems of accurate and complete processing, retrieval and, eventually, preparation for statistical analysis.

Contributing most heavily to the complexity of the cases, particularly as it related to statistical proofs upon which the plaintiffs relied substantially, however, was the nature and structure of the defendant's organization. The health care business is highly sophisticated and includes many diverse technical and professional disciplines. As the class evolved, it became readily apparent that the positions in the company did not constitute a fungible group. Job descriptions numbered in the many hundreds; skills, education and experience factors were not interchangeable; job descriptions ran the gamut from doctors, dentists, lawyers, accountants, actuaries, marketing specialists and media representatives through computer analysts, customer billing consultants and related technical fields. Thus, the frequently used approach of merely comparing raw average pay differentials, for example, would be inappropriate, if not impossible. Consequently, the proposed utilization of statistical evidence at trial required exhaustive research, translation, and preparation. In addition, of course, were the problems associated with the investigation, discovery, and preparation of anecdotal evidence with relation to specific acts or conduct of management from hundreds of employees. Eventually these obstacles were overcome and trial, after several adjournments, commenced on December 15, 1983.

After the second day of what was anticipated to be a 12 to 16 week trial, the parties advised the court that settlement negotiations had reached an encouraging level. At the suggestion of the parties, conferences were held with the court and culminated in a proposed Consent Judgment. Trial was suspended and the requisite procedures under Federal Rules of Civil Procedure, Rule 23 to effectuate the settlement were conducted. On March 26, 1984, the court conducted a hearing concerning the propriety of the proposed agreement and found that the Consent Judgment should be approved and entered. On April 6, 1984, the court issued its Order Approving the Consent Judgment.³

The Consent Judgment⁴ can only be described as unique and a brief exposition will facilitate an understanding of the issues to be determined and the focus of this Opinion. Foremost, the Consent Judgment essentially assumes liability. It does not suggest, and the court does not mean to imply, that BCBSM admits to discriminatory policies and practices, but the consent decree transforms the issue of liability into a question of relief. Further, the Consent Judgment concerns itself with equitable relief. It recognizes and contains certain modifications which had been previously implemented by the defendant with respect to employment practices as they affect women and other minorities. It also included additional modifications in employment practices to assure related, non-discriminatory policies and practices.⁵ These provisions were final and needed no further judicial consideration.

The unique feature of the Consent Judgment dealt with the issue of monetary award. The court previously described the pertinent provisions in this regard as follows:

The issue of monetary award has been hotly disputed. The disagreement does not rise simply from the relative merits with which each party perceives the case, but also from the size of the class and the variety and number of the positions involved. In an effort to compromise, the parties have agreed to a floor and ceiling regarding an award of 1.5 million and 4.5 million, respectively. These figures represent the minimum and maximum of the linear range of awardable damages. The exact figure is to be established by the Court after a trial on the merits. Under the proposed judgment, trial will be limited to the submission of statistical evidence. At the conclusion of this presentation and any rebuttal the parties deem necessary, the Court will fix damages on the "strength" of plaintiffs' statistical case. Thus, if plaintiffs make no showing of discrimination with the statistical evidence or if that showing is very weak, then plaintiffs will only be entitled to 1.5 million. Conversely, if the plaintiffs' case is very "strong," then the Court will award 4.5 million. In the event plaintiffs' statistical case is neither "weak" nor "strong," but falls somewhere in between, then the Court will assess the award appropriately between 1.5 and 4.5 million. Moreover whatever plaintiffs' recovery, the decree provides for the payment by defendant of reasonable fees and costs incurred by plaintiffs, thereby protecting the fiscal integrity of the award.

Memorandum Opinion and Order Approving Consent Judgment, April 6, 1984, at page 6.⁶ Further, the Consent Judgment provided that:

In determining whether a "case" has been made out, or to what degree a case has been made out, the Court should take into consideration the totality of all evidence before the Court at the conclusion of the statistical presentation which is within the guidelines set above.

... The Court is not to be governed solely by a statistical dollar analysis which may show dollar differentials in excess of the maximum of the range. Such showings are only intended to be evidence of the strength (or lack of strength) of the overall case and are not intended to have a dollar for dollar relationship to the amount of the award. On the other hand, the parties contemplate that the Court will take into account the period of time, if any, during which the Court concludes the plaintiffs have shown the existence of a "case" of discrimination, the nature of the discrimination, together with the strength of that showing.

Consent Judgment, at pages 7 and 8.

The effect of these provisions is to modify the usual order of proof and the customary step-by-step analysis suggested by the Supreme Court in such cases as McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) and Texas Dept. of...