McArthur v. Southern Airways, Inc.

• Decision Date: 22 July 1977
• Docket Number: No. 75-3933,75-3933
• Citation: 556 F.2d 298
• Parties: 15 Fair Empl.Prac.Cas. 1123, 14 Empl. Prac. Dec. P 7743 Patricia C. McARTHUR, Plaintiff, Fay Mathews Eubanks et al., for themselves and all other female employees similarly situated, Plaintiffs-Appellants Cross-Appellees, v. SOUTHERN AIRWAYS, INC., et al., Defendants-Appellees Cross-Appellants, and Myra Blackburn et al., Intervenors-Co-Defendants-Appellees, Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 298

556 F.2d 298

15 Fair Empl.Prac.Cas. 1123, 14 Empl. Prac.

Dec. P 7743

Patricia C. McARTHUR, Plaintiff Fay Mathews Eubanks et al., for themselves and all other female employees similarly situated Plaintiffs-Appellants Cross-Appellees, v. SOUTHERN AIRWAYS, INC., et al., Defendants-Appellees Cross-Appellants and Myra Blackburn et al., Intervenors-Co-Defendants-Appellees Cross-Appellants.

No. 75-3933.

United States Court of Appeals, Fifth Circuit.

July 22, 1977.

Rehearing En Banc Granted Oct. 11, 1977.

J. R. Goldthwaite, Jr., Atlanta, Ga., for plaintiff.

John B. Shepard, Erle Phillips, Atlanta, Ga., for Southern Airways.

John F. O'Donnell, Asher W. Schwartz, Renee H. Rivkis, Malcolm A. Goldstein, New York City, for Transport Workers Union.

Duane C. Aldrich, Richard R. Boisseau, Atlanta, Ga., for Rep. Blackburn, et al.

Appeals from the United States District Court for the Northern District of Georgia.

Before CLARK and GEE, Circuit Judges, and MARKEY ^*, Chief Judge.

CLARK, Circuit Judge:

This appeal presents a diverse combination of litigants who raise a wide variety of legal arguments all of which are affected by an erroneous procedural ruling with broad impact and the intervention of significant new precedents after the instant appeal was filed. The coalescence of these factors indicate that the appeal should not be resolved in an ordinary way. 28 U.S.C. § 2106 (1970) authorizes us to require further proceedings in cases brought here for review as may be just under the circumstances. Pursuant to that authority, we correct the procedural error and remand the case for a fresh and orderly resolution in the district court.

Three former female Southern flight attendants ¹ filed, on behalf of themselves and all former female flight attendants similarly situated, a complaint alleging that Southern had discriminated against them in their employment on the basis of sex in violation of Title VII of the Civil Rights Act of 1964 (the Act), 42 U.S.C. §§ 2000e et seq. Defendants are Southern and the collective bargaining representatives for Southern's flight attendants (union defendants): Transport Workers Union of America, a national union; and its representative, Local 550, Airline Stewards and Stewardesses Association. Each class representative had resigned or been terminated from her position as flight attendant when she married because of Southern's official policy forbidding employment of married female flight attendants. Before any defendant filed an answer, nine other former female flight attendants ² moved to intervene as party-plaintiffs, and all twelve moved to amend the complaint by deleting the class action allegations. The district court granted the motions in their entirety.

The twelve plaintiffs and the defendants compromised the individual claims and presented a consent decree to the district court which it approved. The consent decree provided that plaintiffs be reinstated as flight attendants with full seniority as of their date of original hire. They were also afforded several privileges attendant to seniority, including full salary, retirement and vacation benefits, and choice-of-base and choice-of-flight privileges. Under the consent decree, counsel for plaintiffs received $5,000 in attorney's fees, and plaintiffs surrendered all causes of action or claims for relief they might otherwise have had under the pleadings.

Several currently employed female Southern flight attendants ³ subsequently moved to intervene, on behalf of themselves and all others similarly situated, and to vacate the consent decree which had effectively displaced their positions of seniority with Southern. The district court permitted the intervention subject to plaintiffs' and defendants' written objections. It temporarily denied intervenors' motion to vacate, except that, pending resolution of the merits of the intervenors' arguments, implementation of seniority benefits was stayed to the extent that it would displace any currently employed flight attendants.

Plaintiffs and Southern initially opposed the intervention and the motion to vacate the consent decree. ⁴ Both argued that intervenors had no substantial interest in the action or had not been substantially harmed and that the consent decree was, in all respects, proper. Intervenors objected to the consent decree on the ground that, among other things, plaintiffs could not drop the class action allegations from their complaint as a part of an agreement to settle the action with defendants.

After several conferences between the district court, plaintiffs, intervenors, and Southern, at which extensive but unsuccessful settlement negotiations took place, the district court scheduled a trial to consider the merits of the original consent decree. On the Friday before the proposed Monday trial, Southern announced for the first time that it would move to amend its original answer and oppose plaintiffs' claims. At the trial Southern argued that the consent decree was invalid because, among other things, plaintiffs' Title VII claims were time-barred under 42 U.S.C. § 2000e-5(d) ⁵ and the district court was without jurisdiction of the case. In support of the original consent decree, plaintiffs contended that, by entering into the original settlement, Southern waived its right to oppose their claims to reinstatement with seniority and was estopped to repudiate its original position. Southern, plaintiffs, and intervenors presented evidence on the merits of the original consent decree. At the district court's request, all parties submitted post-trial memoranda setting forth their contentions on this issue.

In its final opinion, the district court held, among other things: The currently employed female Southern flight attendants could intervene since the original consent decree affected their positions of seniority with Southern. Intervenors were not members of the class that plaintiffs represented in their original complaint and were not entitled to receive notice of plaintiffs' amendment deleting the class claims. Intervenors were permitted to raise issues related to their relative seniority status with Southern and could not raise any jurisdictional issues. Southern was estopped to repudiate the consent decree and had waived its right to contend that plaintiffs' claims were time-barred under Title VII. Plaintiffs were entitled, as of right, to amend their action to delete the class claims and convert their suit into a multiple-party action under Federal Rule Civil Procedure 15(a) prior to the filing of the defendants' answer or the court's sanction of the suit as a class action under Federal Rule Civil Procedure 23(c)(1). Plaintiffs were not so numerous that joinder of all members was impracticable as required by rule 23(a)(1). Finally, after reviewing the parties' arguments relative to seniority, the award of full seniority to the 12 plaintiffs was permanently set aside. Six plaintiffs were found to be entitled to seniority benefits of varying lengths, and the remaining six were found not to be entitled to any award of seniority.

Plaintiffs, intervenors, and Southern appeal or cross-appeal and present this court with various arguments that attack or support the district court's decision. ⁶ Our resolution of the case requires us to reach only those issues pertaining to rules 15(a) and 23.

Federal Rules of Civil Procedure 15 & 23

Plaintiffs and Southern argue that intervenors are not members of the class represented in plaintiffs' original complaint and that therefore they have no standing to object to any of the district court's rulings under rules 15(a) and 23 which affect the rights of absentee class members. We do not deem it crucial, however, that intervenors must possess standing for us to review the district court's rulings. We have repeatedly recognized that rule 23 vests the district courts with broad authority when managing class actions, Hitt v. Nissan Motor Co. (In re Nissan Motor Corp. Antitrust Litigation), 552 F.2d 1088, 1095-1096 (1977), and "indeed insist upon, the court's participation as the manager of the case." Gordon v. Eastern Air Lines, Inc. (In re Air Crash Disaster at Florida Everglades on December 29, 1972), 549 F.2d 1006, 1012 n.8 (1977). Once a class suit is filed, the district court's supervisory role is not dependent upon the parties' presenting certain motions to the district court. We have held that, under rule 23(c)(1), a district court has an independent obligation to determine whether an action shall proceed as a class action. Rodriguez v. East Texas Motor Freight, 505 F.2d 40, 49-50 (1974), rev'd on other grounds, --- U.S. ----, ---- - ----, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977). Rule 23(e), which is written in obligatory terms similar to subdivision (c)(1), requires the district court to give absentee class members some form of notice prior to the dismissal or compromise of a class action. Because rule 23(e) is designed to promote important policies which we discuss below, we hold that this obligation is one which the parties to a class action may not waive, cf. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 175-76, 94 S.Ct. 2140, 2151-52, 40 L.Ed.2d 732 (1974), that, similar to 23(c)(1), it imposes an independent obligation upon the district court to act, and that the failure of the district court to comply with its requirements is reviewable on appeal.

Plaintiffs argue that the district court acted properly in permitting them to delete their claims since it found that "plaintiffs and other discriminatees are not sufficiently numerous as to fulfill the requirements of (rule 23(a) (1))." No evidence was ever submitted to the district court, however, as to the size of the alleged class described in plaintiffs' original complaint. Its finding in this regard is unsupported and thus clearly erroneous. Fed.R.Civ.Pro. 52(a); see East Texas Motor Freight System, Inc. v. Rodriguez, --- U.S. ----, ----, 97 S.Ct. 1891, 52...