Paxton v. Union Nat. Bank, s. 81-1650

Citation688 F.2d 552
Decision Date27 October 1982
Docket NumberNos. 81-1650,81-1656 and 81-1657,s. 81-1650
Parties29 Fair Empl.Prac.Cas. 1233, 74 A.L.R.Fed. 1, 30 Empl. Prac. Dec. P 33,055 Melvin PAXTON, Jr.; and Katrina E. Terry; Phyllis Mosley; Jerry Riley; George Spann, Appellants, v. UNION NATIONAL BANK, a corporation, Appellee. Harold Dominic BROWN, Appellant, v. UNION NATIONAL BANK OF LITTLE ROCK, Appellee. Melvin PAXTON, Jr.; and Katrina E. Terry; Phyllis Mosley; Jerry Riley; George Spann, Appellees, v. UNION NATIONAL BANK, a corporation, Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

John W. Walker, P. A. Hollingsworth, Little Rock, Ark., Jack Greenberg, Ronald L. Ellis, New York City, for appellants.

James E. Darr, Jr., Little Rock, Ark., for appellee/cross-appellant.

Before HEANEY, McMILLIAN and ARNOLD, Circuit Judges.

HEANEY, Circuit Judge.

This is an appeal from a judgment of the United States District Court for the Eastern District of Arkansas, 519 F.Supp. 136, denying each of the named plaintiffs and intervenors relief, refusing to certify a class action and holding that the Union National Bank of Little Rock did not discriminate against black applicants or employees in any aspect of the employment relationship. We affirm the district court insofar as it denied relief to Melvin Paxton, Katrina Terry and George Spann, and to the extent that it refused to certify a class of black applicants. We hold, however, that Jerry Riley and Phyllis Mosley proved that they were denied promotions on account of their race, and that Mosley was discriminatorily discharged. We further hold that the district court erred in refusing to certify two We reverse and remand to the district court with directions to it to award appropriate relief to Mosley and Riley, and to the promotion subclass.

subclasses of black discriminatees-those discriminated against with respect to promotions and those discriminatorily discharged-and in failing to grant relief to the promotion subclass.

I. PROCEDURAL HISTORY

These consolidated Title VII and section 1981 actions were brought by Melvin Paxton and Harold Dominic Brown against the Union National Bank of Little Rock, Arkansas, alleging race discrimination in hiring, testing procedures, promotions, discharges, job assignments, compensation and other terms and conditions of employment. 1 They brought suit on their own behalf and on behalf of a class alleged to consist of "all black individuals who are (1) employed by defendant; (2) have sought employment with defendant, but have been refused due to race; (3) might seek employment with defendant; (4) have been employed by defendant and have been adversely affected by defendant's discriminatory practices and policies."

Five additional black persons, Katrina Terry, Phyllis Mosley, Jerry Riley, Bobby Scott and George Spann were granted leave to intervene as plaintiffs. Terry, Mosley and Spann were former employees of the Union National Bank, while Riley and Scott were employees at the time of trial. Bobby Scott's case was settled and dismissed prior to trial. 2

The plaintiffs and intervenors moved to certify the litigation as a class action pursuant to Fed.R.Civ.P. 23. The district court, Judge G. Thomas Eisele presiding, began an evidentiary hearing on the certification issue on April 7, 1980. Some time later, the court, with the apparent acquiescence of the parties, informally decided to merge the certification hearing with the trial on the merits and to reserve a decision on the certification issue until the trial was completed. The trial was recessed on April 18, 1980, and not resumed until August 12. On October 21, after fifteen days of hearings had been held, Judge Eisele recused himself. This case was then assigned to Judge Henry Woods. Judge Woods stated that he would not rehear the witnesses that had been called while Judge Eisele was presiding and directed the parties to prepare a transcript of the prior proceedings. He resumed the trial on April 7, 1981, and completed it on April 23, 1981, after eleven additional days of testimony. At the close of the evidence, he refused to certify a class and ruled against the plaintiffs and intervenors on their individual claims.

The court treated the case as one involving disparate treatment. 3 It held that the On appeal, the plaintiffs and intervenors contend that the court erred in failing to certify a class, and in denying relief to the class and named plaintiffs and intervenors.

class action failed because the plaintiffs and intervenors had not sustained their burden of proving that Union National Bank discriminated against any class of its employees, and because the plaintiffs had not met the requirements of Rule 23. It found that the plaintiffs had failed to prove a prima facie case of discrimination with respect to any aspect of the employment relationship and that even if they had, the defendant had sustained its burden of articulating a legitimate nondiscriminatory reason for its employment decisions with regard to the six named plaintiffs and intervenors and all other employees whose names had been suggested as putative discriminatees.

II. GENERAL BACKGROUND

The Union National Bank is a federally chartered bank with a main office and thirteen branches in Little Rock, Arkansas. The bank has been owned by Herbert H. McAdams, an attorney and successful northwest Arkansas banker, since 1971.

The bank hired very few black persons prior to 1973. In 1973, McAdams undertook an effort to develop business from black businesses and workers. In furtherance of this goal, McAdams directed Joseph E. Zegler, a vice president and personnel officer of the bank, to institute an affirmative action program designed to bring more black employees into the bank. Zegler published a personnel policy manual, which contained an equal opportunity policy, 4 actively recruited black persons for employment, and initiated a course for them in basic bank training. Black persons were hired into the bank in numbers approximating their numbers in the work force in the Little Rock area.

Most of the black employees were hired into entry-level positions.

The total number of persons employed by the bank grew from 332 in 1974 to 432 in 1980. The turnover rate among employees during the same period was very high, approximating forty percent per year.

The average educational level of black persons employed by the bank during this period was 13.1 years; the average for white employees was 13.5 years. The bank did not preserve the records with respect to the applicant pool; thus, the record does not indicate the number of blacks that applied to the bank for employment or the education and experience of those that did apply.

III. ANALYSIS

Our first subject of concern is the timing of the district court's decision with respect to class certification. These consolidated actions were filed on April 12, 1976, and September 25, 1978. Extensive discovery was undertaken by the parties. On April 7, 1980, the court began evidentiary hearings on the propriety of maintaining the consolidated suits as a class action, telling the parties that

(w)e had a terrible experience in this court of having a moratorium on civil cases for years. Class actions were filed and they sat here for years, and we've been faced with arguments that people who might have asserted their individual claims did not do so in reliance upon the hope that they would be a member of a class and get benefits that way four or five years after the event.

So I think there's been a suggestion that from the point of view of the plaintiff that the earlier the class is certified, the fewer who are left out of that class * * *

Then the defendants have a vital stake in an early determination because of the whole scope of the trial on the merits is thereby affected if there's going to be a class at all, and so I think what would have to be done, absent agreement of the parties, there's very little you can't do, that the Court is going to have to take it up preliminarily and make a certification or decide on class at the earliest practicable time.

The subsequent decision to delay certification until after the trial was completed, notwithstanding the apparent acquiescence of the parties, 6 "is directly contrary to the command of subdivision (23)(c)(1) that the court determine whether a suit denominated a class action may be maintained as such '(a)s soon as practicable after the commencement of (the) action * * *.' " Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178, 94 S.Ct. 2140, 2152, 40 L.Ed.2d 732 (1974). See Horn v. Associated Wholesale Grocers, Inc., 555 F.2d 270, 273 (10th Cir. 1977).

It is rarely appropriate for a court to delay the certification decision until after a trial on the merits. See Eisen v. Carlisle & Jacquelin, supra, 417 U.S. at 177-178, 94 S.Ct. at 2152-53; Horn v. Associated Wholesale Grocers, Inc., supra, 555 F.2d at 274; Peritz v. Liberty Loan Corp., 523 F.2d 349, 353-354 (7th Cir. 1975). It was not necessary to do so here. The discovery undertaken by the parties and the evidence adduced during the early stages of the certification hearing should have provided the court with sufficient information to resolve the question of whether a class action was an appropriate vehicle for plaintiffs' claims. If the court was still in doubt as to the propriety of a class action, it could have made the certification "conditional," and altered or amended its ruling at any time prior to completion of the trial. See Fed.R.Civ.P. 23(c)(1).

The prejudice inherent in delaying the certification determination until after trial has been thoroughly explored in the context of litigation under subdivision (3) of Rule 23(b). The courts' concern in Rule 23(b)(3) suits has been to prevent "one-way intervention;" i.e., to protect defendants from putative class members who can "opt-out" of an...

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