Rutstein v. Avis Rent-A-Car

• Decision Date: 11 May 2000
• Docket Number: RENT-A-CAR,No. 99-10782,99-10782
• Citation: 211 F.3d 1228
• Parties: (11th Cir. 2000) DAVID RUTSTEIN, Plaintiff, Zerei Agudath Israel Bookstore, Levi Sufrin, Plaintiffs-Appellees, v. AVISSYSTEMS, INC., a Delaware Corporation, authorized to do business in the State of Florida, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1228

211 F.3d 1228 (11th Cir. 2000)

DAVID RUTSTEIN, Plaintiff, Zerei Agudath Israel Bookstore, Levi Sufrin, Plaintiffs-Appellees, v. AVIS RENT-A-CAR SYSTEMS, INC., a Delaware Corporation, authorized to do business in the State of Florida, Defendant-Appellant.

No. 99-10782.

United States Court of Appeals Eleventh Circuit.

May 11, 2000.

[Copyrighted Material Omitted] Appeal from the United States District Court for the Southern District of Florida. (No. 97-00807-1-CV-ASG), Alan Stephen Gold, Judge.

Before TJOFLAT, Circuit Judge, and RONEY and FAY, Senior Circuit Judges.

TJOFLAT, Circuit Judge:

Jewish plaintiffs¹ brought this civil rights lawsuit in the United States District Court for the Southern District of Florida on behalf of themselves, and all others similarly situated, against Avis Rent-A-Car System, Inc. ("Avis"). Plaintiffs alleged that Avis had denied them their right to make and enforce contracts because of their race, ancestry, and ethnic characteristics,² in violation of 42 U.S.C. § 1981 (1994).³ They sought compensatory damages, punitive damages, and injunctive relief. The district court certified the case as a class action under Federal Rule of Civil Procedure 23(b)(3).⁴ Pursuant to Rule 23(f),⁵ we permitted Avis to appeal the district court's class certification decision. We now reverse.

I.

The procedural history of this case is somewhat complicated by the fact that the original plaintiff, David Rutstein, was apparently not all that he claimed to be. On May 6, 1997, Rutstein filed a complaint alleging that Avis, a corporation engaged in the business of renting cars, had "adopted as an official corporate policy a practice to discriminate against Jewish customers as a class of people and [had] instructed its employees to decline to open a corporate account for a business owned and/or operated by this class of people."⁶ Rutstein claimed that at Avis' World Reservations Center in Tulsa, Oklahoma (the "Reservation Center"), employees had been instructed not to open corporate accounts for "Yeshivas." A Yeshiva was understood to be someone with a "Jewish sounding name" or "Jewish accent."⁷ When a telesales representative at the Reservations Center identified a caller requesting to open a corporate account as a Yeshiva, the caller was either denied the account entirely, or was issued a "bogus" account that was not accorded the same benefits as those associated with a legitimate corporate account.

Rutstein claimed that he had applied for, but was denied, a corporate account because he is Jewish. Specifically, Rutstein alleged that

[c]ommencing January 1993, [he] resided in North Miami Beach, Florida and operated Rutstein Insurance Agency. Upon application to Avis to open a corporate account and advising the account representative that [he] formerly lived in Crown Heights, New York and that the purpose of the opening of the account was to permit ... Rutstein to visit his rabbi in New York and to conduct ongoing business in New York, the Plaintiff was advised that he would not qualify for the opening of a corporate account.

Three months later Rutstein moved the court to certify a class, under Federal Rule 23(b)(2) and Rule 23(b)(3), of "all Jewish individuals and Jewish-owned businesses who have attempted to contract, have contracted, or will in the future contract with Avis to open a corporate rental account and who were or will be subjected to the policies and practices known as the 'Yeshiva policy'." Immediately after Rutstein filed his class certification motion, however, events occurred which made it apparent that he might not be an adequate class representative. Rutstein failed to appear at a court-ordered deposition scheduled for October 28, 1997, prompting Avis to move the court to dismiss the action, hold Rutstein in contempt, and direct him to pay expenses, including attorneys' fees, incurred by Avis as a result of his failure to appear.⁸ Further, Avis moved the court for summary judgment, contending that

[e]vidence independently obtained by Avis demonstrates that plaintiff does not have a valid claim against Avis. Among other things, plaintiff never owned and operated a "Rutstein Insurance Agency" which he claims had existed since January 1993 and which he claims was wrongfully denied a corporate account by Avis. The evidence reveals that it was not until November 1993 that plaintiff even obtained an insurance license for himself as an individual and received his first appointment as an insurance agent by an insurer. No Rutstein Insurance Agency has ever been registered with the Florida Department of Insurance. Plaintiff's current business, known as Senior Allican, Inc., was not incorporated until August 1997, five months after this lawsuit was filed.

At a hearing before the district court on January 30, 1998, Rutstein's counsel admitted that Rustein was not an appropriate representative of the class. Counsel claimed that Rutstein had become "intimidated" by Avis's aggressive defense strategies, and that Rutstein had decided that he did not want to represent a class of "thousands" after all. Counsel assured the court that there was no cause for concern, however, and that the action could live on. On December 5, 1997, counsel had filed a motion on behalf of the Zerei Agudath Israel Bookstore ("ZAI"), located in Chicago, Illinois, to intervene in the case as a plaintiff and proposed class representative under Federal Rule of Civil Procedure 24(b).⁹ ZAI alleged that it was "a Jewish business which was subject to the precise discriminatory business practices which lie at the heart of [Rutstein's] complaint. [ZAI] applied for and received Avis account status, but once Avis discovered that [ZAI] was what Avis considered a 'Yeshiva', it terminated [ZAI's] account...."¹⁰ On February 23, 1998, ZAI sought class certification under Rules 23(b)(2) and (3), seeking to represent a class of

[a]ll Jewish individuals and Jewish-owned businesses who, subsequent to January 1, 1990, have attempted to contract, have contracted, or will in the future contract with Avis to open an account for use in their business, and who were refused an account, had their account canceled, or were given a less advantageous account because of their religion, ancestry, and/or ethnicity.

On March 27, 1998, the district court granted ZAI's Rule 24(b) motion to intervene reasoning that because Rutstein was plainly inadequate as a class representative, intervention by ZAI would "strengthen the adequacy of class representation." The court also denied Avis' motion for summary judgment against Rutstein, denied Rutstein's request to act as class representative, and concluded that Rutstein could remain in the case as a nonrepresentative class member. A month later, the court also granted Levi Suffrin's motion to intervene as a plaintiff and proposed class representative under Rule 24(b). Suffrin had filed a complaint on February 23, 1998, alleging that his corporate account had been terminated by Avis, and that the explanation Avis proffered for the termination (that he had presented a false identification when trying to rent a vehicle) was pretextual.¹¹

Finally, on February 8, 1999, the district court granted ZAI and Suffrin's motion for class certification under Federal Rule 23(b)(3). The court also denied class certification under Rule 23(b)(2). Avis sought an interlocutory appeal of the class certification decision under Rule 23(f) and we granted permission to appeal.

II.

The initial burden of proof to establish the propriety of class certification rests with the advocate of the class. Jones v. Diamond, 519 F.2d 1090, 1099 (5th Cir.1975).¹² Assuming that the district court correctly interpreted the applicable law, we review the court's grant of class certification for an abuse of discretion. Andrews v. American Tel. & Tel. Co., 95 F.3d 1014, 1022 (11th Cir.1996).

III.

A.

"A class action may be maintained only when it satisfies all the requirements of Fed.R.Civ.P. 23(a) and at least one of the alternative requirements of Rule 23(b)." Jackson v. Motel 6 Multipurpose, Inc., 130 F.3d 999, 1005 (11th Cir.1997) (footnote omitted). In the instant case, the district court certified a class under Rule 23(b)(3), which provides that

[a]n action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition ...

(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that 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). That common questions of law or fact predominate over individualized questions means that "the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole, must predominate over those issues that are subject only to individualized proof." Kerr v. City of West Palm Beach, 875 F.2d 1546, 1558 (11th Cir.1989) (quoting Nichols v. Mobile Bd. of Realtors, Inc., 675 F.2d 671, 676 (5th Cir. Unit B 1982)).¹³ "The predominance inquiry focuses on 'the legal or factual questions that qualify each class member's case as a genuine controversy,' and is 'far more demanding' than Rule 23(a)'s commonality requirement." Jackson, 130 F.3d at 1005 (quoting Amchem Prods., Inc. v. Windsor 521 U.S. 591, 623-24, 117 S.Ct. 2231, 2249-50, 138 L.Ed.2d 689 (1997)).

In order to determine whether common questions predominate, "we are called upon to examine the cause[ ] of action asserted in the complaint on behalf of the putative class." McCarthy v. Kleindienst, 741 F.2d 1406, 1412 (D.C.Cir.1984). Whether an issue predominates can only be determined after considering what value the resolution of the class-wide issue will have in each class member's underlying cause of action. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 2249...