United States: Court Uses Novel Issue Certification Device To Sidestep Individualized Issues Otherwise Precluding Class Certification

Seyfarth Synopsis:  A group of female truck drivers sued their employer for policies allegedly resulting in a hostile work environment for and retaliation against women who complained of sexual harassment on the job.  Under Rules 23(b)(3) and 23(c)(4), the U.S. District Court for the Northern District of Iowa certified both a hostile work environment class and retaliation class on issues relating to the employer's liability.  Such certification was made possible by the drivers' bifurcation proposal, which involved a representative trial on aspects of liability and individualized trials on remaining aspects of liability and damages.  Employers should take note that there is a trend among some federal courts to use Rule 23 in novel ways to certify classes of employees to avoid confronting issues that, traditionally, would preclude class certification.

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Class actions are supposed to promote the efficiency and economy of litigation by allowing the claims of a group of individuals with the same claims to be decided in one proceeding.  Many claims brought in the employment context, such as hostile work environment and retaliation claims, are not amenable to class treatment, but some courts have taken an expansive reading of Rule 23 to allow certification of classes even when resolution of the class claims would not resolve the claims of the individual class members.  This is precisely what happened in Sellars v. CRST Expedited, Inc., No. 15-CV-117 (N.D. Iowa Mar. 30, 2017), where Chief Judge Leonard T. Strand of the U.S. District Court for the Northern District of Iowa certified classes alleging hostile work environment and retaliation even though individualized trials would be required to establish remaining issues of liability and damages for each individual class member.

Case Background

Plaintiffs, three female truck drivers, brought claims under Title VII of the Civil Rights Act of 1964 and the California Fair Employment and Housing Act against their employer, CRST Expedited, Inc. ("CRST").  Id. at 3.  CRST employs thousands of truck drivers on two-person teams, so that one driver can sleep while the other drives.  Id.  Plaintiffs alleged that CRST maintained patterns or practices of discrimination amounting to a hostile work environment and retaliation toward female drivers who reported sexual harassment.  Id.

Specifically, Plaintiffs alleged that three practices of CRST created a hostile work environment, including: (a) failing to find a harassment complaint corroborated without an admission by the accused himself or a third-party's eyewitness account; (b) failing to discipline male drivers even when a harassment complaint was corroborated; and (c) tolerating the failure of responsible employees to act promptly in the face of a harassment complaint and instead encouraging the accuser to keep driving with the accused.  Id. at 8-15.

Plaintiffs also alleged that three practices of CRST constituted retaliation against female drivers who reported harassment, including: (a) requiring an accuser to exit the truck upon complaining and thereby precluding her from earning wages by continuing to drive; (b) forcing accusers to cover transit and lodging costs after exiting the truck; and (c) extending student-driver training for those student-driver accusers who were forced to exit the truck after complaining of harassment. Id. at 13-18.

Based on evidence which included testimony from CRST employees and eight female drivers supporting the foregoing allegations, Plaintiffs moved for certification of two classes under Rule 23, including: (a) female drivers subjected to a hostile work environment based on sex ("Hostile Work Environment Class"); and (b) female drivers subjected to retaliation in response to complaints of sexual harassment ("Retaliation Class").  Id. at 23-24.  Plaintiffs also moved to certify a California-only class of female drivers.  Id. at 24.

The Court's Decision

In a lengthy opinion, Judge Strand certified the Hostile Work Environment and Retaliation Classes only with respect to particular issues under Rule 23(b)(3) and Rule 23(c)(4), but denied certification of the California-only classes.

The Court's decision to certify the classes depended heavily upon Plaintiffs' proposal of bifurcating the case into two phases.  Id. at 28, 46.  Under Plaintiffs' proposal, Phase I – the "liability" phase, as the Court characterized it – would determine whether CRST: (a) created or tolerated a hostile work environment; and (b) retaliated against women based on sex.  If such liability were established, each case would then proceed to Phase II to determine in individual trials whether: (a) each plaintiff subjectively believed the work environment to be hostile (a finding required to prove a hostile work environment claim and, therefore, a part of liability omitted from Phase I's "liability" trial); and (b) damages.  Id. at 28, 40 n.15.

In finding that liability issues for the Hostile Work Environment Class satisfied Rule 23(a) and 23(b)(3), the Court found that all three of Plaintiffs' theories of discrimination provided common questions of law and fact which predominated over individual questions affecting the claim.  Id. at 27-39 & 43-48.  The Court emphasized that the fact that Plaintiffs would attempt to prove those theories through one-off accounts of individual employees did not preclude certification.  Id. at 35 ("Plaintiffs' reliance on anecdotal evidence to establish a pattern or practice does not defeat commonality") (citations omitted)).

In finding that liability issues for the Retaliation Class also satisfied Rule 23(a) and 23(b)(3), the Court reasoned that Plaintiffs' theory that CRST retaliated by requiring female drivers to exit the truck after complaining of harassment provided common questions of law and fact that  predominated over individual questions affecting the claim.  Id.  at 36-37 & 43-48.  However, the Court determined that Plaintiffs' two other theories of retaliation – forcing accusers to cover transit and lodging costs and extending student-driver training –  presented too many individualized questions for adjudication by representative evidence, even in a bifurcated trial.  Id. at 37-39.

The Court cited Rule 23(c)(4) in certifying the above classes, which allows a court to certify a class "with respect to particular issues," as opposed to an entire claim.  Id. at 48. Nonetheless, the Court went on to consider Plaintiffs' "alternative" request for certification under Rule 23(c)(4) in a separate portion of the opinion.  Id. at 50-52.

In addressing Rule 23(c)(4), the Court noted a circuit split as to whether a plaintiff must show that his entire claim satisfies the predominance requirement of Rule 23(b)(3) before certifying particular issues under Rule 23(c)(4), or whether a plaintiff need only show predominance with respect to the particular issue for certification under 23(c)(4).  Id.  at 51-52.  The Court opined that while the Eighth Circuit has not yet decided the issue, the Court would follow the Second, Fourth and Ninth Circuits in certifying the sufficiently common issues presented by Plaintiffs despite the fact that Plaintiffs' claims in their entirety did not merit certification.  Id. at 52.

Accordingly, as to the Hostile Work Environment Class, the Court certified the issues of whether CRST had any of the following policies, patterns or practices that create or contribute to a hostile work environment: (1) failing to find their complaints were corroborated without an eyewitness or admission; (2) failing to discipline drivers after complaints were corroborated; and (3) failing to discipline responsible employees for not promptly responding to sexual harassment complaints.  Id. at 55.  As to the Retaliation Class, the Court certified the issue of whether CRST has a policy, pattern, or practice of retaliating against women complaining of sexual harassment by requiring them to exit the truck after complaining.  Id.

In other parts of the opinion, the Court denied Plaintiff's request for hybrid certification of injunctive relief classes under Rule 23(b)(2). Id. at 49-50.  The Court also rejected CRST's arguments against certification based on the Rules Enabling Act and Article III standing.  Id. at 52-54.

Implication For Employers

This case is part of a trend, post-Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013), whereby courts have used Rule 23(c)(4) issue certification or an expansive view of Rule 23(b)(3) to sidestep individualized issues that would otherwise preclude certification.  In this case, the Court certified a class claim despite the fact that individual issues of liability as well as damages would remain in individual trials in Phase II under the bifurcation plan at issue.  The Court did not address in great detail whether such a hyper-segmented plan is likely to achieve the efficiency and fairness objectives the class action device was designed to achieve.  In circumstances like this, employers should emphasize the absence of such efficiency and fairness in defending against certification.

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