McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc.

In the

United States Court of Appeals

For the Seventh Circuit

No. 11-3639

G EORGE M C R EYNOLDS, et al., on behalf

of themselves and all others similarly situated,

Plaintiffs-Appellants,

v.

M ERRILL L YNCH, P IERCE, F ENNER & S MITH, INC.,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 6583—Robert W. Gettleman, Judge.

A RGUED JANUARY 13, 2012—D ECIDED F EBRUARY 24, 2012

Before P OSNER, W OOD , and H AMILTON, Circuit Judges.

P OSNER, Circuit Judge. The plaintiffs have filed a class

action suit that charges Merrill Lynch with racial dis-

crimination in employment in violation of Title VII of

the Civil Rights Act of 1964 and 42 U.S.C. § 1981. The

plaintiffs ask that a class be certified for two purposes:

deciding a common issue, Fed. R. Civ. P. 23(c)(4)—whether

2 No. 11-3639

the defendant has engaged and is engaging in practices

that have a disparate impact (that is, a discriminatory

effect, though it need not be intentional) on the members

of the class, in violation of federal antidiscrimination law;

and providing injunctive relief. Fed. R. Civ. P. 23(b)(2).

They also want damages. But while they asked the dis-

trict court to certify the class for purposes of seeking

compensatory and punitive damages, see Rule 23(b)(3),

at argument the plaintiffs’ lawyer said she wasn’t

asking—not yet anyway—for such certification, though

her opening brief had suggested that if we found that

the district court had erred in refusing to certify for

class treatment the disparate impact issue and injunctive

relief, we should order the court to “consider [on remand]

the extent to which damages issues also could benefit

from class treatment, consistent with Allen v. International

Truck & Engine Corp., 358 F.3d 469 (7th Cir. 2004).” We

defer that question to the end of our opinion. But we

note here that without proof of intentional discrimina-

tion, which is not an element of a disparate impact

claim, the plaintiffs cannot obtain damages, whether

compensatory or punitive, but only equitable relief

(which might however include backpay, and thus have

a monetary dimension). 42 U.S.C. § 1981a(a)(1); Kolstad

v. American Dental Association, 527 U.S. 526, 534 (1999).

Section 1981a(a)(1) is explicit that damages cannot be

awarded in respect of “an employment practice that

is unlawful because of its disparate impact.”

The district court denied certification, and the plain-

tiffs asked this court for leave to appeal the denial. A

motions panel granted leave, but the defendant argues

No. 11-3639 3

that the panel erred—that the appeal is untimely. We

begin with that question.

Rule 23(f) of the civil rules permits appeals from

orders granting or denying class certification despite

the general policy (though one with many exceptions)

against allowing interlocutory appeals in the federal

court system. A denial of class certification often dooms

the suit—the class members’ claims may be too slight

to justify the expense of individual suits. Conversely,

because of the astronomical damages potential of many

class action suits, a grant of certification may place enor-

mous pressure on the defendant to settle even if the

suit has little merit. See, e.g., CE Design Ltd. v. King Archi-

tectural Metals, Inc., 637 F.3d 721, 723 (7th Cir. 2011). And

because class actions are cumbersome and protracted, an

early appellate decision on whether a suit can be main-

tained as a class action can speed the way to termination

of the litigation by abandonment, summary judgment,

or settlement. E.g., Blair v. Equifax Check Services, Inc.,

181 F.3d 832, 834-35 (7th Cir. 1999); Newton v. Merrill

Lynch, 259 F.3d 154, 162-65 (3d Cir. 2001).

But Rule 23(f) requires that leave to appeal be sought

from the court of appeals within 14 days of the entry of

the order granting or denying certification. The district

court denied the plaintiffs’ initial motion for class certif-

ication in August 2010. In July 2011 the plaintiffs filed

an amended motion for class certification, which the

district judge denied in September, and within 14 days

of that denial the plaintiffs sought our leave to ap-

peal. The defendant asks us to treat the request for

4 No. 11-3639

leave to appeal as an untimely request to appeal the

August 2010 denial of certification. That would amount

to treating the plaintiffs’ second motion for certification

as an untimely motion to reconsider the denial of

the first motion.

The question of timeliness may seem to be about juris-

diction, since most deadlines for appeals from a district

court have been held to be jurisdictional. But as we

noted recently in In re IFC Credit Corp., 663 F.3d 315, 319-

20 (7th Cir. 2011), the Supreme Court has been moving

toward a definition of the subject-matter jurisdiction of

the federal courts that includes all cases that these courts

are “competent,” in the sense of legally empowered, to

decide. This implies that deadlines for appealing are not

jurisdictional, since they regulate the movement upward

through the judicial hierarchy of litigation that by def-

inition is within federal jurisdiction. Yet appeal dead-

lines either found in statutes or adopted by courts by

direction of a statute continue to be treated as jurisdic-

tional—though not all of them; the Supreme Court re-

cently rejected such a “bright line” rule in favor of re-

quiring a “clear indication” that the deadline was

intended by Congress to be jurisdictional. Henderson v.

Shinseki, 131 S. Ct. 1197, 1203 (2011). (The power of Con-

gress to impose such limits on the jurisdiction of the

federal courts is not questioned.) But because no “clear

indication” is to be found in the pertinent statutory texts,

see, e.g., 28 U.S.C. §§ 2101(c), 2107(a), (c), the Court has

found itself saying such things as that Congress is not

required to “use magic words in order to speak clearly

on this point” and that “context, including [the Supreme

No. 11-3639 5

Court’s] interpretation of similar provisions in many

years past, is relevant.” Henderson v. Shinseki, supra, 131

S. Ct. at 1203, quoting Reed Elsevier, Inc. v. Muchnick, 130

S. Ct. 1248 (2010).

What we take away from this formula is that if the

Court has traditionally treated a particular statu-

tory deadline as jurisdictional it will go on doing so, id. at

1203-06; John R. Sand & Gravel Co. v. United States, 552

U.S. 130, 134 (2008); Bowles v. Russell, 551 U.S. 205, 209-10

and n. 2 (2007); In re Caterbone, 640 F.3d 108, 111-13

(3d Cir. 2011), even though doing so doesn’t comport

with the new “competence” standard. Deadlines for ap-

pealing are just a type of statute of limitations, as acknowl-

edged in John R. Sand & Gravel v. United States, supra, 552

U.S. at 133, and statutes of limitations ordinarily are

affirmative defenses rather than jurisdictional bars. A

deadline for bringing or appealing a federal case presup-

poses that the case is within the competence of federal

courts to decide.

We declined in Asher v. Baxter Int’l Inc., 505 F.3d 736, 741

(7th Cir. 2007), to rule on whether the deadline in

Rule 23(f), though it is promulgated by the Supreme

Court under the authority of the Rules Enabling Act,

29 U.S.C. § 2072, rather than found in or directed to be

adopted by a statute, is jurisdictional. But by now it is

clear that it is not jurisdictional—that the exception to

the “competence” standard is limited to statutory dead-

lines, United States v. Neff, 598 F.3d 320, 322-23 (7th

Cir. 2010), for how can a court contract or expand

its jurisdiction except by force of a constitutional

6 No. 11-3639

or statutory provision? If the deadline was made by

Congress, then whether it is jurisdictional depends on

congressional intent, and, the Supreme Court appears to

be saying, in the absence of any clues to that intent

on whether the courts traditionally have treated the

deadline as jurisdictional. The time limit in Rule 23(f),

having been created by the Court rather than by

Congress (no time limits are specified in the Rules

Enabling Act—the Act is an enabler, not a specifier), is

governed by the “competence” standard and therefore

is not jurisdictional, for obviously the suit from which

the appeal is sought to be taken is within the jurisdiction

of the federal courts.

But suppose our understanding of the evolving

Supreme Court doctrine is wrong, and the deadline in

Rule 23(f) is jurisdictional. The only difference between

a deadline that is jurisdictional and one that is not is

that a litigant cannot lose the benefit of the former

type (until judgment becomes final after exhaustion of

appellate remedies) by failing to assert it, or because

the other party’s failure to comply would in

nonjurisdictional settings be excused by such doctrines

as equitable estoppel or equitable tolling. The defendant

has from the outset vigorously contested the timeliness

of the appeal, and the plaintiffs are not arguing that they

should be excused for having missed the deadline. Even

if not jurisdictional, a deadline is mandatory in the sense

that if invoked by a party in timely fashion the court

is bound by it. Eberhart v. United States, 546 U.S. 12, 19

(2005) (per curiam); Asher v. Baxter Int’l Inc., supra, 505 F.3d

at 741; Maxwell v. Dodd, 662 F.3d 418, 421 (6th Cir. 2011);

Wilburn v. Robinson, 480 F.3d 1140, 1146-47 (D.C. Cir. 2007).

No. 11-3639 7

Rather, the plaintiffs’ argument is that their 14 days to

seek leave to appeal ran anew from the denial of their

amended motion for class certification. The defendant

points out that a deadline for appealing cannot be ex-

tended by a motion for reconsideration of a previous

appealable order, Asher v. Baxter Int’l Inc., supra, 505 F.3d

at 739-40; Gary v. Sheahan, 188 F.3d 891 (7th Cir. 1999);

Jenkins v. BellSouth Corp., 491 F.3d 1288, 1290-92 (11th

Cir. 2007); McNamara v. Felderhof, 410 F.3d 277, 280-81

and n. 8 (5th Cir. 2005), unless the motion is made within

the time allowed for taking the appeal, Blair v. Equifax

Check Services, Inc., supra, 181 F.3d at 837, and this rule

applies to appeals under Rule 23(f). Id. Otherwise the

deadline for taking the appeal would be eviscerated.

And this is so even if the motion for reconsideration

doesn’t just say “and for the reasons stated in our

original motion we ask the court to reverse its ruling”

but adds “and by the way we have thought of some

clever new arguments for why our motion should have

been granted.” Carpenter v. Boeing Co., 456 F.3d 1183, 1190-

91 (10th Cir. 2006). For it is easy to think up new argu-

ments.

But it doesn’t follow that the failure to take a timely

appeal from one interlocutory order operates as a forfei-

ture, jurisdictional or otherwise, of the right to appeal

a subsequent order. For the later motion may not be,

either in form or, more important, in substance, a

motion to reconsider the previous denial. A rule

limiting parties to one interlocutory appeal from a grant

or denial of class certification would disserve Rule 23(f).

It is important that the question whether the case is to

8 No. 11-3639

proceed as a class action be resolved sooner rather than

later. So if it becomes clear in the course of the law-

suit, as a result of new law or newly learned facts, that the

denial of certification was erroneous, and if years of

litigation lie ahead before a final judgment can be

expected, and if therefore an appeal from the denial of

certification may either end the litigation or at least

place it on a path to swift resolution, the court of appeals

should have discretion to allow the appeal.

The fact that the appellate court has a discretionary

jurisdiction over Rule 23(f) appeals is important. Ap-

pellate jurisdiction in the federal system ordinarily is

mandatory. With few exceptions, we have to decide all

appeals that we have jurisdiction to hear; we do not

have a discretionary appellate jurisdiction like the

Supreme Court. But because our jurisdiction to hear

interlocutory appeals under Rule 23(f) is discretionary,

there is little danger that the filing in the district court of

a second motion for certification based on altered cir-

cumstances, followed if it is denied by a motion in

this court for leave to appeal, will either delay the

district court proceedings (Rule 23(f) provides that “an

appeal does not stay proceedings in the district court

unless the district judge or the court of appeals so orders”)

or burden us or the opposing party. If the movant is

playing a delay game, prompt denial by the motions

panel of leave to appeal probably will end it; if he

persists he will be courting sanctions in both the district

court and this court for filing frivolous pleadings.

And by the way, we do not permit a party to circumvent

the 14-day deadline in Rule 23(f) by appealing a denial of

No. 11-3639 9

class certification under 28 U.S.C. § 1292(b) (authorizing

interlocutory appeals that present a controlling issue of

law on which there is substantial room for disagreement

and prompt resolution would expedite the litigation),

Richardson Electronics, Ltd. v. Panache Broadcasting, 202

F.3d 957, 959 (7th Cir. 2000), which has no deadline.

Dicta in the Tenth Circuit’s opinion in Carpenter

v. Boeing Co., supra, go beyond the unexceptionable propo-

sition that merely presenting “new arguments” does not

change a motion for reconsideration of a grant or denial

of class certification into a motion that if denied is

appealable under Rule 23(f). The opinion states (456

F.3d at 1191) that

given the multifactor analysis that courts must apply

in deciding the propriety of class certification, [even

appellate review limited to whatever changed cir-

cumstances had given rise to the fresh motion for

certification] would often require contorted thinking

that exceeds the capacities of even appellate courts.

How can an appellate court say that one particular

new factor would require a different result re-

gardless of how the district court weighed the

factors presented originally? In stating that the

new factor required a different result, the appellate

court must engage in weighing the factors weighed

by the district court in its original ruling but

cannot know precisely how much weight the dis-

trict court granted to each. In particular, what if

the district court clearly erred in giving dispositive

weight to one factor? How is the appellate court to

10 No. 11-3639

ignore such error (in keeping with the presumption

that the original decision was correct) even when it

addresses a motion for reconsideration that raises

only a rather inconsequential new factor?. . . We are

not inclined to adopt a construction of Rule 23(f) that

would regularly require mental gymnastics just for

the purpose of giving litigants a second bite at the

interlocutory-appellate-review apple. We note that

the very absence of a prompt appeal by the party

aggrieved by the decision on certification suggests

that the concerns justifying Rule 23(f) are, at the

least, less significant in the particular case. If the

decision whether or not to certify the class was truly

outcome determinative, one would not expect the

losing party to continue the litigation for months

before launching a new challenge to the ruling. Any

value in permitting a belated interlocutory appeal

is overridden by the desirability of the district court’s

proceeding expeditiously.

A court of appeals is never obliged to engage in “con-

torted thinking” about a Rule 23(f) appeal, for it can

always deny leave to appeal, and should do so if it

would have to do mental contortions in order to make

up its collective mind whether appeal should be al-

lowed. And if the new motion for certification

“raises only a rather inconsequential new factor,” then

the failure of the plaintiffs to have sought inter-

locutory review of the denial of the original motion

for certification becomes a reason to deny leave to

appeal out of hand, without any “mental gymnastics.” As

No. 11-3639 11

for “not expect[ing] the losing party to continue the

litigation for months before launching a new challenge

to the ruling,” the new challenge is timely if filed as

soon as the development warranting a new motion for

certification occurs, but untimely if the plaintiff dawdles.

And if the appeal is not “belated,” but based on develop-

ments that may warrant certification, allowing the

appeal may very well speed up rather than slow down

the litigation. In effect the court held in Carpenter that

the new motion for certification was in substance an

untimely motion for reconsideration. The holding is

unexceptionable, but the dicta are not persuasive.

The basis of the plaintiffs’ renewed motion for class

certification in the present case was the Supreme Court’s

decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541

(2011), handed down a month earlier. That was an im-

portant development in the law governing class certifica-

tion in employment discrimination cases—possibly a

milestone. It may seem a perverse basis for a renewed

motion for class certification, since the Supreme Court

reversed a grant of certification in what the defendant

in our case insists is a case just like this one. But the

district judge, though he again denied certification,

didn’t think the plaintiffs were perverse in basing their

new motion on Wal-Mart. On the contrary, he said

that “Wal-Mart does add a lot to the landscape under

Rule 23 . . . . I think this really cries out for a 23(f) appeal,

and I would support it. And I’m going to put that in

my order [denying the renewed motion for certifica-

tion—and he did] . . . . [T]his is one [case] that really cries

out for [a Rule 23(f) appeal] with the change in the land-

12 No. 11-3639

scape by the Wal-Mart opinion. Of course, you know,

most defendants think that the change is in their

interest, not in the plaintiffs’. But you’ve [the judge was

addressing the plaintiffs’ lawyer] made a good argument,

and I think it deserves to be put to rest one way or the

other.” The judge was right.

Wal-Mart holds that if employment discrimination

is practiced by the employing company’s local managers,

exercising discretion granted them by top management

(granted them as a matter of necessity, in Wal-Mart’s

case, because the company has 1.4 million U.S. employees),

rather than implementing a uniform policy established

by top management to govern the local managers, a

class action by more than a million current and former

employees is unmanageable; the incidents of discrim-

ination complained of do not present a common issue

that could be resolved efficiently in a single proceeding.

Fed. R. Civ. P. 23(a)(2). Not that the employer would

be immune from liability even in such a case; if the

local managers are acting within the scope of their employ-

ment in discriminating against their underlings on a

forbidden ground (sex, alleged in Wal-Mart, race in our

case), the employer is liable for their unlawful con-

duct under the doctrine of respondeat superior. But

because there was no company-wide policy to challenge

in Wal-Mart—the only relevant corporate policies were

a policy forbidding sex discrimination and a policy of

delegating employment decisions to local managers—there

was no common issue to justify class treatment.

The district judge thought this case like Wal-Mart be-

cause Merrill Lynch, accused of discriminating against

No. 11-3639 13

700 black brokers currently or formerly employed by

it, delegates discretion over decisions that influence

the compensation of all the company’s 15,000 brokers

(“Financial Advisors” is their official title) to 135

“Complex Directors.” Each of the Complex Directors

supervises several of the company’s 600 branch offices,

and within each branch office the brokers exercise a

good deal of autonomy, though only within a frame-

work established by the company.

Two elements of that framework are challenged: the

company’s “teaming” policy and its “account distribu-

tion” policy. The teaming policy permits brokers in the

same office to form teams. They are not required to form

or join teams, and many prefer to work by themselves.

But many others prefer to work as part of a team.

Team members share clients, and the aim in forming or

joining a team is to gain access to additional clients, or

if one is already rich in clients to share some of them

with brokers who have complementary skills that will

secure the clients’ loyalty and maybe persuade them to

invest more with Merrill Lynch. As we said, there are

lone wolves, but there is no doubt that for many

brokers team membership is a plus; certainly the plain-

tiffs think so.

The teams are formed by brokers, and once formed

a team decides whom to admit as a new member.

Complex Directors and branch-office managers do not

select the team’s members.

Account distributions are transfers of customers’ ac-

counts when a broker leaves Merrill Lynch and his cli-

14 No. 11-3639

ents’ accounts must therefore be transferred to other

brokers. Accounts are transferred within a branch

office, and the brokers in that office compete for the

accounts. The company establishes criteria for deciding

who will win the competition. The criteria include the

competing brokers’ records of revenue generated for

the company and of the number and investments of

clients retained.

The Complex Directors, as well as the branch-office

managers, have a measure of discretion with regard to

teaming and account distribution; they can veto teams

and can supplement the company criteria for distribu-

tions. And to the extent that these regional and local

managers exercise discretion regarding the compensa-

tion of the brokers whom they supervise, the case is

indeed like Wal-Mart. But the exercise of that discretion

is influenced by the two company-wide policies at

issue: authorization to brokers, rather than managers, to

form and staff teams; and basing account distributions

on the past success of the brokers who are competing

for the transfers. Furthermore, team participation and

account distribution can affect a broker’s performance

evaluation, which under company policy influences

the broker’s pay and promotion. The plaintiffs argue

that these company-wide policies exacerbate racial dis-

crimination by brokers.

The teams, they say, are little fraternities (our term but

their meaning), and as in fraternities the brokers choose

as team members people who are like themselves. If

they are white, they, or some of them anyway, are more

No. 11-3639 15

comfortable teaming with other white brokers. Obviously

they have their eyes on the bottom line; they will join

a team only if they think it will result in their getting

paid more, and they would doubtless ask a superstar

broker to join their team regardless of his or her race.

But there is bound to be uncertainty about who will be

effective in bringing and keeping shared clients; and

when there is uncertainty people tend to base decisions

on emotions and preconceptions, for want of objective

criteria.

Suppose a police department authorizes each police

officer to select an officer junior to him to be his partner.

And suppose it turns out that male police officers never

select female officers as their partners and white

officers never select black officers as their partners. There

would be no intentional discrimination at the depart-

mental level, but the practice of allowing police officers

to choose their partners could be challenged as enabling

sexual and racial discrimination—as having in the

jargon of discrimination law a “disparate impact” on a

protected group—and if a discriminatory effect was

proved, then to avoid an adverse judgment the depart-

ment would have to prove that the policy was essential

to the department’s mission. 42 U.S.C. § 2000e-2(k)(1)(A)(i);

Ricci v. DeStefano, 129 S. Ct. 2658, 2672-73 (2009); Bryant

v. City of Chicago, 200 F.3d 1092, 1098-99 (7th Cir. 2000).

That case would not be controlled by Wal-Mart (al-

though there is an undoubted resemblance), in which

employment decisions were delegated to local managers;

it would be an employment decision by top management.

16 No. 11-3639

Merrill Lynch’s broker teams are formed by brokers, not

managers, just as in our hypothetical example police

officers’ partners are chosen by police officers, not super-

visors. If the teaming policy causes racial discrimination

and is not justified by business necessity, then it

violates Title VII as “disparate impact” employment

discrimination—and whether it causes racial discrimina-

tion and whether it nonetheless is justified by business

necessity are issues common to the entire class and there-

fore appropriate for class-wide determination.

And likewise with regard to account distributions: if

as a result of racial preference at the team level black

brokers employed by Merrill Lynch find it hard to join

teams, or at least good teams, and as a result don’t

generate as much revenue or attract and retain as many

clients as white brokers do, then they will not do well

in the competition for account distributions either;

and a kind of vicious cycle will set in. A portion of a

team’s pre-existing revenues are transferred within a

team to a new recruit, who thus starts out with that

much “new” revenue credited to him or her—an advan-

tage, over anyone who is not on a team and thus must

generate all of his own “new” revenue, that translates

into a larger share of account distributions, which in

turn helps the broker do well in the next round of such

distributions. This spiral effect attributable to company-

wide policy and arguably disadvantageous to black

brokers presents another question common to the class,

along with the question whether, if the team-inflected

account distribution system does have this disparate

impact, it nevertheless is justified by business necessity.

No. 11-3639 17

There is no indication that the corporate level of Merrill

Lynch (or its parent, Bank of America) wants to discrimi-

nate against black brokers. Probably it just wants to

maximize profits. But in a disparate impact case the

presence or absence of discriminatory intent is ir-

relevant; and permitting brokers to form their own

teams and prescribing criteria for account distributions

that favor the already successful—those who may owe

their success to having been invited to join a successful

or promising team—are practices of Merrill Lynch,

rather than practices that local managers can choose or

not at their whim. Therefore challenging those policies

in a class action is not forbidden by the Wal-Mart deci-

sion; rather that decision helps (as the district judge

sensed) to show on which side of the line that separates

a company-wide practice from an exercise of discretion

by local managers this case falls.

Echoing the district judge, the defendant’s brief states

that “any discrimination here would result from local,

highly-individualized implementation of policies rather

than the policies themselves.” That is too stark a dichot-

omy. Assume that with no company-wide policy on

teaming or account distribution, but instead delegation

to local management of the decision whether to allow

teaming and the criteria for account distribution, there

would be racial discrimination by brokers or local man-

agers, like the discrimination alleged in Wal-Mart. But

assume further that company-wide policies authorizing

broker-initiated teaming, and basing account distributions

on past success, increase the amount of discrimination.

The incremental causal effect (overlooked by the district

18 No. 11-3639

judge) of those company-wide policies—which is the

alleged disparate impact—could be most efficiently

determined on a class-wide basis.

We are not suggesting that there is in fact racial dis-

crimination at any level within Merrill Lynch, or that

management’s teaming and account distribution

policies have a racial effect. The fact that black brokers

have on average lower earnings than white brokers may

have different causes altogether. The only issue at this

stage is whether the plaintiffs’ claim of disparate impact

is most efficiently determined on a class-wide basis

rather than in 700 individual lawsuits.

The district judge exaggerated the impact on the feasi-

bility and desirability of class action treatment of the

fact that the exercise of discretion at the local level is

undoubtedly a factor in the differential success of

brokers, even if not a factor that overwhelms the effect

of the corporate policies on teaming and on account

distributions. Obviously a single proceeding, while it

might result in an injunction, could not resolve class

members’ claims. Each class member would have to

prove that his compensation had been adversely affected

by the corporate policies, and by how much. So should

the claim of disparate impact prevail in the class-wide

proceeding, hundreds of separate trials may be neces-

sary to determine which class members were actually

adversely affected by one or both of the practices and if

so what loss he sustained—and remember that the class

has 700 members. But at least it wouldn’t be necessary

in each of those trials to determine whether the chal-

No. 11-3639 19

lenged practices were unlawful. Rule 23(c)(4) provides

that “when appropriate, an action may be brought or

maintained as a class action with respect to particular

issues.” The practices challenged in this case present a

pair of issues that can most efficiently be determined on

a class-wide basis, consistent with the rule just quoted.

As said in Mejdrech v. Met-Coil Systems Corp., 319 F.3d

910, 911 (7th Cir. 2003),

class action treatment is appropriate and is permit-

ted by Rule 23 when the judicial economy from con-

solidation of separate claims outweighs any con-

cern with possible inaccuracies from their being

lumped together in a single proceeding for decision

by a single judge or jury. Often, and as it seems to us

here, these competing considerations can be recon-

ciled in a “mass tort” case by carving at the joints of

the parties’ dispute. If there are genuinely common

issues, issues identical across all the claimants, issues

moreover the accuracy of the resolution of which

is unlikely to be enhanced by repeated proceedings,

then it makes good sense, especially when the class

is large, to resolve those issues in one fell swoop

while leaving the remaining, claimant-specific issues

to individual follow-on proceedings.

The kicker is whether “the accuracy of the resolu-

tion” would be “unlikely to be enhanced by repeated pro-

ceedings.” If resisting a class action requires betting

one’s company on a single jury verdict, a defendant may

be forced to settle; and this is an argument against defini-

tively resolving an issue in a single case if enormous

20 No. 11-3639

consequences ride on that resolution. In re Bridgestone/

Firestone, Inc., 288 F.3d 1012, 1020 (7th Cir. 2002); In re

Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1299-1300 (7th

Cir. 1995); contra, Klay v. Humana, Inc., 382 F.3d 1241,

1274 (11th Cir. 2004). But Merrill Lynch is in no danger

of being destroyed by a binding class-wide determina-

tion that it has committed disparate impact discrim-

ination against 700 brokers, although an erroneous in-

junction against its teaming and account distribution

policies could disadvantage it in competition with broker-

age firms that employ similar policies—though we have

no information on whether others do.

The Mejdrech decision, and Bridgestone/Firestone and

Rhone-Poulenc more fully, discuss the danger that

resolving an issue common to hundreds of different

claimants in a single proceeding may make too much

turn on the decision of a single, fallible judge or jury.

The alternative is multiple proceedings before different

triers of fact, from which a consensus might emerge;

a larger sample provides a more robust basis for an

inference. But that is an argument for separate trials on

pecuniary relief, and the only issue of relief at present

is whether to allow the plaintiffs to seek class-wide in-

junctive relief. There isn’t any feasible method—certainly

none has been proposed in this case—for withholding

injunctive relief until a series of separate injunc-

tive actions has yielded a consensus for or against

the plaintiffs.

As far as pecuniary relief is concerned, there may

be no common issues (though then again there may be,

No. 11-3639 21

see Allen v. International Truck & Engine Corp., supra,

358 F.3d at 472), and in that event the next stage of the

litigation, should the class-wide issue be resolved in

favor of the plaintiffs, will be hundreds of separate suits

for backpay (or conceivably for compensatory damages

and even punitive damages as well, if the plaintiffs aug-

ment their disparate-impact claim with proof of inten-

tional discrimination). The stakes in each of the plain-

tiffs’ claims are great enough to make individual suits

feasible. Most of Merrill Lynch’s brokers earn at least

$100,000 a year, and many earn much more, and

the individual claims involve multiple years. But

the lawsuits will be more complex if, until issue or

claim preclusion sets in, the question whether Merrill

Lynch has violated the antidiscrimination statutes

must be determined anew in each case.

We have trouble seeing the downside of the limited

class action treatment that we think would be appro-

priate in this case, and we conclude that the district

judge erred in deciding to the contrary (with evident

misgivings, however). The denial of class certification

under Rules 23(b)(2) and (c)(4) is therefore

R EVERSED.

2-24-12