Appendix — Thomas v. Powell

i tesa 2 « 2001

Cin 6) AOPACE OF THE CLenk

Supreme Court of the (CInited States

WALTER J. THOMAS, et al.,

Petitioners,

COLIN L. POWELL,

Secretary of the Department of State, et al.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Appendix to Petition for Writ of Certiorari

G Arthur Robbins

Counsel of Record

ATTORNEY AT LAW

116 Cathedral Street

Suite E

Annapolis, Maryland 21401

(410) 295-7100

Counsel for Petitioners

THE LEX GROUP ¢ 1108 East Main Street # Suite 1400 @ Richmond, VA 23219 \\

(804) 644-4419 @ (800) 856-4419 Fax: (804) 644-3660 ¢ www.thelexgroup.com Nu

TABLE OF CONTENTS

Appendix to Petition

Page

Opinion

United States Court of Appeals

for the District of Columbia Circuit

Record No. 00-5022

ONIONS FOUN 27 BOON sc hcnsisnainvisscnsiiosnectoninninnnninsnsiiians App. 1

Opinion

United States District Court

for the District of Columbia Circuit

Case No. 86-2850 (SS)

entered December 6, 1999 .........:::cssssesrcsrccsssrsensenes App. 19

Order

United States District Court

for the District of Columbia Circuit

Case No. 86-2850 (SS)

Opinion

United States Court of Appeals

for the District of Columbia Circuit

Record Nos. 97-5004(L), 97-5018

EE NE Fs BE aii sascascthccaccecneninamimensneaaxen App. 44

Opinion

United States District Court

for the District of Columbia Circuit

Case No. 86-2850 (SS)

entered November 7, 1996 .............cscccsscsssssssssanecsees App. 65

App. i

Order

United States District Court

for the District of Columbia Circuit

Case No. 86-2850 (SS)

entered November 7, 1996.00... .ccccccccccccsoceceseseses.. App. 109

Complaint

Superior Court of the District of Columbia

Civil Division

Case No. 99cal898

eked Dilemcts 10, SOU ca App. 111

Retainer Agreement by and between

Washington Lawyers’ Committee for Civil Rights and

Akin, Gump, Strauss, Hauer & Feld and

Walter J. Thomas

dated December 1988 ............cceccescsscsscssoscoscosees.-.. App. 133

Transcript of Hearing Proceedings before

The Honorable Stanley Sporkin

On Maren 20, FIRB cc cisescsrcknatakde ew App. 136

Excerpts of Transcript of Hearing Proceedings before

The Honorable Stanley Sporkin

on July 15, 1996........ Wil lcsisahnepheicinimuslabadbaabentibsadiasaie App. 179

Testimony of Alan Latimer:

Direct Examine... ccsaccsssssocimrceaisarensac ccc. App. 225

Cross ExaniiR ssccvcccenuleistieens, ol App. 241

Testimony of Bruce Thomas:

Direct EG ci cucisccucniin gale App. 243

Transcript of Hearing Proceedings before

The Honorable Stanley Sporkin

on July 15, 1996, continued:

Testimony of Odie Fields:

Direct Examimation. .............:cccccceeeeseeseneeeeseereneeeenens App. 255

Testimony of Ray Robinson:

Direct Examination. ...........cccccseceeeeesereeeeeeeeeneenees App. 261

Testimony of Mary Smoot:

Direct Examination. ............cccccccceceeeeseeeeeneeeeeennentees App. 268

Cross Examimation.............:ccccceetecceeeseeeeeeeeeeeeeeneeees App. 273

Testimony of Dorothy Watson:

Direct Examination. .:..........:cccccccceeeeseeeeseeeseeeneeneens App. 274

Testimony of Alfred Neal, Jr.:

Direct Examimation.............cccsceceeesseeeeeeeeeeeseeneeetenes App. 280

Cross Examimation.............ccccssseseeeeeeseseeeeeseneeneeeenes App. 284

Testimony of Bisa Williams-Manigault:

Direct Examination. ............ccccccceseseseeensereeeeeeeeenenees App. 285

Testimony of Odie Fields, recalled:

Direct Examination. ..........cccccssseseeeeeseereseeenensenenenes App. 289

Testimony of Charlotte Williams:

Direct Examination. ............cccsececeeeseereeeeeneeeeseenenees App. 296

Transcript of Hearing Proceedings before

The Honorable Stanley Sporkin

on July 15, 1996, continued:

Testimony of Bernard Johns:

RIE III i soscincchieighicce ah ene cr App. 299

Testimony of Lisa Ruth Layne:

RSE EIS NOE eae App. 302

Testimony of Edith Spruill:

| ATA TL App. 305

Testimony of Robert Watkins. Jr.:

I I a App. 309

Testimony of Earle Scarlett:

PP NN App. 311

Testimony of Walter Thomas:

Ne RIO iiiiritiinsinctnnccdisaececicickn App. 326

Transcript of Hearing Proceedings before

The Honorable Stanley Sporkin

OR Te a lei App. 353

RG Ricca App. 367

App. iv

I of 6 DOCUMENTS

WALTER J. THOMAS, ET AL., APPELLANTS v.

COLIN L. POWELL, SECRETARY OF THE

DEPARTMENT OF STATE, ET. AL., APPELLEES

No. 00-5022

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

247 F.3d 260, 2001 U.S. App. LEXIS 7687

January 18,2001, Argued

April 27, 2001, Decided

April 27, 2001, Filed

PRIOR HISTORY:

[**1] Appeal from the United States District Court

for the District of Columbia. (86cvO2850).

: DISPOSITION:

| Affirmed.

CASE SUMMARY

PROCEDURAL POSTURE:

Plaintiffs took part in a federal class action, which

settled. Afterward, plaintiffs sued defendant class counsel in

state court for professional negligence. On defendant's

motion, the United States District Court for the District of

Columbia enjoined plaintiffs from pursuing their state court

suit. Plaintiffs appealed.

App. |

OVERVIEW:

Plaintiffs cited the Anti-Injunction Act as the reason

why the district court erred in issuing an injunction barring

them from prosecuting their state court lawsuit. In that

lawsuit, plaintiffs claimed that defendant breached duties

owed to them with respect to the class settlement. Plaintiffs

also claimed their retainer agreement imposed additional

duties on defendant. The Anti-Injunction Aces relitigation

exception clearly applied to the settlement-related claims

since the district court, in approving the settlement, found it

was fair, adequate, and reasonable, and was not the product

of collusion between the parties. Further, the district court

found that defendant fairly and adequately protected the

interests of the class. The remaining retainer-related claim

also entailed relitigating an issue already decided in the

federal courts. Accordingly, plaintiffs were barred from

pursuing their state court complaint.

OUTCOME:

The judgment was affirmed.

CORE CONCEPTS

Civil Procedure: State & Federal Interrelationships Anti-

Injunction Act

The Anti-Injunction Act forbids federal courts from

granting injunctions to stay proceedings in a state court, with

three exceptions. 28 US.C.S. § 2283.

Civil Procedure: State & Federal Interrelationships Anti-

Injunction Act

One of the exceptions to the Anti-Injunction Act

permits a federal court to enjoin state proceedings when

necessary to protect or effectuate its judgments. 28 US.CS. $

2283.

App. 2

Civil Procedure: Preclusion & Effect of Judgments

Collateral Estoppel

The doctrine of collateral estoppel, or as it is now

commonly called "issue preclusion," provides that once an

issue is actually and necessarily determined by a court of

competent jurisdiction, that determination is conclusive in

subsequent suits based on a different cause of action

involving a party to the prior litigation. :

Civil Procedure: State & Federal Interrelationships Anti-

Injunction Act

The relitigation exception to the Anti-Injunction Act

permits federal courts to enjoin state court adjudication of

claims or issues that actually have been decided by the

federal court.

Civil Procedure: Settlements: Settlement Agreements

Before approving a class action settlement, the

district court must determine whether the settlement is fair,

adequate, and reasonable and is not the product of collusion

between the parties.

Torts: Malpractice Liability: Attorneys

In the District of Columbia, a legal malpractice

plaintiff is required to demonstrate duty, breach, causation,

and harm. As with any tort action, legal malpractice liability

is predicated on a finding that the injury was proximately

caused by the breach of duty.

Civil Procedure: Class Actions: Prerequisites

If an opt out right cannot be justified, there is no

reason to certify a class action under Fed. R. Civ. P.

23(b)(3) rather than Fed. R. Civ. P. 23(b)(1) or (2).

App. 3

COUNSEL:

G. Arthur Robbins argued the cause for appellants.

On the briefs was David G. Whitworth, Jr.

Henry F. Schuelke, III argued the cause for appellees.

With him on the brief were. S. Robert Sutton, Henry Morris,

Jr., and Marc L. Fleischaker.

JUDGES:

Before: EDWARDS, Chief Judge, SENTELLE and

RANDOLPH, Circuit Judges. Opinion for the Court filed by

Circuit Judge RANDOLPH. Dissenting opinion filed by

Circuit Judge SENTELLE.

OPINION BY:

RANDOLPH

OPINION;

[*261]

RANDOLPH, Circuit Judge: The Anti-Injunction

Act forbids federal courts from granting injunctions "to stay

proceedings in a State court,” with three exceptions. 28 US.C

§ 2283. One of the exceptions permits a federal court to

enjoin state proceedings when "necessary ... to protect or

effectuate its judgments." 28 US.C. § 2283. The scope of

this "relitigation exception" is the central issue in this case.

Walter J. Thomas cites the Anti-Injunction Act as the

reason why the district court erred in issuing an injunction

barring him and his co-plaintiffs from prosecuting a lawsuit

in the Superior [**2] Court for the District of Columbia. We

shall assume, without deciding, that the District of Columbia

is a "State" within § 2283's meaning. A lawsuit Thomas and

others brought in the Superior Court complains about the

performance of their attorneys in a class action filed in the

United States District Court for the District of Columbia in

1986. Much of the history is recounted in Thomas v.

Albright, 139 F. 3d 22 7 (D. C. Cir. 1998). The federal

App. 4

action began when Thomas and another plaintiff filed a

complaint in district court seeking certification as a class

action and alleging that the Department of State

discriminated against black Foreign Service Officers. See id.

at 229. After six years of discovery, an amended complaint

allowing 30 additional individuals to intervene, the addition

of still more class representatives and lengthy settlement

negotiations, attorneys (*262] for parties signed a consent

decree resolving the case and agreeing that the district court

should certify the class and approve the settlement pursuant

to Rule 23(b)(2) of the Federal Rules of Civil Procedure. See

Thomas, 139 F.3d at 229. By this point, however, the

relationship [**3] between class counsel and Thomas and

several other class representatives had frayed.

At a hearing on January 31, 1996, Thomas complained

at length that several of the named class action plaintiffs had

neither been informed of, nor agreed with the impending

settlement. One month earlier, in December 1995, Thomas had

retained another attorney-Barbara B. Hutchinson--to represent

his interests. On March 20, 1990 me district cowl held a

preliminary fairness hearing. The new attorney representing

Thomas and Allen Latimer (a co-plaintiff in the Superior Court

action) argued that because her clients disagreed with parts of

the proposed settlement, the court could and should modify it.

An attorney representing Odie Fields, Mary Cynthia Smoot, and

Alfred Neal (the remaining coplaintiffs in the Superior Court

action) argued against the consent decree and urged the district

court to reject it. Thomas personally asked the court not to give

preliminary approval ‘to the proposed settlement. Despite

Thomas’s plea, me court tentatively approved the settlement and

ordered notice to be given to the 359 putative class members, of

which 34 wrote to me cowl supporting the settlement, while 55

wrote [**4] in opposition to it. See Thomas, 139 F.3d at 230.

On July 15 and 23, 1996, the court held an additional fairness

hearing. Attorneys for Thomas and other class members again

urged the court to modify or to reject the settlement.

App. 5

ee se Ey I gd ES BASE age Oe ERE

——————————

In its final judgment, the district court concluded that

the settlement was fair and reasonable, but the court added a

provision permitting nine class members to opt out of the

settlement. See id. On appeal, we held that the district court

had abused in discretion in allowed these class members to

opt out. We also concluded that the overall class settlement

was fair. See id. at 233. Five of the class members then sued

the class counsel for professional negligence in the Superior

Court of the District of Columbia. On a motion by the class

counsel defendants, the district court enjoined these class

members from pursuing their suit. See Thomas v. Albright,

77F Supp. 2d 114,124 (D.D.C. 1999).

Thomas and his co-plaintiffs think the Anti

Injunction Act barred the injunction and that the relitigation

exception does not apply. The exception rests on the idea

that federal courts should not be forced to rely ["5] on sot

court application of resjudicata or estoppel principles to

protect federal court judgments and decrees. See Chick Kam

Choo v. Exxon Corp., 486 U.S. 140, 147, 100 L. Ed. 2d 127,

108 S. Ct. 1684 (1988); Toucey v. New York Life Ins. Co.,

314 US. 1180 1-46, 86 L. Ed. 100, 62 S. Ct. 139 (1941)

(Reed, J., dissenting). Although the attorney-defendants in

the Superior Court action case were not parties to the

concluded federal action, traditional preclusion principles

may nonetheless bar Thomas and his coplaintiffs from

prosecuting that action against them. See Parklane Hosiery

Co. v. Shore, 439 US. 322, 326 n.5, 58 L. Ed. 2d 552, 99 S.

Ct. 645 (1979); Ethnic Employees of the Library of Congress

v. Boorstin, 243 U.S. App. D.C. 186, 751 F.2d 1405, 1409

(D.C. Cir. 1985); RESTATEMENT (SECOND) OF

JUDGMENTS § 29 (1980). The doctrine of collateral

estoppel, or as it is now commonly called "issue preclusion,"

see RESTATEMENT, supra, at |, provides that "once an

issue is actually and necessarily determined by a court of

competent jurisdiction, that determination is conclusive in

subsequent suits based on a [**6] (*263] different cause of

App. 6

action involving a party to the prior litigation." Montana v.

United States, 440 US. 147, 153, 59 L. Ed. 2d 210, 99 S. Ct.

970 (1979); see McLaughlin v. Bradlee, 256 US. App. D.C.

119. 803 F2d 1197, 1201-02 & n. I (D.C. Cir. 1986);

Otherson v. Department of Justice, 228 US. App. D.C. 481,

711 F.2d 267, 273 (D.C. Cir. 1983). The relitigation

exception to the AntiInjunction Act therefore permits federal

courts to enjoin state court adjudication of those "claims or

issues ... [that] ... actually have been decided by the federal

court." Chick Kam Choo v. Exxon Corp., 486 US. at 148.

Even if a federal court had not decided all the issues

raised in the state court action, the relitigation exception

could still apply. Assume, for instance, that issues not

decided in the federal action would be resolved in plaintiffs

favor in the state court. If the plaintiff still could not prevail

because an essential element of his state cause of action had

already been determined against him in the federal suit, the

relitigation exception would permit an injunction against the

state proceedings. See, eg [**7] , Next Level

Communications v. DSC Communications Corp., 179 F3d

244, 256-57 (Sth Cir. 199%) (enjoining entire state court

action where state court would be required to decide issues

already litigated in federal court), see also United States v.

District of Columbia, 210 US. App. D. C. 87, 654 F.2d 802,

809-10 (D.C. Cir. 1981) (finding that relitigation exception

permits federal courts to enjoin state proceedings that raise a

different cause of action, but still threaten judgment in

federal proceeding). In this case, we must therefore compare

the complaint in the Superior Court to the record in the class

action in order to determine whether, in order for the plaintiff

to succeed in Superior Court, that court will have to rule

upon an issue or claim already decided by the federal district

court or the court of appeals. See Chick Kam Choo, 486 US..

at 148.

App. 7

In their Superior Court complaint, Thomas and his

coplaintiffs alleged the following:

L

U2

The class action attorneys breached a duty of

undivided loyalty to Thomas by " 'selling out’ and

betraying [the Plaintiffs] ... when they- entered into (a)

secret agreement” to settle the case [**8] without

seeking Thomas's approval first. See Complaint for

Professional Negligence P 28, Thomas v. Akin,

Gump, Strauss, Hauer & Feld, L.L.C., No. 99cal898

(D.C. Super. Ct. filed Mar. 19, 1999); see also id. P

P 37, 46, 55, 64 (making same allegations for

Thomas's coplaintiffs).

The class action attorneys failed to disclose the

alleged conflict of interest created by acting as class

counsel and failed to inform Thomas of the

negotiating position they would take with the State

Department. See id. P 29; see also id. P P 38, 47,

56, 65 (making same allegations for Thomas's co-

plaintiffs).

The class action attorneys failed to follow Thomas's

"express instructions regarding the certification of the

class action as a Rule 23(b)(3), which would have

provided for him to ‘opt-out’ of the class in order to

receive his full measure of damages...... Jd. P 26; see

also id. P P 35, 44, 53, 62 (making same allegation

for Thomas's co-plaintiffs).

Thomas and his co-plaintiffs claimed that because of

these alleged breaches of duty, they lost their federal cause of

action and the potential damages they might have derived from

it. See id P 31; see also id. [**9] P P 40, 49, 58, 66 (making

same allegations for Thomas's coplaintiffs). They also alleged

that they suffered damages by having to retain separate counsel

and spend additional time and money dealing with the [*264]

federal lawsuit. See id. P P 30,39, 482 57, 65.

App. 8

As to the first two of these claims there can be no

doubt that the district court's injunction falls within the

exception to the Anti-Injunction Act. Before approving the

class action settlement, the district court performed its duty

of determining whether the "settlement is fair, adequate, and

reasonable and is not the product of collusion between the

parties." Pigford v. Glickman, 340 US. App. D.C. 420, 206

F3d 1212, 1215 (D.C Cir 2000) (internal quotations

omitted). The court found that the "settlement was clearly

negotiated at arras length and presents no danger of

collusion" between the parties. See Thomas v. Christopher,

169 F.R.D. 224, 239 (D.D.C. 1996). The court further found

that class counsel “fairly and adequately protected the

interests of the class." Jd. While the Superior Court

complaint alleges that the class action attorneys "sold out"

their clients, that they engaged [**10] in collusive secret —

negotiations to the detriment of their clients, the district court

squarely decided otherwise. The Superior Court plaintiffs

may not relitigate these matters and an injunction preventing

them from doing so in the Superior Court was in order.

The third claim set forth above rests partly on the

retainer agreement between Thomas and the class action

attorneys, an agreement Thomas says imposed additional

duties on the class action attorneys. nl Thomas's complaint

pointed to this language in the agreement:

In the event there is any offer of settlement that

would compromise and resolve all the plaintiffs’ claims in

Walter J Thomas v. Shultz, C.A. No. 86-2850, the Client

hereby agrees to abide by the wishes of the majority of the

plaintiffs with respect to the acceptance or rejection of Be

settlement offer.

Compl. P 9.

App. 9

nl Though the Superior Court

complaint does not make this distinction, the

retainer agreement is between the class action

attorneys and Thomas alone.

His claim[**I1] regarding their retainer agreement is

part of a larger argument about whether the class action

attorneys committed professional negligence. In the District

of Columbia, a legal malpractice plaintiff is required to

demonstrate duty, breach, causation, and harm. "As with any

tort action, legal malpractice liability is predicated on a

finding that the injury was proximately caused by the breach

of duty." Dalo v. Kivitz, 596 A.2d 35. 41 (D.C. 1991). For

the sake of argument we shall assume that Thomas (and his

co-plaintiffs) would be able to make his case in the Superior

Court that the class action attorneys had a duty and breached

it. Thomas would still have to prove that he suffered a harm

as a result. According to the complaint, his harm or injury

consisted in his loss of the ability to pursue a potentially

lucrative individual claim for damages. See Compl. P 3 1.

In explaining his theory of damages to us he adds that had

"Conflicted Counsel timely informed the Named Class

Representatives of the conflict, or withdrawn pursuant to the

retainer agreements, the Named Class Representatives would

have earlier engaged independent counsel to protect their

personal interests. (** 12] Brief of Appellants at 17.

This separate counsel would have protected Thomas's

personal interests, he thinks, by having the class action

certified with opt-out provisions allowing for individual

suits. In other words, if the class action had been certified

under Federal Rule of Civil Procedure 23(b)(3), rather than

Rule 23(b)(2), Thomas and his coplaintiffs would have been

able to opt-out and pursue individual actions (in which they

suppose they would have done better). [*265] See Compl. P

P 13-14. To prove this case in the Superior Court, the

plaintiffs would have to establish that they were damaged

App. 10

because the class should have been certified under Rule

23(b)(3). See Macktal v. Garde, IMI F. Supp. 2d 18, 21 (D.

D.C. 2000) (to prove malpractice, must establish that

plaintiff had a valid claim); Mosi v. Aiello, 69 A.2d 57, 60

(D.C 1949) (same). But that necessarily would entail

relitigating an issue already decided in the federal courts.

In Thomas vy. Albright, 139 F.3d at 235, we rejected

the district court's decision to create a hybrid class certified

under Rule 23(b)(2) with an opt-out clause. See Thomas,

139 F.3d at 230. [**13] n2 The district court had made no

Endings that the class was appropriately certified under Rule

23(b)(3); but the court had "made all the factual findings-

necessary to show that a hybrid class was not appropriate."

Thomas, 139 F.3d at 235. We found it unnecessary to

remand the case to the district court because "the dissidents

do not allege any alternative basis that, if proved, would

enable the district court upon remand to permit them to opt

out." /d. at 237. In our view the claims of the dissident

plaintiffs-Thomas and the others--were not "different in kind

from those of other class members." /d. at 236. We thus held

that the class was properly certified under Rule 23(b)(2) with

no opt-outs. Thomas's malpractice action could survive only

if that holding were relitigated and found to be incorrect.

n2 Our conclusion in Thomas that

there was no basis for certifying a hybrid class

necessarily meant that there was no basis for

certifying a class under Rule 23(b)(3).

Though the case considered the propriety of a

hybrid class action--which is different from a

pure (b)(3) class action-we explicitly

concluded that no plaintiffs claim was

sufficiently atypical to justify permitting class

members to opt out, which is the key

characteristic of both hybrid and (b)(3) class

actions. See Thomas, 139 F.3d at 236. If an

App. |1

opt out right could not be justified, there

would be no reason to certify the class action

under 23(b)(3) rather than 23(b)(1) or (2). See

I HERBERT NEWBERG & ALBA CONTE.

NEWBERG ON CLASS ACTIONS § 4.20 .

(3d ed. 1992) (arguing that Rule 23 requires a

court to certify a class action as a (b)(3) class

action only if it cannot be certified under

(b)(1) or (2)). Moreover, a hybrid class action

is certified under both (b)(2) and (b)(3). See

Thomas, 139 F.3d at 234; Eubanks vy.

Billington, 324 US. App. D.C. 41, 110 F 3d

87, 96 (D.C. Cir. 1997). By finding that a

hybrid class action was unjustified, we

necessarily found that the claims did not meet

(b)(3)'s criteria for an opt out class action.

See Thomas, 139 F 3d at 235 (noting that the

district court did not make findings necessary

for a (b)(3) class action and then noting that

"to the contrary, the court made all the factual

findings to show that a hybrid class was not

appropriate"). We therefore disagree with the

dissent that the federal proceedings left open

the question whether the class could be

certified under Rule 23(b)(3).

[**14]

The only other claim Thomas might have is that the

alleged defects in representation damaged him to the extent

that he had to hire outside counsel to represent him in the

fairness disputes. See Compl. P P 30, 39, 48, 57, 64. Under

District of Columbia law, one can sue to recover the cost of

retaining additional counsel in response to a lawyer's

malpractice. See Knight v. Furlow, 553 A. 2d 1232, 1235

(D.C. 1989). But that narrow claim is undercut by Thomas's

App. 12

own litigation posture here, which is that he wanted the

opportunity to bring in individual counsel earlier in the

process. It is senseless to suppose that damages resulted

from failing to bring in individual counsel to advance the

losing claim that the class should be certified either as a

hybrid class or a Rule 23(b)(3) class. As we have held, that

claim could prevail if and only if Thomas were permitted to

relitigate the issues already decided in the class action.

We therefore conclude that if the Anti-Injunction Act

applies to the District of [*266] Columbia, the relitigation

exception to the Act permitted the district court to enjoin

Thomas and his co-plaintiffs from pursuing their complaint

in the Superior [**15] Court. Since Thomas has not argued

that the court abused its discretion in issuing the injunction,

we have no reason to question the court's judgment that the

balance of interests, both public and private, weighed in

favor of issuing the injunction. See Thomas, 77 F. Stipp. 2d

at 123-24.

Affirmed.

DISSENTBY:

SENTELLE

DISSENT:

SENTELLE, Circuit Judge, dissenting: The

decision reached by the majority in this case depends upon

the proposition that all issues that could be raised in the

malpractice action brought by Walter J. Thomas and his co-

plaintiffs were precluded by the disposition of the class

action. While this is almost true, I do not think it is entirely

SO.

In their complaint before the District of Columbia

Superior Court, the plaintiffs allege that their counsel

entered into a consent decree certifying the class pursuant

to Rule 23(b)(2), "contrary to the express instructions and

wishes of the Plaintiffs." The plaintiffs further allege that

their attorneys breached a fiduciary duty because the

plaintiffs "had rejected any compromise or settlement

which would result in a certification of the class pursuant to

Rule 23(b)(2), rather than 23(b)(3), which would [**16]

allow the individual Plaintiffs to 'opt out' of the class in

order to maintain their individual causes of action." It

would appear that Thomas and his co-plaintiffs are stating,

or attempting to state, a cause of action depending upon the

propositions that class counsel had an individual duty to the

plaintiffs and that the plaintiffs had instructed counsel not

to agree to the (b)(2) certification. These propositions raise

factual issues that should be resolved by the D.C. Superior

Court.

When the district court approved the settlement in

the underlying action and certified the class under Rule

23(b)(2), it noted that "Plaintiffs moved for certification

under Rule 23(b)(2)." Thomas v. Christopher, 169 F.R.D.

224, 239 (D.D. C. 1996). Similarly, on appeal, this Court

stated that "class counsel repeatedly requested certification

App. 14

pursuant to (b)(2), [and] the consent decree stated that the

parties agreed to certification pursuant to (b)(2)." Thomas v.

Albright, 139 F.3d 227, 235 (D.C. Cir. 1998). Indeed, the

consent decree barred the district court from "modifying the

terms of the agreement." /d. at 233. Although the plaintiffs

argued [**17] for the right to opt out of the settlement

during the fairness hearings and again on appeal, they did

so within the confines of Rule 23(b)(2). Their arguments

would have been unnecessary if their counsel had

negotiated for a Rule 23(b)(3) certification.

The majority mistakenly asserts that in order to

prevail in their Superior Court case, "the plaintiffs would

have to establish that they were damaged because the class

should have been certified under Rule 23(b)0)." Slip Op. a

7. Rather to prevail, the plaintiffs simply would have to

establish that the class could have been certified under Rule

23(b)(3). nl That question has never been litigated.

n 1 I disagree with the majority's

analysis of the rules governing class actions.

The majority states that "no plaintiffs claim

was sufficiently atypical to justify permitting

class members to opt out, which is the key

characteristic of ... (b)(3) class actions." Slip

Op. at 8 n.2. Rule 23(a) unequivocally states

that one prerequisite to any class action is that

the representative parties’ claims are "typical

of the claims ... of the class." FED. R. CIV.

P. 23(a). Specifically, a 23(b)(3) class action

is justified whenever "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.

App. 15

CIV. P. 23(b)(3). The district court

undoubtedly could have certified the Thomas

class under 23(b)(3), even though--and,

perhaps, because--the plaintiffs' claims were

"no different in kind from those of other class

members." /39 F.3d at 236 Nevertheless,

because the consent decree compelled the

district court to certify the class under

23(b)(2), it had no reason to confront this

question. Cf Eubanks v. Billington, 324 U.S.

App. D.C. 41, 110 F.3d 87, 96 (DC Cir.

1997) (refusing to address whether "full (b)(3)

protections" should be afforded to the

plaintiffs because "the plaintiffs did not seek

certification as ... a (b)(3) ... class").

[**18] (*267]

Although the plaintiffs were represented separately

during the fairness hearings, they contend that they essentially

were not represented at the table when counsel negotiated with

the State Department. If they had been adequately represented,

then their views on opting out surely would have been expressed

in the precertification negotiations. If the plaintiffs had

instructed counsel not to agree to a 23(b)(2) certification and if

counsel had an individual duty to the plaintiffs (two very big

"ifs"), then, as the plaintiffs allege, counsel may have violated its

fiduciary duty by (1) not telling them about the conflict between

the interests of the plaintiffs and the class as a whole and (2) not

advocating the plaintiffs’ position in the negotiations. These

issues were not addressed by the district court in its initial

decision or by this Court on appeal. In fact, these issues could

not have been litigated because the consent decree negotiated by

counsel locked the district court in to certifying the class

pursuant to Rule 23(b)(2). See Thomas, 139 F. 3d at 233.

App. 16

The majority assumes, without deciding, that the

District of Columbia is a "State” within the meaning [**19]

of the Anti-Injunction Act, 28 U.S.C. § 2283, suggesting that

the scope of the Act's relitigation exception "is the central

issue in this case,” Slip Op. at 2. In this case, the Court need

not assume, much less decide, that the Act applies to D.C. n2

The scope of the relitigation exception is not the central issue

in this case. With or without the Anti-Injunction Act, the

United States District Court cannot enjoin the ongoing

litigation in the Superior Court without some legal basis for

doing so. Here, as I understand the appellees’ complaint, the

basis is that the issues involved in the Superior Court case

have been heretofore litigated in the federal litigation. It may

be that the appellees should ultimately prevail, but in my

view it should be achieved after the litigation of what appear

to me to be open issues in the Superior Court.

n2 As I have noted before, some

sections of the Court Reform Act, Pub. L. No.

91-358, 84 Stat. 473 (1970), require D.C. courts

"to be treated as state courts, others do not."

United States v. Mills, 296 US. App. D.C. 65,

964 F.2d 1186, 1198 (D.C. Cir. 1992) (en banc)

(Sentelle, J., dissenting). "Congress has not, for

example, plainly extended the prohibition upon

the issuance of federal injunctions staying state

court proceedings, see 28 US.C § 2283, to

District proceedings.” Id. Indeed, whether D.C.

courts are protected by § 2283 is a valid

question that has not been resolved. There is no

reason to suggest that the Anti-Injunction Act

plays any role in the outcome of this case.

[**20]

A court cannot issue a permanent injunction without

first finding that the applicant has demonstrated actual

success on the merits. See Amoco Production Co. v. Village

of Gambell, 480 U.S. 531, 546 n. 12, 94 L. Ed. 2d 542, 107

S. Ct. 1396 (1987). Here, to establish success on the merits.

counsel must show that Thomas and his co-plaintiffs are

collaterally estopped from asserting the issues raised in their

malpractice claims. The plaintiffs have not actually litigated

the issues I discuss above, nor has any court decided those

[*268] issues. Whether we apply the Anti-Injunction Act or

the general law governing issue preclusion, our analysis is

the same, and the district court plainly erred when it enjoined

the D.C. Superior Court. Compare Chick Kam Choo v. Euon

Corp., 486 U.S. 140, 149, 100 L. Ed. 2d 127. 108 S. Ct. 1684

(1988) (holding that for the Act! s relitigation exception to

apply the party moving for an injunction must show that.the

issue "was itself actually litigated and decided by the District

Court"), with Davis v. Davis, 663 A.2d 499, 50] (D.C. 1995)

(explaining that issue preclusion applies when "the issue is

actually litigated [**21] and ... determined by a valid, final

judgment on me merits’).

The majority may be correct that Thomas and his

coplaintiffs suffered no harm, but that seems to me a merits

question and not a preclusion one. That is, if the injunction

is lifted, it may well be that the Superior Court can rule that

there is no harm, and therefore no cause of action, but I

believe that is for the Superior Court to determine and not for

us. Like my colleagues, I agree that Thomas and his

coplaintiffs' malpractice claim is very shaky. Unlike my

colleagues, however, I believe that ruling is not for this Court

to make.

For these reasons, I respectfully dissent.

App. 18

LEXSEE 77 F. Supp. 2d 114,AT 124

WALTER THOMAS, et al., Plaintiffs, v.

MADELINE K. ALBRIGHT, Defendant

Civil Action No. 86-2850 (SS)

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF COLUMBIA

77 F. Supp. 2d 114; 1999 U.S. Dist. Lexis 19006

December 7, 1999, Decided

December 8, 1999, Filed

DISPOSITION:

[**1] Class counsel's application for permanent

injunctive relief GRANTED, and Walter J. Thomas, Alan

B.C. Latimer, Mary Cynthia Smoot, Odie Fields, and Alfred

Neal, and their officers, agents, servants, employees, and

attorneys, and those persons in active concert or participation

with them, acting individually or as representatives of a

class, enjoined from prosecuting the lawsuit styled Thomas,

et al. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., et al.,

C.A. No. 1898-99 in the Superior Court for the District of

Columbia.

CASE SUMMARY

PROCEDURAL POSTURE:

Class counsel filed an application for preliminary and

pen-nanent injunctive relief. Class counsel sought to enjoin

a lawsuit styled as a malpractice action brought in a state

court by a group of five former class action plaintiffs.

App. 19

OVERVIEW:

Class counsel filed an application for preliminary and

permanent injunctive relief Class counsel sought to enjoin a

lawsuit styled as a malpractice action brought in a state court

by a group of five former class action plaintiffs. The former

class action plaintiffs were a part of a group of African-

American foreign service officers who sued their employer

for racial discrimination. While that class action suit had

settled, the five plaintiffs were dissident concerning its

settlement, contending that their individual rights had been

disserved by the class settlement. They had sought to opt

out. After a fairness hearing, they were not permitted to opt

out. The court granted class counsel's application to enjoin

the malpractice suit against them. Class counsel's

competence had been ruled on in the class action, barring

collateral attack. Class counsel's responsibility was to the

class as a whole, not to individual class members.

OUTCOME:

Class counsel's application to enjoin a malpractice

suit brought by dissident class members was granted because

counsel's competence had been established in the class

action. Collateral estoppel barred relitigation of that issue.

CORE CONCEPTS

Civil Procedure: State & Federal Interrelationships:

Anti-Injunction Act

See 28 US. CS, § 2283.

Civil Procedure: State & Federal Interrelationships:

Anti-Injunction Act

Civil Procedure: Preclusion & Effect of Judgments:

Res Judicata

App. 20

Civil Procedure: Preclusion & Effect of Judgments:

Collateral Estoppel

The exception provided in 28 US.C.S. § 2283 that

allows an injunction in aid of the court's jurisdiction, or to

protect or effectuate its judgments is commonly referred to as

the "relitigation exception." The relitigation. exception

allows a federal court to enjoin a state court action where, in

effect, the state court is asked to relitigate matters already

determined by a federal court, This is to preserve the full

fruits and advantages of a federal Court's judgment. Under

such circumstances, a federal court may issue an injunction

to protect the finality of its judgment. Thus, a federal court

may enjoin an action in a state court when issue preclusion

(collateral estoppel) or claim preclusion (res judicata) is the

source of the movant's application for relief.

Civil Procedure: Preclusion & Effect of Judgments

Collateral Estoppel

Issue preclusion prevents a party in the same or

subsequent action from gaining a redetermination of an issue

of fact or law when (1) the issue is actually litigated and (2)

determined by a valid, final judgment on the merits; (3) after

a full and fair opportunity for litigation by the parties or their

privies; (4) under circumstances where the determination was

essential to the judgment, and not merely dictum.

Civil Procedure: Class Actions

Class counsel is required to act in the best interests of

the class considered as a unit.

rear

Civil Procedure: Class Actions

Class counsel is responsible for protecting the

interests of the class, even in circumstances where the class

representatives -- their direct clients -- take a position that

counsel considers contrary to those interests.

App. 21

Civil Procedure : Injunctions

To succeed, movants must demonstrate a likelihood

of success on the merits, that irreparable injury will result

without injunctive relief, that no other parties will be harmed

by a grant of such relief, and that the public interest is served

by the issuance of the injunction.

COUNSEL:

For WALTER J. THOMAS, BERNARD JOHNS,

plaintiffs: Charles Lindsay Warren, AKIN, GUMP,

STRAUSS, HAUER & FELD, L.L.P., Washington, DC.

For WALTER J. THOMAS, BERNARD JOHNS,

ARNOLD NC ISSACS, plaintiffs: Warren Eugene Connelly,

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L-P.,

Washington, DC.

For WALTER J. THOMAS, plaintiff. Barbara

Bethune Hutchinson, New Carrollton, MD.

For WALTER J. THOMAS, BERNARD JOHNS,

plaintiffs: Carl E. Anderson, WALTER & HAVERFIELD,

Cleveland, OH.

For WALTER J. THOMAS, BERNARD JOHNS,

ARNOLD M. ISAACS, plaintiffs: David Gregg Whitworth,

Jr.,. WHITWORTH & SMITH, P.A., Crofton, MD.

For SUSAN E. ALEXANDER, ISAIAH M.

ALDRIDGE, LAWRENCE [**2] ATCHERSON,

HERMAN 0. BAILEY, JOHNEY BROOKS, TUSHINDE

COOPER, E. LLOYD DAVIS, ODIE FIELDS, CASTE

GHEE, CONSTANCE E. HUGGINS, ERIC JAMES, ALAN

B.C. LATIMER, LISA LAYNE, MAURICE MCLEGGAN,

ALPHONSO G. MARQUIS WARD D. MORROW,

ALFRED NEAL, RAYMOND G. ROBINSON, MARY

CYNTHIA SMOOT, MELVIN T. SPENCE, LAURANCE

STANLEY, VANDOSTER TABB, JUDITH OD.

TONOHOU, AUBREY VERDUN, ROBERT WATKINS,

DOROTHY WATSON, CHARLOTTE WILLIAMS,

JOSZET H. ZIEGLER, JOHNITY MARY MILLER,

App. 22

ANITA BANKS, intervenors-plaintiffs: Charles Lindsay

Warren, AKIN, GUMP, STRAUSS, HAUER & FELD,

L.L.P., Washington, DC.

For SUSAN E. ALEXANDER, ISAIAH M.

ALDRIDGE, LAWRENCE ATCHERSON, HERMAN 0.

BAILEY, JOHNEY BROOKS, TUSHINDE COOPER, E.

LLOYD DAVIS, ODIE FIELDS, CASTE GHEE,

CONSTANCE E. HUGGINS, ERIC JAMES, ALAN B.C.

LATIMER, LISA LAYNE, MAURICE MCLEGGAN,

ALPHONSO G. MARQUIS, WARD D. MORROW,

ALFRED NEAL, RAYMOND G. ROBINSON, MARY

CYNTHIA SMOOT, MELVIN T. SPENCE, LAURANCE

STANLEY, VANDOSTER TABB, JUDITH OD.

TONOHOU, AUBREY VERDUN, ROBERT WATKINS,

DOROTHY WATSON, CHARLOTTE WILLIAMS,

JOSZET H. ZIEGLER, intervenors-plaintiffs: Warren

Eugene Connelly, AKIN, GUMP, STRAUSS, HAUER &

FELD, L.L.P., Washington, DC.

For SUSAN E. ALEXANDER, [**3] ISAIAH M.

ALDRIDGE. LAWRENCE ATCHERSON, HERMAN 0.

BAILEY. JOHNEY BROOKS, E. LLOYD DAVIS, ODIE

FIELDS. CASTE GHEE, CONSTANCE E. HUGGINS,

ERIC JAMES, ALAN B.C. LATIMER, LISA LAYNE,

MAURICE MCLEGGAN, ALPHONSO G. MARQUIS2

MARY MILLER, WARD D. MORROW, ALFRED NEAL,

DIANNA RITTER, RAYMOND G. ROBINSON, MARY

CYNTHIA SMOOT, MELVIN T. SPENCE, LAURANCE

STANLEY, VANDOSTER — TABB, JUDITH D.

TONOHOU, AUBREY VERDUN, ROBERT WATKINS,

DOROTHY WATSON, CHARLOTTE WILLIAMS, HUGH

WILLIAMS, JOSZET H. ZIEGLER, intervenors-plaintiffs:

Joseph Marc Sellers, COHEN, MILSTEIN, HAUSFELD &

TOLL, P.L.L.C., Washington, DC.

For SUSAN E. ALEXANDER, ISAIAH M.

ALDRIDGE, LAWRENCE ATCHERSON, HERMAN 0.

BAILEY. JOHNEY BROOKS, TUSHINDE COOPER, E.

App. 23

LLOYD DAVIS, ODIE FIELDS, CASTE GHEE,

CONSTANCE E. HUGGINS, ERIC JAMES, ALAN B.C.

LATIMER, LISA LAYNE, MAURICE MCLEGGAN,

ALPHONSO G. MARQUIS; MARY MILLER, WARD D.

MORROW, ALFRED NEAL, DIANNA RITTER,

RAYMOND G. ROBINSON, MARY CYNTHIA SMOOT,

MELVIN T. SPENCE, LAURANCE STANLEY,

VANDOSTER TABB, JUDITH D. TONOHOU, AUBREY

VERDUN, ROBERT WATKINS, DOROTHY WATSON.

CHARLOTTE WILLIAMS, HUGH WILLIAMS, JOSZET

H. ZIEGLER, intervenors-plaintiff's: Carl E. Anderson,

WALTER & HAVERFIELD, Cleveland, (**4] OH.

For ALAN B.C. LATIMER, intervenor-plaintiff.

Barbara Bethune Hutchinson, New Carroliton, MD.

For ALPHONSO G. MARQUIS, WARD D.

MORROW, ALFRED NEAL, RAYMOND G. ROBINSON,

MARY CYNTHIA SMOOT, MELVIN T. SPENCE,

ROBERTS WATKINS, DOROTHY WATSON, intervenors-

plaintiffs: Theresa Grace Lawhorn Watson, Washington,

DC.

For JAMES A. BAKER, III, defendant: Richard Neal

Reback, U.S. DEPARTMENT OF INTERIOR, Washington,

D.C.

For WARREN CHRISTOPHER, defendant: John

Oliver Birch, Cynthia Ann Schnedar, U.S. ATTORNEY’S

OFFICE, Washington , D.C.

For MADELEINE K. ALBRIGHT, _ federal

defendant: Meredith Manning, U.S. ATTORNEY'S

OFFICE, Washington, D.C.

For AKIN, GUMP, STRAUSS, HAUER & FELD,

WARREN E. CONNELY, CHARLES L. WARREN,

MICHAEL J. MADIGAN, JOSEPH M. SELLERS, AVIS E.

BUCHANAN, Non Parties: S Robert Sutton, JANIS,

SHUELKE & WECHSLER, Washington, D.C.

App. 24

JUDGES:

Judge Stanley Sporkin, United States District Court.

OPINION BY:

Stanley Sporkin

OPINION:

[*166] MEMORANDUM OPINION

This matter is before the Court on Class counsel’s

application for preliminary and permanent injunctive relief. Class

Counsel seeks to enjoin a lawsuit [**5] styled as a malpractice

action brought in the Superior Court for the District of Columbia

by a group of five former class action plaintiffs. n1

nl Thomas, et al. v. Akin, Gump, Strauss,

Hauer & Feld, L.L.P., et al. C.A. No. 1898-

99, Superior Court for the District of

Columbia. The five plaintiffs in that case are

Walter J. Thomas, Alan B.C. Latimer, Mary

Cynthia Smoot, Odie Fields, and Alfred Neal;

each either named plaintiffs or plaintiff-

intervenors in the class action (sometimes

referred to herein as the “dissident plaintiffs”).

Judge Diaz of the Superior Court has stayed

that matter pending the outcome of class

counsel’s application for injunctive relief

here.

The Underlying Class Action

The substantive claims in this case have long since

been resolved. In 1986, a group of African-American

Foreign Service Officer (“FSOs”) sued their employer, the

United States Department of State. Plaintiffs alleged

discrimination by the State Department in the assignment,

promotion, tenuring, performance evaluation, [**6] and

termination of African American FSOs. The lawsuit sought

monetary damages and appropriate injunctive relief.

Following nearly ten years of extensive discovery and

negotiations, a proposed settlement was reached by class

counsel and the State Department in 1996. The parties

agreed that the class should be certified for settlement under

Rule 23(b)(2). The State Department agreed to a draft

consent decree that required substantial changes in the

Department’s employment practices, and enjoined the

agency from discriminating on the basis of race against

African-American FSOs. Additionally, the Department

agreed to pay $3.8 million in monetary damages, reinstate

four terminated class members, and retroactively promote

seventeen class members.

The law firm of Akin, Gump, Strauss, Hauer & Feld,

L.L.P., through Warren E. Connelly, Charles L. Warren, and

Michael J. Madigan, and others, served as counsel for the

putative plaintiff class, and for the class as certified. Joseph

M. Sellers and Avis E. Buchanan, of the Washington

Lawyers’ Committee for Civil Rights & Urban Affairs, also

represented the class. This group of attorneys prosecuted the

case and engaged the State Department in the [**7]

settlement negotiations. N2 To help effectuate the settlement,

class counsel and lawyers for the State Department agreed

that the issue of whether any plaintiff could opt-out of the

settlement would be a decision left solely for the Court to

determine with class counsel taking no position on this issue.

Class counsel communicated to the plaintiffs that the consent

App. 26

—————

decree would be silent on the opt-out issue, and that

plaintiffs unhappy with the settlement could argue for the

right to opt-out of the settlement before the consent decree

was entered, at the fairness hearing to be conducted by the

Court. n3

n2 These attorneys are the named defendants

in the Superior Court action.

n3 Settlement of a class action lawsuit under

Rule 23(e) requires court approval of the

settlement and notice to the class members of

the proposed settlement. Fairness hearings

are con0ducted to solicit testimony and

argument on the fairness of the settlement and

adequacy of class counsel’s representation of

the class in negotiating the settlement.

[**8]

The five "dissident" plaintiffs each engaged separate

counsel to represent their individual interests at the class

action fairness [* 117] hearing. Thomas and Latimer were

represented by Barbara B. Hutchinson; Fields, Neal, and

Smoot retained Theresa L. Watson to represent their

individual interests. Ms. Hutchinson was retained in

December 1995, while the settlement was being negotiated.

The dissident plaintiffs, and others, had hired Carl Anderson

as additional co-counsel for the class in 1994, but terminated

his representation before the fairness hearing in 1996. Court-

approved notice of the proposed settlement was transmitted

to all class members, informing them of their right to file

comments concerning the proposed consent decree, and to

appear at the hearing. The objections of Ms. Watson's and

Ms. Hutchinson's clients were included in the notice sent to

all class members.

App. 27

The fairness hearing was held on three days in July

1996. At the hearing, the Court heard from every class

member who requested an opportunity to speak, and from |

their legal representatives. Plaintiffs Thomas, Latimer,

Fields, Neal, and Smoot, along with others represented by

Ms. Watson and Ms. Hutchinson, objected [**9] to the

consent decree on the ground that it failed to provide an

adequate remedy for the wrongs alleged in the complaint.

Those plaintiffs argued that they were not fairly compensated

for their individual injuries. Those plaintiffs also made it

clear that if the Court rejected their arguments and approved

the settlement, they should have the right to individually

pursue their underlying causes of action. In other words,

those plaintiffs sought the right to opt-out of the settlement

On the merits of the compromise, the Court approved

the settlement under Rule 23(e). It found the consent decree

"as a whole [was] fair, reasonable, and adequate to the class,"

and "was clearly negotiated at arm’s length and [presented]

no danger of collusion.” Thomas v. Christopher, 169 F.R.D.

224, 239 (D.D.C. 1996), affd in part and revd in part,

Thomas v. Albright, 139 F3d 227 (D.C. Cir.), cert. denied,

525 US. 1033, 142 L. Ed. 2d 480, 119 S. Ct. 576 (1998). The

Court found the settlement to be in the best interests of the

class as a whole. While the settlement may not have

provided the degree of relief that some individual members

sought, the Court approved [**10] the settlement based on

the benefits it provided to the class generally. The Court

specifically found "that class counsel .. fairly and adequately

protected the interests of the class." 169 F.R.D. at-239.

The Court addressed the opt-out issue at length.

After hearing each of the individual plaintiffs’ objections to

the settlement, me Court found that some of the plaintiffs

had individual equities that would not be satisfied by the

agreement. Accordingly, the Court ordered the right to opt-

out be made available to class members who did not believe

App. 28

that the settlement and consent decree provided them with

appropriate relief for the injury they sustained. It stated:

If Defendant is right and those who

want to opt out do have the strongest cases,

what a grave injustice would then be done to

those parties if the Court were to extinguish

their individual rights.

The Court has been impressed with the

vehemence with which some members of the

class have opposed the settlement. It is quite

clear that those members will believe

themselves to have been "sold out" if this

Court refuses to allow opt out of the

settlement.

Thomas v. Christopher, 169 F. R. D. at 245. [**11]

A group of unsatisfied class members, including the

dissident plaintiffs, appealed. On appeal, they argued that

the settlement (1) did not effectively address the

Department's assignment system retaliatory acts, or

employee records tarnished with discriminatory decisions;

(2) did not provide adequate relief in the form of additional

or enhanced promotions; (3) was insufficient regarding

reinstatement; (4) did not adequately compensate the

dissident plaintiffs; and (5) was improperly approved over

the objections of the dissident plaintiffs, who were named

plaintiffs. Thomas v. Albright, [*118] 139 F.3d at 231-33.

Additionally, the dissidents argued that class counsel did not

adequately protect the individual interests of the dissident

plaintiffs when class counsel agreed to take no position on

the opt-out issue, and agreed to a "no modifications" clause

in the settlement agreement. The Court of Appeals noted

succinctly that "the dissidents complain about particular

App. 29

eS

portions of the overall settlement and claim that they are

individually entitled to more." /d., 139 F. 3d at 233.

Despite the dissidents’ arguments, the Court of

Appeals affirmed this Court's (**12] finding on the fairness

of the settlement, and rejected the challenge to the adequacy

of legal representation by class counsel. Particularly, the

Court of Appeals wrote:

Finally, the dissidents argue that class counsel

did not act in the interest of the class when

counsel agreed to argue that the consent

decree was fair and not to advocate the right

to opt out, and agreed to the provision of the

consent decree stating that the court may not

modify the agreement. In our view counsel

more than adequately represented the class as

a whole.

Thomas v. Albright, 139 F 3d at 233.

This Court's granting the right to dissenters to opt out

of the settlement was reversed. The Court of Appeals held

that under intervening law, that option was not available in

this case. Id. at 233-36, citing Eubanks v. Billington, 324

US. App. D.C 41, 110 F.3d 87 (D.C Cir. 1997). This

holding did not affect the findings that the settlement was

fair, and that class counsel adequately represented the class.

The Superior Court Action

The class action having been finally and fully

adjudicated, in March 1999, five dissident plaintiffs brought

[**13] a lawsuit for alleged malpractice against class counsel

in the Superior Court for the District of Columbia. The

dissident plaintiffs alleged that under a retainer agreement

with class counsel, signed by Walter Thomas and others,

App. 30

class counsel was retained to represent plaintiff class

members’ individual claims as well as their putative class

claims. The dissident plaintiffs alleged that class counsel

owed fiduciary duties to Thomas and others, as their

attorneys, including a duty to represent their interests

"without undivided loyalty."

The dissident plaintiffs "do not take issue with this

Court's decision on the adequacy" of class counsel's

representation of the class, and are not trying to set aside the

consent decree or obtain additional remedies not provided for

in the settlement. These plaintiffs claim that the Superior

Court malpractice action seeks only to recover damages

against class counsel "due to the breach of the fiduciary

duties owed to Thomas, et al. not as members of the class,

but as individuals whom the Attorney Defendants signed

retainer agreements with before the inception of the class."

Thomas Response Brief at 11.

Class counsel, now defendants in the Superior [**14]

Court, moved to dismiss the Superior Court action, stating

that the fiduciary duty relied upon by the dissident plaintiffs

is non-existent, and that the complaint is barred by the

doctrine of collateral estoppel. Class counsel received a stay

in that court pending the current motion for injunctive relief

in this Court. Class counsel describes the so-called

malpractice action as a "collateral attack" on this Court's

decision, and states that it will suffer irreparable harm by

having to endure wasteful relitigation of the adequacy of

their representation of the dissident plaintiffs.

This Court has ancillary jurisdiction in this matter to

vindicate its authority and effectuate its decree in the underlying

class action settlement and consent decree. See Kokkonen v.

Guardian Life Ins. Co. of America, 511 U.S. 375, 380, 128 £.

Ed. 2d 391, 114S. Ct. 1673 (1994). Neither party has suggested

otherwise. Class counsel also suggests that the Court retains

jurisdiction and injunctive power to [*I 191 effectuate its

judgment under the All Writs Act, 28 US.C. § 1651.

App. 31

The Relitigation Exception to the Anti-Injunction

Act

Class counsel argues that the Anti-Injunction [**15]

Act. 28 US.C. § 2283, does not preclude this Court from

enjoining Plaintiffs’ action in the Superior Court. The Anti-

Injunction Act provides:

A court of the United States may not grant an

injunction to stay proceedings in a State court

except as expressly authorized by Congress,

or where necessary in aid of its jurisdiction, or

to protect or effectuate its judgments.

28 US.C § 2283. The purpose of the statute is to

promote comity and avoid unseemly conflicts and friction

between state and federal courts. Signal Properties, Inc. v.

Farha, 482 F.2d 1136 (Sth Cir. 1973); Euge v. Smith, 418

F.2d 1296 (8th Cir. 1969). The statute was designed to

precisely limit and describe a federal court's authority to

enjoin state court actions.

The exception provided in the statute that allows an

injunction "in aid of [the Court’s] jurisdiction, or to protect or

effectuate its judgments" is commonly referred to as the

"relitigation exception." The relitigation exception allows a

federal court to enjoin a state court action where, in effect, the

state court is asked to relitigate matters already determined

[** 16] by a federal court. This is to preserve the "full fruits and

advantages of a federal court's judgment." Jn Re National

Student Marketing Litigation, 655 F. Supp. 659, 664 (D.D.C

1987); see also Samuel C Ennis & Co. v. Woodmar Realty Co.,

542 F.2d 45, 49 (7th Or. 1976), cert. denied, 429 U& 1096, 51

L. Ed.2d 543, 97S. Ct. 11 12 (1977). Under such circumstances,

a federal court may issue an injunction to protect the finality of

its judgment. Thus, a federal Court may enjoin an action in a

App. 32

state court when issue preclusion (collateral estoppel) or claim

preclusion (res judicata) is the source of the movant's

application for relief Chick Kam Choo v. Exxon Corp., 486

US. 140, 147, 100 L. Ed. 2d 1270 108 S. Ct. 1684 (1988);

Golden v. Pacific Maritime Ass'n, 786 F2d 14250 1427 (9th

Cir. 1986). The central question is whether an injunction is

necessary to protect or effectuate this Court's judgment

entered in the class action. This question must be evaluated

by first examining class counsel's argument that the Superior

Court action is barred on grounds of issue preclusion.

Issue preclusion prevents [** 17] a party in the

same or subsequent action from gaining a redetermination

of an issue of fact or law when "(1) the issue is actually

_ litigated and (2) determined by a valid, final judgment on

the merits; (3) after a full and fair opportunity for litigation

by the parties or their privies; (4) under circumstances

where the determination was essential to the judgment, and

not merely dictum." Davis v. Davis, 663 A.2d 499, 501

(D.C. 1995), quoting Washington Medical Center v. Holle,

573 A.2d 1269, 1283 (D.C. 1990).

Class counsel argues that as a matter of law, judicial

approval of the adequacy of class counsel's representation

under Rule 23(e) necessarily precludes class members from

later suing class counsel for alleged malpractice. Class

counsel asserts that the adequacy of their legal representation

of the dissident plaintiffs was litigated, and fully and finally

decided by this Court. They state that the dissident plaintiffs

objections to the settlement and adequacy of class counsel

were fully addressed at the faimess hearing. They note that the

dissident plaintiffs were represented by individual counsel at

the fairness hearing, and the Court was [**18] there presented

with objections and argument on behalf of the dissidents. The

Court, in approving the settlement, expressly found that class

counsel adequately represented the plaintiffs, and class counsel

submits that finding was necessary to the Court's approval of

the settlement and consent decree under Rule 23(e).

App. 33

in

Moreover, class counsel submits [*120] that the finding on the

adequacy of class counsel was not mere dictum, but essential

to the Court's judgment approving the settlement and consent

decree. Accordingly, class counsel states that any claim

alleging the inadequacy of class counsel would be precluded

under the doctrine of collateral estoppel.

Class counsel points to cases in the Sixth, Ninth,

Seventh, and Fifth circuits that support their position. In

Laskey v. International Union (UAW), 638 F. 2d 954 (6th Cir.

1981), members of a class action sued class counsel for

malpractice after the underlying class action was resolved by a

judicially-approved settlement under Rule 23(e). As in this

case, in Laskey, the dissatisfied class members claimed that

class counsel's interests conflictec: with their own; that counsel |

failed to inform members of their right to [** 19] opt-out of

the settlement, failed to inform the class of counsel's claim for

reimbursement from settlement proceeds, and that the court

improperly accepted settlement over the named plaintiffs

objections. The District Court granted summary judgment and

injunctive relief in favor of class counsel, and the Sixth Circuit

affirmed, stating:

Since appellants had the opportunity to object to

the legal representation at the prior settlement

hearing and since a finding that the class was

adequately represented is necessary for finding

the settlement was fair and reasonable, which in

turn was essential to approving the settlement ...

appellants are collaterally estopped from now

asserting that the legal representation was not

adequate and that [class counsel] committed

legal malpractice.

Laskey, 638 F. 2d at 95 7.

App. 34

The Ninth Circuit, in Golden, also applied the

“relitigation exception" in favor of class counsel to uphold an

injunction against a state court malpractice and fraud

proceeding. There, class counsel had successfully negotiated

a judicially-approved consent decree, but dissatisfied

plaintiffs sued class counsel in state court, alleging that class

[**20] counsel falsely informed plaintiffs that their suit was

not a class action, and that class counsel had falsely informed

the District Court that plaintiffs endorsed the class action

format and setilement. The District Court enjoined the state

malpractice case, finding that the "conduct of [class] counsel

and the relevant attorney-client relationship were litigated in

the Golden action during the fairness hearings and addressed

by (the] court after [plaintiffs] had a full and fair opportunity

to present evidence in favor of their claims." Golden, 786

F2d at 1428. The Ninth Circuit affirmed that finding, noting

that plaintiffs had a full and fair opportunity to litigate their

malpractice and fraud claims at the fairness hearing, and that

the state malpractice action was an attempt to harass class

counsel and was in effect "an abuse of the court process." Jd.

at 1429. Class counsel also cite Samuel C. Ennis & Co., Inc.

v. Woodinar Realty Co., 542 F 2d 45 (7th Cir. 1976), cert.

denied, 429 US. 1096, 51 L. Ed. 2d 543, 97 S. Ct. 1112

(1977) (collateral estoppel precluded state malpractice action

against bankruptcy [**21] attorneys because the bankrupt

had a full and fair opportunity to litigate the fraud issue in

the underlying bankruptcy work-out proceeding), and other

cases where class action attorneys successfully enjoined state

malpractice cases, through the relitigation exception, based

on inherent findings of fairness and adequacy of

representation in the underlying case. See, In re Corrugated

Container Litig., 643 F.2d 195 (5th Cir. 1981), rehg denied,

655 F.2d 1131 (Sth Cir. 1981); Hutton Construction Co. v.

County of Rockland, 1997 U.S. Dist. LEXIS 7666 (S.D.N.Y.

June 2, 1997).

App. 35

The dissident plaintiffs argue that in the underlying

class action. while the fairness of the settlement and class

counsel's representation of the plaintiff class was actually

litigated, the discreet issue of whether those attorneys failed

to properly represent the dissident plaintiffs individual

interests was not a part of the fairness determination.

[*121] Plaintiffs argue that Laskey and the cases cited

by class counsel are not applicable because in those cases,

the dissident plaintiffs suggested malpractice arising out of

class counsel's conduct in obtaining relief [**22] for the

class. Plaintiffs claim that in their Superior Court action,

they are not contesting the fairness of the settlement or the

adequacy of class representation. Rather, they submit that

the attorneys failed to properly represent the plaintiffs’

individual interests, apart from the class, and thus collateral

estoppel would not be applicable. Plaintiffs cite only one

case for that proposition -- Beckwith v. Llewellyn, 326 N. C.

569, 391 S. E. 2d 189 (N. C. 1990).

In Beckwith, a woman brought a malpractice action

against the attorney who had represented her and her children

in her husband's wrongful death suit. The underlying

wrongful death case had been settled for roughly $ 4 million.

The settlement and the payment of attorneys’ fees from the

settlement were approved by the trial court, as required by

North Carolina law where the deceased was survived by

minor children--the would-be beneficiaries of the settlement.

Plaintiff then filed the claim for malpractice against her

attorneys, alleging that the calculation and payment of

attorneys’ fees was in excess of her initial agreement with

counsel, and that counsel never informed the plaintiff that

under a second [**23] agreement to represent the plaintiff,

the fee calculation had changed. The trial court in the

malpractice action granted summary judgment in counsel's

favor on collateral estoppel grounds, but the North Carolina

Court of Appeals reversed, finding that the plaintiffs

complaint was grounded on allegations of breach of fiduciary

App. 36

duties and negligence, and therefore "does not constitute a

collateral attack by plaintiff on [the] settlement." Beckwith,

3918S. E 2d at 190.

Beckwith is distinguishable from the instant matter.

In Beckwith, the complaining plaintiff and her trial attorneys

were on the same side in requesting the trial court to approve

the settlement along with counsel fees as being fair to the

minors involved. The complaining plaintiff did not argue in

the underlying matter that the settlement was unfair, or that

counsel had taken advantage of her. Thus, the appellate

court found that "the focus in the prior case was not whether

the attorneys had taken advantage of their client but whether

the settlement ... was fair to the minors involved. ... Plaintiff

and her attorneys were on the same side." Beckwith, 391 S.E.

2d at 191-92.

In [**24] this case, the dissident plaintiffs did object

to the terms of settlement, and argued that the settlement was

unfair. They retained separate counsel to represent their

individual interests at the fairness hearing. Jn Beckwith the

trial court did not address the adequacy of counsel's

representation of the plaintiff, but rather it only considered

the fairness of the settlement to the minor children.

The Court finds that the adequacy of the

representation provided by Akin, Gump and the Washington

Lawyers' Committee for Civil Rights was actually litigated

in this matter. The Court entered a valid, final judgment on

the merits after a full and fair opportunity for the dissident

plaintiffs to address the merits of class counsel's

representation. In fact, those plaintiffs did make their

objections known to the Court, and by their individual

attorneys argued that the settlement did not fully address

their individual rights. Indeed, this Court agreed with

dissident. plaintiffs that they should be allowed to opt out of

the settlement so that they could assert their individual

causes of action.

App. 37

The Court's finding that the settlement was fair, and

that class counsel did in fact adequately [**251 represent the

class was essential to its judgment. Rule 23(e) required the

Courts finding of fairness as a condition to approval of the

settlement. Thus, what is clear is that the settlement and

consent decree rest on the essential finding that class counsel

adequately represented the plaintiffs.

[*122] The dissident plaintiffs, through the Superior

Court action, now seek from class counsel the monetary

relief that counsel could not obtain in its negotiations with

the State Department. While plaintiffs claim not to be

attacking the settlement or consent decree, or the adequacy of

class counsel's representation in negotiations with the State

Department, it is impossible to read that action as anything

but a collateral attack on the findings of this Court (and the

Court of Appeals) that class counsel fairly and adequately

carried out its duties to the members of the class.

Dissident plaintiffs’ complaint that class counsel

failed zealously to protect the individual interests of the

plaintiffs, over those of the class, has no merit. First, the

dissident plaintiffs had their own counsel representing their

individual interests at the fairness hearing and beyond. That

procedure assured that [**26] the interests of the dissident

plaintiffs would be properly represented, and was the proper

route to take when the conflict arose over the settlement. See

Maywalt v. Parker & Parsley Petroleum Co., 67 F.3d 1072

2d Cir. 1995). To argue that their individual interests were

not zealously prosecuted is to ignore the role played by

dissidents' individual counsel, who were retained while

settlement negotiations were ongoing, and who appeared as

counsel in the proceedings before this Court.

Second, the dissident plaintiffs' complaint that Akin,

Gump and Lawyers’ Committee attorneys failed to advance

their individual interests runs counter to the requirements of

class counsel in a class action. Class counsel is required to

act in the "best interests of the class considered as a unit."

App. 38

————————————— NT

Distro, Osan esieiee ts

Parker v. Anderson, 667 F.2d 1204, 1211 (Sth Cir.), cert.

denied, 459 U.S. 828, 74 L. Ed. 2d 650 103 S. Ct. 63 (1982).

The Manual for Complex Litigation states clearly that class

counsel is responsible for protecting the interests of the class,

"even in circumstances where the class representatives --

their direct clients -- take a position that counsel consider

[**27] contrary to those interests." Manual for Complex

Litigation (Third) § 30.43.

Clearly, the action in Superior Court thus attempts to

relitigate issues that have already been finally and fully

litigated in this forum -- the appropriateness of. the

representation of these plaintiffs by Akin, Gump and the

Lawyers' Committee. That action can only be viewed as an

attempt to attack and relitigate the findings of this Court and

the Court of Appeals. As such, the dissident plaintiffs seek

to burden class counsel with the needless expense of

"relitigation" in Superior Court. If such a case were allowed

to go forward, the consequences to future class actions could

be quite severe. First, the threat of a state malpractice action,

despite findings of fairness and adequacy of representation in

the class action, could discourage future class counsel from

attempting to settle and compromise a class action. This is

especially true in cases where the class numbers in the

hundreds or thousands of individual members -- it would be

near impossible to satisfy the individual interests of every

member of the class. And if class counsel did attempt to

satisfy ali of those interests, counsel's hands would [**28] be

impossibly tied in any type of settlement negotiation. The

result of such a policy is clear: more protracted litigation

without settlement or compromise of the claims and

allegations brought by the class. In actions where a class

seeks prospective and retroactive injunctive relief, such

handcuffing would sound a death knell to class counsel's

ability to evaluate its case and negotiate a workable

settlement in the best interest of the class as a whole, in a

timely manner.

App. 39

The threat of a malpractice suit of this kind could

significantly discourage attorneys from bringing future

meritorious class actions. Groups like the Lawyers’

Committee, and law firms that are willing to devote their

resources essentially on a pro bono basis, would be greatly

discouraged from reaching out to help deserving class

litigants if to do so would likely expose them to the "double

jeopardy" of a [* 123] state malpractice action. n4 In a world

fraught with numerous injustices that can only be vindicated

through the vehicle of a class action, attorneys should not be

dissuaded from bringing meritorious actions by the threat of

a state court malpractice law suit.

n4 This case lasted over a period of ten years.

Class counsel at the Lawyers’ Committee,

Akin, Gump, and Walter & Haverfield

devoted more than 30,000 hours litigating and

negotiating the settlement, which provided S

1.4 million for legal fees, approximating S 47

per hour, well below those attorneys’ normal

hourly rates and the D.C. Circuit guidelines.

See Thomas vy. Christopher, 169 F.R.D. at

235. It is clear that this case was taken on a

quasi-pro bono basis, in the best traditions of

the legal profession.

*29]

The Court is concerned that allowing the malpractice

action to proceed necessarily implies a nullification of this

Court's findings on the adequacy of counsel's representation of

the plaintiffs. It removes one of the Court's most important

functions in a class action - protecting the interests of the class

members through fairness hearings and other procedures

designed to assure that members of the class as a whole are not

compromised by the individual interests of a minority of the

App. 40

<< T

class, or possibly by the vindictiveness of a few. The Court

expects that its findings on the fairness of a settlement, adequacy

of notices, and adequacy of class representation are final and

have the force of law. The dissident plaintiffs’ attempt to

relitigate this Court's findings through the ruse of a so-called

malpractice action would have the effect of undermining the

settlement and consent decree reached in this matter.

Injunctive Relief

Having found that the dissident plaintiffs are to be

collaterally estopped from relitigating this Court's decision in

Thomas v. Christopher, through the guise of a state court action

styled as a malpractice lawsuit or otherwise, the Court now

considers [**30] the appropriateness of injunctive relief.

To succeed, movants must demonstrate a likelihood of

success on the merits, that irreparable injury will result without

injunctive relief, that no other parties will be harmed by a grant

of such relief, and that the public interest is served by the

issuance of the injunction. Washington Metro Area Transit

Commn vy. Holiday Tours, Inc., 182 U.S. App. D.C. 220, 559

F.2d 841, 844 (D.C Cir, 1977); Serono Laboratories v. Shalala,

158 F.3d 1313 (D.C. Cir. 1998). As discussed above, movants

have demonstrated a likelihood of success on the merits.

The injury to class counsel by having to endure wasteful

relitigation in state court of an issue already finally decided by

this Court is clearly irreparable. See Laskey, 638 F.2d at 957;

Golden, 786 F.2d at 1428-29; Ennis, 542 F.2d at 49-50.

Additionally, the Court finds that the potential for nullification

or compromise of the Court's judgment in the underlying matter

is sufficient alone to constitute irreparable injury to class

counsel and class members who have received the benefit of the

settlement and consent decree. [**31] See Royal Ins. Co. v.

Quinn-L Capital Corp., 759 F. Supp. 1216, 123 7 (N.D. Tex.

1990), revd in part on other grounds, 960 F.2d 1286 (5th Cir.

1992).

App. 41

eae a a sn

The harm to other parties, particularly the dissident

plaintiffs who brought the malpractice suit, is limited at best.

Those plaintiffs, as class members, were entitled to receive

the benefits resulting from the settlement of the class action.

Those plaintiffs already have been given an adequate forum

(i.e. at the fairness hearing) to air their individual grievances.

Their objections were taken into account by this Court. After

hearing their objections to the settlement, the Court granted |

them the right to opt out of the settlement. Although the

Court of Appeals did not agree with his determination, the

dissidents’ position was given full consideration. Fairness

does not require that plaintiffs be afforded still another

opportunity to air their grievances in the form of a

malpractice action in state court.

(*124] What is more, injunctive relief in this case is

in the public interest. The public interest favors finality of

Court judgments. Further, injunctive relief will promote the

justifiable use of the federal [**32] class action device in

meritorious cases without exposing counsel to duplicative

state court lawsuits when class counsel properly discharges

their duties to the class as a whole. The public interest is

served by reducing the potential for the constant relitigation

of issues between this nation's state and federal court systems.

Royal, 759 F. Supp. at 1237-38.

In accordance with the above an injunction will issue

precluding the dissident plaintiffs from prosecuting their action

in Superior Court.

Date: 12/7/99 /s/ Judge Stanley Sporkin

United States District Court

App. 42

ORDER

This matter comes before the Court on class counsel's

application for preliminary and permanent injunctive relief.

Class counsel seeks to enjoin prosecution of a lawsuit styled

Thomas, et al. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P.,

et al, C.A. No. 1898-99, which is currently filed in the

Superior Court for the District of Columbia.

A hearing was held on class counsel's application for

relief on October 29, 1999, and parties’ positions were fully

briefed and argued. For the reasons set forth in the

accompanying Memorandum Opinion, it is, this Seventh day

of December, [**33] 1999:

ORDERED that class counsel's application for

permanent injunctive relief is GRANTED, and it is further

ORDERED that Walter J. Thomas, Alan B.C.

Latimer, Mary Cynthia Smoot, Odie Fields, and Alfred Neal,

and their officers, agents, servants, employees, and attorneys,

and those persons in active concert or participation with

them, acting individually or as representatives of a class, are

hereby enjoined from prosecuting the lawsuit styled Thomas,

et al. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., et al.,

C.A. No. 1898-99 in the Superior Court for the District of

Columbia,

SO ORDERED.

December 7, 1999 /s/ Judge Stanley Sporkin

United States District Court

App. 43

rs

9 of 47 DOCUMENTS

WALTER J. THOMAS, ET AL.,

APPELLEES/CROSS-APPELLANTS, v.

MADELEINE K. ALBRIGHT,

SECRETARY OF STATE,

APPELLANT/CROSS-APPELLEE

No. 97-5004 Consolidated with 97-5018

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

139 F.3d 227; 1998 U.S. App. LEXIS 6177;

77 Fair Empl. Prac. Cas. (BNA) 227;

74 Empl. Prac. Dec.(CCH) P45, 535;

40 Fed. R. Serv. 3d (Callaghan) 558

November 13,1997, Argued

March 27,1998, Decided

March 27, 1998, Filed

SUBSEQUF’ iT HISTORY:

(**I] Certiorari Denied November 30, 1998.

Reported at: 1/998 U.S. LEXIS 7592. Certiorari Denied

November 30, 1998, Reported at: 1998 U.S. LEXIS 7841.

PRIOR HISTORY:

Appeals from the United States District Court for the

District of Columbia. (No. 86cvO2850).

DISPOSITION:

Affirmed the district court's decision that the consent

decree is fair and reasonable, but reversed its decision

allowing opt-outs.

App. 44

COUNSEL:

Cynthia A. Schnedar, Assistant U.S. Attorney, argued

the cause for appellant/cross-appellee, with whom Mary Lou

Leary, U.S. Attorney at the time the briefs were filed, John

D. Bates, R. Craig Lawrence, and John Oliver Birch,

Assistant U.S. Attorneys, were on the briefs.

Barbara B. Hutchinson argued the cause for

appellees/cross-appellants Walter J. Thomas, et al., with

whom Theresa L. Watson was on the briefs.

Avis E. Buchanan, argued the cause for amicus curiae

plaintiff class, with whom Warren E. Connelly, Charles L.

Warren, Richard P. Schlegel, and Joseph M. Sellers were on

the briefs.

JUDGES:

Before: EDWARDS, Chief Judge, GINSBURG,

Circuit Judge, and BUCKLEY, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GINSBURG.

OPINIONBY:

GINSBURG

OPINION:

[*229] GINSBURG, Circuit Judge: This is a Title

VII class action in which the plaintiffs allege that the United

States Department of State discriminated [**2] against

African-American Foreign Service Officers. The Department

and a group of nine class members separately appeal from

the district court's approval of the class settlement. The

Department appeals the district court's decision to permit

class members to opt out of the class settlement. The nine

cross-appellants challenge the district court's approval of the

consent decree as fair and reasonable. We affirm the district

court's decision that the consent decree is fair and reasonable,

but reverse its decision allowing opt-outs.

App. 45

I. Background

In 1984 Walter J. Thomas, a former Foreign Service

Officer, filed an administrative complaint on behalf of

himself and other African-American FSO, alleging racial

discrimination in the Department's employment practices. In

1986, after the Department had rejected Thomas’ complaint,

he and another former FSO filed a class action complaint in

district court alleging that the Department engaged in racially

discriminatory employment practices and retaliated against

those who complained about them. Thomas v. Christopher,

169 F. R. D. 224, 229 (D. D.C. 1996).

The plaintiffs moved for class certification under

Federal Rule of Civil Procedure 23(b)(2). [**3] The court

denied their motion but permitted the plaintiffs to file an

amended complaint adding several more plaintiffs. The parties

conducted discovery for six years and, beginning in 1993,

engaged in settlement negotiations, eventually under the

supervision of a magistrate judge. In 1994 the plaintiffs filed

another motion for class certification, in which they contended

that although their class could be certified pursuant to Rule

23(b)(3), "it is more appropriately maintained as a Rule 23(b)(2)

class action." The court deferred ruling upon this motion

pending the outcome of the settlement negotiations.

In 1995 the parties reached a settlement in principle, and

in January 1996 they signed a consent decree. The consent

decree "resolves all claims that were or could have been

brought" by African-American FSOs between 1984 and 1996

based upon racial discrimination in promotions, awards,

tenuring, termination, performance reviews, assignments, and

training, or upon retaliation for complaining about such

discrimination. The parties agreed that the court would certify

the class pursuant to Rule 23(b)(2).

App. 46

(1)

The consent decree provided for the following

relief:

Monetary Relief--The [**4] Department agreed to

pay a total of $3.8 million, to be allocated as follows:

(a) $125,000 for the named plaintiffs $40,000 to

Thomas for "his leadership and coordinating role"

and $85,000 divided equally among the 29 other

named plaintiffs); (b) $2.9 million for those who

experienced delays in and denials of promotions, to

be allocated upon the basis of a formula specified in

the consent decree, but not to class members who

would receive a promotion under the consent decree

or who had been promoted at the same rate ds white

employees; and (c)$775,000 for class members who

had been terminated, of which at least $200,000 was

to be distributed formulaically to those who were

either terminated for unsatisfactory performance or

constructively discharged, and up to $575,000 of

which was reserved for a maximum of four recipients

to be chosen upon the basis of, among other things,

the severity of the discrimination and the degree of

economic hardship they had suffered.

Promotions--The Department agreed to give

retroactive promotions to the 16 mid-level class

members and to the one senior-level class member

who had been at their [*230] current grade-levels for

the longest time and [**5] had been recommended

previously for promotion.

Reinstatement--The Department agreed to offer a new

five-year appointment to each of four class members

who had been fired when they failed to get tenure

within the required time.

(4) Injunctive and Prospective Relief--The Department

agreed to: (a) submit to an injunction against its

discriminating on the basis of race or retaliating for

equal employment opportunity activities; (b) create a

council for Equality in the Workplace to monitor the

EEO activities of the Department; (c) modify its

employee evaluation reports and engage a consultant

to help determine whether further revisions are

necessary; (d) revise and expand its diversity and

EEO training; (e) establish a working group to

monitor the grant of awards to employees; (f) use

its best efforts to include an African-American on any

board considering an African-American for

termination; (g) continue development of an

electronic personnel database to monitor employment

actions; (h) report employment and EEO information

to class counsel for four years; and (i) adopt an

affirmative action plan approved by the Equal

Employment Opportunity Commission.

(5) Attorneys’ Fees--The Department [**61] agreed to

pay $2.1 million in attorneys' fees, plus an additional

amount for any services rendered after the district

court s preliminary approval of the consent <ecree.

Class counsel and the Department also entered into a

letter agreement providing that (1) the consent decree would

not address the issue of opt-outs; and (2) class counsel would

(a) support the settlement in court as "fair and reasonable to

the class as a whole"; (b) not take a legal position regarding

opt-outs other than to advise the court that it "may have the

discretion to allow opt outs", and (c) not advocate that class

members opt out.

In March the district court held a two-day hearing and

preliminarily approved the consent decree. The court then

ordered that the consent decree and notice of the fairness

hearing be sent to all known class members. 169 F.R.D. at

App. 48

23]. The notice advised class members that the court might

grant them the right to opt out. Of 359 class members, 34

wrote the court in support of the consent decree and 55 wrote

in opposition. 169 F.R.D. at 235.

In June class members were informed of their

individual awards under the consent decree. The Department,

as agreed, retroactively promoted 17 [**7] class members

and reinstated four. It awarded an average of $ 10,900 in

promotion damages to 265 class members. Twenty-nine

class members received an average termination award of

$16.400, and the four class members who had incurred the

greatest injuries received an average termination award of

$75,000. Id. at 234-35. i.

At the fairness hearing later that month 14 class

members testified; three supported the consent decree, eight

opposed it, and three were "ambivalent or neutral." /d. at

235. The court required the Department to send notices to

opponents of the agreement informing them that if they

wished to opt out then they had to file a motion stating "the

reasons for this request, and any law" supporting it. Of the

nineteen class members who filed motions to opt out all but

nine chose ultimately to remain in the class.

The court certified the class under Rule 23(b)(2) and

approved the consent decree pursuant to Rule 23(e). The

court found that the settlement was "negotiated at arm's

length and presents no danger of collusion"; it then held that

the consent decree was fair and reasonable in light of the

disputed evidence and the risks of litigation. Nonetheless,

the court [**8] allowed those class members so desiring to

opt out of the consent decree. Id. at 239-44.

App. 49

II. Analyst

The Department of State appeals the district court's

decision permitting opt-outs, while the cross-appellants, nine

members of the plaintiff class, object to the court's approval

of the consent decree. Class counsel submitted a brief in

support of the consent decree but did not take a position

concerning the dissidents’ right to opt out.

[*23 1] A. Fairness of the Consent Decree

Rule 23(e) states that "[a] class action shall not be

dismissed or compromised without the approval of the

court." Before it can approve a settlement a district court

"must find that the settlement is fair, adequate and reasonable

and is not the product of collusion between the parties."

Cotton v. Hinton, 559 F.2d 1326, 1330 (Sth Cir. 1977); see

Isby v. Bayh, 75 F.3d 1191, 1196 (7th Cir. 1996); Van Horn

v. Trickey, 840 F.2d 604, 606 (8th Cir. 1988); Grant v.

Bethlehem Steel Corp., 823 F2d 20, 22 (2d Cir. 1987). The

court's primary task is to evaluate the terms of the settlement

in relation to the strength of the plaintiffs' case. See, e.g.,

Ishy, 75 F.3d at 1199. The court should [**9] not reject a

settlement merely because individual class members

complain that they would have received more had they

prevailed after a trial. See EEOC v. Hiram Walker & Sons,

Inc., 768 F2d 884, 889 (7th Cir. 1985); see also United

States v. Trucking Employers, Inc., 182 U.S. App. D.C. 315,

561 F.2d313,317(D.C Cir. 1977).

The dissident members of the class in this case

contend that for a host of reasons the district court abused its

discretion in approving the consent decree as fair. We

conclude, to the contrary, that the settlement is eminently fair

and reasonable to the class as a whole.

First, with respect to the class-wide relief the dissidents

complain that the consent decree does not (1) alter the

Department's allegedly discriminatory assignment system, (2)

give any "relief for retaliatory acts taken by the Department," or

(3) provide for the expungernent of employee records infected

with discrimination. In making the first two charges the

dissidents seem oblivious to the significant monetary,

reinstatement, and promotional relief awarded to class members

who claim the Department discriminated or retaliated against

them. Moreover, the injunction prohibits discrimination [**10]

in general and in assignments in particular, forbids retaliation,

and prescribes monitoring procedures so that class counsel can

ensure the Department complies. Together these provisions of

the consent decree both redress past and deter future

discrimination in assignments and inhibit future retaliation.

Finally, although the consent decree does not provide for

expungement of employee records potentially tainted by

discrimination, it does require revisions to the employee

evaluation reporting form in order to help prevent racial

discrimination in the future.

Second, the dissidents argue that the consent decree is

inadequate with respect to the compromise of claims regarding

discrimination in promotions. While the district court found no

statistically significant evidence of such discrimination in the

junior and senior grades, the plaintiffs did present statistical

evidence suggesting that there had been between 40 and 47

fewer promotions, primarily in the mid-level grades, than there

would have been but for discrimination. The Department

presented its own statistical evidence suggesting that the

shortfall was at most 10 promotions. The district court

reasonably determined that in [**11] view of the conflicting

evidence, the compromise calling for 17 promotions was fair

and reasonable. Moreover, those who were not awarded a

promotion received monetary compensation for delays in and

denials of promotions.

App. 51

— —

Relatedly, the court did not abuse its discretion in

approving the provision of the consent decree calling for only

one promotion to be made in the senior grades; there was no

statistically significant evidence of any shortfall of promotions

in those grades. Nor did the district court abuse its discretion

when it concluded that the consent decree was fair in awarding

retroactive promotions only to those active FSOs who had been

at their current grade the longest and who had been

recommended for but not granted a promotion. To determine

which individual class members would have been promoted but

for discrimination would have been difficult for all concerned,

wherefore we cannot say that the quick and dirty alternative

upon which the parties settled was unreasonable. We reject also

the dissidents’ contention that it was unfair not to provide any

monetary award to those who received a promotion. A

settlement necessitates compromise, and the agreement that

some individuals [**12] would get a promotion while others

would get cash is not an unreasonable way to allocate two

scarce resources.

[*232] Third, the dissidents contend that the consent

decree is insufficient regarding reinstatement. They argue that

(1) four reinstatements was too few; (2) the reinstatements went

only to employees who were terminated when they failed to get

tenure and not to tenured employees who were terminated for

allegedly poor performance; and (3) those who were reinstated

should have received tenured positions rather than returning as

untenured employees. The parties presented conflicting

evidence regarding whether there was a statistically significant

excess in the number of African-American employees

terminated. The Department's expert argued that employees

terminated when they did not get tenure should be treated

separately from tenured employees fired for performance-related

reasons because the two types of adverse decisions are

unrelated. Nonetheless, the Department's expert opined that

terminations of neither tenured nor untenured African-American

employees were significantly above the norm.

App. 52

ia a <<

We conclude that the district court properly held

both that four was a reasonable number [**13] of

reinstatements and that the agreement limiting reinstatement

to those who were terminated for failing to reach tenure was

fair in light of the parties’ competing statistical analyses and

the risks attendant to litigation. Further, although the

number of reinstatements was limited to four, 29 of the 30

employees who applied for termination damages received a

monetary award. Again, the dissidents have not shown that

this division of the settlement proceeds is unreasonable

considering the interests of the class as a whole. As for the

reinstatements being without tenure, none of the dissidents

appears to be among those reinstated; therefore, the

dissidents do not have standing to pursue this particular

objection to the class settlement. See Pettway v. American

Cast Iron Pipe £o., 576 F.2d 1157, 1181 (5th Cir. 1978)

("Appellants wno were excluded from wie subclass and

denied back pay lack standing to contest the adequacy of the

awards received by other class members”).

Fourth, the dissidents appear to complain that they

did not receive sufficient monetary relief. We conclude,

however, that the district court did not abuse its discretion in

approving as fair, adequate, and reasonable [**14] the

amount of the damages provided in the consent decree. Class

counsel estimated the Department's overall exposure to

liability at from $2.5 million to $4 million while the

Department put the figure at from $725,00 to $10 million;

each side had reasonable arguments for its position. Based

upon the conflicting evidence and arguments, the risks of

litigation, and the time value of money, the district court

reasonably determined that the $3.8 million upon which the

parties had sewed was "at the high end" of what the class

could have expected after trial. The dissidents complain that

the settlement "unfairly limited monetary relief for egregious

acts of discrimination to four persons." The dissidents

provide no reason why it was unfair to award an average of

App. 53

$75,000 in damages to the four most significantly injured of

the terminated class members. A claim that individual

dissenters are entitled to more money is not, by itself,

sufficient to reject the overall fairness of the settlement; as

we indicated above, a settlement necessitates compromise.

Fifth, the dissidents argue that it was improper for the

court to approve the settlement over the objections of a large

number of [**15] class members, including several of the

named plaintiffs. But a settlement can be fair even though a

significant portion of the class and some of the named

plaintiffs object to it. See Grant, 823 F.2d at 23; Hiram

Walker, 768 F-2d at 891-92; Cotton, 559 F.2d at 1331;

Flinn v. FMC Corp., 528 F.2d 1169, 1173 (4th Cir. 1975);

cf Pettway, 5 76 F. 2d at 1215-1 7 (acknowledging general

rule but holding settlement unfair where approximately 70%

of class and all named plaintiffs objected). Here only 15% of

the class members objected; 85% accepted the settlement,

and many of them actively supported it. The district court

did not abuse its discretion, therefore, in approving the

settiement in spite of some opposition.

The dissidents cite Ficalora v. Lockheed California

Co., 751 F.2d 995 (9th Cir. 1985), [*233] and Mandtyano v.

Basi’ Vegetable Products, Inc., 541 F.2d 832 (9th Cir.

1976), for the proposition that it is an abuse of discretion for

a district court to approve a settlement over the objection of

the named class members. The teaching of those cases,

however, is that the district court must consider the

objections raised by the named plaintiffs. Ficalora, 751

[**16] F.2d at 997;MandiYano, 541 F.2d at 836-37. In

MandiYano the court also said that the opposition of a

significant number of named plaintiffs "is a factor to be

considered when approving a settlement." 54/ F.2d at 837.

Here the district court conducted hearings and permitted all

interested parties, including the dissidents, to testify. The

court considered the objections of the plaintiffs but pointed

out that "the best interests of the class as a whole must

App. 54

-

a

. Se Ce

remain the pararsount consideration even though some class

members believe that they will not receive all the individual

relief to which they believe they are entitled." 1/69 F.R.D. at

243. The district court's decision is therefore consistent with

the Ninth Circuit cases cited.

Finally, the dissidents argue that class counsel did not

act in the interest of the class when counsel agreed to argue

that the consent decree was fair and not to advocate the right

to opt out, and agreed to the provision of the consent decree

stating that the court may not modify the agreement. In our

view counsel more than adequately represented the class as a

whole. The letter agreement to which the dissidents point

was part of a global compromise [**17] between the parties,

who had negotiated their settlement only after significant

discovery and under the supervision of a magistrate judge.

In view of the complexity and fragility of such a

compromise, the provision prohibiting the court from

modifying the terms of the agreement is understandable as

being in the interests of both parties; it is not indicative that

class counsel acted in any way at the expense of the class.

In sum, the dissidents complain about particular

portions of the overall settlement and claim that they are

individually entitled to more. It is the obligation of the

district court, however, to evaluate the fairness of the

settlement to the class as a whole. We conclude that the

district court did not abuse its discretion in approving the

consent decree as fair, adequate, and reasonable to the class

as a whole.

App. 55

B. Opting Out

The Department argues that our recent decision in

Eubanks v. Billington, 324 US. App. D. C 41, 110 F.3d 87

(D.C Cir. 1997), holding that a court may permit members of

a class certified under Rule 23(b)(2) to opt out of the class

action and thus retain the right to sue on their own, is invalid

after the still more recent decision of [** 1 8] the Supreme

Court in Amchem Products, Inc. v. Windsor, 138 L. Ed. 2d

689, 117 S. Ct. 2231 (1997). Alternatively, the Department

contends that under the criteria of Eubanks the district court

abused its discretion in permitting the dissidents to opt out.

We conclude that Amchem does not affect our holding in

Eubanks, but we agree with the Department that under

Eubanks the district court abused its discretion in permitting

the dissidents to opt out.

Rule 23(a) establishes four prerequisites for

certifying a lawsuit as a class action. They are that

(1) the class is so numerous that joinder of all

members is impracticable, (2) there are questions of law or

fact common to the class, (3) the claims or defenses of the

representative parties are typical of the claims or defenses of

the class, and (4) the representative parties will fairly and

adequately protect the interests of the class.

Rule 23(b) provides for three types of class actions.

Subsection (b)(1) allows a class action if separate actions

would risk inconsistent adjudications or if individual

adjudications would "be dispositive of the interests of the

other members not parties ... or substantially [**19] impair

or impede their ability to protect their interests." Under

subsection (b)(2) a class action may be maintained where

App. 56

the party opposing the class has acted or

refused to act on grounds generally applicable

to the class, thereby making appropriate final

injunctive relief or corresponding declaratory

relief with respect to the class as a whole.

[*234] Finally, a subsection (b)(3) class action is

appropriate where

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.

The requirements of predominance and superiority in

subsection (b)(3) are, of course, additional to the

requirements of subsection (a), which applies to all class

actions. The right to opt out of a subsection (b)(3) class

action is expressly provided in Rule 23(c)(2).

In Amchem the Supreme Court addressed the

procedure for approving a class action settlement. In that

case the parties had simultaneously filed a class action

complaint, an answer thereto, and a settlement agreement.

[(**20] The district court certified the class action under Rule

23(b)(3) and approved the settlement. The Third Circuit

reversed, holding that the district court should have evaluated

whether to certify the class just as it would have done if the

action were going to be tried. Georgine v. Amchem Prods.,

Inc., 83 F.3d 610, 624-26 (1996).

The Supreme Court affirmed the judgment of the

court of appeals although it clarified that "settlement is

relevant to a class certification" in that, if the case is surely

going to be settled, then the "district court need not inquire

whether the case, if tried, would present intractable

App. 57

management problems." Amchem Prods., Inc. v. Windsor,

138 L. Ed. 2d 689, 117 S Ct. 2231, 2248 (1997). A

"settlement-only class certification" does, however, depend

upon compliance with all the requirements of Rule 23(a) and

(b). The Court made clear that a district court is to adhere

closely to the rule:

Of overriding importance, courts must be mindful

that the rule as now composed sets the requirements they are

bound to enforce.

***

Federal courts ... lack authority to substitute

for Rule 23's certification criteria a standard

never adopted--that [**21] if a settlement is

"fair," then certification is proper.

117 S. Ct at 2248, 2249.

The Department contends that this court's recent

decision in Eubanks was effectively overruled by the

Supreme Court's direction in Amchem that courts are bound

to observe strictly the requirements of Rule 23. Eubanks was

a Title VII class action brought against the Librarian of

Congress and certified under subsection (b)(2). The district

court approved the parties’ settlement and held that even if

there were a right to opt out of a subsection (b)(2) class

action, the individual plaintiffs had failed to show that they

were entitled to opt out. Upon appeal we held that, although

the district court may in certain circumstances permit

members of the plaintiff class to opt out of a ()(2) suit, the

court in that case had not abused its discretion in declining to

do so. We recognized that Rule 23 does not "address the

possible need for opt-out rights in non-(b)(3) actions," but we

thought the Rule "sufficiently flexible to afford district

courts discretion to grant opt-out rights in (b)(1) and (b)(2)

class actions” in certain circumstances. Eubanks, 110 F. 3d

App. 58

at 93, 94. We based that ruling [* *22] upon Rule 23(d)(5),

which specifically authorizes the court to make "appropriate

orders” to govern “procedural matters" in a class action;

subsection (d)(5) is broad enough, we held, to permit the

district court to provide for opt-outs when appropriate in

(b)(1) and (b)(2) class actions. See id. at 96; see also Fed.

R. Civ. P. 23(d) advisory committee's note (1966) (stating

that subsection (d) "is concerned with the fair and efficient

conduct of the action").

We went on to say that the district court may, when

necessary to the fair and efficient conduct of the litigation,

exercise its discretion to allow opt-outs in at least two ways.

First, if the court finds that "the assumption of

cohesiveness” underlying certification of a (b)(2) class is

inapplicable to the individual class members’ claims for

monetary damages, then it may certify a hybrid class action

under subsections (b)(2) and (b)(3)--the latter of which

contemplates individual damages determinations Eubanks,

110 F.3d at 96. Second, if the court determines [*235] that

particular plaintiffs’ claims are “unique or sufficiently

distinct from the claims of the class as a whole," as, for

example, where a member of the [**23] plaintiff class had

filed Is own civil action before the class action was filed, see,

e.g., County of Suffolk v. Long Island Lighting Co., 907 F.2d

1295, 1304-05 (2d Cir. 1990), then it may permit opt outs

"on a selective basis." Eubanks, 110 F. 3d at 96

Nothing in the interpretation of Rule 23 we advanced

in Eubanks is inconsistent with the Supreme Court's

subsequent decision in Amchem. The district court s error in

Amchem had been in substituting me fairness inquiry of Rule

23(e) for the certification requirements of Rule 23(a) and (b).

In Eubanks we did not omit or even relax any requirement of

Rule 23; rather, we held only that in certain limited

circumstances the district court has discretion under

subsection (d)(5) to permit opt-outs, notwithstanding the

absence of a specific authorization in subsection (b)(2).

App. 59

In the alternative the Department argues that the

district court abused its discretion by permitting opt-outs

because it did not follow either of the options for doing so

outlined in Eubanks. When the district court issued the

decision now before us, Eubanks had not yet been decided.

Relying instead upon Holmes v. Continental Can [**24] Co.,

706 F2d 1144 (11th Cir. 1983), the district court asserted

that allowing opt outs is appropriate "When the monetary

relief stage ... is functionally more similar to a (b)(3) class

than to a (b)(2) class." 1/69 F.R.D. at 244. The court was

"impressed with the vehemence with which some members

of the class have opposed the settlement" and noted its

“concern” that "in the absence of allowing for ‘opting out'

some searing individual injury might be greatly under

compensated,” /d. at 245.

We agree that the district court abused its discretion

when it allowed class members to opt out of the settlement in

this case. The district court did not pursue either of the two

options we later approved in Eubanks, nor did it adduce any

other tenable ground upon which opting out might be

permitted. Indeed, the dissident plaintiffs do not argue that

their case fits within either of the two circumstances

instanced in Eubanks, nor do they suggest any alternative

basis upon which we can uphold the decision of the district

court.

First, the district court clearly did not certify a hybrid

class action based upon a finding that "the assumption of

cohesiveness for purposes of injunctive [**25] relief that

justifies certification as a (b)(2) class is unjustified as to

claims that individual class members may have for monetary

damages." Eubanks, 110 F.3d at 96. Class counsel repeatedly

requested certification pursuant to (b)(2), the consent decree

stated that the parties agreed to certification pursuant to

(b)(2), and the court ultimately certified the class pursuant to

(b)(2). Although the district court in allowing opt-outs did

refer to the distinction between a (b)(2) and a (b)(3) class

App. 60

action, the court did not purport to hold, and did not make

findings sufficient to support the conclusion, that a hybrid

class certification was appropriate: The court found neither

that the assumption of cohesiveness underlying a (b)(2) class

certification was unjustified with respect to plaintiffs’

individual claims for monetary damages, nor that the

monetary or other individual claims were appropriate for

certification under (b)(3). Nor did the district court address

the predominance and superiority requirements for

certification under (b)(3). To the contrary, the court made all

the factual findings necessary to show that a hybrid class was

not appropriate. The court determined that [**26] the

plaintiffs sought "extensive injunctive and systemic relief in

addition to monetary damages," 1/69 F.R.D. at 239, and

found that the plaintiffs’ "predominantly equitable claims ...

arose from a system of personnel actions that have been

uniformly imposed on all class members," id. at 238.

We recognized in Eubanks that whenever individual

plaintiffs in a subsection (b)(2) class have claims for

different amounts of damages, their interests may begin to

diverge. //0 F.3d at 95. As noted above, however, before

hybrid certification is appropriate there must be some reason

to believe that the assumption of cohesiveness underlying a

subsection (b)(2) class action does not [*236] apply to the

individual claims for monetary damages; for example, the

amounts claimed by various class members may be so

disparate as to create a conflict of interest within the class.

Here the district court did not find that the assumption of

cohesiveness had broken down; nor do the dissident

plaintiffs so argue before this court.

Second, the district court did not find that the claims

of the individual dissidents are so atypical of the claims of

the class as to justify permitting them to opt out of the class.

(**27] The court stated that there might be some class

member(s) with a "searing individual injury" who would be

"under compensated" if limited to the relief provided in the

App. 61

consent decree. The court did not determine, however, that

there are in fact such persons in the class, let alone that the

dissidents are among them. The dissidents do not even argue

that they have suffered an unusually grave degree of injury;

rather, they argue merely that they stand to be under

compensated for their injuries. As we made clear in Eubanks,

however, that is not a sufficient justification for permitting

members of the class to opt out:

That ... appellants received less under the

settlement agreement than they might have

expected to receive had they prevailed in

individual lawsuits cannot alone justify an

opt-out, as no party can reasonably expect to

receive in a settlement precisely what it would

receive if it prevailed on the merits.

Id. at 98. Moreover, this argument was more properly

directed to the issue of fairness, id. at 98-99, and as such it

was rejected both by the district court in the fairness hearing

and by this court (in Part II.A, above). Nor are the

dissidents' [**28] claims different in kind from those of other

class members: In certifying the class the court specifically

found that the claims of the named plaintiffs, including eight

of the nine cross-appellants, were "typical" of the claims of

the class as a whole. 1/69 F.R.D. at 238.

Third, although the district court could properly rely

upon Holmes before we issued Eubanks, it erred in its

application of that case and thereby abused its discretion. See

Koon v. United States, 518 US. 81, 116 S. Ct. 2035, 2047,

135 L. Ed. 2d 392 (1996) ("A district court by definition

abuses in discretion when it makes an error-of law"). In

Holmes the court held that "the presence in the lawsuit of a

significant number of atypical claims not common to the

class" required the district court to permit opt-outs. 706 F.2d

at 1155. The court also suggested that the assumption of

App. 62

cohesiveness in Rule 23(b)(2) claims for injunctive relief

may break down when there are individual claims for

disparate amounts of monetary damages and that in such

cases opt-outs may be required. Jd. at 1159-60. As we have

pointed out, however, here the district court did not find (and

the dissidents do not contend) [**29] that the dissidents’

claims are atypical or that the assumption of class

cohesiveness has broken down.

The dissidents argue, at least implicitly, that they

should be permitted to opt out because several of them had

individual discrimination complaints pending against the

Department. In Eubanks, however, we _ rejected the

contention that a pending administrative complaint--as

~ opposed to a lawsuit filed in court--is sufficient to support a

class member's preference to opt out of a class action. See

110 F.3d at 97. One may not, by first filing an administrative

charge and then affirmatively joining a class action as a

named plaintiff or an intervenor, obtain the option to see

whether the result in the class suit is satisfactory and, if not,

then to take up the administrative charge again.

The dissidents also argue, as they emphasized at oral

argument, that they must be permitted to opt out because

they object to the settlement of their individual claims (as

opposed to the class claims). This is not the law; otherwise

members of the plaintiff class would have to be allowed to

opt out whenever there are individual claims for monetary

damages in addition to class claims for injunctive [**30]

relief Eubanks itself involved claims for injunctive as well as

monetary relief, however, and we upheld the district court’s

decision not to permit opt-outs. Insofar as the -dissidents

mean to suggest that their individual claims for monetary

damages are somehow unique or atypical, as noted above

they give us no reason to accept that conclusion.

[*237] We hold, therefore, that the district court

abused its discretion in permitting the dissident class

members to opt out of this class action; the district court

App. 63

made no findings that would support opting out under

Eubanks. Nor is it necessary to remand the case for the-

district court to make further findings in light of Eubanks;

the Department argued in its brief that a remand was not

necéssary, and the dissidents did not seek a remand to

develop the record further in the event we determined that

Eubanks was not’satisfied. Moreover, the dissidents do not

allege any alternative basis that, if proved, would enable the.

district court upon remand again to permit them to opt out.

Ill. Conclusion

For the reasons stated above, we hold that the district

court did not abuse its discretion in approving the fairness of

the consent decree. [**31] We also conclude that 4mchem

does not undermine this court's holding in Eubanks, and that

the district court abused its discretion in permitting some

members of the class to opt out of the settlement of this case.

Accordingly, we uphold the district court’s approval of the

cousent decree and direct that it be made binding upon all

members of the class.

So ordered.

LEXSEE 169 F.R.D. 224,AT 229

WALTER J. THOMAS, et al., Plaintiffs, v.

WARREN CHRISTOPHER,

Secretary of State, Defendant.

Civil Action No. 86-2850 (SS)

UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF COLUMBIA

169 F.R.D. 224; 1996 U.S. Dist. LEXIS 16894

November 7, 1996, Decided

November 7,1996, Filed

COUNSEL:

[**I] For WALTER J. THOMAS, plaintiff: Charles

Lindsay Warren, Warren Eugene Connelly, AKIN, GUMP,

STRAUSS, HAUER & FELD, L.L.P., Washington, DC.

Barbara Bethone Hutchinson, New Carrollton, MD. Carl E.

Anderson, WALTER & HAVERFIELD, Cleveland, OH.

For BERNARD JOHNS, plaintiff: Charles Lindsay

Warren, (See above). Warren Eugene Connelly, (See above).

Carl E. Anderson, (See above).

For SUSAN E. ALEXANDER, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, WASHINGTON

LAWYERS' COMMITTEE FOR CIVIL RIGHTS,

Washington, DC. Carl E. Anderson, (See above).

For ISAIAH M. ALDRIDGE, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above). Carl

E. Anderson, (See above).

For LAWRENCE ATCHERSON, intervenor-plaintiff:

Charles Lindsay Warren, (See above).. Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above). Carl

E. Anderson, (See above).

For HERMAN O. BAILEY, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Conneliy, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For JOHNEY [**2] BROOKS, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For TUSHINDE COOPER, _intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Carl E. Anderson, (See above).

For E. LLOYD DAVIS, intervenor-plaintiff: Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For ODIE FIELDS, intervenor-plaintiff: Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For CASSIE GHEE, intervenor-plaintiff: Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For CONSTANCE E. HUGGINS, | intervenor-

plaintiff: Charles Lindsay Warren, (See above). Warren

Eugene Connelly, (See above). Joseph Marc Sellers, (See

above). Carl E. Anderson, (See above).

For ERIC JAMES, intervenor-plaintiff. Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Joseph Marc Sellers, [**3] (See above). Carl

E. Anderson, (See above).

For ALAN B.C. LATIMER, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Barbara Bethone Hutchinson, (See

above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For LISA LAYNE, intervenor-plaintiff: Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For MAURICE MCLEGGAN, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For ALPHONSO G. MARQUIS, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhom Watson,

LAW OFFICES OF EVA P. BRITT, Washington, DC.

Joseph Marc Sellers, (See above). Carl E. Anderson, (See

above).

For MARY MILLER, intervenor-plaintiff.- Joseph

Marc Sellers, (See above). Carl E. Anderson, (See above).

For WARD D. MORROW, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhom Watson,

(See above). Joseph Marc Sellers, [**4] (See above). Carl

E. Anderson, (See above). '

For ALFRED NEAL, intervenor-plaintiff: Charles

Lindsay Warren, (See above). Warren Eugene Connelly,

(See above). Theresa Grace Lawhom Watson, (See above).

Joseph Marc S:llers, (See above). Carl E. Anderson, (See

above).

App. 67

For DIANNA RITTER, intervenor-plaintiff: Joseph

Marc Sellers, (See above). Carl E. Anderson, (See above).

For RAYMOND G. ROBINSON, | intervenor-

plaintiff: Charlies Lindsay Warren, (See above). Warren

Eugene Connelly, (See above). Theresa Grace Lawhom

Watson, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For MARY CYNTHIA SMOOT, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhom Watson,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For MELVIN T. SPENCE, §intervenor-plaintiff.

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhom Watson,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For LAURANCE STANLEY, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). [**5] Joseph Marc Sellers, (See

above). Carl E. Anderson, (See above).

For VANDOSTER- TABB, _ intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For JUDITH D. TONOHOU, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For AUBREY VERDUN, _ intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

App. 68

For ROBERT WATKINS, | intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhorn Watson,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For DOROTHY WATSON, _intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Theresa Grace Lawhom Watson,

(See above). Joseph Marc Sellers, (See above). Carl E.

Anderson, (See above).

For CHARLOTTE WILLIAMS, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See [**6] above). Joseph Marc Sellers, (See

above). Carl E. Anderson, (See above).

For HUGH WILLIAMS, intervenor-plaintiff: Joseph

Marc Sellers, (See above). Carl E. Anderson, (See above).

For JOSZET H. ZIEGLER, intervenor-plaintiff:

Charles Lindsay Warren, (See above). Warren Eugene

Connelly, (See above). Joseph Marc Sellers, (See above).

Carl E. Anderson, (See above).

For JAMES A. BAKER, III, defendant: Richard Neal

Reback, U.S. ATTORNEY'S OFFICE, Washington, DC.

For WARREN CHRISTOPHER, Secretary of State,

defendant: John Oliver Birch, Cynthia Ann Schnedar, U.S.

ATTORNEY'S OFFICE, Washington, DC.

JUDGES:

Stanley Sporkin, United States District Judge

OPINIONBY:

Stanley Sporkin

App. 69

OPINION:

[*228] MEMORANDUM OPINION

This matter comes before the Court for consideration

of a Consent Decree entered into by the parties. Plaintiffs’

case was originally brought in October of 1986, so it has

taken ten years to reach this proposed settlement. The Court

attributes this delay to the complexity of the action and the

settlement discussions, as well as to the untimely death of the

judge to whom this case was originally assigned.

The Consent Decree seeks to resolve all claims that

were or could have [**7] been brought under Title VII of the

Civil Rights Act of 1964, as amended, 42 U.S.C. §§2000e-16

et seq., by any African-Americans who were "Foreign

Service Generalist Officers" or "Foreign Service Generalist

Officer" career candidates at any time between January 20,

1984 and March 22, 1996, the date of Preliminary Approval

of the Consent Decree.

The Court held preliminary fairness hearings on the

proposed Consent Decree on March 21, 1996 and March 21,

1996. The Court held additional hearings on July 15, 1996,

July 22, 1996, July 23, 1996 and September 19, 1996.

During those hearings, the Court heard sworn testimony

from members of me putative class who both supported and

opposed the consent decree. The Court also heard argument

on various matters related to the Consent Decree by counsel

for the parties.

Members of the Plaintiff class testifying at those

hearings have identified several issues that were of concern

to the Court in its evaluation of the proposed Consent

Decree. The Court has corresponded with the Secretary of

State in an effort to address some of those concerns, and the

correspondence is a part of the record. - Several of these

issues have subsequently been addressed [**8] by the

Department of State and the Court hopes that several other

App. 70

concerns will yet be addressed by the Department. One

issue, that of possible "opting out" of the class of present and

former FSOs by those who desire to do so, will be resolved

by the Court's decision here.

[*229] The Court has reviewed the parties’ Proposed

Joint Findings of Fact and Conclusions of Law and adopts

them as its own with certain minor modifications. The

Court's Findings of Fact and Conclusions of Law follow.

FINDINGS OF FACT

Background :

In June 1984, Walter J. Thomas, an African-American

former Foreign Service Officer ("FSO"), filed an administrative

EEO class complaint on behalf of himself and other African-

American FSOs, alleging discrimination regarding post and

duty assignments, performance appraisals, promotions,

censuring, and selection out. In May 1986, Bernard Johns, who

is also an African-American former FSO, filed an individual

administrative complaint alleging racial discrimination for

failure to promote him from grade FO-02 to grade FO-01 and

for not receiving an assignment for which he had bid. ~~

Following denial of Mr. Thomas’ class complaint by the

agency, on October 17, 1986, Walter J. [**91 Thomas and

Bernard Johns filed their original complaint in this action. The

complaint alleged that the Department of State engaged in

discriminatory employment practices and retaliatory behavior in

violation of Title VII of the Civil Rights Act of 1964, as

amended, 42 US.C $$ 2000e et seq. Specifically, the complaint

asserted that: (1) the State Department discriminated against

black FSOs in assignments, performance appraisals,

promotions, tenure, and selection out and (2) that the

Department had retaliated against black FSOs for objecting to

these unlawful employment practices.

App. 71

The State Department denied each of Plaintiffs’

allegations, contending that: (1) the Department had

complied with the letter and spirit of Title VII, and (2) the

Plaintiffs did not satisfy the requirements for class

certification. Plaintiffs filed their first motion to certify the

lawsuit as a class action on January 15, 1987, prior to taking

any discovery. They sought certification of a class of all

black Foreign Service Officers and career candidates

employed by-the Department of State at any time after

January 20, 1984. Plaintiffs’ motion for class certification

was denied by Judge Revercomb on July [**10] 20, 1987.

On April 28, 1988, Judge Revercomb denied

reconsideration of the motion to certify a class action, but

granted Plaintiffs’ motion to file an amended complaint

thereby allowing 30 additional individuals to intervene in

order to assert claims of discriminatory employment

practices and retaliatory behavior against the Department

similar to those asserted by Plaintiffs Thomas and Johns.

Following several status conferences, the Court indicated it

would consider a renewed motion to certify the class.

Between 1988 and 1994, class counsel obtained in

discovery more than 60,000 documents, and hundreds of

answers to interrogatories, and they took more than 60 hours

of depositions of State Department witnesses regarding the

employment practices at issue. In addition, class counsel

retained Economic Research Services, Inc. ("ERS"), a

Tallahassee, Florida, based economic consulting firm which

has considerable experience in employment discrimination

cases, to perform ‘statistical and other studies on a

"stipulated" computerized database of information provided

by the State Department in discovery. This database consists

of 93 separate computer tapes and over 1000 pages of

explanatory [**II] memoranda, printouts, and other

documents. Working at Kass counsel's direction from 1988

through 1995, ERS performed numerous alternative analyses

of more than one million individual personnel transactions

App. 72

recorded on the database occurring from 1981 through 1994,

pertaining to over 6000 FSOs of all races. The primary

objective of these analyses was to determine whether

statistically significant evidence of racial discrimination

against African-American FSOs existed in any State

Department employment practices covered by the complaint.

The State Department retained Longbranch Research

Associates to create the stipulated data base and to analyze

data with respect to Plaintiffs’ allegations in this case.

On December 6, 1991, shortly after the enactment of

the Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat.

1071-1100, the [*230] Plaintiffs moved the Court for leave

to file a Second Amended Complaint to demonstrate that

their claims against the Department were based on a

disparate impact as well as a disparate treatment theory of

liability and to request a jury trial, compensatory damages,

prejudgment interest, and expert fees, which were not

available to Plaintiffs prior to the enactment [**12] of the

Civil Rights Act of 1991.

By order dated June 2, 1993, the Court established

December 1, 1993 as the date for filing a renewed motion for

class certification. At the parties’ request, on September 21,

1993, the Court suspended discovery and the previously

established litigation schedule in order to pen-nit the parties

to pursue settlement negotiations. After the deadline for

completing those negotiations was twice extended, and in the

absence of an imminent settlement, on February 14, 1994,

the Court directed counsel for the Plaintiffs to file their

renewed motion to certify a class by June 15, 1994.

On June 2, 1994, Plaintiffs withdrew their Second

Amended Complaint, on which the Court had not yet ruled,

and moved the Court for leave to file a Third Amended

Complaint which renewed the claims in the Second

Amended Complaint, designated four additional class

representatives, and updated certain factual representations.

On June 8, 1994, the Court granted Plaintiffs’ motion.

App. 73

Plaintiffs filed their Motion for Class Certification on

June 15, 1994, and the State Department filed its opposition

to Plaintiffs’ motion on September 14, 1994. Both parties

supported their filings with [**13] detailed affidavits from

their statistical experts. However, as a result of the progress

reported by the parties in settlement discussions which

continued, at the Court's request, under the supervision of

Magistrate Judge Alan Kay, the class certification hearing

was scheduled and postponed several times. During

negotiations, the parties met with Magistrate Judge Kay on

more than 15 occasions.

In February 1995, counsel for the class and the

Department reached an agreement in principle to settle the

case. Various Plaintiffs opposed some of the elements of

this agreement. Negotiations between the parties continued

in order to finalize the details. On January 31, 1996, counsel

for the plaintiff class agreed to recommend a settlement to

the approximately 360 class members. The terms of the

settlement are embodied in a Consent Decree, which was

signed by counsel for the parties on January 31, 1996, and

then submitted to the Court for its approval.

To determine whether the proposed Consent Decree

was fair, reasonable, and adequate, the Court followed the

two-step procedure suggested in the Manual for Complex

Litigation § 30.44, at 241-42 (2d ed. 1985). First, the Court

held a Preliminary [**14] Hearing on March 20, 1996. This

was: (1) to determine whether the proposed agreement was

within the range of an acceptable settlement justifying final

approval and, if so, (2) to arrange for providing notice to the

members of the class and affording them a hearing to

determine whether final court approval should be granted.

At the Preliminary Hearing, the Court heard extensive

presentations from counsel for the parties, counsel for

individual class members, and, separately, from 13 class

members. The Court granted preliminary approval on March

22, 1996.

App. 74

The second stage of the settlement approval process

- involved sending the proposed Consent Decree to every known

member of the class together with a-court approved notice

informing all class members of their right to file comments,

objections, and any statement of interest in opting out of the

settlement. Class counsel, counsel for the defendant, and

counsel for some of the individual Plaintiffs all reviewed the

notice prior to its approval by the Court. This notice also

informed all class members of their opportunity to appear and

be heard at a Fairness Hearing on July 15, 1996. The Court's

March 22, 1996 order and the Fairness Hearing {**15] Notice

stated that class members’ responses to the Notice and

comments on the Consent Decree must be received by the Court

on or before June 11, 1996.

With respect to the Fairness Hearing on July 15, 1996,

the court-approved notice was sent during the first week of April

1996 to all known class members as follows:

(a) To class members in the Foreign Service assigned to

State Department positions [*231] in the United States

and to class members separated from the Foreign

Service but employed by the State Department in a Civil

Service or contractor position, the required documents

were delivered by State Department internal mail. The

documents delivered through the State Department's

internal mail included an "Acknowledgment of Receipt"

form and a pre-addressed envelope to use to return the

confirmation form.

(b) To class members in the Foreign Service assigned to

non-State Department positions in the United States and

to class members who are separated from the Foreign

Service but who do not work for the State Department in

another capacity and whose last known address is in the

United States, delivery was via U.S. registered or

certified mail, return receipt requested.

App. 75

(c) [**16] To class members in the Foreign Service

assigned to U.S. Government facilities overseas,

delivery was via U.S. Department of State pouch.

Of 359 known class members who were sent notice,

approximately 30 notices were either returned or delivery

was not acknowledged. No class member indicated any

deficiencies in nature or timeliness of the notice provided to

them. Nor did any class members complain of lack of

opportunity to present to the Court their views in opposition

to or in favor of the settlement.

In addition, in accordance with Section 108 of the

Civil Rights Act of 1991, 42 U.S. C. § 2000¢e-2, all FSOs

and career candidates employed by the State Department as

of March 22, 1996, the date of Preliminary Approval, were

provided notice that one or mom of me terms of the

settlement might adversely affect their interests and legal

rights and to advise them of the opportunity to file objections

or comments and to appear at the July 15, 1996 Fairness

Hearing. Accordingly, the Court finds that the conditions of

Section 108 of the Civil Rights Act of 1991 were satisfied

and that the terms of the Consent Decree may not. be

challenged hereafter by anyone who either had actual notice

[**171 of the settlement or whose interests were adequately

represented by another person who presented objections at

the Fairness Hearing.

The notice of the July 15, 1996 hearing was

reasonably calculated, under all of the circumstances, to

apprise interested parties of the proposed settlement and

afford them: an opportunity to comment on the terms of the

Consent Decree. See, e.g., Weinberger v. Kendrick, 698 F.2d

Go 70-71 (2d Cir. 1982) (citing Mullane v. Central Hanover

Bank & Trust Co., 339 U.S. 306i 314, 94 L. Ed. 865, 70S.

Ct. 652 (1950)), cert. denied, 464 US. 818; see also, Grunin

v. International House of Pancakes, 513 F.2d 114, 120 (8th

Cir. 1975)(11the mechanics of the notice process are left to

App. 76

the discretion of the court subject to the broad

‘reasonableness’ standards imposed by due process"), cert.

denied, 423 US. 864, 46 L. Ed. 2d 93, 96 S.Ct. 124 (1983).

The Consent Decree and Fairness Hearing Notice delivered

to class members and other individuals reasonably conveyed

the information that was required to be communicated and

afforded a reasonable time for those interested to comment

on the proposed settlement. The objectors had adequate and

reasonable [** 18) opportunity to formulate and present

meaningful objections to the proposed settlement. In all,

nearly 11 weeks were available for the preparation and filing

of objections between Preliminary Approval of the proposed

settlement on March 22, 1996, and the deadline for filing

objections on June 11, 1996.

Based on the foregoing, and all other evidence before

the Court, the Court finds that pursuant to the requirements

of Rule 23 and due process, proper notice of the proposed

class certification and terms of the settlement was given to

class members.

Relief to the Plaintiff Class in the Settlement

The Court finds that the settlement provides fair,

reasonable and adequate relief to the class, as follows:

1. Prospective and Injunctive Relief

The Consent Decree provides that an injunction will be

entered, effective for four years from the date of this Court's

Preliminary Approval, prohibiting the State Department [*232]

from discriminating on the basis of race in promotions, awards,

censuring, terminations, performance evaluations, selection out,

post and duty assignments, conal assignments, or training. The

injunction also bars the State Department from retaliating

against any [**191 class member for participation in equal

employment opportunity activities.

App. 77

The Consent Decree requires the following

significant internal State Department reforms:

Council for Equality. The Consent Decree provides

for a senior level Council for Equality in the Workplace to

monitor and advance equal employment opportunities in the

Department. The Council will consist of eight high-ranking

members of the Department selected by the Secretary of

State, including at least one African-American, and will be

chaired by the Under Secretary of State for Management. In

response to a suggestion from the Court, the Secretary of

Saw agreed to appoint one additional Council member from

outside the State Department and to meet personally on an

annual basis with this Council. The Council will review ©

annually data on the racial profile of post and duty

assignments and honor award recipients within each Bureau

and across the Department, including the profiles of

Ambassadorial positions, Assistant Secretary and Deputy

Assistant Secretary positions, and all other "program

direction" positions. Following its review of the data, reports

from Assistant Secretaries and Bureau heads, the Council

[**20] will meet with Assistant Secretaries and bureau heads —

to make policy recommendations concerning employment

practices that advance the goals of equal employment

opportunity in the Foreign Service. Class counsel may

submit reports to the Council regarding barriers to

advancement or imbalances in opportunity in the Foreign

Service on the basis of race, which they or members of the

class believe exist at the State Department. The Council will

also provide class counsel with copies of its annual reports.

Job Analysis/EER Revision. The State Department,

with the assistance of an expert consultant, will hire a

contractor to conduct a comprehensive job analysis of FSO

job duties, including an assessment of the knowledge, skills

and abilities needed by FSOs. The expert consultant will

then recommend whether the current Employee Evaluation

Report ("EER") form used to evaluate FSOs should be

App. 78

modified to ensure that the potential of tenured FSOs is

assessed on the basis of the knowledge, skills, and abilities

necessary to perform successfully at the next higher grade

and that racial bias is minimized in that assessment, Class

counsel will play an active role, particularly in such areas

[**21] as selecting the expert consultant, reviewing the draft

Statement of Work for the contract solicitation, participating

on a committee to advise the contractor, and reviewing the

results of the job analysis and the underlying data.

Performance appraisals determine who is promoted and who

is selected out. These steps are designed to assure that the

Foreign Service evaluation system relies on objective criteria

to predict future success and to address the other concerns

that motivated the class action.

EEO/Diversity Awareness Training. The State

Department will revise and expand its EEO/Diversity

Awareness training and require priority participation by all

supervisors of FSOs and, eventually, by all FSOs. The

revised training courses draw on successful programs used

by other agencies and by private industry. They teach

management methods that foster equality in the workplace

and avoid discrimination in evaluations, assignments, and

awards. The value of this provision lies in its potential to

continue to change attitudes and behavior in the Department

long after the Decree itself has expired. Plaintiffs’ counsel

already have reviewed a draft agenda for each course,

including a [**22] description of all activities and the goal of

each activity.

Superior Honor Awards. The Director General

appointed a working group to review individual Superior

Honor Award Nominations to determine whether these

awards reflect the racial composition of the bureaus in the

Department and, if not, to examine the circumstances under

which the imbalances occurred, and to make

recommendations [*233] to redress any particular or

systemic problems that are identified. The purpose is to

App. 79

prevent future racial imbalance in the selection process,

unless the working group finds legitimate (i.e., performance-

based) reasons for the imbalance. Class counsel, after receipt

of the raw data provided to the working group, may submit

their own recommendations to the working group. Class

counsel will also be offered the opportunity to review the

report of the working group and to make such suggestions as

counsel believe are warranted.

Certification of Selection Out Process. When a

Performance Standards Board ("PSB") is considering an

African-American FSO generalist for possible selection out,

the Department will make its best efforts to include at least

one African-American member on the Board. [**23] The

Department will notify class counsel of its efforts in each

instance in which an African-American member is not

included on such a PSB. In addition, the Department will

certify that the PSB received a briefing on EEO and made is

decision on the factors identified in applicable precepts.

Electronic Database. The Department will establish

an Integrated Personne! Management System ("IPMS"). The

IPMS will permit the Department to collect and analyze data

pertaining to personnel functions including but not limited to

promotions, awards, censuring, and terminations by race.

Affirmative Action Plan. The Department will

maintain and revise the current EEOC-approved affirmative

action plan applicable to members of the Foreign Service.

Monitoring. The Consent Decree provides a

mechanism for class counsel to monitor the Department's

compliance with the consent decree. For a total of four

years, commencing on t e date the Court gave Preliminary

Approval to the Consent Decree, the Department shall report

the following information, covering the preceding twelve

months, to class counsel: total FSO generalist population

statistics; program direction, stretch, and training [**24]

assignments; tenure decisions; honor awards; diversity

training; promotions; and selections out. The Consent

App. 80

Decree also provides a mechanism for the parties to resolve

disputes concerning application of or compliance with the

consent decree. All reports will be filed with the Court, to

enable it, as appropriate, to engage in an independent

assessment of the implementation of the Consent Decree.

At the Fairness Hearing, Plaintiffs' expert on

prospective relief gave his opinion that, after participating in

extensive discussions with the State Department and

consultations with class members, he had come to believe

that the Consent Decree embodies significant reform

measures designed to eliminate the barriers to advancement

by class members. He also gave his expert opinion that the

monitoring and accountability systems in the Decree were

"state-of-the art."

y 5 Retroactive Relief

Sixteen class members will receive immediate

promotions within the midlevel grades, and one class

member will be promoted in the Senior Foreign Service from

grade FE-OC to FE-MC. To maximize the remedial long-

term effect on discrimination in the Department's personnel

system, the seventeen promotions [**251 will be awarded to

class members currently active in the Foreign Service who

have been at their present grade for the longest period of time

and who were recommended but not reached Or promotion

from that grade.

The Consent Decree provides for the selection of an

impartial review panel (the "Review Panel") to make

reinstatement decisions and decisions concerning termination

damages. The panel consists of three members, one chosen

by the 30 original named Plaintiffs, one chosen by class

counsel, and the third chosen by the first two members. The

Panel member chosen by the Plaintiffs through a nomination

and voting process is a social anthropologist, an educator,

and a former country director in the Peace Corps. Class

App. 81

counsel chose an attorney who served as counsel to the

Deputy Attorney General, exercising oversight responsibility

for issues affecting civil and political rights, and who [*234]

previously worked in the Civil Rights Division of the Justice

Department, Those two Panel members selected as the third

panelist a former FSO who served as Ambassador to Malawi

and Uganda and as Consul General in Capetown. Following

their selection, and subsequent to an interview with the

Court, Panel [**26] members received court appointments. -

Their work and decisions, cloaked in quasi-judicial

immunity, were discharged in exemplary fashion.

The Panel completed ‘its work successfully and, on

July 11, 1996, submitted to the Court its Decisions and

Recommendations.

The Department will provide reinstatement with new

five year limited term appointments as Junior Officer

Candidates to four class members who did not obtain tenure

while they served as Foreign Service Officer career

candidates. The four reinstatements were offered to

individuals selected by the Review Panel from a negotiated

list of eligible class members according to the criteria set

forth in the Consent Decree. The factors for selection

included: (1) evidence that the class member was

recommended for tenure by a Foreign Service

Commissioning and Tenure Board but did not receive career

status for other reasons, e.g. failure to clear language

probation; (2) evidence of the _ percentage of

recommendations for tenure based on the number of

performance evaluations that are officially part of the class

member's performance file; and, (3) evidence of the time the

class member spent in the Foreign Service before being

separated. A list [**27] of class members eligible for

reinstatement is contained in a Confidential Exhibit to the

Consent Decree.

App. 82

The agreement provides for the class to receive a total

award of $ 3.8 million in satisfaction of all class claims for

monetary relief. $ 125,000 will be distributed to the 30

named Plaintiffs (or their estates) in recognition of their

efforts to resolve the class action successfully, including

$40,000 to Walter J. Thomas, the lead plaintiff, nl and

$85,000 pro rata among the 29 other named Plaintiffs.

nl Mr. Thomas has elected to opt out

of the settlement, so he will not receive this or

any other sum from the settlement.

$2.9 million will be distributed to class members who

did not receive promotions or whose promotions were

delayed. That money will be distributed according to a

formula based on the amount of promotion delay

experienced by each class member beyond the median time

calculated by Plaintiffs’ expert for white male FSOs.

A total of $775,000 has been divided into two pools

for distribution [**28] to class members who may have been

"selected out,” i.e., terminated, for race-related reasons. Pool

A (at least $200,000) will be allocated on a formula basis to

29 class members who were terminated from the Foreign

Service on the grounds of "unsatisfactory performance" or

who were considered constructively discharged according to

the impartial Review Panel established by the terms of the

Consent Decree and approved by the Court. Pool B

($575,000) will be distributed to four members of Pool A

based on a number of specified criteria applied by the

Review Panel as described in Appendix F of the Consent

Decree. Pool B is available to a maximum of four class

members in Pool A because that is a reasonable estimate of

the number of excess terminations shown “by statistical

analysis. The monetary award to any individual from Pool B

is capped at $ 250,000.

App. 83

During the first week in June 1996, class members

were notified of the preliminary calculations of the amount

of their individual "promotion damages" awards. Under the

terms of the Consent Decree, 265 class members would

receive an average award for promotion damages of S

10,900. Class members who did not qualify for this type of

award (**29] include those who were promoted at or faster

than white males, the comparison group used for damages

calculations or those who were excluded under the damage

distribution provision of the Consent Decree (Exhibit F)

because they achieved the personal rank of Career Minister

or Career Ambassador, or because they served as Chief of

Mission regardless of personal rank. Seventeen class

members who upon final approval of the Consent Decree

will receive immediate promo6ons [*235] to the next highest

grade were also notified of their promotions in early June

1996.

The Review Panel also reviewed the applications of

eight class members who applied for reinstatement and, as

provided for in the Consent Decree, selected four. The Panel

also analyzed the applications of thirty class members who

applied for "termination damages" awards from "Pool A" and

"Pool B." The Panel selected twenty-nine class members,

who will receive an average Pool A award of $16,400. The

panel then selected four class members for Pool B and

awarded them an average of $75,000. The Pool B awards

ranged from $40,000 to $120,000. All Pool A and Pool B

recipients were notified of their awards in early June.

Ninety-one of 359 [**30] class members, as well as

two non-class members, filed comments regarding the

Consent Decree. Thirty-four class members submitted

comments in support of final approval of the Consent Decree

and fifty-five class members objected to various provisions.

Class members filed objections claiming inadequate

individual and/or class-wide relief, inadequate injunctive

and/or prospective relief, and inadequate monitoring

App. 84

provisions. Several class members did not identify their

objections. Two non-class members filed objections

asserting that the relief provided by the Consent Decree

constitutes reverse discrimination.

At the July 15, 1996 Fairness Hearing, the Court

heard from all class members who appeared and chose to

testify. Of the 14 who spoke, 3 testified in favor of the

settlement, 8 were opposed, and 3 were ambivalent or

neutral. Two groups of objecting Plaintiffs retained separate

counsel to present their objections. The Fairness Hearing

continued on July 22 and on July 23 to permit counsel to

respond to the Court's questions about the Consent Decree.

At the close of the July 23 hearing, the Court directed the

State Department to send a second notice to the twenty-seven

~ class members [**31] who had indicated through testimony

at the Fairness Hearing or. in written comments their

preliminary interest in “opting out.” The notice required

those twenty-seven to file a motion to opt out, to explain the

reasons for their request, and to provide the legal authority

which supported their request. The notice required those

class members to respond by September 3, 1996.

Nineteen class members filed motions with the Court

seeking to opt out of the settlement (three class members

subsequently withdrew their motions and have been

reinstated in the settlement). The Consent Decree itself does

not expressly permit or prohibit opting out. The State

Department maintains that the Court does not have the legal

authority to permit "opt outs" under the circumstances of this

case because the class sought certification under Rule

23(b)(2). Counsel for the 16 class members who seek

permission to opt out contended that the Court has the

discretion to permit opt outs. The Court addresses this issue

below.

App. 85

a Legal Fees

The settlement provides for the distribution of $2.1

million in legal fees and expenses as set forth in Exhibit K to the

Consent Decree. Defendant's counsel stated at (**32] the July

15, 1996 Fairness Hearing that the sum of $2.1 million was

offered separately from the $ 3.8 million offer to settle the

monetary claims of the class, The sum of $2.1 million includes

reimbursement for expenses in excess of $650,000 actually

incurred by the firms listed in Exhibit K of the Consent Decree.

The balance of approximately $1.4 million represents

compensation for the time spent by counsel and persons

working at their direction.

The Washington Lawyers’ Committee for Civil Rights

& Urban Affairs, the law firms of Akin, Gump, Strauss, Hauer

.& Feld, L.L.P. and Walter & Haverfield devoted more than

30,000 hours to litigating and negotiating the settlement of this

case. This reimbursement is considerably less than the rate

provided under the guidelines established by Laffey v.

Northwest Airlines, Inc., 241 U.S. App. D.C 11, 746 F.2d 4

(D.C Cir. 1984), which applies to the determination of legal fees

in Title VII cases in the District of Columbia circuit.

Additional Findings

In addition to those findings of fact included above, the

Court further finds as follows:

[*236] -Upon consideration of the number and

extent of negotiating sessions, the close [**33]

involvement of Magistrate Judge Alan Kay, and

the compromises reached on the specific

settlement terms, the Court finds that the

Consent Decree was the product of arm's length

bargaining and that there was no evidence of

collusion;

App. 86

-Based upon the report of the Review Panel -

and testimony from the Review Panel at the

Fairness Hearing, the Court finds that the

Review Panel reached its decisions according

to the guidelines and procedures set forth in

the Consent Decree and that its decisions were

fair and reasonable;

-The reform measures undertaken by the State

Department together with the four year

injunction against discrimination and the

provisions enabling class counsel to monitor

the State Department's progress in

implementing the terms of the Consent

Decree are fair, adequate and reasonable

prospective relief measures; and

-The award of $2.1 million in legal fees and

expenses is reasonable and justified in light of

the duration of this case, the relief obtained for

the class, and the fact that the amount of legal

fees and expenses represents a compromise that

is appropriate under the facts and circumstances

of this settlement.

CONCLUSIONS OF LAW

Title [**34] VII of the Civil Rights Act of 1964, 42

U.S.C. $$2000e et seq., as amended, prohibits discrimination in

employment on the basis of race. Specifically, Title VII makes

it unlawful for an employer to “fail or refuse to hire or to

discharge any individual, or otherwise to discriminate against

any individual with respect to his compensation, terms,

conditions, or privileges of employment, because of such

individual's race, color, religion, sex, or national origin..." 42

U.S.C. $ 2000e-2(a)(1).

App. 87

Title VII also makes it unlawful for an employer to

"limit, segregate, or classify his employees ... in any way

which would deprive or tend to deprive any individual of

employment opportunities or otherwise adversely affect his

status as an employee. 42 U.S.C. § 2000e-2(a)(2).

Certification of The Settlement Class

The parties have agreed that the Court, by approving

the Consent Decree, shall be certifying a class of all African-

Americans who are or were State Department Foreign

Service Generalist Officers or Foreign Service Generalist

Officer career candidates at any time between January 20,

1984 and March 22, 1996, the date of Preliminary Approval

of the Consent Decree. [**35]

The practice of certifying a settlement class

simultaneously with the approval of the pre-certification

settlement is widely accepted. Bowling v. Pfizer, Inc., 143

F.R.D. 141, 157, (S.D. Ohio 1992) ("tentative settlement can

precede or be concurrent with class certification" (quoting

Clark Equipment Co. v. Allied Indus. Workers of America,

803 F2d 878, 881 (6th Cir. 1986))),- County of Suffolk v.

Long Island Lighting Co., 710 F. Supp. 1422, 1424 (E.D.N.Y

1989); In re Beef Industry Antitrust Litig., 607 F.2d 167,

173-78 (Sth Cir. 1979), cert. denied, 452 US. 905 (1981); see

also Herbert Newberg & Alba Conte, Newberg on Class

Actions § § 11.22, 11.27 (3d ed. 1992).

By granting the requested certification, the parties

will be able to avoid protracted litigation and effectuate a

settlement that will provide immediate and substantial

benefits to the members of the class. Moreover, given the

lengthy, active, arms length negotiations between the parties

and the fairness of the settlement, there is no danger of abuse

of the settlement class device in this case.

Federal Rule of Civil Procedure 23(a) explicitly sets

forth four prerequisites to class certification: [**36] (1) the

class is sO numerous that joinder of all members is

impracticable; (2) there are questions of law and fact

common to me class; (3) the claims of the class

representatives are typical of the claims of the class; and, (4)

the class representatives will fairly and adequately protect

the interests of

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