Petition for Writ of Certiorari — Sodexho Marriott Services, Inc. v. McReynolds

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.orame Court, U.S.

(1) FILED

QO21731 MAY 23 2B

No. 02-

IN ‘THE

Supreme Court of the United States

SODEXHO MARRIOT SERVICES, INC.,

Petitioner,

CYNTHIA CARTER McREYNOLDS,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES CourRT OF APPEALS FOR THE

DisTRICT OF COLUMBIA CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

GeEorGE W. JOHNSTON

Topp J. Horn*

MITCHELL Y. Mirviss

VENABLE, BAETJER AND Howarp, LLP

1800 Mercantile Bank & Trust Bldg.

Two Hopkins Plaza

Baltimore, Maryland 21201

(410) 244-7400

Attorneys for Petitioner

* Counsel of Record

180803 ce

COUNSEL PRESS

(800) 274-3321 * (800) 359-6859

QUESTION PRESENTED

A decision to certify a putative class often constivutes

the single most significant event in deciding the outcome of

a class action lawsuit, as commentators and many in Congress

have recognized. Fed. R. Civ. P. 23(f) was promulgated in

1998 so that significant class certification decisions could

be appealed and reviewed before trial to ensure uniformity

of decisions and prevent significant errors.

In this massive employment discrimination case, the

district court certified a nationwide class of managerial and

executive level employees despite, as the court admitted, the

lack of a direct precedent and without providing the defendant

an opportunity to rebut plaintiffs’ statistical evidence and

anecdotal claims. The D.C. Circuit denied defendant’s

petition for interlocutory appeal, applying a standard that

limits Rule 23(f) appeals to rare cases.

This petition therefore raises a critical question regarding

class action procedure that has sharply divided the circuits:

Do the circuit courts of appeal have discretion to limit

their grant of interlocutory appeals under Fed. R. Civ.

P. 23(f) to those rare class certification decisions that

present (i) manifest error by the district court, (11) an

unsettled fundamental issue of law that is likely to evade

end-of-the-case review, or (iii) a “death knell” impact

terminating the case?

PARTIES AND RULE 29.6 CORPORATE

DISCLOSURE STATEMENT

Petitioner Sodexho Marriott Services, Inc., now

Sodexho, Inc. (“Sodexho”), is the defendant in the district

court proceedings below. Respondents Cynthia Carter

McReynolds, et al. are current and former management-level

employees of Sodexho and its two predecessor corporate

entities, Marriott Management Services (“MMS”), a former

division of Marriott International, Inc., and Sodexho U.S.A.

(“SUSA”), a former division of Alliance Sodexho, S.A. Ten ‘es

named plaintiffs brought this action: Ms. McReynolds, Lisa

Mitchell, Robert Morris, Jr., Chip Moss, Marilyn McNish,

Ezzie L. Henry, Dwain P. Richardson, Tarsha Ann Hardy,

Gail L. Darlington, and Samuel Cokes. Their motion for class

- certification sought certification of a class of all African

American salaried employees of Sodexho, MMS, and SUSA

at any time from March 9, 1998 to December 7, 2001 who

have held or sought managerial level positions.

Pursuant to Rule 29.6, Sodexho certifies that it is a

wholly owned subsidiary of Sodexho Alliance, S.A., a

publicly held company. No other publicly held company holds

10% or more of its siock. Sodexho may have indemnity

coverage for at least some of the claims and potential damages

sought by plaintiffs through an EPLI insurance policy with

the Federal Insurance Company, a subsidiary of The Chubb

Corporation, which is publicly traded. No other publicly

traded company is financially interested in the outcome of

the proceeding.

lil

TABLE OF CONTENTS

Page

Question Presented ....-.-------srrr crt i

Parties and Rule 29.6 Corporate Disclosure

Statement .....--05sessereee* Pe otek ie at ii

Tabla OF COMLCTES 0... eccrine steers i

Table of Cited Authorities .....------ssesrrrees iV

Table of Appendices .....-----+ssssrrrrrtet X1V

Opinions Below ......-----sssssrrerr |

Statement of Jurisdiction .....---+-sssrsrcrtte |

See ee ee ea l

Statement of the Case ......-- eres 2

Reasons for Granting the Petition .......---++>: 1]

A. The Conflict Among The C ircuits Regarding

The Standards For Granting Review Under

ae reer: eee eee 12

B. Sodexho’s Petition Satisfied The Third,

Fourth, Seventh, And Eleventh Circuits’

Standards For Rule 23(f) eee 19

ek haga sade e ens exe eee ees 28

TABLE OF CITED AUTHORITIES

Page

Cases

Abram y. United Parcel Serv. of Am., Inc.,

200 F.R.D. 424 (E.D. Wis. 2001) ............. 24

Abrams v. Kelsey-Seybold Med. Group, Inc.,

178 RR. 116 6D. Ten. 1997) onc ccciccccss 25

Beck v. Boeing Co.,

203 F.R.D. 459 (W.D. Wa. 2001) ............. 24

Beck v. Boeing Co.,

320 F.3d 1021 (9th Cir. 2003),

aff'd in part, rev'd in part on other grds.,

60 Fed. Appx. 38, 2003 WL 683797

COUR GA FO ay BD kn oven es cee vanenes 13,14

Berger v. Compaq Computer Corp.,

EO? On GIR Eee GE PED «vos oc denesives 14

Bertuili v. Indep. Ass'n of Cont’l Pilots,

242 F.3G 290 (Sth Cir. ZOOL)... cece cee eens 15

Betts v. Sunstrand Corp.,

No. 97 C 50188, 1999 WL 436579 (N.D. IIl.

SE 5 -em ad ooo a he eA ee 25

Blair v. Equifax Check Servs., Inc.,

181 F.3d 832 (7th Cir. 1999) ......... 15, 17, 18, 19

Bolin v. Sears, Roebuck & Co.,

231 F.3d 970 (Sth Cir. 2000) ...... ge eee 15

jae Ce eae cooncamaniall

Cited Authorities

Page

Caridad v. Metro-North Commuter R.R. Co.,

191 F.3d 283 (2d Cir. 1999), cert. denied,

529 U.S. 1107 (2000) ....---s see reercrere passim

Casas v. American Airlines, Inc.,

304 F.3d 517 (Sth Cir. 2002) ...---- eee eee 14

Cason v. Nissan Motor Accept. Corp.,

28 Fed. Appx. 392, 2002 WL 22351 (6th Cir.

ae a ee ee 14

Castano v. Am. Tobacco Co.,

84 F.3d 734 (Sth Cir. 1996) ..---- ee eee: 21, 26

City of Hialeah, Fla. v. Rojas,

311 F.3d 1096 (11th Cir. 2002) ..------ +e eee 14

Coleman v. General Motors Accept. Corp.,

296 F.3d 443 (6th Cir. 2002) ...---- errr rere 14

Cooper v. Southern Co.,

205 E.R.D. 596 (N.D. Ga. 2001) ..---- ++ eee: 24

Culpepper v. Irwin Mortg. Corp.,

753 F.3d 1324 (11th Cir.), reh’g denied, 273 F.3d

: 1118 (11th Cir. 2001), cert. denied, 534U.S.1118

| CODD oo 5 i ENTREE 14

: Donaldson v. Microsoft Corp.,

205 F.R.D. 558 (W.D. Wa. 2001) .--- +--+ - eee? 24

SS ee

Cited Authorities

Page

Eisen v. Carlisle & Jacquelin,

GET US. TB Tr eo ve cc tt hones aie 6, 21

Franze v. Equitable Assurance,

296 F.356 1250 CLI Ch, BOGE 4 ve caewene ees 14

General Telephone Co. v. Falcon,

GST Wey SOF Cheek va kA ee cheeses 1, 8, 10, 22

Glover v. Standard Fed. Bank, 7

203 F.36 953 COUN Ce, FE) vn vc cvavccensace 14

Hawkins v. Comparet-Cassani,

yore se Bro 2, Tee |) eee error re 14

Heimmermann y. First Union Mortg. Corp.,

305 FBG 1257 (11 Cir, 2OUE) 5... ces csesens 14

In re Allstate Ins. Co., No. 02-8010, 2002

WL 31545753 (D.C. Cir. Nov. 14, 2002) ...... 13

In re Bioproducts, Inc.,

No. 02-8006, 2002 WL 1997993 (D.C. Cir. Aug.

EP) POUR 46a Shes eu Neha eee eee 13

In re Bridgestone/Firestone, Inc.,

oun ©.20 COTS CTR GC, GUE) nov i vavacceeves 14

In re Delta Air Lines,

310 F.3d 953 (6th Cir. 2002) ................ 19

sf ahd DR edhe CR PADI LAE IODA LYE te 8D AAA

‘

vil

Cited Authorities

Page

In re LifeUSA Holding, Inc.,

242 F.3d 136 (3d Cir. 2001) ....- ckke ohne s 14

In re Linerboard Antitrust Litig.,

305 F.3d 145 (3d Cir. 2002) ...---- seer e rere 14

In re Lorazepam & Clorazepate Antitrust Litig.,

289 F.3d 98 (D.C. Cir. 2002) ....---e errr ees 12, 13

In re Rand Corp.,

No. 02-8007, 2002 WL 1461810 (D.C. Cir. July

“errr e eects ee i

In re Sumitomo Copper Litig.,

262 F.3d 134 (2d Cir. 2001) ...--- ee errr eee 15

In re Veneman,

309 F.3d 789 (D.C. Cir. 2002) ...----- +++: 13

In re Visa Check/MasterMoney Antitrust Litig.,

280 F.3d 124 (2d Cir. 2001) ...---- eer eres 14, 15

Isaacs v. Sprint Corp.,

261 F.3d 679 (7th Cir. 2001) ...---- reer eee: 14, 20

Jefferson v. Ingersoll Int'l Inc.,

195 F.3d 894 (7th Cir. 1999) ..--- sere eres 15

Johnston v. HBO Film Mgmt., Inc.,

265 F.3d 178 (3d Cir. 2001) ..-- eee rere rere 14

Vill

Cited Authorities

Page

Kirkland v. Midland Mortg. Co.,

BGS F.36 F277 CLI CH BUGE) ok cece sevens 14

Lienhart v. Dryvit Sys., Inc.,

Bae UDO USO CHU, SE) vc recs cececensas 14, 18

Lott v. Westinghouse Savannah Co. River Corp.,

200 FDL. 559 SL. FID) cc cccccccsesses 24-25

McKowan Lowe & Co., Ltd. v. Jasmine, Ltd.,

yoo ge Rk he es re ere 14

McReynolds v. Sodexho Marriott Servs., Inc.,

a06 FBT. 428 ODL. DOOR) nc cvcccesvss passim

Mejdrech v. Met-Coil Sys. Corp.,

319 F.3d 910:(7th Civ. 2003) ow. cc nce cecesees 13

Miller v. Hygrade Food Prods. Corp.,

198 F.R.D. 638 (E.D. Pa. 2001) .............. 24

Monahan yv. City of Wilmington,

49 Fed. Appx. 383, 2002 WL 31341336 (3rd Cir.

PE 5 orkid aoe cues Ken ci eek ated een 14

Murray v. Auslander,

244 F.3d 807 (11th Cir. 2001) ............... 14

Newton vy. Merrill Lynch, Pierce,

Fenner & Smith, Inc.,

259 F.3d 154 (3d Cir. 2001) .......... 14, 17, 19, 21

Cited Authorities

Page

O’Sullivan v. Countrywide Home Loans, Inc.,

319 F.3d 732 (7th Cir. 2003) ...----e eee eeees 13

Patterson v. Mobil Oil Corp.,

241 F.3d 417 (Sth Cir. 2001) ...-.----- ee eee 15

Piazza v. Ebsco Indus., Inc.,

273 F.3d 1341 (11th Cir. 2001) ....-----+++5- 14

Pickett v. lowa Beef Processors,

209 F.3d 1276 (11th Cir. 2000) ...-------++: 15

Prado-Steiman ex rel. Prado v. Bush,

221 F.3d 1266 (11th Cir. 2000) ......----- 15, 18, 19

Reap v. Cont’l Cas. Co.,

199 F.R.D. 536 (D.N.J. 2001) «2... eee rere 24

Reid v. Lockheed Martin Aeronautics Co.,

205 E.R.D. 655 (N.D. Ga. 2001) ..------ ++ ee 24

Rhodes y. Cracker Barrel Old Country Store, Inc.,

713 E.R.D. 619, 2003 WL 933152 (N.D. Ga. Mar.

7, 2003) 2... ceccccccccccescres ae uenent 22

Rivera vy. Wyeth-Ayerst Labs.,

283 F.3d 315 (Sth Cir. 2002) ...----- ++ seers 14

Robinson v. Metro-North Commuter R.R. Co.,

267 F.3d 147 (2d Cir. 2001) ....---- eee e eres 26

Cited Authorities

Page

Rutstein v. Avis Rent-A-Car Sys., Inc.,

210 F.38 E226 C21 Coe. FOGD) nn we ccc ccs sees 15

Sandwich Chef of Tex., Inc. v.

Reliance Nat. Indem. Ins. Co.,

Fae Pe Be COME GE, GOGED oe i cc cceeescases 13-14

Serafty v. Inter. Automated Sys., Inc.,

180 F.R.D. 418 (D. Utah 1998) .............. 22

Smilow v. S.W. Bell Mob. Sys., Inc.,

peop & Beets te ol. rn 13

Smilow v. S.W. Bell Mob. Sys., Inc.,

No. 01-8001 (1st Cir. July 12, 2001) .......... 14

Smith v. Texaco, Inc.,

FBS Tyg Ct ee 14

Smith v. Univ. of Wash. Law School,

233 F.36 1166 (9 Cir. 2000)... nc cece cccesss 15

Stastny v. S. Bell Tel. & Tel. Co.,

b&b oe ee eee err ai, 23

Szabo v. Bridgeport Machs., Inc.,

yg ee ty me | rrr passim

Turner v. Beneficial Corp.,

242 F.3d 1023 (11th Cir.) (en banc), cert. denied,

rr ree rere 15

Cited Authorities

Page

Wagner v. Taylor,

oe by, fi keg 7) ere rere 23

Waste Mgmt. Hldgs., Inc. v. Mowbray,

208 F.3d 288 (1st Cir. 2000) ................. 15, 18

West v. Prudential Secs., Inc.,

BOS Fie BSS CPE, BOGE) civ civeresevees 14

West Pub. Co. v. Carter,

No. 98-90015-D, 1999 WL 996377 (11th Cir. June

rr re ee re reer Tr ree 15

Wright v. Circuit City Stores, Inc.,

201 F.R.D. 526 (N.D. Ala. 2001) ............. 24

Zachery v. Texaco Explor. & Prod., Inc.,

185 F.R.D. 230 (W.D. Tex. 1999) ............ 25

Zapata v. IBP, Inc.,

167 F.R.D. 147 (D. Kan. 1996) .............. 25

Zinser v. Accufix Res. Inst., Inc.,

253 F.3d 1180 (9th Cir.), amended by 273 F.3d

Se Es SE niyo bee deeckeeks eaye es 14

xil

Cited Authorities

Page

Statutes and Rules

TE Ra Oe |) eer Perr re rer re 1

rt So 2 Pere errre rere eee Te 12

PLR Toe oe | rrr rT re ry |

ye Ee | eT ee ee ee: 1]

p gk 8 ol ee PP eee rere ret l

LIS oe P| eer eer rey 1

42 U.S.C. § BUENO 66004055 443s R see 1

Pe, Bi GO. Ee 6 vv suvkccuahacweeouenen 21

ee Se BEE sos bab acvadeeeeaeee passim

xii

Cited Authorities

Other

Robert G. Bone and David S. Evans, Class

Certification and the Substantive Merits, 51 Duke

EE SE

Civil Rules Advisory Comm., Minutes, April 28-29,

1994, 1994 WL 809916 (J.C.U.S. 1994) .......

Civil Rules Advisory Comm., Minutes, February

16-17, 1995, 1995 WL 870909 (J.C.U.S. 1995)

ae nn nt nn ee ee et ee ee ee eee ees eeveeeeeee

Civil Rules Advisory Comm., Minutes, November

9-10, 1995, hearing, 1995 WL 870908 (J.C.U.S.

EE SSIES Te

Civil Rules Advisory Comm., Minutes, May 1-2,

1997, 1997 WL 1056241 (J.C.U.S. 1997) ......

Page

17, 27

xiv

TABLE OFAPPENDICES

Page

Appendix A — Order Of The United States Court

Of Appeals For The District Of Columbia Circuit

Denying Petition For Leave To Appeal Dated And

ge. ere la

Appendix B — Memorandum Opinion And Order

Of The United States District Court For The

District Of Columbia Dated And Filed June 25,

PE Va eS aE ee ee aes 3a

Sodexho respectfully petitions for a writ of certiorari to

review a decision by the United States Court of Appeals for

the D.C. Circuit denying Sodexho’s Fed. R. Civ. P. 23(f)

petition to appeal an order of the United States District Court

for the District of Columbia certifying a class for liability

purposes. ~

OPINIONS BELOW

The ruling of the Court of Appeals denying Sodexho’s

Rule 23(f) petition is unreported and is reprinted at Appendix

A (App. la-2a). The memorandum opinion of the district

court granting plaintiffs’ motion for class certification is

reported at 208 F.R.D. 428 (D.D.C. 2002) and is reprinted at

Appendix B (App. 3a-52a). The order of the district court

certifying the class is unreported and is reprinted at Appendix

B (App. 53a-54a).

STATEMENT OF JURISDICTION

The Court of Appeals denied Sodexho’s Rule 23(f) petition

on February 25, 2003. This Court has jurisdiction under

28 U.S.C. § 1254(1). Plaintiffs asserted original jurisdiction

in the district court pursuant to 42 U.S.C. § 2000e-5(f) and

28 U.S.C. §§ 1331, 1343, 2201, and 2202.

RULE INVOLVED

. Rule 23 of the Federal Rules of Civil Procedure is printed

at Appendix C (App. 55a-59a).

STATEMENT OF THE CASE

In General Telephone Co. v. Falcon, 457 U.S. 147, 161

(1982), this Court held that district courts must conduct a

“rigorous” analysis of claims for class certification under

Rule 23. In applying Falcon in this case, the district court

did not allow Sodexho to challenge or rebut plaintiffs’

evidence, reflecting one side of a wide gulf among the lower

courts as to whether, and to what extent, Falcon requires

deferential judicial review of class allegations. Pursuant to

Rule 23(f), Sodexho petitioned the D.C. Circuit to consider

that and other important and unsettled issues of law

concerning the use of class actions in employment

discrimination cases. The D.C. Circuit declined to hear the

appeal, applying a standard under which that court and the

Second Circuit “rarely” grant Rule 23(f) appeals.

The case involves the certification of a nationwide class

of 2,600 current and former African American managerial

employees — including top-level management — in an

employment discrimination action against the largest food

and facilities management corporation in the United States.

Ten named plaintiffs claim that decentralized and subjective

promotion practices at more than 5,000 job sites in 47 states

discriminate against African American managers. This case

apparently is one of the largest employment discrimination

class actions regarding promotions of managerial-level

employees ever brought against a private employer.

Sodexho was formed on March 28, 1998 through a

merger of MMS, a division of Marriott International, Inc.,

and SUSA, a division of Sodexho Alliance, S.A., into

Sodexho Marriott Services, Inc., a publicly-traded company

listed on the New York Stock Exchange. Due to this merger’s

size and complexity, the MMS and SUSA sides of Sodexho

did not integrate payroll and accounting systems, salary

grades and personnel policies until early 2000.

Sodexho is a massive company with six autonomous

divisions, each itself the size of a significant corporation.

As of November 2001, it employed over 110,000 individuals.

App. 4a, 208 F.R.D. at 431. The company is largely

decentralized. Its six distinct divisions function like wholly-

owned subsidiaries, each with its own unique culture and

identity. Each division keeps its own accounting records,

issues its own internal financial reports, maintains its own

human resources department, and, except at the highest levels

of executive management, makes its own independent

promotion decisions. Within these six divisions, there is a

total of approximately 155 separate geographic regions

dispersed nationwide that have significant autonomy in

personnel decisions, including the selection of mid-level

" managers. The regions service 5,000 local accounts, spread

Over an even greater number of sites.

The scope of the proposed class action is therefore

staggering. Plaintiffs challenge promotion decisions made

by literally thousands of decision-makers (there were 5,436

local General Managers and 486 regional District Managers

during the class limitations period) unconnected by any

allegedly discriminatory policy or common purpose other

than their substantial autonomy in decision-making and their

alleged use of subjective criteria.

The ten named plaintiffs brought this action on March

9, 2001, claiming that Sodexho’s promotion policies violated

Title VII and related civil rights statutes under disparate

impact and treatment theories. They complained that they

are segregated into certain units, denied promotion opportunities

to higher-level management positions, underrepresented at

higher pay band levels, harassed, and discriminated against in

training, discipline, compensation, termination, and performance

reviews. Their complaint sought equitable remedies, back pay,

front pay, compensatory damages, and punitive damages for

the class, which, given plaintiffs’ avowed intention to seek the

maximum $300,000 compensatory and punitive damages award

permitted by Title VII, would total close to $/ billion in damages

plus back and front pay.'

After a period of class-related discovery, plaintiffs moved

for class certification in December 2001. Their motion rested

upon the named plaintiffs’ limited anecdotal accounts of alleged

instances of discrimination, corroborating evidence by several

putative class members and a single white supervisor, an

industrial expert’s critique of Sodexho’s promotion practices,

and a statistical analysis by another expert, Dr. Bernard Siskin.

Based upon a statistical analysis of 10,000 promotion decisions

concerning Sodexho’s managerial positions during a five-

year span (1995-2001) rather than the three-year limitations

period (March 1998-2001), Dr. Siskin found a shortfall of

approximately 250 promotions for African Americans.

He ignored numerous factors that could account for promotion

decisions for managerial-level employees, e.g., prior experience,

education, or part-time status. The report also failed to assess

whether the shortfall was national in scope or was limited to

particular divisions, regions, or local operating units.

1. At deposition, certain named plaintiffs reaffirmed their intent

to pursue maximum damages, but, in the proceedings below, plaintiffs

tried to distance themselves from that testimony. They offered no

evidence that their claims were lower, however, nor did they provide

an estimate of their actual demand.

ee ee

In response, Sodexho proffered extensive evidence of

its aggressive pursuit of affirmative action and improved

internal promotion policies since the merger. Its Senior Vice

President of Human Resources is African American, as was

his predecessor. Based in part on his initiatives, which

plaintiffs castigate as discriminatory, African American

representation in the company stands at 12.2%, well in excess

of labor force availability, and has improved since the merger.

Sodexho’s employment practices have been reviewed

numerous times by the U.S. Department of Labor’s Office

of Federal Contract Compliance Programs (“OFCCP”) and

have repeatedly received a clean bill of health. The OFCCP

recently conducted a comprehensive review of Sodexho’s

headquarters division, assessing many of the same

promotional results attacked by plaintiffs, and found no

evidence of discrimination.

Sodexho also proffered expert evidence from Dr. Joan

Haworth, who serves as the district court's neutral expert in

massive Amtrak class action litigation pending in the same

court. She demonstrated that, even under Dr. Siskin’s flawed

methodology, his own back-up data (which he conspicuously

failed to analyze in his report) found no statistically

significant adverse promotion results in four of Sodexho’s

six divisions. Indeed, only 9 of Sodexho’s approximately

155 regions — a mere 6% — had statistically significant

adverse results. In other words, plaintiffs’ own evidence

demonstrated that any alleged problems were localized.

In addition to pointing out the exculpatory impact of

Dr. Siskin’s unreported data, Dr. Haworth applied a much

more accurate regression analysis. Unlike what Dr. Siskin

indicated in his report, Dr. Haworth accounted for division,

geography, and other factors. That more refined analysis

showed that only 2 to 3 of those approximately 155 regions

had statistically significant negative results for African

Americans.’

Dr. Haworth also demonstrated, and plaintiffs did not

dispute, that the representation of African American class

members in most divisions exceeded their labor market

availability. Indeed, at high-level pay bands, where

discrimination supposedly was the most rife, African

American representation at all of Sodexho’s divisions was

consistent with availability.

Finally, Dr. Haworth assessed whether use of Sodexho’s

systems for posting job vacancies (a focus of plaintiffs’ case)

had discriminatory impact, and she found none.

None of this objective evidence was considered by the

district court, which cited decisions emanating from Eisen v.

Carlisle & Jacquelin, 417 U.S. 156, 177 (1974), as requiring

it to accept as true all facts alleged by plaintiffs and to ignore

Sodexho’s evidence to the contrary. See App. 4a-5a, 208

F.R.D. at 431 (stating that “the Court will assume the facts

as set forth by plaintiffs”). That unquestioning acceptance

of plaintiffs’ facts led the district court to critical errors.

For example, the court treated Sodexho as if it were a

monolithic, static entity notwithstanding decentralization and

2. None of the named plaintiffs worked in regions that either

expert had found to have statistically significant adverse results. Many

worked in a region with significantly favorable promotion results:

29% of the promotions i1 that region went to African Americans.

Ironically — and tellingly — that is the same region in which most of

the anecdotal instances of discrimination cited by plaintiffs

supposedly occurred.

cee ~ he eae

the merger of two unrelated corporations at the outset of the

limitations period. It concluded that Sodexho’s system for

posting vacancies and making promotion decisions is the

same as that MMS used in 1994, even though that system

was replaced in 2000 (and was never used by SUSA).?

And it ignored clear evidence of intra-class conflicts arising

from the fact that the named plaintiffs and other class

members are themselves members of the very management

structure that they allege has discriminated against them

— a clear ground for rejecting the class under settled D.C.

Circuit precedent.*

The district court’s treatment of the statistical evidence

was equally one-sided. Applying Second Circuit precedent,

3. Three years ago, well within the class limitations period,

Sodexho closed its system for posting job vacancies that it had

inherited from Marriott in favor of a new “Career Center” posting

system that imposes mandatory written procedures, including written

job descriptions with objective criteria for selection (such as

experience and education), review of all job postings by human

resources personnel, and disciplinary action for non-compliance.

The district court never considered the newer system. See App. 8a-

9a, 33a & n.18, 208 F.R.D. at 432-33, 441 & n.18.

4. Even though named plaintiffs testified to specific and discrete

adverse decisions made by other class members, including denials

of promotions, the court summarily dismissed these conflicts as

abstract and unproven. See App. 47a-48a, 208 F.R.D. at 447. Their

testimony was not, however, ambiguous or confusing. For instance,

named plaintiffs McReynolds and Moss each passed over named

plaintiff McNish for promotions in decisions that McNish alleges

are discriminatory. Named plaintiffs Morris and McNish each alleged

instances in which putative class members denied them promotions

in favor of white individuals. Plaintiff Howell alleges that an African

American supervising manager gave a discriminatory performance

evaluation and wrongfully eliminated her job.

the court held that it could not consider Sodexho’s statistical

evidence or Dr. Haworth’s critique of Dr. Siskin’s analysis,

as that would constitute a battle of experts inappropriate for

Rule 23 analysis. Instead, the only consideration was whether

plaintiffs’ statistical evidence satisfied the minimum

requirements for admissibility. See App. 38a, 208 F.R.D. at

443 (refusing to pass on the merits of plaintiffs’ statistical

evidence and instead considering only whether that evidence

was “‘so incomplete as to be inadmissible as irrelevant’”)

(quoting Caridad v. Metro-North Commuter R.R. Co., 191

F.3d 283, 292 (2d Cir. 1999), cert. denied, 529 U.S. 1107

(2000)). Because Dr. Siskin’s report satisfied that minimal

threshold, the court never addressed the fact that even his

data and methodology showed that any statistically significant

instances of discrimination were narrowly concentrated in

tiny pockets of discrete geographical regions and divisions.

In essence, the court permitted Sodexho to mount a bare-

bones Daubert-type challenge to Dr. Siskin’s opinion, but

nothing more, making certification a foregone conclusion.

Not surprisingly, under this liberal standard, the court

found plaintiffs’ proffer sufficient to meet the commonality

and typicality tests of Rule 23(a) and certified a class for

liability purposes only.° Instead of conducting a rigorous

analysis as required by-Falcon, the court certified a

nationwide class based upon the shakiest of foundations:

(1) limited anecdotal evidence largely emanating from one

of the 155 regions; (2) Dr. Siskin’s finding of a “shortfall”

5. Rather than address the overwhelming problems that it would

face in assessing damages and determining back pay for such an

enormous class, the court deferred any consideration of whether the

class could satisfy the requirements of Rule 23(b)(2) or (b)(3) as to

remedy. See App. 50a-52a, 208 F.R.D. at 448-49. Thus, the court never

determined whether plaintiffs’ claims as a whole satisfy Rule 23(b).

of some 250 promotions for African Americans out of 10,000

promotion decisions made in 1995-2001 (far beyond the

3-year limitations period) without controlling for geography,

experience, education, or other critical factors; and

(3) Sodexho’s use of allegedly subjective criteria and

decentralized processes for upper-level promotions.

It is no exaggeration to say that the district court’s

decision holds dire implications for challenges to the

promotion record of any large national corporation.

A nationwide class of 2,600 managerial employees was

certified because plaintiffs’ expert found that African

American managers are underrepresented at higher pay scales

when compared to white managers with comparable dates

of hire. Until now, such allegations of glass-ceiling obstacles

to upper-level management positions have never been held

to permit a massive class action absent proof that the barriers

to promotion emanate from discriminatory policies, rather

than job-related selection decisions or other exogenous

factors. And, until now, no nationwide class has been certified

without proof that nationwide discrimination occurred.

Under the district court’s analysis, evidence of purported

minority under-representation in upper-level management

positions anywhere in a national corporation may trigger class

certification if it is not explained by seniority and if it is

coupled with anecdotal evidence of discriminatory treatment

and subjective promotion criteria. Plaintiffs need not

demonstrate statistically significant labor market availability;

account for education, prior experience, or other factors

affecting promotion decisions; or produce evidence of

corporate-wide discriminatory policies or practices.

Such a momentous decision warrants careful appellate

consideration, and Sodexho therefore timely petitioned the

D.C. Circuit for leave to pursue an interlocutory appeal

pursuant to Rule 23(f). The petition raised several important

and unsettled issues of law:

Whether Falcon permits a district court to rely upon

statistical analyses and anecdotal evidence that, for

all practical purposes, the defendant is not allowed

to challenge or rebut — even though, under plaintiffs’

methodology, only a small percentage of regions

showed statistically significant adverse results?

Whether the existence of decentralized and subjective

decision-making in deciding promotions for

managerial and executive-level employees could

constitute a nationwide discriminatory policy

sufficient to satisfy the commonality requirement of

Rule 23(a)(2)?

Whether named plaintiffs are adequate class

representatives if they (or other class members) allege

discriminatory treatment by other class members?

Whether a district court may certify a class for

liability purposes only, without determining that the

remedies sought by the class satisfy Rule 23(b)?

The D.C. Circuit denied this petition in a per curiam

order stating that Sodexho had failed to demonstrate an

unsettled fundamental issue of law that is likely to evade

end-of-the-case review. App. 1a-2a. This standard, obviously,

is nearly impossible to meet, requiring proof of a likelihood

that Sodexho’s certification challenge would evade end-of-

nee memeemmemmemem

the-case review. Short of a sworn declaration that it cannot

afford to take the case to trial given the risk of a crippling

damage award — a grave concession to make in any settlement

effort — it is difficult to see how Sodexho could ever satisfy

this test. Indeed, in applying virtually the same standard as

in the D.C. Circuit, the Second Circuit has stated candidly

that it will only “rarely” grant 23(f) requests.

This Court has never addressed Rule 23(f). In light of

the significance of the district court’s ruling and the sharp

division among the circuits as to the appropriate standards

for appellate review under Rule 23(f), this case presents a

compelling opportunity for the Court to resolve that conflict.

REASONS FOR GRANTING THE PETITION

Certification is often the case-defining event in a large

class action case. See, e.g., Szabo v. Bridgeport Machs., Inc.,

249 F.3d 672, 675 (7th Cir. 2001) (certification “may induce

a substantial settlement even if the [plaintiffs’] position is

weak”); Civil Rules Advisory Comm., Minutes, Nov. 9-10,

1995 hearing, 1995 WL 870908, at *4 (J.C.U.S. 1995)

(“[a] grant or denial of certification can ‘make or break’ the

litigation”). That is especially the case here in light of the

relief sought by the class — well over $1 billion arising from

the purported wrongful denial of promotions among 2,600

class members. Where the stakes are so momentous, this

Court should intervene and ensure that consistency among

the circuits and basic common sense prevail as to the

standards for interlocutory appeal of certification decisions.

A. The Conflict Among The Circuits Regarding The

Standards For Granting Review Under Rule 23(f).

The D.C. Circuit’s refusal to hear Sodexho’s appeal is

especially deserving of certiorari. Its standard for deciding

whether to exercise its broad discretion to decide Rule 23(f)

petitions for interlocutory appeal is virtually impossible to

meet, at least as stringent as the mandamus and 28 U.S.C.

§ 1291 remedies that it was intended to supplant. Both the

Third and Seventh Circuits have rejected the D.C. Circuit’s

restrictive tests.

This disparity among the Circuits was recognized by the

D.C. Circuit decision that first announced the rule, /n re:

Lorazepam & Clorazepate Antitrust Litig., 289 F.3d 98, 102-

04 (D.C. Cir. 2002). There, the D.C. Circuit considered but

rejected more liberal standards in favor of a test limiting Rule

23(f) appeals to cases where the petition satisfies one of three

grounds: (1) the certification decision constitutes a “death-

knell” for a party such that the case will not proceed further

and is “questionable” on the merits; (2) it presents an

unsettled and fundamental question of law that is important

both to the specific case and to class actions generally and is

“likely to evade end-of-the-case review”; or (3) the decision

is “manifestly erroneous.” /d. at 105. The D.C. Circuit did

not rule out other circumstances but made clear that Rule

“‘23(f) review should be granted rarely where a case does not

fall within one of these three categories.” Jd.

This standard is patently unfair and wholly unrealistic.

Cases with “manifest error” are rare and, in any event,

- remediable by mandamus. Death-knell cases and certification

decisions that are likely to evade end-of-the case review are

even more rare and extraordinary. Indeed, to prove that a

certification decision is likely to evade end-of-the-cas@

review, a defendant would have to prove that it cannot afford

to face the potentially devastating impact of an adverse class-

wide judgment and therefore will be forced to settle the case

before trial. The mere assertion of such a claim would greatly

prejudice the defendant: once it publicly announces its

unwillingness to risk trial, the defendant would have to

negotiate settlement from a vantage of absolute weakness,

having already declared a losing hand. Essentially, the

defendant who seeks interlocutory appeal must accept the

price that, if the appeal fails, it will likely have to capitulate

to the class*s demands ~ a risk that few, if any, Rule 23(f)

petitioners would ever accept.

In essence, the D.C. Circuit has established its own death-

knell rule for Rule 23(f). As of this petition, the D.C. Circuit

has yet to grant a Rule 23(f) petition. See Jn re Allstate Ins.

Co., No. 02-8010, 2002 WL 31545753, at *1 (D.C. Cir. Nov.

14, 2002) (per curiam); /n re Veneman, 309 F.3d 789, 794-

96 (D.C. Cir. 2002); Jn re Bioproducts, Inc., No. 02-8006,

2002 WL 1997993, at *1 (D.C. Cir. Aug. 29, 2002) (per

curiam); /n re Rand Corp., No. 02-8007, 2002 WL 1461810,

at *1 (D.C. Cir. July 8, 2002) (per curiam); /n re Lorazepam

& Clorazepate Antitrust Litig., 289 F.3d at 109 (all denying

Rule 23(f) petitions).°®

6. Contrast with cases from the following jurisdictions, all of

which granted Rule 23(f) review: Smilow v. S.W. Bell Mob. Sys.,

Inc., 323 F.3d 32, 36-37 (1st Cir. 2003); Beck v. Boeing Co., 320

F.3d 1021, 1023 (9th Cir. 2003); Mejdrech v. Met-Coil Sys. Corp.,

319 F.3d 910, 910 (7th Cir. 2003); O'Sullivan v. Countrywide Home

Loans, Inc., 319 F.3d 732, 737 (7th Cir. 2003); Sandwich Chef of

Tex., Inc. v. Reliance Nat. Indem. Ins. Co., 319 F.3d 205, 218-19

(Cont’d)

(Sth Cir. 2003); City of Hialeah, Fla. v. Rojas, 311 F.3d 1096, 1100-

01 (11th Cir. 2002); Monahan v. City of Wilmington, 49 Fed. Appx.

383, 384, 2002 WL 31341336, at *1 (3rd Cir. 2002); Heimmermann

v. First Union Mortg. Corp., 305 F.3d 1257, 1259 (11th Cir. 2002);

Casas v. American Airlines, Inc., 304 F.3d 517, 520 (Sth Cir. 2002);

In re Linerboard Antitrust Litig., 305 F.3d 145, 150 (3d Cir. 2002);

Coleman v. General Motors Accept. Corp., 296 F.3d 443, 446 (6th

Cir. 2002); Franze v. Equitable Assurance, 296 F.3d 1250, 1251 (11th

Cir. 2002); McKowan Lowe & Co., Lid. v. Jasmine, Lid., 295 F.3d

380, 382 (3d Cir. 2002); In re Bridgestone/Firestone, Inc., 288 F.3d

1012, 1015-16 (7th Cir. 2002); Glover v. Standard Fed. Bank, 283

F.3d 953, 959 (8th Cir. 2002); West v. Prudential Secs., Inc., 282

F.3d 935, 937 (7th Cir. 2002); Rivera v. Wyeth-Ayerst Labs., 283

F.3d 315, 318 (Sth Cir. 2002); Smith v. Texaco, Inc., 281 F.3d 477,

479 (Sth Cir. 2002); Cason v. Nissan Motor Accept. Corp., 28 Fed.

Appx. 392, 393, 2002 WL 22351, at *1 (6th Cir. Jan. 7, 2002) (appeal

granted, then vacated on unrelated grounds); Piazza v. Ebsco Indus.,

Inc., 273 F.3d 1341, 1345 (11th Cir. 2001); In re Visa Check/

MasterMoney Antitrust Litig., 280 F.3d 124, 132 (2d Cir. 2001);

Johnston v. HBO Film Memt., Inc., 265 F.3d 178, 183 (3d Cir. 2001);

Isaacs v. Sprint Corp., 261 F.3d 679, 681 (7th Cir. 2001); Newton v.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 162

(3d Cir. 2001); Berger v. Compaq Computer Corp., 257 F.3d 475,

478 (Sth Cir. 2001); Smilow v. S.W. Bell Mob. Sys., inc., No. 01-

8001, slip op. at 1-2 (1st Cir. July 12, 2001), cited in Smilow, 323

F.3d at 36; Lienhart v. Dryvit Sys., Inc., 255 F.3d 138, 141 (4th Cir.

2001); Zinser v. Accufix Res. Inst., Inc., 253 F.3d 1180, 1186

(9th Cir.), amended by 273 F.3d 1266 (9th Cir. 2001); Culpepper v.

Irwin Mortg. Corp., 253 F.3d 1324, 1326 (11th Cir.), reh’g denied,

273 F.3d 1118 (11th Cir. 2001), cert. denied, 534 U.S. 1118 (2002);

Hawkins v. Comparet-Cassani, 251 F.3d 1230, 1236 n.7 (9th Cir.

2001); Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675 (7th Cir.

2001); Murray v. Auslander, 244 F.3d 807, 810 (11th Cir. 2001);

Kirkland v. Midland Mortg. Co., 243 F.3d 1277, 1279 (11th Cir.

2001); In re LifeUSA Holding, Inc., 242 F.3d 136, 142 (3d Cir. 2001);

(Cont’d)

r “

This draconian impact should come as no surprise. With

the exception of the “manifest error” prong, the D.C. Circuit

standard was drawn from Jn re Sumitomo Copper Litig., 262

F.3d 134, 140 (2d Cir. 2001), which did not mince words as

to its intent to shut the door on Rule 23(f) appeals: “We

anticipate, therefore, that the[se] standards of Rule 23(f) will

rarely be met.”

That was never the intent of the authors of Rule 23(f).’

Throughout the Advisory Committee’s lengthy consideration

of this provision, the authors repeatedly described its

fundamental importance given the fact that class certification

(Cont'd)

Turner v. Beneficial Corp., 242 F.3d 1023, 1024 (11th Cir.) (en banc)

(referencing panel’s grant of 23(f) petition), cert. denied, 534 U.S.

820 (2001); Bertulli v. Indep. Ass'n of Cont’l Pilots, 242 F.3d 290,

293 (5th Cir. 2001); Patterson v. Mobil Oil Corp., 241 F.3d 417, 418

(Sth Cir. 2001); Smith v. Univ. of Wash. Law School, 233 F.3d 1188,

1192 (9th Cir. 2000); Bolin v. Sears, Roebuck & Co., 231 F.3d 970,

973 (5th Cir. 2000); Prado-Steiman ex rel. Prado v. Bush, 221 F.3d

1266, 1271 (11th Cir. 2000); Rutstein v. Avis Rent-A-Car Syc., Inc.,

211 F.3d 1228, 1231 (11th Cir. 2000); Pickett v. Jowa Beef Proc’rs,

209 F.3d 1276, 1279 (11th Cir. 2000); Waste Mgmt. Hldgs., Inc. v.

Mowbray, 208 F.3d 288, 295 (1st Cir. 2000); Jefferson v. Ingersoll

Int’l Inc., 195 F.3d 894, 897 (7th Cir. 1999); West Pub. Co. v. Carter,

No. 98-90015-D, 1999 WL 996377, at *1 (11th Cir. June 30, 1999);

Blair v. Equifax Check Servs., Inc., 181 F.3d 832, 837 (7th Cir. 1999).

7. Indeed, in a subsequent opinion, the Second Circuit allowed

interlocutory appeal under Rule 23(f) to address “a legal question

about which there is a compelling need for immediate resolution”

without requiring petitioner to demonstrate that that issue was likely

to evade end-of-the-case review. Jn re Visa Check/MasterMoney

Antitrust Litig., 280 F.3d 124, 132 n.3 (2d Cir. 2001). Thus, the

Second Circuit standard may in fact be significantly more liberal

than the D.C. Circuit standard.

is often a case-defining or deciding event. See, e.g., Civil

Rules Advisory Comm., Minutes, April 28-29, 1994, 1994

WL 809916, at *10 (J.C.U.S. 1994) (comments of Herbert

M. Wachtell, Esq., observing that provision for interlocutory

appeal “is a desirable supplement to interlocutory appeal by

certification of the district court and permission of the

appellate court” because “[t]he decision on class certification

is, at times, effectively the final decision in the action. Denial

leaves the representatives unable to litigate the claim, while

grant forces the defendant to settle’’).®

Indeed, the Advisory Committee defeated efforts to limit

the breadth of the Rule. In response to public comment and

testimony, the Committee removed statements in its Note

that would have advised courts that the Rule was not intended

to have broad effect: “Passages predicting that permission

to appeal would be granted with restraint, and that the

8. Accord, Civil Rules Advisory Comm., Minutes, Feb. 16-17,

1995, 1995 WL 870909, at *9 (J.C.U.S. 1995) (“Many participants

believed that the opportunity for appeal, controlled in the discretion

of the court of appeals, is highly desirable. The decision on class

certification can have overwhelming importance. A defendant may

feel forced to settle by certification, while a plaintiff may feel forced

to abandon the claim by denial of certification.”); id. at *17

(comments by Henry Thumann, Esq., describing 23(f) as a cure to

“the in terrorem effect of an improvidently certified class”); id.,

Minutes, Nov. 9-10, 1995, 1995 WL 870908, at *5 (“the draft is

intended to make appeals more readily available” and “the major

impetus for appeal will come in cases presenting unsettled issues

of law”); id., Minutes, May 1-2, 1997, 1997 WL 1056241, at *6

(“Appellate courts have strained to take a more active role in class-

action law in recent years, with good results. Affording a more regular

means of involvement, increasing the opportunities for appellate

review, may do much to simplify current law and make practice more

nearly uniform.”).

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proposed change is modest, were removed.” Civil Rules

Advisory Comm., Minutes, May 1-2, 1997, 1997 WL

1056241, at *7 (J.C.U.S. 1997). The final version of the Note

thus charges that appeals presenting significant legal issues

should be heard: “Permission is most likely to be granted

when the certification decision turns on a novel or unsettled

issue of law, or when, as a practical matter, the decision of

certification is likely dispositive of the litigation.” Fed. R.

Civ. P. 23(f) Advisory Committee Note (emphasis added).

The D.C. Circuit rule cannot be reconciled with these

principles. Even if the drafters intended courts of appeal to

have broad, unfettered discretion akin to this Court’s

discretion to grant or deny writs of certiorari, see id., they

did not intend for those courts to use that discretion to limit

review to the rarest of cases.

By contrast, standards adopted by the Third and Seventh

Circuit comport with the drafters’ intent, as they explicitly

allow interlocutory appeals raising significant issues without

requiring defendant prove that the issues are likely to evade

end-of-the-case review. See Newton v. Merrill Lynch, Pierce,

Fenner & Smith, Inc., 259 F.3d 154, 165 (3d Cir. 2001)

(allowing Rule 23(f) review if the district court made

“an erroneous ruling” or if the ruling would “facilitat[e]

development of the law on class certification”); Szabo y.

Bridgeport Machs., Inc., 249 F.3d 672, 675 (7th Cir. 2001)

(granting interlocutory appeal because (a) the size of the

proposed class put inordinate settlement pressure on the

defendant, (b) the district court’s decision was problematic,

and (c) the 23(f) petition raised “important legal issues” that

“have evaded attention by appellate courts”); Blair v. Equifax

Check Servs., Inc., 181 F.3d 832, 834-35 (7th Cir. 1999)

(permitting appeal where (a) denial of class certification

effectively ends the case; (b) grant of class certification raises

stakes of litigation and places inexorable pressure on

defendant to settle; and (c) appeal would clarify fundamental

issue of law).?

Not only is there an irreconcilable conflict between the

D.C. Circuit and the Third and Seventh Circuits, but there

also is a conflict between the D.C. Circuit and the Eleventh

and Fourth Circuits. Those circuits utilize a flexible “sliding

scale” test that permits review of important unsettled legal

issues without requiring proof that the issues will evade end-

of-the-case review. See Prado-Steiman ex rel. Prado v. Bush,

221 F.3d 1266, 1271-77 (11th Cir. 2000) and Lienhart v.

Dryvit Sys., Inc., 255 F.3d 138, 142-46 (4th Cir. 2001).'°

9. The First Circuit has praised the Seventh Circuit’s Blair

opinion as “cogently reasoned” and agreed that it “captures the

essential principles on which Rule 23(f) rests.” Waste Mgmt.

Holdings, Inc. v. Mowbray, 208 F.3d 288, 293 (1st Cir. 2000).

Nevertheless, to avoid a flood of interlocutory appeals and ensure

that Rule 23(f) remains “the exception, not the rule,” id., Mowbray

amended Blair’s third factor (fundamental issues of law) to emphasize

that the issue must be “likely to escape effective review.” Jd. at 294.

Thus, the First Circuit has adopted a highly restrictive standard closer

to that of the D.C. Circuit, even though it professes affinity with the

Seventh Circuit.

-10. In Prado-Steiman, the Eleventh Circuit identified the

following factors: (1) whether the district court’s order is likely

dispositive of the htigation by creating a “death knell” for either

plaintiff or defendant; (2) whether petitioner has shown a substantial

weakness in the class certification decision, such that the decision

likely constitutes an abuse of discretion; (3) whether the appeal will

permit resolution of an unsettled legal issue that is important to the

particular litigation as well as important in itself; (4) the nature and

(Cont’d)

i athe

Unlike the D.C. Circuit, the Third and Seventh Circuits

recognize that Rule 23(f) review is important because class

actions usually settle and, as a result, key district court

decisions have “not been subject to appellate consideration.”

Szabo, 249 F.3d at 676. Thus, those courts focus on whether

an appeal presents significant legal issues, whereas the D.C.

Circuit considers whether end-of-the-case review is likely.

Not surprisingly, the Third, Seventh, and Eleventh Circuits

have employed Rule 23(f) to address significant class

certification issues.

B. Sodexho’s Petition Satisfied The Third, Fourth,

Seventh, And Eleventh Circuits’ Standards For Rule

23(f) Review.

The Newton, Szabo, and Blair factors fit this case like

Cinderella’s glass slipper. There is little question that, under

the Third or Seventh Circuit standards or the broad balancing

test used in the Eleventh and Fourth Circuits, Rule 23(f)

review would have been granted in this case.

The massive size of the certified class and plaintiffs’

claims alone would justify 23(f) review in the Seventh and

(Cont'd) :

status of the litigation before the district court; and (5) the likelihood

that future events may make immediate appellate review more or

less appropriate. Since Prado-Steiman, the Eleventh Circuit has

granted Rule 23(f) petitions eight times (eleven times overall) and

denied appeal once. The Sixth Circuit also employs a balancing test

but does not mandate specific factors. See In re Delta Air Lines, 310

F.3d 953, 959 (6th Cir. 2002) (denying review under balancing test

that expressly “eschew[s] any hard-and-fast” bright-line rule and

instead holds that “any pertinent factor may be weighed in the exercise

of th{e court’s] discretion” to allow or reject Rule 23(f) petitions).

Third Circuits. See /saacs v. Sprint Corp., 261 F.3d 679, 681

(7th Cir. 2001) (“all [circuits] agree that a compelling case

for the exercise of our new discretion is one in which the

grant of class status places undue pressure on the defendant

to settle regardless of the actual merit of the suit”). As the

Seventh Circuit stated in Szabo, a certification order that

“turns a “$ 200,000 dispute (the amount Szabo claims as

damages) into a $ 200 million dispute. . . . puts a bet-your-

company decision to [defendant]” that may “induce a

settlement even if the [plaintiffs’] position is weak.” Szabo,

249 F.3d at 675. Indeed, the historical record shows just that.

Since Title VII was amended over a decade ago to include

compensatory and punitive damages, no private sector

employment discrimination class action to Sodexho’s

knowledge has proceeded through a full trial of liability and

damages. Interlocutory review under Rule 23(f) is the only

meaningful recourse for most defendants in Sodexho’s

situation.

Sodexho’s petition also raised fundamental, unsettled

issues of class action law that readily satisfied the Third and

Seventh Circuit’s tests.

First, Sodexho raised an open question in the D.C.

Circuit (and a direct conflict among other circuits) as to

whether a district court’s class certification analysis is limited

to consideration of the plaintiffs’ evidence or whether the

court may consider rebuttal evidence offered by the

defendant. Applying Second Circuit precedent, the district

court held that it could not consider defendant’s statistical

evidence demonstrating the absence of class-wide

discrimination, even where that evidence was interstitial in

nature and not simply reflecting a disagreement of experts.

The only material question was whether plaintiffs’ statistical

evidence was sufficiently relevant to the claims to be

admissible (i.e., a minimal Daubert question). Under this

standard, little more than a deferential Fed. R. Civ. P. 12(b)(6)

analysis is needed for certification, and any artfully framed

complaint supported by a colorable expert opinion will satisfy

Fed. R. Civ. P. 23. =~

This issue clearly constituted an unsettled, fundamental

issue of law regarding class certification. While a sharply

divided (2-1) Second Ciréuit panel opinion in Caridad v.

Metro-North Commuter R.R. Co., 191 F.3d 283, 292 (2d Cir.

1999) supported the district court’s opinion, both the Third

and Seventh Circuits reject that approach. See Newton, 259

F.3d at 167 (concluding that court may make a preliminary

inquiry into the merits and should decide certification

“‘only after consideration of all relevant evidence and

arguments’”); Szabo, 249 F.3d at 675 (reversing district court

decision that had “certified the class without resolving factual

and legal disputes that strongly influence the wisdom of class

treatment’). Indeed, in Szabo, the Seventii Circuit expressly

stated that the “proposition that a district court must accept

all of the complaint’s allegations when deciding whether to

certify a class cannot be found in Rule 23 and has nothing to

recommend it[,]” 249 F.3d at 675, a position diametrically

contrary to that of the district court and Caridad."

11. Earlier decisions in at least two other circuits agree with

the Third and Seventh Circuits. See Castano v. Am. Tobacco Co., 84

F.3d 734, 744 (Sth Cir. 1996) (holding that Zisen v. Carlisle &

Jacquelin, 417 U.S. 156, 177 (1974) does not bar inquiry beyond

sufficiency of plaintiffs’ allegations); Stastny v. S. Bell Tel. & Tel.

Co., 628 F.2d 267, 273-74 (4th Cir. 1980) (district court must delve

into the circumstances of the case because at this stage “the class

action and merit inquiries essentially coincide”). Some c.strict courts

(Cont’d)

Commentators have underscored the profound significance

of this conflict among the circuits, especially for employment -

discrimination cases, and called for clarification. See Robert G

Bone and David S. Evans, Class Certification and the

Substantive Merits, 51 Duke L.J. 1251, 1270 (2002) (describing

“a rather muddled body of case law” in which the “[cJourts

disagree about how closely they can examine evidence and

scrutinize the factual merits at the certification stage’”’). As Bone

and Evans explain, the practical impact of a holding that district

courts lack authority to engage in a critical analysis of plaintiffs’

expert opinion, notwithstanding Falcon’s admonition that courts

must “rigorously” assess class claims, is to ensure certification.

Id. at 1325-26 (effect “is to insulate almost any expert’s statistical

evidence from challenge at this certification stage and virtually

guarantee plaintiffs’ success in establishing certificatior

requirements. ... even when the evidence for company-wide

discrimination is seriously flawed”’) (emphasis added). This case,

where the district court essentially started and stopped with

plaintiffs’ allegations and adopted their tepid statistical analysis

wholesale,'’? presents a paradigm vehicle to address this

fundamental issue of law.

(Cont’d)

have therefore freely considered defendanis’ statistical evidence and

expert reports. See, e.g., Rhodes v. Cracker Barrel Old Country Store,

Inc., 213 F.R.D. 619, _, 2003 WL 933152, at *52 (N.D. Ga. Mar. 7,

2003) (observing that where “statistical evidence established Rule

23 commonality and typicality elements[,]” the court “was obligated

to conduct a careful review of the statistical evidence presented”);

Serafty v. Inter. Automated Sys., Inc., 180 F.R.D. 418, 421-22 (D.

Utah 1998) (crediting defendant’s expert statistical analysis as basis

for rejecting certification).

12. As previously stated, Dr. Siskin’s methodology was

seriously flawed: (1) it did not account for important variables such

(Cont’d)

Second, Sodexho challenged the district court’s ruling

that the existence of a decentralized and allegedly subjective

system for managerial and executive level promotions may

constitute a sufficient “policy” with discriminatory impact

across the entire class. Here, too, the circuits are in conflict,

and no clear D.C. Circuit precedent exists. Indeed, the district

court itself recognized he lack of controlling precedent, see

App. 35a, 208 F.R.D. at 442 (“there is really no case on

point”), but it again essentially sided with Caridad,

concluding that Dr. Siskin’s finding of a shortfall in

promotions for African Americans meant that Sodexho’s

subjective and decentralized process reflected a

discriminatory policy.

As the district court recognized, the issue needs appellate

scrutiny. A flurry of recent district court opinions have refused

to certify classes in employment discrimination cases

involving highly decentralized, geographically sprawling

companies on commonality, typicality, or Rule 23(b)(3)

(Cont’d)

as prior job experience or education, (2) it did not distinguish between

seniority earned in managerial positions and non-managerial positions

or in full-time and part-time positions, and (3) it did not analyze the

results by division and region to determine whether a pattern of

adverse treatment actually exists across Sodexho nationally. Just as

troubling, the district court failed to analyze meaningfully Sodexho’s

evidence of a clear and fatal conflict of interest among class

representatives and members, which, under D.C. Circuit precedent,

Wagner v. Taylor, 836 F.2d 578, 595 (D.C. Cir. 1987), should have

precluded certification. Those intra-class conflicts, a predictable

consequence of certifying a class that includes all levels of

management — from entry-level to division president — were not

speculative and instead were well-documented by detailed testimony.

The district court, however, sidestepped this defect by summarily

dismissing that testimony as “confusing.”

grounds.'* By contrast, over a vigorous dissent, the divided

13. The district court elected not to follow numerous recent

precedents to the contrary. See, e.g., Reid v. Lockheed Martin

Aeronautics Co., 205 F.R.D. 655, 670 (N.D. Ga. 2001) (use of

decentralized, subjective hiring criteria for “broad, multi-facility

class” defeats certification); Cooper v. Southern Co., 205 F.R.D. 596,

626-27 (N.D. Ga. 2001) (in large, geographically sprawling company,

individual managers’ discretion did not constitute a “policy” of

discrimination); Donaldson v. Microsoft Corp., 205 F.R.D. 558, 567

(W.D. Wa. 2001) (“[cJourts have recognized that it is not possible to

make a finding of commonality where the putative class involves

extensive diversity in terms of geography, job requirements, and/or

managerial responsibilities”); Beck v. Boeing Co., 203 F.R.D. 459,

463-64 (W.D. Wa. 2001) (“if these statistics do not apply at each and

every location covered by the putative class, commonality has not

been established”, aff'd in part, rev'd in part on other grds., 60 Fed.

Appx. 38, 2003 WL 683797 (9th Cir. Feb. 25, 2003); Wright v. Circuit

City Stores, Inc., 201 F.R.D. 526, 542 (N.D. Ala. 2001) (claims of

individuals “who worked in a 542 multi-state geographical area, in

different organizational divisions ..., in separate facilities, at

different times, reporting directly to and under the direct supervision

of numerous autonomous decision-makers.... do not lend

themselves to class treatment”); Abram v. United Parcel Serv. of Am.,

Inc., 200 F.R.D. 424, 432 (E.D. Wis. 2001) (“[hJere, by contrast, the

decisions of apparently hundreds of center managers are implicated,

requiring many individualized inquiries that not only undermine

‘commonality’ but also have the potential to render class treatment

unworkable”); Reap v. Cont’l Cas. Co., 199 F.R.D. 536, 544-45

(D.N.J. 2001) (“policy of delegating discretionary employment

decisions to local supervisors” is not ordinarily a basis for class

certification “absent an allegation that the company intended to use

this policy to discriminate”); Miller v. Hygrade Food Prods. Corp.,

198 F.R.D. 638, 642-44 (E.D. Pa. 2001) (individualized inquiries

predominate where subjective standards were applied to “individuals

employed in different divisions, under different supervisors, for

varying durations of time”); Lott v. Westinghouse Savannah Co. River

(Cont’d)

ty,

;

panel in Caridad reversed a district court decision that had

reached a similar outcome. See 191 F.3d at 292; compare

with 191 F.3d at 296 (Walker, J., dissenting) (“As a matter

of law, I cannot agree ... that [defendant’s] practice of

delegating personnel decisions — plaintiffs prefer to call it

‘overdelegation’ — constitutes a policy or practice sufficient

to satisfy the commonality requirement’).

The significance of this issue is compounded

exponentially by the transparent flaws in plaintiffs’ expert

evidence. Many large corporations are vulnerable to

(Cont’d)

Corp., 200 F.R.D. 539, 556 (D.S.C. 2000) (“[t]he diversity of

employment conditions, coupled with the sheer absence of evidence

proving [that] centralized decisionmaking for the types of decisions

challenged in this suit compels the court to find a lack of

commonality”); Zachery v. Texaco Explor. & Prod., Inc., 185 F.R.D.

230, 239-40 (W.D. Tex. 1999) (refusing to certify multi-facility class

working in 17 business units spread across 15 states, each with

varying amounts of local autonomy over employment decisions);

Betts v. Sunstrand Corp., No. 97 C 50188, 1999 WL 436579, at *7

(N.D. Ill. 1999) (“[t]he lack of a centralized hiring decisionmaker,

the sheer number of managers who hire applicants, and the wide

range of jobs included in the prospective class, indicate the lack

of a common nucleus of operative fact between class members”);

Abrams v. Kelsey-Seybold Med. Group, Inc., 178 F.R.D. 116, 130

(S.D. Tex. 1997) (commonality and typicality lacking because

“the members of the purported class were not subjected to the

same decision making authority”); Zapata v. IBP, Inc., 167 F.R.D.

147, 159 (D. Kan. 1996) (absence of centralized employment

decisionmaking or a showing of decentralization by the defendant

may result in denial of class certification). See also Stastny v. S. Bell

Tel. & Tel. Co., 628 F.2d 267, 278 (4th Cir. 1980) (reversing

certification of statewide class where district court had failed

“to appreciate the significance of the dispersion of . . . class members

throughout a great number of geographically separated facilities”).

a potentially devastating class action if subjective,

decentralized decision-making for management level

positions may be deemed a discriminatory “pattern or -

practice” merely because of a shortfall in promotions for

African American managers to upper level managerial

positions when measured by the date of their hire but not

measured by potential differences in region, job status,

education, prior experience, part-time experience or other

obvious candidates that could account for the disparity. At

least in Caridad, the plaintiffs’ expert “controlled for various

factors that one would expect to be relevant to the likelihood

of disciplinary action and promotion.” 191 F.3d at 293

Finally, Sodexho petitioned the D.C. Circuit to consider

another important, fundamental issue of law: whether the

district court properly certified a class only for liability

purposes without determining that the remedies sought by

the class satisfy Rule 23(b). The district court acknowledged

that at least one of plaintiffs’ claims (a continuing violation

theory) might preclude certification under Rule 23(b) for a

remedy, see App. 40a n.27, 208 F.R.D. at 444 n.27, thus

raising a clear possibility that plaintiffs’ claims ultimately

might not satisfy Rule 23(b). Again, the circuits have split

on whether a district court may use a partial certification

mechanism to avoid Rule 23(b). Compare Castano v.

Am. Tobacco Co., 84 F.3d 734, 745 n.21 (Sth Cir. 1996)

(“The proper interpretation of the interaction between

subdivisions (b)(3) and (c)(4) is that a cause of action, as a

whole, must satisfy the predominance requirement of (b)(3)

and that (c)(4) is a housekeeping rule that allows courts to

sever the common issues for a class trial.”) with Robinson

v. Metro-North Commuter R.R. Co., 267 F.3d 147, 167-69

(2d Cir. 2001) (allowing district court’s partial certification).

Each of these issues warranted appellate review in its

own right. Collectively, they presented a compelling set of

important issues lying at the intersection of Rule 23 and

massive employment discrimination actions. They easily

parallel the issues raised in the numerous appeals that other

circuits have allowed under Rule 23(f).

The unfairness of de minimis review under Rule 23(f)

has not escaped Congressional attention. See Civil Rules

Advisory Comm., Minutes, May 1-2, 1997, 1997 WL

~ 1056241, at *6. Last year, the House of Representatives

passed a bill, H.R. 2341, mandating an automatic right to

interlocutory appeal of all certification decisions under Rule

23, and a similar bill has been introduced this year.

Unfortunately for Sodexho and the many others in its

predicament, even if it were to become law as currently

drafted, the bill might not apply to currently pending cases.

Nevertheless, the fact that the House would be so struck by

the unfairness of the lack of an opportunity for interlocutory

appeal that it would take steps to supersede Rule 23(f) speaks

volumes to the degree to which the D.C. Circuit has strayed

from the original intent of the Rule.

The interlocutory nature of Rule 23(f) makes certiorari

imperative. By definition, if the conflict among the circuits

regarding Rule 23(f) is ever to be reviewed by this Court, it

must be done following the denial of leave to pursue an

interlocutory appeal, as here. Given the magnitude of the

class certified by the district court, the existence of numerous

unsettled and important issues of law, and the overwhelming

impact of the certification decision on the course of the case,

the issue presented herein is uniquely situated for review by

this Court.

CONCLUSION

For the foregoing reasons the petition for a writ of

certiorari should be granted.

Respectfully submitted,

GEORGE W. JOHNSTON

Topp J. Horn*

MITCHELL Y. Mirviss

VENABLE, BAETJER AND Howarp, LLP

1800 Mercantile Bank & Trust Bldg.

Two Hopkins Plaza

Baltimore, Maryland 21201

(410) 244-7400

Attorneys for Petitioner

* Counsel of Record

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.