Class Action Defense News, Developments and Commentary

Class Action Lawsuit Defense

Home | Class Action Lawsuit Defense

Contrary to the Seventh Circuit’s recent decision in <a title="Baker Hostetler Employment Class Action Report Post on McReynolds" href="http://www.employmentclassactionreport.com/class-certification/adrift-with-uncertainty-seventh-circuit-certifies-race-discrimination-class/">McReynolds</a>, in which the Court allowed issue certification in the wake of <a title="Baker Hostetler Employment Class Action Report Post on Dukes" href="http://www.employmentclassactionreport.com/class-action/supreme-court-reverses-ninth-circuit-in-dukes-v-wal-mart/">Wal-Mart</a>, in <a title="Puffer v. Allstate" href="http://www.ca7.uscourts.gov/tmp/GU10QH7T.pdf">Puffer v. Allstate Insurance Co.</a>, No. 11-1273 (March 27, 2012), the Seventh Circuit affirmed a lower court’s ruling denying certification for female employees who claimed that the Allstate Insurance Company’s (“Allstate”) compensation policies discriminated against them.  Never reaching the Wal-Mart standard, the Seventh Circuit held that class members who intervened to challenge the lower court’s class certification denials after the original plaintiff settled her case were barred from asserting a disparate impact claim on appeal that had not been preserved by the original plaintiff in the district court.   

The original plaintiff, Katherine Puffer, brought the action on behalf of herself and a putative class claiming that Allstate carried out a nationwide pattern or practice of sex discrimination in violation of Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963. Puffer alleged that Allstate discriminated against her and a class of approximately 1700 female managers by paying lower wages to female employees than their male counterparts.  In her complaint, Puffer also alleged gender-based earning disparities rooted in differential treatment and disparate impact theories based on Allstate’s salary, promotion, and training policies, which left significant discretion in the hands of individual managers. 

The lower court denied plaintiff’s motion for class certification, addressing plaintiff’s pattern-or-practice claim. The court concluded that common issues did not predominate based on the individualized inquiries that would be necessary to determine the reason for each of Allstate’s employment actions.  In response to the court’s concerns and the passing of the Lilly Ledbetter Fair Pay Act of 2009, plaintiff again moved for class certification and narrowed her argument to focus solely on Allstate’s uniform compensation policies, which plaintiff claimed disadvantaged female employees.  Plaintiff’s motion did not fully address the disparate impact claim.  The magistrate judge denied plaintiff’s second motion, holding that the court’s commonality concerns were not resolved by plaintiff’s narrowing of the issue.  Subsequently, Puffer settled her individual claims.

Intervenors appealed, raising only the disparate impact claim.  In light of the Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the intervenors did not appeal the denial of class certification as to the pattern-or-practice claim of intentional discrimination.  The Seventh Circuit held that because plaintiff failed to “meaningfully develop [the disparate impact claim] before the district court,” the intervenors could not rely on it as a basis for their appeal.  The Seventh Circuit ruled that because the intervenors stood in the shoes of the original plaintiff, the disparate impact claim had been waived because plaintiff neglected to argue it before the district court.

Coming fast on the heels of the McReynolds decision, the Puffer decision – in which the Seventh Circuit appears to have delved deeply not only into the procedural deficiencies, but also the factual deficiencies, of the case – may be an indication that one of the lasting results of Wal-Mart is closer scrutiny by the courts of the specifics of each case.

Seventh Circuit Upholds Lower Court Decision Denying Class Certification in Gender-Based Pay Discrimination Case