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IN T HE UNI TED ST ATES C OURT OF

APPEALS FO R T HE TH IRD CIR CU IT

_______________
NO. 03-3488

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GAIL WATSON CHI ANG; *LYNDA ALEXANDE R MUHAMMAD; JACQUELINE C ARR; DENISE PI TTMAN; CARMEN MCALP INCLARKE; KAREN HUN T; THERE SA COLL INGWOODMOR RIS; DAVID C. NICHOLAS; PRECI OUS YEAR WOOD; FREDERICK FREEMAN; BEVERLY RAWLINS; ANDREA CARROLL; RONALD J. MITCHELL; JACK DANIEL; CHRIS TINE DANIEL; ANESTA E. GORE; VANETA MARTIN; CARMEN GO NZALEZ; M. NARTEL GREEN; SHIRLEY WILL IAMS; MARIA BL YDEN; GONZALO RIVERA; BLANCHE R. RAWLI NS; RHEA L. JOHNS ON; MARILYN RIVE RA; KEI TH R. WILL IAMS; AL BRUNN; EMERYL CHRI STOP HER; CHARLES G. JOHNSON; VELSINA L. GEORGE; KALEEN CLOUDEN; EUNICE GOMES; RUTH DUBL IN; KIMBE RLEY L . O LI VER; ELENA HERBER T; LAWRENCE CHRI STI AN; MARJORI E JO HN; LAVERNE WILLIAMS; REVEREND JAMES CHR ISTIAN, on behalf of themselves and all others simil arlysituated v.

ANN M. VEN EMA N, In her Offic ial Capacityas Secret ary of The United States Department of Agricult ure,
Appellant

*Amended pursuant to Cl erk' s Order

dated 11/ 24/03

_________________

On Appeal From The Distric t Court of

the Virgi n Islands (No. 00-cv- 00004) Dis tric t J udg e: Hon or ab le Tho mas K.

Mo ore

_______________ Argued December 10, 2003 Before: NYGA ARD , BECKE R, and ST AP LE TO N, Circuit

Judges

. (Fil ed September 20, 2004)

DOUGLAS B . I NMAN, E SQ. (AR GUED) Sayr e & Chavez 7 Church Street Ch ristiansted , St. Cro ix USVI 00820

Attorneyfor Appellees

PETER D. KEIS LER, ESQUIRE Assist ant Attorney General DAVID M. NI SSMAN, ES QUIRE2

United States Attorney ERNEST BATEGNA, ESQUIRE Assist ant Unite d States Attorney ROBERT M. LOE B, E SQUIRE CHARLES W. S CARBOROUGH, ESQUIRE, COLETTE G. MATZZIE, ESQUI RE ( ARGUED) Attorney s, Appell ate Sta ff Civil Divi sion, PHB R oom 9149 U.S. Department

of Justi ce 601 D. Stre et , N W Washington, DC 20530-0001

Attorney s for Appel lant

______________________
OPINI ON OF THE COURT

_______________________

BE CK ER , Circuit

Judge

. This is an i nterl ocutoryappeal bythe defe ndan t, Unite d St at es Secret ary of Agricult ure, Ann M. Ve nema n (“Vene m an”) purs uantto Fed . R. Civ. P. 23(f), in which s he challenges a class certi fication gran t ed by the D istrict Court in a civil rights case brought against her in her of fic ial ca pa cit y. The lead p laintiff is Gai l Watson Chiang (“Chiang” ), t he repres entative of the putative class , w ho, along with thirty -eight other plai ntiffs, alle ges sys temati c discrimination agai ns t persons who a re “Black, H ispani c, women, and/orVirgin I slander s,” over a period of ninete en year s, i n the a dminist rati on of loan prog rams intend ed to he lp low in come ruralfamili es obtai n ho mes and make repair s to exi sti ng homes. The cl ai ms are made pri marily under the Equal Cred it Op portu nity Act, 15 U .S.C . § 1691

et se q. (“EC OA ”), wh ich m akes it “unlawful for any cred itor to disc rimina te againstany app licant, w ith resp ect to any aspectof a c redit tran sactio n . . . on the basis of r ace , colo r, r e ligi on, national origi n, sex or mari tal s tatus , or age. ” 15 U.S .C. § 1691 (a) . To es tabl is h a p ri ma facie case under ECOA the class mem bers must show that ( 1) plaintiff was a member of a protected class ; (2) plaint iff appl ied for credit fro m defendants ; (3) plaint iff

was qualif

ied forthe cre dit; and ( 4) de spite qualif ication, plaint

iff was de nie d cred it. S ee Matthiese n v. Banc One Mortgag e Corp ., 173 F.3 d 1 242, 124 6 (10th C ir. 1999).
Ac c ording to Chiang, the regi onal USDA offic e in V ermo nt, wh ic h h ad juri sdiction over the U.S. Virgi n Islands, kept Vir gin Is la nde rs “ou t o f the s y st em” by im pl em en tin g a “p ho ny, ” ill egal waiting lis t on which thousands of V irgin Islanders, almost all of whom w ere Black, Hispani c, o r female, had thei r names placed inst ead of being give n an actual loa n ap pl ic atio n i n vi ol atio n of USDA po lic y, inst

ructi ons, an d reg ulati ons , . These applic ants were told t hat they wo uld recei ve app li cat

io ns wh en t

heybec ame availa ble but, e v e n after year s of waiti ng, most never did. According to Chi ang, not only were appli cati ons ava il able, but the Virg in Islan ds w as the o nly local ity in the United St at es wh er e this ty pe of waiti ng list was implem e nted. Thus, Chiang submits, the so- call ed “waiti ng l ist ” was not a true waiting l ist

at all, but was rat

her a device us ed to denyclass mem bers loan applications altoge ther.3

Chiang also al le ge s tha t t he USDA admini s trators in Vermont furt he r inst ructedVirgin I slands of fici als t o give applic ations only to t

hose class m emb ers
on the w aiti ng lis t who became a “pr obl em ,” and then t old loca l employ ees “you kno w w hat to d o w ith it.” Th is

me s sage was uniformlyunderst ood by loc al US DA officials to mean that t he applic ations we re no t to be process ed, but rather that a ctions w ere to b e take n to make it difficu lt or im possibl e for the inquiring parti es to me etqualif ications and deadlines, the intention be ing that the applic ants would become so frust ratedthat they wou ld withdra w th eir loa n applications, or that d elays w ould result in disqual ific ationor oth er jus tifi cati on for denial of the appl icatio ns. In Chian g’s submissi on, this became known in the local USDA offi ce as th e “Im poss ible Yes”: an applic ation w ould be giv en ou t, but the U SD A w ould mak e it imp ossible for the pu tative ap pli cant to have the app licatio n fa irly pro ces sed

. Furthermore, Chiang alleges c orrup tio n in the a d minist

rati on of the l oan program in the Virgi n Islands—in the rare inst ances in which loans were approved—through favoritism to local contractors w ho w ere not buildi ng homes in a safe and workmanlike man ne r. This re sulted, it is said, in placing Virgin Isl an ders in to inadequa te and unsafe housi ng , rep resent ing a f u r t h e r for m o f disc rimi natio n ag ains t Vi rgin Islan der s.
At the behest

of Chiang, t he District Cou rt granted a

Rule 23(b)( 3) certific ation to a cl ass of
All persons who are Black, Hispanic, fem ale and /or Vir gin Isl anders who applie d or attempted to apply for, and /orrecei ved, housi ng cred it
, services, home ownership, a ssis tance, trai ning, and/or educati o n a l opportuni ties from the USDA through its Rural Develop me nt offi ces (and predecess or designations) l ocat ed in the U.S . Virg in Islan ds at a nyti me between January 1, 1981 and January 10, 2 000, and who believe they we re di scri minated against on the basis o f
race, gender or nat

ional origin.

In Veneman’s submissi on, the Distri ct Cou rt abus ed its dis cretio n wh en it certi fied what she describes as a spra wling and unm anag eable class acti on seeking $2.8 billion in dam ages from th e USDA. She com plains th at the c lass de finition is

o verbroad, and that it is intern all y inconsi stent

insofar as i t encompasses every Virgin I slander

who app lied or atte mpted to apply

for anyof

the dif ferent Rural Housing Servic e (“RHS”) 1 credit

1 The Rural Housing Servi ce is an agency of

th e US DA

. Formerly kno wn
as the R ural H ousin g and Co mm unity Deve lopmentServi ce, “RH S” is a
successor

agency to th e Farme rs Home Administr ation, which cease d to ex ist in 1994. RHS op erate s a broad r ange of pr ogr ams to address rura l Am erica’s need for sin gle-fa mily and mu lt i- fam ily housing as well as health f a cilities, fire and po lice station s, and other c om mu nity structures. To promote it s goal s , R HS admi n isters direct

loan guarantees and gran ts through st ate and l ocal offi ces locat ed throughout

the nation.4

and benefit

pr ogra ms during a ni neteenyear period ( from 1981 to 2000), includi ng those wit h no n-c red it claim s, tho se w ith untim ely claim s, and Cau casia n loan applic ants who the complaint alle ge s ben efitte d fr om the d iscrim inati on.
In Veneman’s view, not only is the class so sw eepin g that th e thres hold requ ireme nts of Rule 2 3(a ) li kelyare not sati sfied, but even i f the cl ass defi niti on
were deemed to m ee t Rule 23 (a)’s st anda rds, the class fails Ru le 23(b)(3)’s

more stringent require me nts because

common issues d o no t pred ominate over indivi dual ones and c lass treatm ent w ould not be superi or to i ndividualadjudications. Central to Ve neman’s conte ntion i s the argumentthat to prevailon his or he r indivi dual cl ai ms u nde r E COA, each class member would need to dem onst r ate that the US DA ’s proffered reason for deni al of credit (or l oan for defective pr op er ty) was
a pretex t for dis crimin ation o n the b asis of
race, gender or nat

ional origin. According to Ve ne man, li abili ty on these cl aims can only be determined through c a se- by-case inquiries into t

he specif

ics of each trans acti on, and most particularly , the loan eligibility of each p utative class me mber. If the cl a ss member could not have obtaine d the loan, the n he or she cannot

su cceed in his or hercl ai m o f discrimination, regardl ess of the existence of the allege d w aiting list. Chiang counters this with the contention t hat det ermination of loan eligibility would, in fac t, be su scep tible to class proof because t

hose determinati ons
were pure ly ministeria l in nature. In her supp lementalexhibit 1, Chiang submits a c hart for our cons iderat ion which sh e cl ai ms was the primary document used by USDA employe es to de ter m in e e lig ib ilit y, contendi ng that t

hose employ ee s did not have any particul ar knowledge or s kill , but rather, were mere cler ks ch arge d w ith matching incom e to co lumn s on th e cha rt. According to C hian g, t he evaluations of eligibili ty consti tutedneithe r in- depth nor discre tio nary assess men ts of th e circumst ances of each appl icant, and he nce
are s ubj ect to com mo n pr oof

. Veneman is surelycorrect that t he p laintiff in an ECO A case mu st establi sh that he or she was qual ifi ed for loan eligib ili ty as part

of the pri ma facie cas e. The record deve loped thus f ar leav es us in

som e d oubt as to the v alidity of Chiang’s contention s about the susceptibil ity of eligibility determi nations to common proof. Neverthel ess, we believ e tha t this questi on wil l be best resol ved by t

he Distri ct Co u r t i n the fi r st i ns t an ce

. We have no doubt, however, that t he questi on of the exi stence vel non of th e “ ph on y” waiting lis t—and associated techni ques
use d to prevent

Virgin I slander s from g aining access to loan appl ications an d loans

— is a matter appropriate for cl ass determi nation. We will therefore af firm thatportion of the District Cou rt ord e r certi fyi ng the cla ss pu rsuan t to Ru le 23(c)(4), whi ch al lo ws a class action to be maintai ned with res pect to particular issues— in this case the w aiting list— wh ile simu ltaneo usly reserving fo r t h e District Cou rt the authority t o de te rmine whether eligibility for loans can be cer tified as a questi on suit able for

class adjudic ation.

W e a re no t tro ub led by t he seeming5

intern al contr adict ion in the clas s defini tion because, inasm uch as the plaintiffs’ primary claim is that they were di sc riminated again st for b eing V irgin Islanders, a cognizabl e class , we will treat the claim as such and modify the Dist ric t Cou rt’s ce rtif ica tio n o rd er ac co rd in gl y. Wh i le some clai ms allegeindivi dual gender and race di scri minati on, the

num b er of such complai nts appear s to be

sma ll, an d we think that certifying a class of Vir g in Isl anders bes t captures the plaintiffs’ ar gu me nt s. Si nc e 7 6% o f the popu lati on of the U.S. Virgin Islands i s blackand 14 % i s His panic , it is possib le that the cl aims of rac ial and nation al origin discrimination ma y ove rlap

. We therefore leave to the plainti ffs the option to seek to amend the cl ass defi niti on to all ege raci al and gender, r ather t

han na ti onal ori gin, discrimination; any dec isi on on such amendment will be for the Distric t C ourt in the fi rst i nstance. Additional ly , for

reasons explai ned infra , we will further modify the certifica tion ord er to elimin ate the reference to the class members’ “beli ef” in dis crimina t ion, there b y removing such a subjective cri teri on from the cl ass defi niti on.
As the foregoing suggests, the is sues to be dealt with on a class basi s do not prese n t predominance, superi ority, or
man agea bility problems. See Fed. R. Civ. P. 23( b)(3 ). Neither do we fi nd any merit in Veneman’s unti meliness clai ms, which

a re not properl y before us at t his st age of th e case. Fi nally , becausethe othe r aspe cts o f t he case ar e not sui tablefor class determi nation, i.e ., i ncl u sion of the clas s-based clai ms of corrup t administ rati on, and, on the present record, the e ligibility facet o f liability, we will

vaca te the D istrict Co urt’s ord er in all oth er re spe cts.
I. Facts and P rocedura l History

We begin with a

recit ation of

the alle gations support in g class certi fication, de riv ed both from thefirs t amended complaint

and from extens ive i nfo rmal class act ion dis covery(lar gelyexchange of docum ents). We note that it is not necessary for the pl ainti ffs to es tabli sh the merits of their case at t he class certi fication stage, and th at, in dete rmining whether a cla ss will be c erti fied, the substant ive alle gations of the complai nt must be ta ken as tru e. See E isen v. C arlisle & Jac quelin , 417 U.S . 156 , 1 77

- 78 ( 197 4).

Between January1, 1981 and Jan uary 10, 2000, thous ands of V ir gin Islanders requested loan appl ications fr om the USDA in order to pu rchase or m a ke repairs on homes. As noted above , Chiang alle ges that a ll cl ass members who requested hom e loan applic a tions were forced to put t

heir names on an ill egal waiting lis t ins tead of actual ly being give n
an applic ation. 2 Chiang co ntends t hat the

2 Fro m 199 5 t o 19 99, Ch iang worked

as a specialassis tant to the Governor of the Virgin I slan ds . Although s he fil ed this suit as a pri vate ci tize n, she expl ains that she fir st became aware of t he extent of the dis crimination pr oblem due to he r governmentalposition wh ich led her to recei ve “hund re ds , if not thousands, of oral complaint s from Virgi n Islande r s regardi ng what was pe rceived as a longst anding and w idespre a d system atic6

existence of this lis t, generat ed in the USDA region al off ic e in Vermont which had juri sdiction over t

he Virgin Isl ands,

was in direct cont

raventi on o f U SDA inst ructi ons and r egula tions, an d th at no equival ent list existed anywhere else i n the United States . Chiang r epresent s t hat the justific ationUSD A gave fo r placing class

mem bers on t

he wa it ing li st was that (1) the U SD A di d n ot ha ve an y a ppl ications and (2) appl ications were not being give n
ou t bec aus e the US DA had no mo ne y availa ble for loans. H owever, Chiang contends that ap plication s we re, in fa ct, avail able, and th at a certain low leve l of funding was al so avail able despi te her alle gationth at

th e US DA failed to seek or obtain proper lev els of fundi ng for rur al housing loans fo r each of the 19 y ears at issue. 3 According to Ch ia ng , each named plaint iff in this law suit f iled a discrimination co mpl ai ntwit h the USDA prior to thi s acti on, or authorized one to be file d on h is or herbehalf. 4 In March 1997,

discr iminat ion” and thatshe wa s “inundat ed wit

h c omp la in ts of

USDA discrimination from al l quarters. ”

3 Chian g also contends that because class memb ers were placed on t he alle ged w aiti ng lis t, t hey were neve r entere d in to th e o ff

ic ia l US DA da tabase which tracks the number of l oan applic ations in each j urisdi ction. She f urther submits that due to that lack of data entry , the level of need for fundi ng
was neve r prop erly as sessed and s o was
never alloc ated t o the Virgi n Is lands. The la ck of

funding, s he maintai ns, was then used as a r eason for putting class

mem bers on t he waiting l ist , the reby keeping them out of t he databas e and

crea ting a vic iou s circ le. There is, however, no basi s in the record to support the cont ention t

hat the

am ount of funding i s ti ed to thenumber of per so ns who seek loans. The methodologyfor all ocati on of housing funds can b e found in 7 C.F. R. §§ 1 940 .552 and 1 940 .565. T he fo rmu la is based on (1) the State ’s perc entage of t he National num ber o f ruraloccupied substanda rd units; (2) t he State ’ s p ercent ag e of the N ational rura l po pu lati on; (3) the State ’s perc entage of th e National ruralpopulati on in plac e s o f less than 2, 500 populati on; (4) the State’s percent age of the Na tio na l number of ruralhouseholds be twee n 5 0 and 80 percent of the ar ea median inc o me; and (5) the State’s per centage of the N ationa l number of ruralho useholds be low 50 perce nt o f the ar eamed ia n i nc ome . O n t hi s record, it appe ars that none of these factors are derived f rom the U SD A’s applic ation database. To the ext ent that Chiang al leges an unf air alloca tion of fun ds to th e V irgin Islands, as opp osed to discrim inatory behavior on th e part o f the U SD A in administering those f u nds, she seeks reli ef in the wrong for

um and would be bette r served directing her c omp laint else wh ere.

4 Those a u thoriza tions w ere ap paren tly directed to Chiang i n the cours e of her employment

in the Governor ’s offi ce. When she f ie lde d complaint s about t he US DA ’s allege d disc rimina tory beha vio r ,7

Chiang and 48 other named pl ainti ffs file d

an administ

rati ve class program complai nt of discrimination with t

he USDA ’s Office of Civ il Rig hts in W ash ing ton , D.C . T he

nam ed plaint

iffs cl aim never t o hav e recei ved any type of ac know ledgment of th eir co mpl ai nt s f

ro m t he USDA

. How ever, in res ponse to moun ti ng discrimination complaints, the USDA sent

an inves tigative te am to the V irgin Islands. The USDA team conducte d a n invest igati on and docum ented w ha t Chiang sty le s the “Hi ghw a y to Nowhere” in an inte rnal U SD A re port en titled “C ivil Righ ts Com p li ance Revi ew for the U.S. Virg in Islands, October 19-29, 199 7.” The repor t—which was never off iciall y adopted byth e US DA —ide nt if ie d t wo spec ific t echniques used to deny class

mem bers access t o the loan s. 5 Those techni qu es w er e ( 1) cr ea tin g t he ph on y, ill egal “ wa iting list,” an d (2) im plem entin g the “im po ssible y es” scheme. (See JA 384-411). This lawsui t foll owed.
The plaint

iff s fil ed t heir i niti al complaint

on January11, 2000 and fi led their firs t amended complai nt (“FAC”) on March 23 , 2001. The FAC named 39 plaint iffs and sought cl ass certifi cati on. Veneman opp osed class c ertificati on on the grou nds th at the thr esho l d requ ireme nts of Fed . R. Civ. P. 23 (a) h a d not b een met. Veneman als o argued that the class definition w as fatally overb ro ad because it fai led to define the class by refe r ence to anydiscriminat ory practi ce, i ncluded untimel y cl aims and cl ai m s aris ing out of

RHS ’s non -credit b enef it programs, and was not li mited byrace or gender as i t i ncluded all Virgin Isl anders.
On Febr ua ry 28, 2003, t he District Cou rt file d its decisi on certi fyi ng the class under Rule 23 (b)(3). 6 The Court found that the FAC alleged “a patte rn and practi ce of discrimination agai nst each class member.” It

conclud ed th at the pa ttern and p ractice m anife sted itself in three w ays : ( 1) some mem bers w ere denied an ap plication pack age a nd to ld to put their names on an unlawful wait ing list; (2 ) RH S prov ided o ther m emb ers w ith applic at io ns, but the n m ade it im poss ible for them to ob tain cre dit by delib erately delay ing and frust

rati ng the process so that the prog r am would run out of funds, the

she would ask the compl ainant to give her pe rmissi on to lodge a n offi cia l discrimination com plaint w ith the USDA.

5 Venem an refuses t o b e bound by t he conte nts of the re port, call ing i t an “unoffici al and preli minarydraft” fill ed with “hearsay

and bas el ess in nue ndo .” (Re ply B rief , P.7 , not e1)

. 6 The Distri ct Court e x p licitly chose “no t to certify this class under (b)(2)” because even though “Rule 23( b) (2 ) certi fication can b e partic ularly well-s ui ted t o civilright s acti ons chargi ng c las s di scr imination

. . . certi fication is not properwhere ‘the appropri ate f i nal rel ief relates exclusively or p r edom inantly to money damages.’ ” (Op. 14, note 4) (quoti ng AdvisoryCommittee No tes to Ru le 23 ( b) (2)). The D istrict Court concluded t hat, althou gh some measures of injunct ive relief were s ought, “ the equita ble remedies probablydo not predom inate.” (Op. 14 , note 4).8

applic ant would becom e in eligible or t he applic ant would give up; and (3) even pl a inti ffs who did obtain loan s were denied servi ces such as loan workouts and payment moratori a because of t heir r ace, gen der , or n ation al or igin

. In making thesefi nd ings, the Dist rict Cou rt rejec ted Veneman’s ar gument that the class defini tion i mproperly turnedon a
c las s me mb ers’ s tate o f m ind

— i.e., whether they “be lieved ” them selves to ha ve suffered di scri minati on. It rejec ted Ven eman ’s arg um ent that Rule 2 3(a)’s requ ireme nts were not met. The C ourt also fou nd th at the c lass w as suf ficien tly cohesive to warrant

adjudic ationby class acti on given that the com mo n qu esti on in each count was w hether the U SD A’s practi ce and polic y di scri minated aga in st Blacks, Hisp anics, w om en, an d/or V irgin Islanders as a clas s, and that this common questi on predominat ed over diffe rence s in the factualcircumst ances of the i ndividual plaintiffs. The Co urt add itionally held that adjudic ating this case as aclass acti on was superi or to having numerous i n dividual law suits bro ugh t aga inst th e U SD A.
On J ul y 2 2, 2003, a

motions panelof this Cou rt granted Veneman’s petit ion for permissi on to take an i nterl ocutoryappeal under Fed . R . C iv . P . 2 3( f) . T he Di stri ct Cou rt had juri sdiction pursuan t to 28 U.S .C. § 1331. We have juri sdiction over thi s a ppe al pu rsua nt to 28 U .S.C . § 1292(e ).

II. Class Certific ation
A. Standard of Revi ew
In order t o o btain c lass c erti fication, plaint iffs must est ablis h that a ll four r equisi tes of R ule 23 (a) and at least o n e part of R ule 2 3(b ) are me t. See Baby Neal

v. Casey , 43 F .3d 4 8, 5 5 (3d C ir. 1994) (citing Wetzel v. Libert

y Mutual Ins

. Co. , 508 F.2d 239 (3d Cir. 1975 )). We review the District Court’s decisions on class certi fication for abuse of discr etion. See In

re LifeUSA Holding Inc

. , 242 F.3d 136, 143 (3d Cir. 2001). The Dist rict Cou rt abuses its di sc re tio n o nl y if its decisi on “rests upon a clearly erro n eous findi ng of fact, an err ant co nclusi on of law or an improperapplic ation of law to fact .” In re Gen. Motors Cor

p. Pick-Up Truck Fuel Tank Prods. Li ab. Lit ig. , 55 F.3d768, 783 (3d Cir. 199 5).

B. Ru le 23(a)

In any class certi fication, the thre shold issue is whether

the four requi sit es of R ule 23(a), nu m er os ity, com mo nality
, typ ica lity, and adeq uacy, are m et. Ru le 23(a) states:
One or more members of a c la ss may su e or be sued a s repres entative parti es on behalf of al l only if ( 1) the class i s s o
numerous that join der o f all

mem bers is i mpracti cable, (2) there

are questi ons of law or fact

common to th e cl as s, (3 ) the c la ims

or defenses of t

he repres entative par ties are typical of the cl aims or defe nses of the cl ass, and (4) the repres entative pa rtie s wi ll fairly and adequatel y pr otect

the interests of th e cla ss.
Fed. R . Civ. P. 23(a).

V eneman does not now contes t

nu m er os ity, ty pical ity , or adequa cy of9

repres entation. Rather, she focuses on the

com mo nality prong, ar guing that the eligibility determi nations for loans are not

su scep tible to common proof. She also argues that t h e defini tion cont ains an internal contradi ction, and that the cl ass as certi fied is fa tally ov erb roa d.

1. Co mm onality

Ven eman ’s firs t objec tion to the class certi fication is that there are not suffi cient “questi ons of law or fact common to the clas s.” See Fed . R. C iv. P. 23(a)( 2). But the com mo nality stand ard o f Ru le 23(a)( 2) i s n ot a high ba r: it does not require identi cal clai ms or fac ts a mong class

mem ber, as “the com mo nality requirement will be satisf

ied if the named plaintiffs share at le as t one questi on of law or fact with the gri evance s o f the pros pecti ve clas s.” Johnston v. HBO Fi lm Mg mt ., 265 F.3d 178, 184 (3d Cir . 2001). We find that Chiang ’s allegations of d iscriminatory conductdirected at the enti re cla ss do pr es en t aco mmon que stio n of la w.
As noted above
, EC OA mak es it “unla wf ul for a ny credito r to discrim inate against any appl ican t, with res pect t o any aspectof a credi t tr ansacti on . . . on the basis of race
, color, reli gion, national origi n, sex or mari tal s tatus , or age. ” 15 U.S .C. § 16 91( a). T he r egulations governi ng ECOA define a “cr edi t trans acti on” as “ every aspectof an applicant’s dea li ngs with a creditor regardi ng an appli cat ion for credi t or an existing extensi on of credi t (i ncluding, but not limi ted to, information requirements; investigati on p rocedures ; st andards of creditworthiness; terms of cre dit ; furn is hing of credi t infor mation ; revocation, alte rati on, or termination of credit; and col l ecti on procedures ).” 12 C. F. R. § 20 2.2( m) ( em pha sis ad ded ). A potenti al creditor’s refusal to prov id e an applic ationform is al so part of a “cre dit trans acti on” within t

he meaning o f

the stat ute, see Rosa v. Park West Bank & TrustCo. , 214 F .3d 21 3 (1st C ir

. 2000). Indeed, a refusalto p ro vide a l oan application “on the basis of rac e, color, reli gion, nationa l ori gin, s ex or marit al status, or age” would be a pr ototypical EC OA violat

ion, a s it

would den y
mem bers of a prote cted cl ass anyacce ss to credit.
Plaintiffs here alle ge discrimination at severaldiffere nt poi nts in the c redit applic ationproc ess, fro m ref usal to provi d e applic ation f

orms when request ed, through delay ing tac tics in the p rocessi ng of applic ations, to discrim inatio n in administ rati on of l oan proceeds. Given the b roa d languag e of 12 C.F.R. § 2 02.2(m),

we think that al l of these forms of discrim ination fall under the purvi ew of a “cred it trans acti on,” a n d so c onstitu te ECOA violat

ions

. Thus, even though many put at iv e cl as s me mbe rs never even made it to the offi cial ap plica tion process because theywere denied appl icati ons in the firs t ins tan ce, their

request s for—and denial of—applicati ons are ne ve rtheless

co gni za bl e u nde r E COA.
As presented b y Chiang, and as certi fied by the Distric t Cou rt, the heart of t he com plaint a lleges d iscrimin ato r y attem pts to kee p cl as s me mb ers from having acce ss t o ruralhousing l oan pr ogr ams in the V irgin Isla nds. Chiang subm its that

the so- call ed “phony” waiting10

list and th e o ther pr actices that alleg edly contributed to prevent V irgin Islanders from havin g acc ess to lo ans a re all

susce ptible to co mm on p roo f. Tho se multi farious practi ces incl ude th e following : the ref usal t o acce pt submissi on of loan applic ations from class members; the ref

usal t o issue loa n
a pp licati ons; the ref

usal t o process l oan applications; the refus al to provide reasons for failing to process t

he loan applications; the unlawfu l d enial of access t o establ ished pr ocedures and nat iona l funding com puter s ystems; the refus al t o notify class members of eli gibil ity for loans and assi stance; the refusalto employ

m andated priority

funding sy stem; t

he refusalto engage i n mandated proces sing procedures to dete rmine el igibi lit y; the

con c ealmentof discriminat ory acts by refusalto issue notifi cati on stating reas ons for f ailure to process; the failure t o issu e notice s of avail able f

u ndin g and requ ests for information needed to pr ocess a l oan; the refusal to notify class me mbers of next quarter funding avai labi lity; th e concealment

of class m embe rs ’ atte mp ts to

access prog rams by refus al to en ter their information in nati onal dat abase; t he failure to advis e class mem ber s about

r equire men ts for keepi ng loan appl ication s acti ve; the un lawf ul den ial of a ccess to non-p ro gram loans; the refusalto advise class members of thei r ri ght to review and appe al; the unla wful refusalto provi de for administ rati ve review of n on-a ppea lable decisions; the fai lure to investigate and process discrim in at ion complai nts; the denial of acces s to non-pro gra m procedures for as sumption of exi sti ng USDA loa ns an d pro perties; th e system atic denial of access to housing progr ams; and the unlawful dis cour agem ent an d refu sal t o process appl icat ions byway of the “impossi ble y es.”

In our view , th ese claims all ege a uniform course of co ndu ct com mo n to all class mem bers su bject to com mo n pro of in

a singl e tri al. In Hoxworth v. Bli nd er, Robinso n & Co

. , 980 F.2d 912, 924 (3d Cir. 1992), w e held that a “u niform scheme” or “u niform cour se of cond uct”

wo uld support a

find ing of predominance

even wh ere inju ri es re sul ti ng f ro m a fraudule nt s ecurit

ies sc hem e were differe n t for e ach clas s member; whil e imposing a higher stand ard, pr epon deranc e pr esupposes co m m on ali ty. See also In t’ l Brotherhood

of Teamsters v. Uni ted Stat es , 431 U.S . 324, 3 36 (1 977 ) (hold ing tha t a pattern or practice would be present “only whe re the d enia l of ri ghts consi sts of something more than an iso lated, sp orad ic incide nt, but is repeated, ro u tine, or of a general ized nature”). Chiang has all eged such a prac tice he re. W e w ill th erefore affirm the cl ass certifi cati on insofar as it deals with the wai ting l ist and associ ated tech niq ues

.

I f the waiting li st and as soci ate d techni ques clai ms are res olved i n plaintiffs’ favor, t

hey wil l have sat

isfi ed the firs t two prongs of th e ECOA prima facie case: m emb ership in a pro te c ted class (viz., V irgin Isla nder s: see inf ra Part II. B.2) and appli cati on (or, here, attempt ed applic ation) f or credi t. The t hird and fou rth pro ngs , however—that the appli cant

was qualif i ed fo r the cre dit and that, d espite that qu alific ation, defendant denie d11

the credit— may prove h arder t o adjudicate on a class-wide basis.
Chiang contend s that the issues are appr opriate for class certi fication because determi nations of loan el igibi lit y are a pure ly ministerialma tter . At oral argumentbefore this Court , counselfor Chiang submitted a cha rt concerni ng inc om e limit qu alificatio ns fo r certain RHS loans. Counsel arguedthatthe onepage doc umen t d emo nstra ted tha t qualif ication for the l oans at issue was a mechanical func tion that co uld be unde rta ken by any low -level c lerk sim ply b y read ing the c har t. S e e http: //www.rurdev. usda.gov; see also 7 C.F.R. § 3550.

Veneman, on the othe r hand
, subm its that determi ning el igi bility for loan s is quite complex and invol ves the exe rcis e of discre ti on. She conte nds th at in ord er to show that he or she wa s qua lif ie d for a loan, each applic ant w ould need to dem onstra te that he or she met each of the regulatory requirements inc luding in come li mi tati ons and abil ity

to repay

the loan. See 7 C .F.R . § 35 50.53 . Acc ordin g to these regulat

ions, two differe nt kinds of in come must be consi dered: repay me nt in come and e ligib il ity inco me

. See 7 C.F .R. § 35 50. 54. Repa y ment in come
measures the inc ome which the applic ants have availa ble to re pay the lo an, w hile eligi bility in come is bas ed o n the i nco me of all members of the h ous ehold. Veneman submits that a lthough i t may

seem mechanical to take an a ppl icant’s hourl y income and multiply it by the number of y ear ly working hours, such a c alcul ationis far fr om ea syto perform, espe cially when applicant s may have unsta ble work hi stories, the wo rk in questi on may be seasonal , or continued employment

may be ques tionab le— to

name just

a few of the possible v ari ables. Venem an also submits that class mem bers

wo uld need to show that the prop er ty f or which they soug ht a loa n m et the c riteria for collateralon the loan

. See 7 C.F.R. §§ 3550. 56- 57. In short , she di sputes t he notion that loa n eligibili ty could be a mechanical question proper for class adjudic ation.

Federal Rule of

Civi l Pr o cedure 23(c)( 4) provides that “[ w]h en ap prop riate (A) an ac tion m ay be bro ugh t o r maintai ned as a cla ss action with respectto parti cular

issues

. . . .” Ru le 23(c )(4) bo th imposes a d uty on the court to ins ure that only those ques tions which are ap prop riate for class a djud icati on be certifie d, and gives it am ple power to “treat common things in common and to dis tingu is h the distin gui sha ble.” Jenkins v . Uni ted Gas Corp. , 4 00 F. 2d 28, 35 (5th Cir. 1968 ). Beca use we be li ev e tha t t he two questi ons—the existence of the phony

wa it ing lis t and ass ociat ed techni ques on th e one hand, and t

he feasi bili ty of clas s

wide determ ination s of lo an elig ibil it y on the other—are easily distin gui sh ab le , w e will affirm certifi cati on on the former and leave it to the dis tri ct court to dete rmine whether class cert ification might be appr opriate on the latter. W e note in this regard that c ou rts com mo nly use R ule 23(c)( 4) to cert

ifysome element s of liability for cla ss dete rmina tion, w hile leavi ng other el ements to i nd ivi dual12

adjudic ation— or, perhaps mor e
re ali sti ca lly, sett lem ent. S ee, e .g., Ca rne gie v. Household I nt’l , Inc. , 376 F.3d 656, 661 (7th Cir. 2004) (P osner, J.) (“[I]t may be tha t if

and w hen th e def enda nts are determi ned to have vi olate d the l a w sepa rate proceed ings of som e chara ct er will be r equ ir ed t o de te rmi ne the entitlem ents of the i ndividua l class

mem bers to relief.”); Mullen v. Treasure Chest Casino , LLC , 186 F.3d620, 623 (5th Cir. 1999 ). 7

7 Because we are not decid ing th e questi on of appropriateness of class certifica ti on for l oan e ligibilit y determi nation s, we need not rul e on Ch ia ng’s “M otion to Co rrect the Reco rd and Reply” in which she w ish es to intr od uce two exhibit s. The fi rst doc ument

was present ed to us only duri ng the course of oral argument and consi sts of t he on e page in come qua lifica tion cha rt. Since the Distri ct Co urt w ill be call ed upon to make the d etermination as to whether class certi fication is appr opriate for dete rmining the questi on of loan el igibi lit y, that Cou r t shou ld decide how to pr oceed with the requ est. The s eco nd d ocu me nt r elates to evidence (past loan applications) allege dly destr oyed b y the US DA (willf ull y
acc ording to Chiang; in the process o f routi ne dest ructi on of records , accor ding t o Ven eman ). To th e exte nt that th e all ege d intent ional de str uction of

this evidence

wo uld have bearin g on class c ertificatio n by mak ing it impos sible fo r the U SD A to undertake the individual review of all cl ass members’ applic ation f iles that i t advocates, the District Cou rt will again be in a bett er positio n to ev aluate that req uest. Si m ila rly, we need not decide what the applic able testwould be to rebut the pr ima facie case. Veneman would have u s hol d t h at a “but for ” test

applie s, and t

hat putati ve class m emb ers w ould have to show that but for

the dis crimination, a loan

wo uld have been granted in each particul ar
case. Chiang , on the other h and, arg u es that the burden- shifting framework set forth in McDonnell Douglas Corp. v. Green , 411 U.S. 792 ( 1 973), appl ies because EC OA shou ld be c onstru ed in accordance wit

h the la w of Ti tle VII disc rimi natio n ca ses. We have not y et had occasion to decide whether it i s appropri ate t o shift the burden to a defendant to rebuta primafacie claim of discrimination underEC OA

. Several of

our sister Courts of Appeals have so hel d, but one C ourt of Appeal s has questioned whether the McDonell Douglas model can be impo rted fro m the field of employ ment discrim in ation t o that of credi t discrim in atio n. See Lewis v. ACB Bus. Ser vs., Inc. , 135 F .3d 38 9, 406 (6th Cir. 1998) (holdi ng that ECOA’s legi slative his t ory suggests reviewing c laims of discrimination usin g the same burde n alloc ationsys tem found i n Title VII); Moo re v. Unit ed St ates D ept. o f Agriculture
, 55 F .3d 99 1, 995 (4th Cir. 1995) (noti ng that t

he McDonnell Douglas testwould applyto ECOA case but for the factthat pla inti ff s had dir ect evi dence of discrim inatio n); Mercado-Garcia v. Ponc e Fed. Bank , 979 F.2d 8 90, 89 3 (1st Cir. 1992) (noti ng that t

he language of

ECOA and EEO A is “near ly identical” ); Bhandari

v. First Nat’l Bank of

Comm erce , 808 F.2d 1082, 1100-01 (5th Cir. 1987) (explai ning13 2. Internal Contradict

ion

The USDA highli ghts an i nternal contradi ctionin the c lass de finit ion, and

a rgues that this contradicti on is s o egregious that i t render s the cl ass, if not fatally overbroad, then at least log ically im possibl e. In certif ying the c lass, th e Distri ct Court de fined i ts members as “all per son s wh o are B lack, H ispan ic, fem ale and/orVirgi n I sl an de rs .” The USDA argue s that a class consi sting of Blacks, Hispani cs, women, and/or V irgin Islanders is inhere ntly contra dictory as it w ould

nece ssarily both include and exclude wh ite males. We agre e. H owever, rat her than decertifythe cl ass, as the USDA urges us to do, we prefer

to takea less dra stic

course and simply modify t he class defini tion to remove the a m big uity. See 28 U.S .C. § 2106 (e nt itli ng u s t o “a ffi rm,
m od ify, vacate, set as ide or reverse any judgment, decree, or orde r”). Pu rsuan t to the modification, t

he c la ss def inition in relevant part will now re ad “[ a]ll Virg in Islanders who applied or attempt ed t o apply for

. . . and . . . were dis criminated against on the basi s of nati onal ori gin.”

We mo dify the c lass de finition to includeall “V irgin Isla n ders, ” rathe r than to includeonly “persons who are Black, Hispanic, [and /o r] fe mal e, ” b ec au se we underst and Chiang to be al leg ing main ly discrimination again st all Virgin Island ers, rathe r than rac ial di scri minati on among Virg in Islan der s. H ow ever, at vari ous poin ts in her submissions, Chiang does in factappear t o be alle ging indivi dual rac ial and gend er disc rimina tio n against Black, Hispanic, andfema le Vir gin Isl anders ( and in favor of wh ite ma le Vir gin Islanders). The number of specific complaints in these

areas appears t o be sma ll in com pariso n to the cl ai ms of d iscrimin ation a gains t all Virg in I sl an de r s. We note that 76% of the populati on of t he U. S. V irgin Isla nds is Black, and 14% is H ispa nic, see U.S. Census Bure au, Populati on and Housing P r ofile : 2000, a t http: //www.census. gov/ Press- Release/w ww/2002/ us vist atel evel. pdf; thus, it is quite possibl e that

clai ms of racia l and nation al- or igin discr iminat ion migh t overlap here. At all eve nts, we reform the cl ass defini tion based on ou r underst anding o f t he main thrust of Chiang ’s clai ms, but we l eave it open to the plaintiffs to seek to amend the class defini tion shou ld they ac tually wa nt to alle ge racial and gen der, r ather t han natio nal o rigin , disc rimi natio n. We agree with Veneman , h owever, that plainti ffs’ current alle gations of both kind s o f discr iminat ion prese nt an in terna l contradi ction. that language of

EC OA is “closel y r elat ed” to that of EEOA and “was inte nded to be inter pretedsimilarly”); Will iam s v. Fi rst Fed. Sav. & Loan Ass’n , 554 F. Supp. 447, 448-49 (N.D.N.Y. 1981) ( “Protect ions afforded by the ECOA should be appl i ed in the same manner as those cr ea ted by” the EE OC ), aff’d , 697 F.2d 302 (2d Cir. 1982). But see Latimore v. Cit ibankFed. Sav. Bank , 151 F.3d 712, 713 -15 (7 th Cir. 1998) (holdi ng tha t lac k of direc t competition between appli can t s in cre dit context renders analo gy to Title VII cases flawed ).14

Alth oug h w e hav e not p reviou sly held that “Virgin I slander s” i s a legitim ate designation of

nationa l ori gin for pur

poses of a federaldiscrimination clai m, we have

cer tainly imp lied i t. See Moravian Sch

. Advisory Bd. of St. Thomas v. Rawlins
, 70 F.3d 270 , 2 78 (3d Cir. 1995) (Becker, J. concurri ng) (taci tly

assuming that “V irgin Islander” is an acc eptabl e designat ion of nation al origin in a feder al discrimination suit). To th e e xt en t t

ha t t he USDA objec ts to the inc lusion of the term V irgin Islanders in th e c la ss de fi ni ti on, we underst and the obje ction to be based on the

co n fusion it creates wh en co ntrasted to persons who ar e “Black , Hispanic, [o r] fem ale,” rather t han on the ground t hat “V irgin Island er” ca nno t be a le gitima te nationa l origin designation. We have held, for example, t

hat the term Puerto Rican

can designate nati onal ori gin for pur poses
o f a fe der al dis crim inati on s uit, see, e. g. , DiMarco -Za

ppa v. C aba nilla s, 238 F.3d 25, 36 (1 st Cir. 20 01); c.f. Fuentes v. Pers kie
, 32 F.3d 759, 763 ( 3d Cir. 1994) (accepting the District Cou rt’s conclusi on that the pla intiff m ade o ut a prima facie

case of employ ment di scr imination based

on his P uer to R ican her itage ), an d see no

reason to dis tingui sh the cas es as t o the national origi n designations.

3. O verb readth

Veneman also contend s t hat class certi fication shou ld be set as ide on the gro und that the cert ified c lass is “ov erb roa d.” In V enem an’s u nivers e, it

se ems that overbreadth is bei ng used as a catch -all to address a number of issue s that do seem potential ly t o bear on class certi fication without fi tti ng neatl y i nto any othercateg ory . While we note that many

o f these i ssues se em to rel ate at leas t i n part to the c om mo nality pron g of Ru le 23(a)(2), we will no nethe less an aly z e them under Veneman’s convenient heading of “ov erb read th.”

a.
First, Ve nem an arg ues th at t he class defini tion in clud es unti mely c laims. She subm its th at, by attempting to encompass credit discrimination claims dati ng back to January 1, 1981, Chi ang’s defi niti on ignores ECOA ’s two-y ear st atute of limitations. Vene m an contends t hat having brought sui t on January 11 , 2 000, the cla ss ma y not

sue based on act s of discrimination predating January 11, 1998, with the only

excepti on being fort hose indiv idua ls who filed an “el igibl e
com plaint” about such an act with the USDA by Jul y 1, 199 7. 8 Howe ve r, we belie ve that the issue o f time liness g oes to the merits of the cas e, not to the de finit

ion of the cl as s. The c la ims theref ore can not be p reju dge d to den y certif icatio n. S e e Hu ff v. ND Cass Co. , 485 F.2 d 71 0, 7 1 4 (5th Cir. 1973) (en ban c) (holdi ng that requiring a class repres entative to prove the merits of

his or he r clai m before being able to repr esen t a class is revers ible error); see also Eisen v. Carlisle & Jaqu elin
, 417 U .S. 156, 178 (1974) (“In determi ning the propriety of a clas s acti on,

8 See Omnibus Consolidated & Emergency Suppleme ntal Appropriations Acts, 1999, Pub. L. No. 105-277, § 741, 112 Stat. 2681-30 (Oct. 21, 1998) (codified at 7 U .S.C. § 2279 note).15

the ques tion is not whether t he plai ntiff

or plaint iffs have stated a cause of act ion or will prevailon the meri ts, bu t ra ther whether the requirem ents of R ule 23 are met.”) (citation om itted); Gruber v

. Price Waterhouse
, 1 17 F.R.D. 75, 80 (E.D. Pa. 1987) (holdi ng that a

stat ute of l imit ations defense goes to t

he merit s and hence i s not

an appropri ate obj ecti on in t he co ntext of clas s ce rtific ation ).

b. Secon d, Ve nem an arg ues th at in this

case the District

Court approved a class defini tion that was exp licitly rejected in Wil liams v . Glic kman , Civ. No. 95-1149, 1997 U.S . Dist. LEXIS 168 3 ( D.D. C. Feb. 14, 1997), a ca se in which t he plai ntiff

s defined their class as :

All Af rican A meric an or Hisp anic Am eri c an persons who, between 1981 and th e pres ent, have suffere d from racial o r nation al or igin discrim in ationin the application fo r
or the ser vic ing o f loan s or cre dit from th e Fm HA (n ow Fa rm Services Agency ) of t he USD A
, which has cau sed th em to sustain

econom ic los s and /or me nta l anguish/ emotion [sic] distres s damages. Wil liams , at

*10.

In Wil liams , the Court rej ected thi s defini tion as overbr oad, fi ndi ng that “[I]t is not limi ted to any spe cifi c polic y or practi ce wh ich is alle ged to b e discriminat ory ; ins tead, the class p urpo rts to include tho se blac ks an d H ispan ic farmers who have suffered any ty pe of discrimination in their d eali n gs with the F mHA. ” Wil liams , at *14 (emp hasis added ). The USD A argues that Ch iang’s p roposed class is a n exa ct para llel to tha t rejec ted in Wil liams . W e dis agr ee. Besides the fact

that bo th putati ve
c lasse s share r eferences to Black s , Hispanics, and loan di scri minati on, the y
ac tu ally have little in comm on. In Wil liams , plaintiff farme rs fi led su it againstdefendantthe USDA claiming that the Farmers Hom e Ad ministra tio n (F mHA) discriminated against them based

on race or nati onal ori gin. Li ke the putati ve class here, t

he fa rmer s sought

re covery under the Equal Cred i t Op portu nity Act. However, i n Wil liams , the Cou rt ruled that the farm ers’ bare alle gationof a “common thread of discrim inati on” did not s atis fy t he requ i rementthat potentia l cla ss plai ntiff s make a “specif

ic pres entation” identi fyi ng the co mm on q uestion s of law or fac t. Chiang ’s class, on the other hand, did just that in all eging theexistence of a uniform

s che me aimed at preventi ng cl ass member s from gaining acc es s to l oa ns

. We theref ore find Wil liams distinguis hable.

It is no objection to Chiang’s cl ass that the alle gations of a uniform scheme are not contai ned in the class defini tion it se lf : we read W i ll ia ms to hold t hat theproposed class was “ove rl y br oad” because of t he plaintiffs’ varied f

actualalle gations of discrim inati o n, lacki ng Rule 23(a)( 2)

co m m on ali ty, rather

than becaus e of an y lackof specifi city

in the c lass de finit

ion its elf. In fac t, Judge Flannery obj ected to the inclus ion o f all egations o f discrimination in the class de finit ion, holding that “ [b]ecau se the Court must16

answer numerous fact -intensive ques tions before determ ining if an indivi dual may join the cl ass, the propos ed class is not cl e arly defined. ” Wil liams , 1997 U.S. Dist. LEXIS 1683, at *13. Thus Wil liams
ca nnot stand for

the propos iti on that

al l allega ti o ns of a uniform sc heme of discri min ationmust be included in the class defin ition— rather, it s tan ds for the opp osite proposit

ion, t hat cl ass defi niti ons must be free of meri ts al legations that require extensive factualfindings. 9

c.

Veneman also ar gues that the class is overbroadbe ca us e i t c ons is ts of two groups with confl icti ng int eres ts. See Penn. Den tal Ass’n v. Medical Se rv. Ass’n of Penn. , 745 F.2d 24 8, 263 (3d Cir. 1984) (upholdi ng District Court’s r efu sal to certi fy class where proposed class consisted of two groups wit h inh erently confli cting interests ). M ore sp ecif ica lly, Veneman urges us to decertifythe class on the bas is that the re is a signi ficant risk of intra-cl ass confli cts betwee n those class

mem bers wh o rece iv ed loans and those who did not, as well as between those who have claims con cerning their pro pert i es and tho se w ho d o no t.

We do not see any of the purp ort e d conf licts of i nt er es ts th atVene man c la ims

are present

here. Rat

her, we be liev e that the cla ss de fin itio n p ro pe rly ide ntifies a group of p eople wh o attem pted to gain access to the USDA’s Rural Housing program in the Virgin Isl ands and w ere systema tically denied that access. The fact that some class members were a ble to

m ake more progres s than ot hers does no t translate into intra-cla ss con flict, nor does it mean thatt he cla ss as d efine d is fata lly overbroad. d. Fi na lly, Veneman argues that defini ng
a class by r eference to those who “believe” they we re dis crimina ted aga ins t undermines the val idit y of t he class by introducing a subject

ive cri teri on into what shou ld be an o bjec t i ve ev al ua t i on

. We agree. 10 See , e.g

. , NOWv. Schei dler , 172 F. R. D. 351, 357 , 1997 U .S. Dist. LEX IS 4036
, at *9 (N.D. I ll. Mar. 28, 1997) (explai ning that an identif iable c lass ex ists if its mem bers can be a scert ained by referenc e t o o bjective cri teri a and that when membership i n a c lass i s defined solel y by state of mind, the class i s

9 Fo r furthe r discu ssion o f me rits alle gations in class definit ions, se e infra
, Part I I.B.3. d. 10 Ch iang argue s that class certi fication based on a “beli ef in di scri minati on” was alrea dy sti pulate d to by the U SDA in a previous class acti on for dis criminat i on. In Pigford v. Glickman , where a cl ass of African American appli can ts for loans file d racial d iscrimin ation c om pla i nts againstthe USDA , the final consent dec ree inc luded the phrase “AllAfrican American farmers ... [w ho] beli eved t hat they were discriminat ed against on th e bas is of r ace .” Pigfordv. Gli ckman , 185 F.R. D. 82, 92 (D.D .C. 19 99). W hile this is t rue, we fail to see how the USDA ’s pri or stipulatio n to lang uage in a consen t decree bef ore a differe nt court af

fec t s the cl ass defi niti on in th is ca se.17

gene rally deemed unascertaina ble); Zapka

v. Coca-Cola Co. , No. 99 CV 8238, 2000 U.S. Dist. LEXIS 16552, at *7 (N. D. Ill. Oc t. 26, 200 0) (no ting tha t an ide ntifiab le class does not exi st i f membership i n th e class is contingent onthe st ate of mind of the pros pec tive m emb ers); Fears v. Wilhelmina M ode l Ag enc y, Inc. , No. 02 Civ. 4911, 2003 U.S. Dis t. LEXIS 11897, at *6-*7 ( S. D.N .Y. Jul y 15, 2003) (e xplaini ng that membership in a class shou ld rest on objective c riteria that are adm inistrative ly feasib le for th e cou rt to rely on to d etermi ne whether a particul ar individual is a m embe r of the class).

Wh ile Ve nem an is tec hnica lly correct,

we think t

he issue t o be a red herring, for “beli ef” seem s to us to be mere s urplusa ge. It is cl ear enough that

Chiang and the ot

her named pl aint iffs believe that they w ere discrim in ated aga inst. See, e. g. , F ed. R. Civ. P. 11 (b) (req uirin g t hat ple adings repres ent a reasonabl e beli ef t hat cl ai ms
are warran ted by law and have ev identiary support). Such belie f in d iscrimination, how ever, is not

a prerequi sit e for inc lusi on in t he pu tative cla ss. Our earlier modification to the c lass de fin i tion
, see supra Part II.B.2, mak es clear that w e are certi fyi ng a class to try an i ssue comm on to all Virgi n Is lander loan applicants: whether USDA engaged in a pat tern of discrimination via ph ony w aiting lists and de lay ing tactics. This issue is prope rl y adjudic ated on b ehalf of a clas s consis ting of all Virgin Isl ander appl icant s during the relevant period ; if it is adjudicated against Veneman, then furt

her proceedi ngs will be appr opriate to de ter m in e w hi ch , ifan y, class membe rs are ac tually entitled to reli ef. The putative class members’ belie f that they we re disc rimina ted ag ainst is irr elevant

at theclass certi fication st age.

For si mi lar r ea so ns , w e de cline to modify the cla ss def inition to in c lude Virg in Islanders who “clai m thatthey were d iscriminat ed against ,” or t ho se who “wer e discriminat ed aga inst.” “Cla im” se ems to be a mere s ubs tit

ute for “ belie ve” and “a class defined with refe rence t o the state of mind of its mem bers w ill not b e allow ed to proceed un de r Ru l e 2 3. ” 7 A Wr i ght, M il le r & Ka ne, Federal Pract ice & Procedure § 1760, at

124-26. Moreo ver , the Manual for Complex Lit igati on (Second) has recommended that c ourts shou ld “avoid cla ss defi niti ons that depend

on . . . t he s eeking of r elie f (for exampl e, persons clai ming inj ur y or seeking damages from som e state d pra ctice ),” Manual for Complex Lit igati on (Sec ond ) § 30.14 (1985), though we note that later editi ons of the MCL have eli minated t hat stri cture, see Manua l f or Complex Litigation (Fourth) § 21.222 (200 4)

. Limiti ng t he cla ss to tho se w ho w ere in fa ct d iscrimin ated a gains t wo uld se em to prejudge the m erits of the case , contrary to the teach in g of Eisen v. Carlisle & Jacq uelin
, 417 U.S . 156, 1 77 (1 974 ); see al so 5 Jam es W m. M oor e et a l., Mo ore’s FederalPract ice ¶ 23.21[3][ c] (3d ed. 1999) (“A class defini tion is inade quate if

a court must

make a determi nation o f the merits of the individ ual cla ims to determi ne whether a particul ar pers on is a
mem ber of the c lass.”).

We will t

herefore modi fy t

he class defini tion to eli minate t he notion of18

“be lief.” In combina ti on with our first modification, see supra P ar t II .B.2. the class w ill now be de fined as:

All Virgin I slander s who applie d or atte mpted to apply

for, and/or recei ved, housing credit, services, home ownership, assis tance , trai ning, a nd/or educa t iona l opportuni ties fr om the USDA through its Rural Developmen t offices (and predecess o r designations) located i n the U.S. Virg in Islands at anytime between J a nuary 1, 1981 and Januar y 10, 2000.

Thus, with the modi fication s we have made to the c las s d efini tion, and keeping in mind the cave ats abo ut loan eligibility

we have set f

orth, we are confident

that the waiting lis t question satisfi es allfour requisites of R ule 23(a).

C. Rule 23(b)

In additio n to meeting the prerequisi tes of R ul e 23(a), the plai ntiffs must dem onstra te that the clas s woul d sati sfy any one o f the three subsections under Ru le 23 (b). Rule 23 address es the

com mo nality requ ired to d emo nstrate cohesiveness fo r c la ss ce rtif ic atio n i n t wo subsections, (a)(2) a nd (b )(3). R ule 23(a)( 2) requi res that plainti ffs prove that “there are questi ons of law or fact common to th e c la ss .” As explained in Part II. B.1, supra , the rel ative ly low Rule 23(a)( 2)

com mo nality requ ireme nt is easi l y sati sfiedhere. Ho we ver, be caus e the R ule 23(b)(3) predominance r eq uirement s incorp orate the commonali ty requirement of 23(a), it i s possi ble that “even i f Rul e 23(a)’s comm onality r equ ireme nt is sati sfied

. . . t

he predominance c riterion is far more demanding.. ” Amchem Prods. v. Windsor , 521 U.S . 591 , 623 -24 (19 97)

.
The District Court cert ified this class pursuant t o Fed . R. Civ. P. 23 (b)(3). In releva nt part, th e Ru le read s:

An acti on may be maintained as a class act ion if t

he prerequi sit es of subdivi sion (a) are sati sfied, and in additi on:

. . . (3) the co urt fin ds t hat the questi ons of law or fac t com mo n to th e memb ers of t he clas s predom i nate over anyquesti ons affecti ng only indi vidual members, and that a class a ction is supe rior to otheravail able methods for the fair and effici en t adjudic ation of the

co nt ro ve rsy.

Veneman arg ues that , in t his cas e,
common is sue s do not

pr edo mi nate over ind ivid ual o nes

.

I n order t o predominat e, the co mmo n issues must constitute a “signi fican t pa rt” of the in div idu al ca ses. Jenkins v . Raymark Industries, Inc. , 782 F.2d 46 8, 472 (5th Cir. 198 6); see also Wa tson v . Shell O il
, 979 F.2d 101 4, 102 2 (5th Cir. 1992 ). Veneman contends that because th e damages sou ght , on t he o rde r of2.8 bill ion dolla r s, are so hi gh, and wil l requi re such exacti ng, specifi c, i ndi v idual proof, that those indivi dual questions ar e, i n real ity
,19

the p red om inan t issu es in the c ase

.
C hiang concedes that the eventua l calcul ations of da ma ges w ill require indivi dual proo f. Ho we ver, sh e poin ts out that it i s sett led la w that the n ecessi ty for proving damages indi viduall y does not defeatclass predom inance or c la ss certi fication. “The presence of i ndividual questi ons as to [ea ch class member] does not mean that the commo n quest io ns of law and fact do not

predominat e over questi ons affecti ng indivi dual members as required by Rule 23(b)( 3).” Eisenberg v. Gagnon , 766 F.2d 770, 786 (3d Cir. 1985).

To b e sure, there are cases where the questi on of da ma ges is so centra l that it
can, in some sen s e, overt ake the ques tion of liabi lit y. But as noted i n Bogosian v. Gu lf Oil Corp. , 561 F.2d 434, 456 (3d Cir. 1977):

[I]t has been commonlyrecogniz ed that the neces sity for

calcul ation o f damages on an indivi dual basis sh ould not preclude class determi nation when the common issues which dete rmine liability predom inate. If for anyreason the dist rict court were to conclude that there woul d be p roblem s invo lved in proving da mag es wh i ch woul d outweigh the advant ages of cla ss certi fication, it should gi ve appr opriate consider ationto cert

ific ationof a class limi ted to th e d ete rm in ati on of lia bi lity.

(cita tion s om itted ).

That does notseem to be the cas e here, and we are satisf

ie d, based upon t

he anal ysis set forth earl ier i n this opinion,

that both the predominance and the supe riority requirements of Rule 23( b) are easi ly met with re spect to the is sues certified unde r Rule 23 (c)(4)(A). 11

III. Conclusion

For the for eg oing reaso ns, w e w ill affirm the cl ass certifi cat ion pursu ant to Ru le 23(c)( 4)(A) only

insofar as it relates

11 We note that t

he reli ef soug ht is prima rily for monetary damages and not for injunct

ive reli ef. Perhaps antic ipati ng the poten tially p roblem atic asp ect of this p ostu re in a ca se w here— we re liability establ ished—damages calcul ations wo uld prob ably be ex treme ly in d ividual ized, Chiang ackn ow ledge s that “it may com e to pass th a t the t

rialcourt dee ms injunctive reli ef the b et ter remedy and fi nds that damages are m inim al.” (Chiang Brie f, p. 38). Whether that

would be the mor e logica l path we d o no t s ay , b utwe do n ote that unlike i n cases whe re the primary

r elie f sou ght is inju nctiv e in n atur e, s e e Baby Neal v. Casey , 43 F.3d 4 8 (3d C ir. 1 994), Ch iang s eeks only anc ill ar y injunct ive relief: the primary relief sh e seeks is 2.8 b il l ion dollars i n damages. Given that each class memb er w ill likely find him- or her self i n very differe nt circumst ances in terms of es tab lis hing d amages, we think it

unlikel y that the calcul ationof d ama ges w ill be suit able for class de t ermin ation. H ow ever, sh ould Chiang make it t o that stage , we once again defer t o the Dist

rict Co urt in the first inst ance to eva luate whether damages can be adjudicated on a class wide basis.20

to the ques tio n of the alleged waiting lis t and related techni ques, and wil l modifythe class defini tion to provide for a class of:

All Virgin I slander s who applie d or atte mpted to apply

for, and/or recei ved, housing credit, services, home ownership, assis tance , trai ning, a nd/or educa t iona l opportuni ties fr om the USDA through its Rural Developmen t offices (and predecess o r designations) located i n the U.S. Virg in Islands at anytime between J a nuary 1, 1981 and Januar y 10, 200 0.

The certi fication will be va cated in all otherrespe cts

. The Distric t Cou rt shou ld

r eeva luate the appropriateness of class certi fication on certain discre te issues such

as the el igibi lit

y face t of li abili ty and the calcul ationof d ama ges, an d m ay entertain any ap p licati ons for revision of the class defini tion in acc orda nce w ith this opinion.