Source: http://pa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20070716_0000496.WPA.htm/qx
Timestamp: 2017-04-29 13:37:38
Document Index: 512298429

Matched Legal Cases: ['§ 12101', '§ 701', '§ 1785', '§ 23', '§ 1785', '§ 30']

| Hohider v. United Parcel Service
Hohider v. United Parcel Service
MARK HOHIDER AND ROBERT DIPAOLO, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,v.UNITED PARCEL SERVICE, INC., DEFENDANT.PRESTON EUGENE BRANUM, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,v.UNITED PARCEL SERVICE, INC., DEFENDANT.
I. INTRODUCTION. ........................................................... 4
II. PROCEDURAL HISTORY. .................................................. 10
III. STANDARD OF REVIEW. ................................................. 13
A. Rule 23 Requirements for Class Certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
B. Confusion Over the Appropriate Standard of Review For Deciding Class Certification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
C. Supreme Court decisions . .............................................. 16
D. Case law from the United States Courts of Appeals.. . . . . . . . . . . . . . . . . . . . . . . . . . 18
IV. FACTUAL BACKGROUND. ................................................ 33
A. General Background. .................................................. 33
B. UPS's Formal ADA Compliance Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
1. ADA Compliance Procedures Prior to 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2. ADA Compliance Procedures After 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
a. "United Parcel Service Americans with Disabilities Act Procedural Compliance Manual" and procedures set forth therein .................................................... 37
(i) Reasonable Accommodation.. . . . . . . . . . . . . . . . . . . . . . . . . . 39
(ii) The UPS ADA Procedure. ........................... 40
b. The "Ten-Step Process" .................................. 43
(i) Step One: "Commence the Process". . . . . . . . . . . . . . . . . . . . . 44
(ii) Step Two: "Gather Medical Information". . . . . . . . . . . . . . . . 44
(iii) Step Three: "Evaluate Whether the Employee May Have a Disability". .................................... 46
(iv) Step Four: "Notify the Employee" .............................................. 47
(v) Step Five: "Meet with the Employee (Hold Checklist Meeting)" .............................................. 47
(vi) Step Six: "Identify Potential Reasonable Accommodations (Complete Written Checklist)". . . . . . . . . . . . . . . . . . . . . 49
(vii) Step Seven: "Evaluate Appropriate Accommodations (ADA Committee Meets)". ............................. 50
(viii) Step Eight: "Bargain with the Union".. . . . . . . . . . . . . . . . . 51
(ix) Step Nine: "Notify the Employee" .. . . . . . . . . . . . . . . . . . . . 51
(x) Step Ten: "Close the File". ........................... 52
c. Miscellaneous Manual Issues................................. 53
d. Other ADA Training Materials. .............................. 53
e. Notice to Employees. ...................................... 54
C. ADA and Other Kinds of Accommodations in the Sample Districts.. . . . . . . . . . . . . 55
1. ADA Accommodations. .......................................... 55
2. Other Accommodations . ......................................... 56
D. Other General Evidence Submitted by UPS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
E. Challenged Policies. ................................................... 60
1. The Alleged "100% Healed Policy". ................................ 60
a. Evidence from Managers and Former Managers Concerning the Existence of the "100% Release" or "No Restrictions" Policy .................................................... 60
b. Evidence from Employees and Former Employees Concerning the Existence of the "100% Release" or "No Restrictions" Policy .................................................... 63
c. Evidence from UPS's Internal Emails. . . . . . . . . . . . . . . . . . . . . . . . . . 64
d. Evidence from UPS's Early Training Materials. . . . . . . . . . . . . . . . . . 67
e. Evidence from EEOC Determinations. . . . . . . . . . . . . . . . . . . . . . . . . . 69
2. Other Evidence.................................................. 73
V. ADA CLAIMS AND PATTERN-OR-PRACTICE FRAMEWORK ...................................................................... 74
A. Scrutiny of Specific Legal Claims Is Required to Decide Class Certification. . . . . . . 74
B. The Americans with Disabilities Act. ..................................... 75
1. Failure to Make Reasonable Accommodations; Failure to Engage in Interactive Process. ................................................... 78
2. Retaliation. .................................................... 86
C. "Pattern-or-Practice" Framework. ........................................ 88
1. Franks v. Bowman Transportation Company. . . . . . . . . . . . . . . . . . . . . . . . . . 89
2. International Brotherhood of Teamsters v. United States.. . . . . . . . . . . . . . . . 95
3. Cooper v. Federal Reserve Bank of Richmond . . . . . . . . . . . . . . . . . . . . . . . 105
4. Applicability of pattern-or-practice framework to private-plaintiff ADA lawsuits. ................................................. 112
VI. CLASS DEFINITION ...................................................... 122
VII. CLASS CERTIFICATION REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
A. Rule 23(a) Prerequisites. .............................................. 130
1. Numerosity.................................................... 131
2. Commonality. ................................................. 133
a. 100% Healed Policy Claim . ................................ 134
b. The Other Reasonable Accommodation Policies Claims . . . . . . . . . . 146
(i) Implementation of the Formal ADA Compliance Policy ............................................. 146
(ii) Uniform Pretextual Job Descriptions . . . . . . . . . . . . . . . . . . 147
(iii) Prohibiting Employees from Returning to Work With Restrictions and Preventing Use of Seniority Rights to Transfer Positions. ............................. 149
(iv) Withdrawing of Accommodations Previously Provided and then Denying Requests for the Previously Provided Accommodations Claims . ....................... 150
c. Retaliation Claims. ....................................... 151
d. Summary of Commonality Findings ................................................... 152
3. Typicality. .................................................... 152
4. Adequacy. .................................................... 160
a. Class Counsel............................................ 162
b. Plaintiffs' Adequacy . ..................................... 164
B. Rule 23(b)(2) Requirements............................................ 169
1. Grounds generally applicable ..................................... 169
2. Cohesiveness.................................................. 172
3. Claims primarily for monetary relief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176
a. The Incidental Damages Approach. . . . . . . . . . . . . . . . . . . . . . . . . . . 181
b. The Discretionary Approach. ............................... 187
c. Decisions by the United States Court of Appeals for the Third Circuit ......................................................... 191
C. Bifurcation . ........................................................ 200
VIII. CONCLUSION. ......................................................... 201
IX. ORDER. ................................................................ 201
A. Class Claims........................................................ 201
B. Relief. ............................................................ 202
C. Class Definition ............................................................... 202
D. Class Counsel....................................................... 203
E. Other Miscellaneous Matters. .......................................... 203
Pending before the court is a motion for class certification (Doc. No. 180) filed pursuant to Federal Rule of Civil Procedure 23(a) and (b)(2) by plaintiffs Mark Hohider ("Hohider") and Robert DiPaolo ("DiPaolo") and consolidated plaintiff Preston Eugene Branum ("Branum")(collectively, "plaintiffs") on behalf of themselves and all others similarly situated against defendant United Parcel Service, Inc. ("defendant" or "UPS"). Plaintiffs allege in this civil action that UPS engages in a variety of policies and practices that violate the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq. (the "ADA"). Plaintiffs seek certification of a nationwide class to litigate their claims against UPS.
Plaintiffs specifically challenge the following alleged policies at UPS as violative of the ADA and appropriate for classwide adjudication:
(1) enforcing a "100% release" or "no restrictions" unwritten policy, which prohibits employees from returning to UPS in any vacant position unless the employee can return to his or her last position without any medical restrictions;
(2) disseminating a written corporate "ADA compliance policy," which is implemented nationwide to delay and avoid providing accommodations, that is illegal, both on its face and as applied;
(3) using uniform job descriptions, which intentionally fail to describe the essential functions of available UPS jobs, as a pretext to prevent disabled employees from holding any UPS job;
(4) prohibiting employees from returning to work in an alternative job within the employees' restrictions and preventing employees from using union seniority rights to transfer to a position that accommodates their disabilities;
(5) withdrawing accommodations previously provided to disabled workers, and then denying requests for the previously provided accommodations; and
(6) treating persons who make requests for accommodations differently and less favorably in the terms, conditions, rights and privileges, of or incident to, their employment as a result of engaging in this protected act under the ADA.
Plaintiffs' Brief in Support of Motion for Class Certification ("Pls.' Br.")(Doc. No. 180) at 3-4.
The court discerns that plaintiffs seek certification of two kinds of ADA claims against UPS: (1) the first five policies implicate whether UPS's alleged policies, practices and procedures that control re-entry into the workplace, or otherwise govern the making of reasonable accommodations, violate the ADA (the "reasonable accommodation policies claims"); and (ii) the sixth policy implicates whether UPS retaliates against its employees in violation of the ADA (the "retaliation claims").*fn1 See Plaintiffs' Amended [Proposed] Order Granting Plaintiffs' Motion for Class Certification (Doc. No. 155-2) at 2 (proposing certification of "(i) claims concerning whether UPS's policies, practices and procedures that control re-entry into the workplace or otherwise govern the making of reasonable accommodations under Title I of the ADA to employees in UPS's workforce violate the ADA; and (ii) claims concerning whether UPS retaliates against its employees in violation of the ADA.").
The reasonable accommodation policies claims can be further distinguished. Plaintiffs' principal allegation appears to be that UPS enforces an unwritten, de facto "100% healed" return-to-work policy (the "100% healed policy claim"). Plaintiffs argue that the 100% healed policy claim, if proven, constitutes a per se violation of the ADA's requirements relating to the making of reasonable accommodations. That is, plaintiffs argue that at the merits stage of this litigation, with respect to the 100% healed policy claim, if plaintiffs prove the existence of the alleged 100% healed policy, the policy could be declared unlawful and appropriate injunctive and declaratory relief could flow from that determination. Plaintiffs' other reasonable accommodation policies claims appear primarily to be alleging violations of the ADA as a result of the implementation of those policies and not as per se violations.
What makes this matter a case of first impression is that plaintiffs, in a case where defendant challenges whether the proposed class encompasses only persons with disabilities as defined in the ADA, seek to litigate all their ADA claims by virtue of certification of a Rule 23(b)(2) private-plaintiff class and pursuant to the pattern-or-practice framework articulated by the United States Supreme Court in International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977). Plaintiffs attack not alleged individual instances of discrimination, but alleged company-wide policies relating to the ADA. Plaintiffs, therefore, characterize each of their reasonable accommodation policies claims as pattern-or-practice variants of a "failure to make a reasonable accommodation" claim that an individual plaintiff could bring under the ADA in an individual lawsuit. These claims challenge UPS's alleged company-wide policies of non-accommodation in violation of the ADA. Plaintiffs also appear to argue, although less directly, that their retaliation claims can be litigated pursuant to the Teamsters pattern-or-practice framework.
UPS, however, denies the existence of the alleged 100% healed policy and maintains that its formal ADA compliance policies are designed to and do afford employees robust protection under the ADA. In addition, UPS strenuously argues that class certification in this case is inappropriate for a variety of reasons. These reasons include UPS's arguments that the class definition itself is unworkable and requires a host of individualized determinations merely to determine membership in the class; that plaintiffs have failed to satisfy each of the Rule 23(a) prerequisites, largely due to the myriad individualized issues in the case with respect to determinations of disability and whether reasonable accommodations were possible in individual circumstances; and that the undisputed evidence demonstrates that UPS did not act in a manner generally applicable to the proposed class, as required by Rule 23(b)(2). In addition, UPS argues that certification pursuant to Rule 23(b)(2) is inappropriate because plaintiffs seek considerable compensatory damages.
Plaintiffs in their pleadings seek certification of the following proposed class:
Those persons throughout the United States who: (i) according to the records of UPS, its agents and contractors have been employed by UPS at any time since May 10, 2000, including those employees absent from work and receiving either workers' compensation or short or long term disability insurance benefits; and (ii) have been absent from work because of a medical impairment; and (iii) are disabled as defined under the Americans with Disabilities Act (ADA); and (iv) have attempted to return to work or continue to work at UPS or have submitted to UPS a medical release that permits the employee to work with restrictions and conditions, or have been disqualified by UPS from returning to work; and (v) were harmed as a result of UPS's policies, practices and procedures that control re-entry into the workplace or otherwise govern the making of reasonable accommodations under Title I of the ADA to employees in UPS's workforce.
Plaintiffs' Motion for Class Certification ("Pls.' Mot.")(Doc. No. 180). The court and the parties, however, discussed a modified class definition at the hearing on class certification. See Transcript of January 27, 2006 Hearing on Class Certification ("Jan. 27, 2006 Tr.")(Doc. No. 157) at 34-41, 44-45.*fn2 The sufficiency of plaintiffs' proposed class definition will be addressed in more detail below.
In the instant opinion, the court will address several threshold legal issues furiously disputed by the parties before undertaking a rigorous Rule 23 analysis. First, the court will address the appropriate standard of review for deciding whether class certification is appropriate. Second, the court will determine whether plaintiffs can litigate their claims pursuant to the Teamsters pattern-or-practice framework of proof. Third, the court will examine the sufficiency of the class definition, and whether the class as proposed or as modified is readily ascertainable.
The court, after addressing those threshold issues, will undertake the claim-specific analysis required by Rule 23 and the United States Court of Appeals for the Third Circuit to determine whether class certification is appropriate in this case. One other central issue in this case warrants mention at the outset of this opinion. The parties furiously dispute whether this class action can be brought as a Rule 23(b)(2) class action in light of the nature of some of the relief that is sought. That issue will be dealt with in more detail later in this opinion.
The court ultimately concludes for the reasons set forth in this memorandum opinion that (1) plaintiffs' claims are subject to the pattern-or-practice framework of proof enunciated by the Supreme Court in Franks v. Transportation Co., 424 U.S. 747 (1976), International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977), and Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867 (1984), which does not require an individualized inquiry at the liability stage adjudicating whether a company-wide policy is unlawful under the discrimination statutes; (2) the class definition must be modified as set forth herein; (3) plaintiffs met their burden to establish the Rule 23(a) requirements with respect to the 100% healed policy claim, the implementation of the formal ADA compliance policy claim, and the use of uniform pretextual job descriptions claim, but not with respect to the prohibiting employees from returning to work with restrictions and using seniority rights claim, the withdrawal of accommodations claim, or the retaliation claims; and (4) Rule 23(b)(2) certification is appropriate for the 100% healed policy claim, the implementation of the formal ADA compliance policy claim, and the use of uniform pretextual job descriptions claim to the extent that plaintiffs seek declaratory and injunctive relief and monetary relief that is incidental to the injunctive or declaratory relief with respect to these claims, but Rule 23(b)(2) certification will not be granted for other monetary relief including compensatory damages and punitive damages as part of this class action.
On March 10, 2004, plaintiffs Hohider and DiPaolo filed the above-captioned civil action against UPS alleging that UPS's employment practices concerning employees who attempt to return to work after an absence for medical reasons violate the ADA and the Rehabilitation Act of 1973, 29 U.S.C. § 701, et seq. (the "Rehab Act"). (Doc. No. 1). In response to UPS's subsequent motion to dismiss, (Doc. No. 7), plaintiffs Hohider and DiPaolo withdrew the Rehab Act claim. (Doc. No. 12).
On June 29, 2004, plaintiffs Hohider and DiPaolo filed their first motion for class certification, (Doc. No. 16), and their first motion for bifurcation of issues at trial, (Doc. No. 15). In response, UPS filed a motion seeking a scheduling conference to address the need for discovery on certification issues prior to the parties' briefing and the court's decision on the class certification issue. (Doc. No. 21). On July 16, 2004, the court ordered that briefing on plaintiffs' motion for class certification be stayed pending disposition of UPS's motion for a scheduling conference. (Doc. No. 23).
On July 27, 2004, the court held a hearing and addressed the need for discovery prior to briefing and deciding class certification. (Doc. No. 26). At that hearing, after determining that discovery prior to briefing and deciding the class certification motion would be allowed, the court directed the parties to meet and confer and file a class certification discovery plan. The court also denied without prejudice plaintiffs' pending motion for class certification, (Doc. No. 16), and motion for bifurcation of issues at trial, (Doc. No. 15). On August 15, 2004, the court held a case management conference with the parties and set dates for class certification discovery.
During class certification discovery, several issues arose that required briefing by the parties and resolution by the court, leading to extensions of the discovery period and the briefing schedule for deciding the class certification motion. For example, plaintiffs initially sought nationwide discovery from all sixty of UPS's districts. After briefing on whether nationwide discovery should be allowed, the court determined that for the purposes of class certification, plaintiffs could seek discovery from UPS from five UPS districts -- the Laurel Mountain district directly implicated by the individual named plaintiffs' allegations and four other districts. See Transcript of October 4, 2004 Status Conference (Doc. No. 46) at 51, 54-55. In addition, discovery issues arose, including with respect to discovery sought from third party International Brotherhood of Teamsters, plaintiffs' counsel's contacts with certain former and current managerial employees of UPS, the identity of individuals who had contacted plaintiffs' counsel regarding the case and the question whether those communications were privileged or discoverable. See (Doc. Nos. 86, 91, 92)(hearing transcripts). Some of these issues were resolved by stipulation of the parties, (Doc. No. 97); other issues required rulings by the court.
Around the same time that class certification discovery was proceeding in the above-captioned civil action brought by plaintiffs Hohider and DiPaolo, on November 4, 2004, consolidated plaintiff Branum filed a similar civil action against UPS in this court, also alleging that UPS's employment practices violate the ADA and seeking class action treatment of his claims. (Doc. No. 1 in Civ. No. 04-1686). Plaintiffs' counsel and defendant's counsel in the Hohider and DiPaolo case entered appearances in the Branum case. Shortly after the Branum civil action was filed, plaintiffs' counsel filed motions to consolidate the two cases, (Doc. No. 50; Doc. No. 14 in Civ. No. 04-1686). UPS opposed consolidation. (Doc. No. 59). On February 11, 2005, the court held a hearing on plaintiffs' motion to consolidate the two cases for all purposes. (Doc. No. 92). At the hearing, the court ordered that the two cases were consolidated only for the purpose of discovery, indicating that the court would reconsider consolidation for all purposes after deciding UPS's then-pending motion to dismiss Branum's claims and UPS's then-pending motion for summary judgment with respect to Hohider's claims, both of which motions raised similar issues with respect to whether the scope of the EEOC investigations in each case, or what could reasonably be expected to grow out of those EEOC investigations, encompassed class claims.
On April 13, 2005, the court granted the motion of the EEOC for leave to file a brief as an amicus curiae in support of plaintiff Hohider and in opposition to UPS's motion for summary judgment. (Doc. No. 93-1). The court subsequently denied UPS's motion to dismiss Branum's claims, (Doc. No. 17 in Civ. No. 04-1686), without prejudice to UPS's right to raise the issue whether the scope of the EEOC investigation encompassed class claims on a more fully developed record in a motion for summary judgment and the court denied UPS's motion for summary judgment with respect to Hohider's claims. (Doc. No. 144). On December 27, 2005, the court consolidated the two civil actions for all purposes at the above-captioned number.
Currently before the court is an abundance of briefing and a voluminous record concerning plaintiffs' renewed motion for class certification. This briefing includes plaintiffs' renewed motion, (Doc. No. 180), an accompanying corrected proposed order, (Doc. No. 155), an accompanying brief in support, (Doc. No. 181), accompanying appendices, (Doc. Nos. 121, 122, 123, 124) and plaintiffs' reply brief, (Doc. No. 184 with Exhibits at Doc. Nos. 143-2 through 143-5), as well as UPS's brief in opposition, (Doc. Nos. 182 (redacted) and 183 (unredacted)), UPS's appendices, (Doc. Nos. 130 (redacted), 131, 132, 133, 134, 135, 137 (unredacted portions of appendix)), and UPS's surreply brief, (Doc. No. 186). In addition, both plaintiffs and UPS have filed multiple notices of supplemental authority and responses which the court will give whatever weight is deemed appropriate. See (Doc. Nos. 161-78; 189-95, 199-201).
A. Rule 23 Requirements for Class Certification
To be certified, a class must satisfy the four requirements of Federal Rule of Civil Procedure 23(a): (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. FED.R.CIV.P. 23(a). If the Rule 23(a) requirements are met, the court must then find that the class fits within one of the three categories of class actions set forth in Federal Rule of Civil Procedure 23(b). In re Community Bank of Northern Virginia, 418 F.3d 277, 302 (3d Cir. 2005); see Chiang v. Veneman, 385 F.3d 256, 264 (3d Cir. 2004); In re LifeUSA, 242 F.3d 136, 143 (3d Cir. 2001); Georgine v. Amchem. Prods., Inc., 83 F.3d 610, 624 (3d Cir. 1996), aff'd sub nom. Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997); Baby Neal v. Casey, 43 F.3d 48, 55 (3d Cir. 1994). The proponent of class certification has the burden of proving each of the prerequisites of a class action under Rule 23(a) and that the class fits within one of the three categories of class actions set forth in Rule 23(b). Chiang, 385 F.3d at 264; Davis v. Romney, 490 F.2d 1360, 1366 (3d Cir. 1974) (citing J. MOORE, 3B MOORE'S FEDERAL PRACTICE ¶23.02-2 (2d ed.1969)).
B. Confusion Over the Appropriate Standard of Review For Deciding Class Certification
Less well settled as a matter of law, however, is the appropriate standard of review a district court should use when deciding a motion for class certification. Perhaps not surprisingly in this case, therefore, the parties vigorously dispute how much deference, if any, the court should give to plaintiffs' factual allegations concerning the propriety of certification. In addition, in light of the voluminous factual record compiled in class certification discovery and submitted to the court for its consideration in deciding the class certification motion, the parties dispute how stringently the court should review the factual record before it, and in particular factual disputes between the parties, to determine whether the class certification requirements are met.*fn3
Plaintiffs initially argued in their principal brief, in light of Chiang, 385 F.3d at 262, and the oft-quoted language used by the Supreme Court in Eisen v. Carlisle & Jacquelin, 417 U.S. 154 (1974), that it is not necessary for plaintiffs to establish the merits of their case at the class certification stage and the court, in determining whether the class will be certified, should accept the substantive allegations of the complaint as true. Defendant, however, argued that in light of the weight of authority from the United States Court of Appeals for the Third Circuit and other United States Courts of Appeals, the court must go beyond the pleadings to decide class certification and make whatever factual and legal inquiries are necessary to determine whether the Rule 23 requirements are met -- even if this more stringent review requires a preliminary inquiry into issues enmeshed with the merits of plaintiffs' claims. See Newton v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 167 (3d Cir. 2001); Johnston v. HBO Management, Inc., 265 F.3d 178 (3d Cir. 2001); Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir. 2001); see also In re Initial Public Offering Securities Litig., 471 F.3d 24 (2d Cir. 2006)("In re IPO"); Heerwagen v. Clear Channel Communications, Inc., 435 F.3d 219 (2d Cir. 2006); Gariety v. Grant Thornton, LLP, 368 F.3d 356 (4th Cir. 2004); Caridad v. Metro-North Commuter Railroad, 191 F.3d 283 (2d Cir. 1999).*fn4
Plaintiffs in a supplemental brief conceded that the court may "peek behind the pleadings" to assess class allegations, but maintained that a court generally should refrain from conducting a preliminary inquiry into the merits at the class certification stage, acknowledging the Newton decision but citing Barnes v. American Tobacco Co., 161 F.3d 127, 140 (3d Cir. 1998), and Chiang for the proposition that the court should not reach merits issues at the certification stage. Defendant responded that plaintiffs continued to understate the court's duty to scrutinize the factual record and make findings as necessary to determine whether the class certification requirements are met, and in supplemental briefing asked the court specifically to consider recent decisions from the United States Courts of Appeals for the Second Circuit and the Third Circuit on this issue. See Beck v. Maximus, Inc., 457 F.3d 291 (3d Cir. 2006); In re IPO, 471 F.3d 24 (2d Cir. 2006).
The apparent confusion over the appropriate standard of review a district court employs to decide whether certification is appropriate is understandable in light of the current state of the law. Applicable case law on this issue until recently has not been the height of clarity.*fn5 While it is manifestly clear since General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161 (1982), that district courts must apply a "rigorous analysis" to determine whether plaintiffs have shown that the requirements of Rule 23 have been met, courts have disagreed regarding the standard they should apply in making that determination. This court, therefore, will examine relevant Supreme Court decisions, decisions from the various United States Courts of Appeals, including the United States Court of Appeals for the Third Circuit, and the effect of the 2003 Amendments to Rule 23 in an effort to articulate clearly the standard of review this court will apply to the factual record in this case to determine whether the Rule 23 requirements are met with respect to some or all of the claims plaintiffs argue are appropriately subject to class treatment.
The two principal United States Supreme Court decisions which discuss the appropriate standard of review a district court should employ to decide whether to grant or deny a motion for class certification under Rule 23 -- Eisen and Falcon -- have been interpreted by federal courts as offering somewhat contradictory guidance with respect to the appropriate standard of review in class certification decisions. In Eisen, the Supreme Court stated that:
We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action. . . . "In determining the propriety of a class action, the question is not whether the plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but rather whether the requirements of Rule 23 are met."
Id. at 177-78 (quoting Miller v. Mackey International, 452 F.2d 424 (5th Cir. 1971)).*fn6 The United States Court of Appeals for the Third Circuit subsequently appeared to interpret Eisen on at least one occasion to mean "that, in determining whether a class will be certified, the substantive allegations of the complaint must be taken as true." Chiang, 385 F.3d at 262 (citing Eisen, 417 U.S. at 77-78).*fn7
In the other principal Supreme Court decision regarding Rule 23 requirements, however, the Supreme Court instructed that a class action "may only be certified if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied." Falcon, 457 U.S. at 161 (emphasis added). As the United States Court of Appeals for the Second Circuit recently commented in In re IPO, while "the double use of the word 'satisfied' is somewhat perplexing," the important point from the Falcon decision is that "the requirements of Rule 23 must be met, not just supported by some evidence." 471 F.3d at 33 (emphasis added). Moreover, in Falcon, the Supreme Court explained that, in the context of discussing the Rule 23(a) prerequisites, "actual, not presumed, conformance with [the Rule] remains indispensable." Id. at 160. The Supreme Court also recognized in Falcon that "the class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." Id. at 160 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463 (1978))(internal quotations omitted)).
D. Case law from the United States Courts of Appeals
Other than the Eisen and Falcon decisions, however, the United States Supreme Court has not recently or in detail addressed the appropriate standard of review a district court should use when deciding certification. The courts of appeals have struggled to guide district courts regarding the appropriate standard of review for deciding certification motions. District courts, in turn, have approached the issue with trepidation, as if steering a course through the choppy waters between Scylla and Charybdis. As those courts of appeals that have addressed the issue in detail have recognized, district courts deciding certification under the recent state of the law have perceived themselves to be caught between two dangers in a situation where moving away from one can cause a court to risk running afoul of the other: On the one hand, district courts have resisted making preliminary inquiries into merits issues as apparently proscribed by the Supreme Court in Eisen; on the other hand, district courts attempting to follow the guidance of Falcon have resisted deciding certification without a sufficiently "rigorous analysis" that assures that the Rule 23 requirements have been met, including some consideration of the underlying facts.
At bottom, courts have struggled to make sufficiently rigorous factual "findings" in support of certification decisions while at the same time avoiding -- if possible -- making "findings" on merits issues. This struggle has led to various descriptions over time of the standard of review that a district court should use in deciding a certification motion. See, e.g., In re IPO, 471 F.3d at 34-40 (surveying case law within the Second Circuit and in other circuits).
Thankfully, a consensus is emerging among the United States Courts of Appeals. While for some time district courts perceived a split in authority between the approach of the United States Courts of Appeals for the Seventh and the Fourth Circuits versus that of the Second Circuit -- see, e.g., In re Natural Gas Commodities Litigation, 231 F.R.D. 171, 180 n.4 (S.D.N.Y. 2005); DeMarco v. Robertson Stephens Inc., 228 F.R.D. 468, 470 (S.D.N.Y. 2005) -- over time, the approach of those and other courts of appeals have dovetailed toward the standard first articulated in detail by the United States Court of Appeals for the Seventh Circuit in Szabo v. Bridgeport Machines, Inc., 249 F.3d 672 (7th Cir. 2001), a decision cited with approval and followed by the United States Court of Appeals for the Third Circuit in Newton, 259 F.3d at 165-68.
In Szabo, the United States Court of Appeals for the Seventh Circuit focused on the appropriate standard of review used by a district court deciding class certification. The district court in that case assumed for the purposes of the class certification motion that the substantive allegations in the complaint were true. Id. at 674-75.*fn8
The court of appeals reasoned that "[t]he proposition that a district judge 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." Id. at 675. The court of appeals distinguished the standards of review for deciding a motion for class certification and a motion to dismiss pursuant to Rule 12(b)(6) as standards that "differ in kind." Id. at 676. The court of appeals noted that a Rule 12(b)(6) motion tests the legal sufficiency of a pleading in a situation where the factual sufficiency of the allegations will be tested later -- in a motion for summary judgment or at trial. Id. at 675. By contrast, the court of appeals noted that an order certifying a class usually is the district judge's last word on the subject -- there generally is no subsequent test of the decision's factual premises. Id. at 676.
The court of appeals in Szabo reasoned that "[b]efore deciding whether to allow a case to proceed as a class action, therefore, a judge should make whatever factual and legal inquiries are necessary under Rule 23." Id. The court of appeals made clear that this obligation of the judge applies to the Rule 23(a) prerequisites as well as to whether class certification is appropriate under Rule 23(b).*fn9 Id. The court of appeals directed:
Questions such as these require the exercise of judgment and the application of sound discretion; they differ in kind from legal rulings under Rule 12(b)(6). And if some of the considerations under Rule 23(b)(3) . . . overlap the merits -- as they do in this case, where it is not possible to evaluate impending difficulties without making a choice of law, and not possible to make a sound choice of law without deciding whether [the defendant] authorized or ratified the dealers' representations -- then the judge must make a preliminary inquiry into the merits.
Id (emphasis added). The court of appeals in Szabo reasoned that courts make similar inquiries routinely under Rule 12(b)(1) and 12(b)(2), and that, if necessary, courts may hold a hearing to make preliminary factual determinations concerning jurisdiction, venue, and the like. Id. at 676-77.
The court of appeals in Szabo addressed head-on the district court's apparent misunderstanding of the Eisen decision, noting that "[t]he district judge thought that [Eisen] adopts the approach of Rule 12(b)(6) for decisions under Rule 23;" however, "[w]e do not read Eisen so." Id. The court of appeals noted that in Eisen, the Supreme Court observed that the 1966 amendment to Rule 23 departed from the earlier handling of class claims by placing certification ahead of a decision on the merits:
A class thus can lose as well as win, while in a permissive-intervention system the case is decided on the merits before the identities of the parties to be bound are known. The success of the 1966 amendments (which are still in force) depends on making a definitive class certification decision before deciding the case on the merits, and on judicial willingness to certify classes that have weak claims as well as strong ones.
Id. at 677. The court, therefore, reasoned:
A court may not say something like "let's resolve the merits first and worry about the class later" . . . or "I'm not going to certify a class unless I think that the plaintiffs will prevail."
Id. The court of appeals noted, however, that "nothing in the 1966 amendments to Rule 23, or the opinion in Eisen, prevents the district court from looking beneath the surface of a complaint to conduct the inquiries identified in that rule and exercise the discretion it confers." Id. The court also commented that "[p]laintiffs cannot tie the judge's hands by making allegations relevant to both the merits and class certification." Id. (quoting Eggleston v. Chicago Journeymen Plumbers' Local No. 130, 657 F.2d 890, 895 (7th Cir.1981)( "Eisen has not been interpreted so broadly . . . as to foreclose inquiry into whether plaintiff is asserting a claim which, assuming its merit, will satisfy the requirements of Rule 23 as distinguished from an inquiry into the merits of plaintiff's particular individual claim.").
The court of appeals in Szabo characterized the district court's approach in that case as reminiscent of the "across-the-board" rule jettisoned by the Supreme Court in Falcon, noting that in circuits that were following the across-the-board rule, district courts had been required to assume that all members of a proposed class were situated similarly to plaintiff and to certify classes "across the board." Id. The court of appeals explained that Falcon held that "similarity of claims and situations must be demonstrated rather than assumed," quoting the pointed observation from Falcon that "sometimes it may be necessary for the court to probe beyond the pleadings before coming to rest on the certification question . . . [A]ctual, not presumed, conformance with Rule 23(a) remains . . . indispensable." Id. (quoting Falcon, 457 U.S. at 160). In Szabo, the court held that the Falcon rule "is equally true of Rule 23(b)." Id. The court of appeals issued the following caveat against using too deferential a standard of review to decide class certification:
Certifying classes on the basis of incontestable allegations in the complaint moves the court's discretion to the plaintiff's attorneys -- who may use it in ways injurious to other class members, as well as ways injurious to defendants. Both the absent class members and defendants are entitled to the protection of independent judicial review of the plaintiff's allegations.
Id.*fn10
In Newton v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 167 (3d Cir. 2001), the United States Court of Appeals for the Third Circuit cited Szabo with approval and -- notwithstanding the somewhat confusing statement in Chiang that a court at the certification stage should accept the substantive allegations of the complaint as true -- adopted the same approach. In Newton, the court of appeals affirmed the denial of certification by the district court of a putative class of investors.*fn11 The court of appeals granted an interlocutory appeal under Federal Rule of Civil Procedure 23(f) to determine whether the plaintiffs' securities fraud claims satisfied the requirements for class certification under Rule 23 and ultimately affirmed the district court's denial of certification. Id.
In reviewing the district court's decision, the court of appeals as a threshold matter analyzed in detail the effect of the 1998 amendment to Rule 23 providing interlocutory appeal, id. at 162-65, but also had occasion to review the appropriate standard of review a district court should employ in deciding certification, id. at 165-69. The court of appeals noted that, generally, a district court abuses its discretion if its decision "rests upon a clearly erroneous finding of fact, an errant conclusion of law or an improper application of law to fact." Id. at 165-66 (quoting In re General Motors Corp. Pick Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 783 (3d Cir.1995)(quoting Int'l Union, UAW v. Mack Trucks, Inc., 820 F.2d 91, 95 (3d Cir.1987))(internal quotations omitted). The court of appeals instructed that "[a] class certification decision requires a thorough examination of the factual and legal allegations." Id. at 166 (citing Barnes v. Am. Tobacco Co., 161 F.3d 127, 140 (3d Cir.1998), cert. denied, 526 U.S. 1114 (1999)). The court of appeals recognized that "it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question." Id. (quoting Falcon, 457 U.S. at 160; citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (Breyer, J., concurring in part and dissenting in part); 7B CHARLES ALAN WRIGHT, ARTHURR. MILLER& MARYKAYKANE, § 1785 at 16 (West Supp.2000))(internal quotations omitted). The court of appeals in Newton quoted Szabo for the principle that "[b]efore deciding whether to allow a case to proceed as a class action, . . . [courts] should make whatever factual and legal inquiries are necessary under Rule 23." Id. (quoting Szabo, 249 F.3d at 676)(internal quotations omitted).*fn12
The court of appeals took the opportunity in Newton to examine the Eisen decision and its admonition that "nothing in either the language or history of Rule 23 . . . gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." Id. The court of appeals commented that "this admonition must be examined in context," and recognized that "[a]t the time, it was ancillary to the principal issue of whether Fed.R.Civ.P. 23 required a class representative in a securities class action to provide notice to all class members." Id. The court of appeals in Newton explained the evolution of case law following Eisen, noting:
Not long after Eisen, the Court stepped away from this bright-line declaration in Coopers & Lybrand v. Livesay, when it held that "[e]valuation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative's claims or defenses, the adequacy of the representative, and the presence of common questions of law or fact are obvious examples. The more complex determinations required in Rule 23(b)(3) class actions entail even greater entanglement with the merits . . . ."
Id. (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469 n.12 (1978)). In Newton, the court also recognized:
Subsequently, in [Falcon], the Court appeared to move even further away from Eisen, recognizing that "[s]ometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff's claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question. . . . [A]ctual, not presumed conformance with Rule 23(a) remains . . . indispensable."
In Newton, the court of appeals concluded that the reasoning in Falcon applied to issues arising under Rule 23(b)(3). Id. (citing Szabo, 249 F.3d at 677). "As the Court concluded in Livesay, class certification may require courts to answer questions that are often 'enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Id. (quoting Livesay, 437 U.S. at 469 (internal quotations omitted)). The court of appeals instructed that "[t]o address these questions, courts may 'delve beyond the pleadings to determine whether the requirements for class certification are satisfied.'" Id. (quoting 5 MOORE'S FEDERAL PRACTICE § 23.61[5]). In Newton, the court of appeals cited Szabo, 249 F.3d at 677 (holding courts may "[look] beneath the surface of a complaint" to "make a preliminary inquiry into the merits"); Amchem, 521 U.S. at 615 (Fed.R.Civ.P. 23(b)(3) invites a "close look" before determining class certification); 7B WRIGHT, MILLER & KANE, § 1785 at 16 (West Supp.2000) (courts not precluded from "necessary inquiry into the underlying elements of the case in order to evaluate whether Rule 23 has been met"); and MOORE'S FEDERAL PRACTICE, MANUALFORCOMPLEX LITIGATION(THIRD) § 30.1 ("The decision on whether or not to certify a class, therefore, can be as important as decisions on the merits of the action and should be made only after consideration of all relevant evidence and arguments presented by the parties.").
The court of appeals commented that since Eisen, "the nature of class actions and how they are litigated have undergone a sea change." Id. at 167-68. The court of appeals recognized that several United States Courts of Appeals since Eisen have required district courts to go beyond the pleadings in order to decide whether the class certification requirements are met, citing Castano v. American Tobacco Co., 84 F.3d 734, 744 (5th Cir.1996)("[g]oing beyond the pleadings is necessary, as a court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues"); Szabo, 249 F.3d at 675-78; Rutstein v. Avis Rent-A-Car Sys., Inc., 211 F.3d 1228, 1234 (11th Cir.2000); Hanon v. Dataproducts Corp., 976 F.2d 497, 508-09 (9th Cir.1992). The United States Court of Appeals for the Third Circuit held:
In reviewing a motion for class certification, a preliminary inquiry into the merits is sometimes necessary to determine whether the alleged claims can be properly resolved as a class action. This is such an instance. We must probe beyond the surface of plaintiffs' allegations in performing our review to assess whether plaintiffs' securities claims satisfy Fed.R.Civ.P. 23's requirements.
Newton, 259 F.3d at 168-69 (footnotes omitted); see Beck v. Maximus, 457 F.3d 291, 297 (3d Cir. 2006)("Depending on the circumstances, class certification questions are sometimes 'enmeshed in the factual and legal issues comprising the plaintiff's cause of action,' and 'courts may delve beyond the pleadings to determine whether the requirements for class certification are satisfied.'")(quoting Newton, 259 F.3d at 167).
The guidance provided by the United States Court of Appeals for the Third Circuit is clear. District courts are required when necessary to delve beyond the pleadings to determine whether Rule 23 requirements are met. The United States Courts of Appeals for the Second, Fourth, and Seventh Circuits have adopted the same or a largely similar approach. See, e.g., In re IPO, 471 F.3d 24 (2d Cir.);*fn13 Gariety, 368 F.3d 356 (4th Cir.);*fn14 Szabo, 249 F.3d 672 (7th Cir.).
Fear by the parties that a district court's findings made solely for the purpose of deciding certification will somehow affect merits determinations later in the litigation is unwarranted:
The district court's concern that Rule 23 findings might prejudice later process on the merits need not lead to the conclusion that such findings cannot be made. The jury or factfinder can be given free hand to find all of the facts required to render a verdict on the merits, and if its finding on any fact differs from a finding made in connection with class action certification, the ultimate factfinder's finding on the merits will govern the judgment.
Gariety, 368 F.3d at 365. In Gariety, the court of appeals identified preliminary injunction practice as a model for this practice. Id. ("Courts make factual findings in determining whether a preliminary injunction should issue, but those findings do not bind the jury adjudging the merits, and the jury's findings on the merits govern the judgment to be entered in the case.")(citing Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)). In In re IPO, the Court of Appeals for the Second Circuit concurred with the rationale in Gariety regarding whether prejudice inured to the defendant if the court examined issues that overlap with the merits:
The Fourth Circuit in Gariety considered and fully answered the concern expressed in Eisen (with respect to a merits inquiry on an issue unrelated to a Rule 23 requirement) that a merits inquiry on an issue that is related to the merits would prejudice the defendant. The Fourth Circuit noted that such an inquiry would not bind the ultimate fact-finder. . . . A trial judge's finding on a merits issue for purposes of a Rule 23 requirement no more binds the court to rule for the plaintiff on the ultimate merits of that issue than does a finding that the plaintiff has shown a probability of success for purposes of a preliminary injunction.
In re IPO, 471 F.3d at 38.*fn15
At the class certification stage, a district court makes a determination that some legal standard -- e.g., numerosity, commonality, or predominance -- is met; in so doing, a court may resolve underlying factual disputes, and as to these disputes, the court must be persuaded that the fact at issue has been established; much like a district court makes a "ruling" or "determines" other threshold issues that involve disputed issues of fact -- such as the determination that a court has subject-matter jurisdiction. In re IPO, 471 F.3d at 40.*fn16 "The more troublesome issue arises when the Rule 23 requirement overlaps with an issue on the merits." Id. "With Eisen properly understood to preclude consideration of the merits only when a merits issue is unrelated to a Rule 23 requirement, there is no reason to lessen a district court's obligation to make a determination that every Rule 23 requirement is met before certifying a class just because of some or even full overlap of that requirement with a merits issue." Id. "[T]he determination as to a Rule 23 requirement is made only for purposes of class certification and is not binding on the trier of facts, even if that trier is the class certification judge." Id. (citing Gariety, 368 F.3d at 366)(emphasis added).
Perhaps the best articulation of the standard of review was set forth in In re IPO. There, the court of appeals summarized its conclusions with respect to the appropriate standard of review for deciding class certification as follows:
[W]e reach the following conclusions: (1) a district judge may certify a class only after making determinations that each of the Rule 23 requirements has been met; (2) such determinations can be made only if the judge resolves factual disputes relevant to each Rule 23 requirement and finds that whatever underlying facts are relevant to a particular Rule 23 requirement have been established and is persuaded to rule, based on the relevant facts and the applicable legal standard, that the requirement is met; (3) the obligation to make such determinations is not lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical with a Rule 23 requirement; (4) in making such determinations, a district judge should not assess any aspect of the merits unrelated to a Rule 23 requirement; and (5) a district judge has ample discretion to circumscribe both the extent of discovery concerning Rule 23 requirements and the extent of a hearing to determine whether such requirements are met in order to assure that a class certification motion does not become a pretext for a partial trial of the merits.
Id. This articulation of the standard for determining whether a court must consider the merits in resolving class certification issues is consistent with the approach of the United States Court of Appeals for the Third Circuit in Newton, and captures the standard of review that this court will apply in the instant case.*fn17
It does not appear that the 2003 amendments to Rule 23 affect the standard of review in a substantial way. The courts of appeals that have addressed the appropriate standard of review for class certification since the 2003 amendments to Rule 23 have commented on the significance, if any, of the amendments to the issue at hand. For example, in In re IPO, the United States Court of Appeals for the Second Circuit commented that neither the amended rule nor the committee's commentary explicitly resolved the apparent split of authority between court of appeals' then "ambiguous Caridad/Visa Check/Heerwagen" approach to determining Rule 23 requirements and the predominant view of the other circuits that class certification requires findings with respect to such requirements, even if such findings involve consideration of merits issues. Id. at 39.
The court of appeals in In re IPO noted that two of the 2003 changes, however, arguably could be read in combination to permit more extensive inquiry into whether Rule 23 requirements are met: first, that the amended rule removed the provision that class certification "may be conditional;" second, that the amended rule replaces the provision of prior Rule 23(c)(1)(A) that a class certification decision be made "as soon as practicable" with a provision requiring the decision "at an early practicable time." Id. Further, the court of appeals in In re IPO noted that the advisory committee stated "that '[a] court that is not satisfied that the requirements of Rule 23 have been met should refuse certification until they have been met.' " Id. (quoting FED.R.CIV.P. 23(c)(1)(C) 2003 Adv. Comm. Notes). In addition, the court noted that the advisory committee, although condemning an evaluation of the probable outcome on the merits, blessed the use of controlled discovery in aid of the certification decision, including controlled discovery into the "merits," limited to those aspects relevant to making a certification decision on an informed basis. Id; see Gariety, at 368 F.3d at 365. Because the force of the 2003 amendments with respect to the appropriate standard of review is adequately captured in the various decisions of the courts of appeals that addressed the issue, this court will follow the applicable standard of review as set forth by Szabo, Gariety, Newton, and In re IPO.
This court will examine the facts marshaled during class certification discovery and presented to the court for its review in deciding whether the Rule 23 requirements are met and class certification is warranted in this case. The court notes that the parties have compiled and submitted a voluminous factual record concerning class certification in this case. Defendant presented an appendix over 2,000 pages long and plaintiff presented appendices totaling a similar length. Much of the factual background is not in dispute, although the legal consequences of those facts are the subject of serious disagreement. Some key facts, however, are disputed. Where necessary, the court will resolve factual disputes relevant to each Rule 23 requirement. Where there is overlap between a Rule 23 requirement and a merits issue, the court will resolve that dispute with respect to determining whether the Rule 23 requirement has been met. The court otherwise will not assess any aspect of the merits unrelated to a Rule 23 requirement. Any findings in this memorandum opinion, therefore, are made solely for the purpose of deciding certification and will not bind the fact finder at the merits stage of this litigation. The following part of this memorandum opinion will review the factual background of the case as a preface to the Rule 23 analysis.
UPS was founded as a messenger service in 1907, and currently is the world's largest package delivery company, delivering approximately 3.4 billion packages and documents per year. Declaration of R. Joseph Lee ("Lee Decl."), UPS Appendix to UPS's Opposition to Plaintiff's Motion for Class Certification ("UPS App.") at 538-40 ¶4; see Bates v. UPS, No. C99-2216, slip. op. at 5 (N.D. Cal. Oct. 21, 2004)("Findings of Fact & Conclusions of Law")("Bates Findings")(Plaintiff's Appendix of Legal Authorities ("Pls.' Leg. App."), Tab 1 at 5). UPS employs approximately 328,000 individuals in the United States and over 360,000 individuals worldwide. Lee Decl. ¶4 ; see Bates Findings at 5. In the United States, UPS's package operations are divided into seven regions, which in turn are divided into sixty distinct geographical districts. Lee Decl. ¶5.
There are over 1700 UPS facilities within the sixty geographical districts. Id. Each district is responsible for delivery of packages within a specified geographical area. Id. A district consists of business units called "Package Centers" and "Hubs." Id. Each district is further subdivided for the purpose of support functions such as "Plant Engineering," "Industrial Engineering," "Finance and Accounting," "Human Resources," "Labor," "Automotive," "Security," and "Business Development." Id.
Approximately 200,000 UPS employees in the United States are covered by some form of a collective bargaining agreement. Id. ¶6. Some employees are covered by the National Master United Parcel Service Agreement (the "National Master Agreement") between UPS and the Teamsters United Parcel Service National Negotiating Committee representing local unions affiliated with the International Brotherhood of Teamsters. Id. In addition to the National Master Agreement, some employees are covered by supplemental collective bargaining agreements. Id. ¶7.
Class certification discovery in this case was limited to five of UPS's sixty districts (the "sample districts"). The sample districts included the North Illinois district, the Southeast California district, the Georgia district, the Gulf South district, and the Laurel Mountain district. See Plaintiffs' Appendix of Exhibits in support of Motion for Class Certification ("Pls.' Ex. App."), Tab 2 (Apr. 21, 2005 email from Joseph E. Culleiton to Christian Bagin). While the exact number of UPS employees working in a particular district changes on a regular basis, id., UPS generally employs approximately 34,500 individuals, or approximately 10.5% of its domestic workforce, in the five sample districts. Id. (noting that, as of October 2004, UPS employed 34,474 individuals in the five sample districts as follows: North Illinois (7,471), Southeast California (9,777), Georgia (7,705), Gulf South (4,458), and Laurel Mountain (5,064)).
B. UPS's Formal ADA Compliance Procedures
1. ADA Compliance Procedures Prior to 1999
Since the passage of the ADA, UPS has developed formal ADA compliance procedures to guide its employees. See Declaration of Roman M. Williams ("Williams Decl."), UPS App. at 2-7 ¶¶2-7; Lee Decl. ¶11-17. Over the years, UPS revised its formal ADA compliance procedures. For example, in 1992, after the ADA went into effect, UPS distributed a Management Guide to its supervisory personnel entitled "Injured Employees: Focus on Abilities; Health and Safety and the ADA"(the "Focus on Abilities manual"). Lee Decl. ¶11, Ex. G.*fn18 The Focus on Abilities manual, which is copyrighted 1992, described the ADA and UPS's procedures concerning the ADA at that time, including its procedure for requests for accommodations, examples of reasonable accommodations, confidentiality concerns, and terminology related to the ADA and disabilities. Lee Decl., Ex. G.
For example, the Focus on Abilities manual contained UPS's corporate mission statement at the time concerning the ADA, noting that, because UPS as a federal contractor already had taken measures to comply with the Rehab Act, [the passage of the ADA] provides an opportunity for UPS to rededicate the entire organization to the goal of removing existing barriers and providing opportunities for individuals with disabilities. This will provide UPS with an additional resource of qualified people, while allowing individuals with disabilities the opportunity to contribute to the success of UPS as well as to their own economic goals and career pursuits.
Id. at 1. Concerning requests for accommodation, the Focus on Abilities manual stated:
UPS procedure requires specific steps to be followed when a request for an accommodation is received. In addition, documentation must be completed and retained by Human Resource Departments.
If an employee makes a request for an accommodation, the individual should be assured that their request will receive attention by the appropriate management people. No judgments or promises should be made at the time the request is made. Each request should be carefully evaluated. The Human Resources manager should be notified immediately to ensure prompt response to the request. An individual requesting an accommodation must participate and cooperate in the evaluation process.
Id. at 4. In closing, the Focus on Abilities manual noted:
It is the responsibility of UPS managers and supervisors to ensure that individuals with disabilities are given the same opportunities and impartial treatment that has historically guided us in all our relationships with employees and customers. To achieve this goal, it simply requires a focus on the talents and abilities of individuals.
Shortly thereafter, UPS updated its longstanding internal publication "Impartial Employment and Promotion Guide" to include a discussion of the ADA. See Lee Decl. ¶12, Ex. H. UPS submitted to the court a copy of this guide which is copyrighted 1993 and marked "[r]evised June 1993." Lee Decl., Ex. H. The guide, first published in 1965 and periodically updated thereafter, was intended to be issued by UPS to all UPS managers and supervisors and proclaimed to be a reference source and policy statement for the company. Id. at iii. The guide listed the ADA among other federal laws applicable to the employment context in which the company operated. Id. at 11. In the section of the guide addressing "implementing our policies," the guide identified among other workshops that were part of UPS's formal training at the time the "Focus on Abilities Workshop." Id. at 28. The guide described that workshop as one that "educates management on the laws regarding nondiscrimination towards individuals with a disability," and whose primary message was "focus[ing] on looking at their ability rather than disability." Id.
2. ADA Compliance Procedures After 1999
a. "United Parcel Service Americans with Disabilities Act
Procedural Compliance Manual" and procedures set forth therein In 1999, UPS with the assistance of outside legal counsel developed a more detailed ADA procedural compliance manual. Lee Decl. ¶13, Ex. I, also filed at Pls.' Ex. App., Tab 3.*fn19 The outcome was the "United Parcel Service Americans with Disabilities Act Procedural Compliance Manual"(the "Manual"), which provides guidance on UPS's ADA procedures. Lee Decl. ¶13. UPS submits that the Manual was updated in 2000. Id. The court understands that the Manual sets forth the ADA procedural compliance program at UPS that remains in force to the present day. See id. at 13-15.
UPS developed the Manual "to provide guidance on 'reasonable accommodation' and other important concepts under the ADA, with the goal of insuring the fair and equitable treatment of all individuals," according to the introductory letter on the Manual's first page of text. Lee Decl., Ex. I at [1]. The Manual was intended to supplement the UPS Code of Business Conduct and the UPS Policy Book. Id. The Manual was not intended to set forth an exhaustive list of procedures for situations that could arise at UPS relating to the ADA, nor was it intended to establish a mandatory ADA procedure for all employees in all circumstances:
No generalized discussion can adequately capture the complexity and individualized nature of claims that will arise in the UPS environment. Accordingly, this manual neither provides an exhaustive list of permitted or prohibited conduct under the ADA nor establishes a mandatory ADA procedure that must be followed by all personnel in all circumstances.
Id. (emphasis added). Instead the Manual "suggests recommended but flexible procedures to encourage the prompt and equitable resolution of all requests for accommodation." Id. (emphasis added). The Manual sets forth UPS's position that "[t]hese procedures go above and beyond what is actually required by law and should not be construed as a comprehensive statement of the ADA's requirements." Id. The Manual notes that nothing in the Manual is intended to constitute a contractual obligation and individuals are not entitled to contractual rights or guaranteed procedures as set forth in the Manual other than what they are otherwise entitled to as a matter of law. Id.
Although this statement makes explicit that UPS, when developing the Manual, did not intend to set forth an exhaustive, mandatory ADA compliance procedure that governed all situations, the Manual does set forth detailed guidance on, among other things, the scope of the ADA and reasonable accommodation under the ADA. The Manual specifically prescribes an ADA compliance procedure for UPS employees in a section entitled "Evaluating Requests for Accommodation in the UPS Environment," id. at 34-58, and a subsection entitled "The UPS ADA Procedure," id. at 42-57.
(i) Reasonable Accommodation
With respect to "reasonable accommodation" generally, the Manual notes that "[t]he ADA imposes an affirmative obligation on UPS to provide reasonable accommodation to qualified individuals with disabilities" and this "involves the removal of both physical obstacles and policies and procedures in the workplace that create barriers to the full employment of individuals with disabilities." Id. at 13. It explains "reasonable accommodation" to be "any change in the work environment or adjustment in the way things are customarily done that enables an individual with a disability to enjoy equal employment opportunities." Id. The Manual notes that employees generally have the initial obligation to inform a manager or supervisor that an accommodation is needed and to identify the desired accommodation, but that no magic words are required for an employee to put the company on notice. Id. at 14. Further, it describes the importance of an "effective accommodation" -- i.e., one that enables the disabled individual to perform the essential functions of the job in question. Id.
The Manual identifies "particular accommodations that may be 'reasonable' in some cases," including (1) modifications of the work environment, such as structural changes to the workplace to address accessability of lunchrooms, restrooms, work area, or training rooms; (2) auxiliary aids, including modifying equipment or acquiring and using low-tech and high-tech devices; (3) job restructuring, for example "altering the time or manner in which an essential function is performed" or "redistributing or eliminating the nonessential, marginal job functions of a position entirely;" (4) reassignment to open positions in certain cases; (5) transfer; (6) leave of absence; (7) "light duty;" (8) a modified work schedule; and (9) shift changes. The Manual also addresses unreasonable accommodations and "undue hardship" as well as the impact of the collective bargaining agreements on requests for accommodation. Id. at 15-20.
(ii) The UPS ADA Procedure
In Section II of the Manual, UPS sets forth specific procedures for "Evaluating Requests for Accommodation in the UPS Environment." Id. at 34-59. The Manual notes that "[t]he process of evaluating requests for accommodation made by individuals is a multi-disciplinary task involving personnel at both the district and region levels." Id. at 35 (emphasis added). The Manual notes that because in the company's experience requests for accommodation from applicants (as opposed to current employees) vary widely from case to case and often demand heightened flexibility and quick response times from involved personnel, UPS's ADA procedure as set forth in the Manual applies on its face only to current employees. Id.
The Manual gives further guidance concerning what constitutes a request for an accommodation, and what duties it triggers for managers, including who needs to be informed (in the first instance, generally the District Workforce Planning Manager ("DWPM")), what information can be requested (the company has developed a packet to be sent to employees who request accommodations), how requests should be documented,*fn20 and confidentiality concerns. Id. at 35-38.
According to the Manual, responsibility for processing and deciding a request for accommodation under the ADA is shared among UPS's managers and personnel at the district and regional level. The Manual provides an overview of roles and responsibilities of various managers and personnel who are involved in the decisionmaking process concerning ADA requests for accommodation. Id. at 39-41. For example, the Manual instructs that, while the list is not exhaustive and personnel are encouraged to consult with other district and region managers for guidance when appropriate, the following individuals play a role in processing an employee's request for an accommodation under the ADA:
(1) Generally the DWPM is responsible for coordinating and managing an employee's request for accommodation, including exploring the availability and existence of appropriate accommodations with the employee, union (where applicable), and region level decisionmakers; assisting in determining which accommodation, if any, is warranted or feasible; and serving as UPS's primary liaison with all employees throughout the process. Id. at 39.
(2) The Occupational Health Supervisor ("OHS") serves as a liaison between the company, the employee, and the employee's identified physician for purposes of securing all medical information necessary to evaluate whether the employee has a "disability" covered by the ADA; assists in determining whether an employee is a qualified individual with a disability; and participates in identifying accommodations with the employee and DWPM. Id.
(3) The Region Workforce Planning Manager ("RWPM") "is involved in all decisionmaking aspects of the ADA process" and is responsible for initially determining in conjunction with the Region Occupational Health Manager whether it appears that the employee has a condition which may be a covered "disability." Id. at 40. The RWPM is likewise ultimately responsible for identifying what accommodation, if any, UPS will offer to a qualified employee. Id. "In all cases, the RWPM is charged with overseeing the application of ADA policies, procedures, and decisionmaking throughout the districts in his or her region." Id.
(4) The Region Occupational Health Manager ("ROHM") participates in the decisionmaking process and provides guidance in determining (a) whether the employee has a disability under the ADA, (b) whether the employee is a qualified individual with a disability, and (c) what, if any, accommodation should be expended to the employee. Id.
(5) The District Human Resources Manager ("DHRM") participates in determining what accommodation, if any, will be offered to qualified employees with disabilities under the ADA. Id. In addition, the DHRM is kept apprised of the status of employee requests throughout the process and is available to advise and assist district personnel in carrying out their assigned tasks. Id.
(6) The District Labor Relations Manager ("DLRM") serves as the principal contact with the unions and is responsible for ensuring that the company satisfies its obligations under all applicable collective bargaining agreements in executing its ADA procedures. Id. The DLRM also assists in identifying potential accommodations for employees and in determining which accommodation, if any, the company should offer. Id. Where an accommodation will be offered to a union employee, the DLRM negotiates with the union over the parameters of the accommodation and drafts a written accommodation agreement when appropriate. Id. at 41.
(7) The union Business Agent ("BA") is involved in the ADA process only when it is a bargaining unit employee who has made a request for accommodation. The DLRM will negotiate with the BA (or his designee) before an accommodation is provided to a bargaining union employee pursuant the National Master Agreement. Id.
(8) The Corporate Legal Department is available to assist decisionmakers in resolving all issues of concern that arise during the ADA process, and should be apprised whenever there is a dispute among decisionmakers or between decisionmakers and the employee regarding whether the employee's condition is one that is covered under the ADA, whether the employee is qualified within the meaning of the ADA, or whether a particular accommodation is reasonable as a matter of law. Id.
(9) Outside Counsel are likewise available to assist ADA decisionmakers with respect to all aspects of the process, although as a general matter, outside counsel should be contacted only after securing the approval of the Corporate Legal Department. Id.
b. The "Ten-Step Process"
The Manual also sets forth the so-called "ten-step process,"*fn21 which is highly contentious in this litigation. The ten-step process constitutes the backbone of UPS's ADA procedure for resolving requests for accommodation. Indeed, it is this formal procedure, among other policies and practices at UPS, which plaintiffs challenge in this litigation as the embodiment of bad faith and abuse of process. UPS, on the other hand, maintains that its formal procedures, including its ten-step process, are developed and executed in full compliance with the letter and the spirit of the ADA.
(i) Step One: "Commence the Process"
At Step One ("Commence the Process"), according to the Manual, within one week of a request for accommodation, the request should be directed to the DWPM who should open a Request File for the employee. Id. at 43. The DWPM then is responsible for sending out a packet of information to the employee that includes a letter acknowledging the request and medical forms to be completed by the employee's physician. Id. The applicable Essential Job Functions listings are attached and a consent form for the disclosure of medical information to be signed by the employee is included. Id. The DWPM should place copies of all letters in the file and forward the file to the attention of the OHS. Id.
Plaintiffs, however, argue that UPS may never even open an ADA Request File for some employees with restrictions who seek to return to work with an accommodation because certain UPS managers are not sufficiently trained to identify a request when it is made and to forward it promptly to the DWPM for the purpose of opening an ADA file. Plaintiffs cite Hohider's and DiPaolo's experiences to show that some requests for accommodation are ignored or summarily denied by district-level management, and therefore that these requests never result in the opening of an ADA file.*fn22 See, e.g., Declaration of Eva Nickels ("Nickels Decl.") at ¶¶ 4-7.
(ii) Step Two: "Gather Medical Information"
At Step Two ("Gather Medical Information"), according to the Manual, the OHS is responsible for securing all medical information from the employee and the employee's physician. Manual at 44. If the OHS has not received the requested information within two weeks of the date on which the DWPM mailed the acknowledgment letter, the OHS should send a second letter to the employee stating that (a) the process cannot continue until the requested information is returned, and (b) UPS will terminate the process by a certain date, usually within two weeks, unless the OHS receives the information or is contacted by the employee. Id. If the OHS does not receive the information by the stated deadline, the OHS should send a letter to the employee stating that the process has been terminated, inform the DWPM, and then close the file. Id. If the employee subsequently submits the requested information and renews a request for accommodation the OHS or DWPM must reopen the file and commence the process a second time. Id.
Once the OHS secures the medical documents, the OHS evaluates whether sufficient information exists from which to determine whether the employee has a condition that could be covered under the ADA. Id. If there is insufficient information, the OHS should advise the employee in writing of the specific additional information that is needed to evaluate properly the request and the consequences of failing to provide this information. Id. Where necessary, the OHS in consultation with the DWPM also may seek guidance from a company-approved physician or request the employee to submit to a medical evaluation by a UPS certified physician. Id. The company evaluation must be job-related and limited to an evaluation of the impairments identified by the employee and their impact on the employee's ability to work at UPS. Id. Once the OHS certifies that sufficient medical information exists to proceed with the employee's request, the OHS should forward the file promptly to the attention of the ROHM.
Plaintiffs argue that at Step Two, UPS utilizes a "confusing questionnaire" that contains legal terms of art which an employee must have his or her physician complete in order to continue with the ADA process. See Pls.' Br. at 19; Pls.' Dep. App., Tab 1 (Deposition of Vance Allison, who appears to be a management-level employee at UPS involved in processing reasonable accommodation requests) ("Allison Dep.") at 69, 187-90. Plaintiffs argue that this form is designed to delay or stop the process of receiving an accommodation because no accommodation request will be processed until the questionnaire is satisfactorily completed and because UPS deems all accommodation requests withdrawn unless the employee's physician returns the form within four weeks. Plaintiffs argue that this combination of requirements -- a confusing form and the rule ...