Court Opinion

ID: 4548968
Source: CourtListenerOpinion
Date Created: 2020-07-17 09:07:00.525083+00
Date Added: 2024-06-11T09:12:36.185133
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                  revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                             COURT OF APPEALS

MARLON CARTER and All Others Similarly                                 UNPUBLISHED
Situated,                                                              July 16, 2020

               Plaintiffs-Appellants,

v                                                                      No. 349368
                                                                       Wayne Circuit Court
MICHIGAN STATE POLICE and DIRECTOR OF                                  LC No. 15-015901-CZ
THE DEPARTMENT OF STATE POLICE
COLONEL KRISTIE KIBBY ETUE,

               Defendants-Appellees,
and

CIVIL SERVICE COMMISSION and STATE
           PERSONNEL DIRECTOR,

               Defendants.

Before: TUKEL, P.J., and SERVITTO and BECKERING, JJ.

PER CURIAM.

        Plaintiffs, Marlon Carter and all others similarly situated, appeal by leave granted1 the trial
court’s order denying their motion for class certification. On appeal, plaintiffs argue that the trial
court erred by concluding that plaintiffs failed to establish the commonality requirement for class
certification in this class action against defendants, State Police and Colonel Kristie Kibby Etue,2

1
 Carter v State Police, unpublished order of the Court of Appeals, entered September 18, 2019
(Docket No. 349368).
2
 The trial court entered a stipulated order on May 29, 2019, dismissing defendants Civil Service
Commission and State Personnel Director with prejudice.

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and by improperly assessing the merits of the lawsuit in denying the motion. For the reasons stated
below, we reverse the trial court’s order and remand the matter for further proceedings.

                                        I. BACKGROUND

        This appeal arises from a class action against defendants challenging an aspect of defendant
Michigan State Police’s (“MSP”) selection process known as the “prescreening interview.” Part
of an extensive selection process conducted by MSP’s Recruitment and Selection section, the
prescreening interview is conducted after an applicant passes a preliminary examination, submits
an online application and numerous personal documents, fills out a supplementary application and
personal history questionnaire, passes a fitness test, and undergoes an orientation to the application
process and an overview of what recruit school will entail. According to the description in MSP
Official Order 58, the prescreening interview is not a hiring interview, but is used to “determine if
the applicant meets the minimum standards to continue in the selection process.”

        During the prescreening interview, the applicant is asked a series of questions from a
prepared questionnaire. Factors considered during the interview include prior drug use, criminal
history, and credit history. For certain factors, such as credit history, academic performance, or
maturity, are assessed subjectively, while other factors, such as drug use, are assessed both
subjectively and objectively. Following the interview, the applicant is rated with a 1, 2, or 3.
Applicants rated 3 meet the minimum qualifications to move forward in the selection process,
those rated 2 do not meet the minimum qualifications and must wait two years to reapply, and
those rated 1 do not meet the minimum qualifications and are permanently disqualified. Prior to
2014, the decision whether to give an applicant a 1, 2, or 3 on the prescreening interview was in
the sole discretion of the two interviewers who conducted the interview. A new policy was put in
place in 2014, whereby the decision to score an applicant with a 1 or 2 was made during “consensus
meetings” of a group of four to five individuals. There were no guidelines for how decisions were
made during the consensus meetings. In addition, the decision-making process of the consensus
meetings was not documented.

        The named plaintiff, Marlon Carter, is an African-American male who applied for a
position with the MSP. After undergoing a prescreening interview on December 8, 2012, he
received a rating of 2 based on a poor credit history and currently past-due bills.3 According to
internal documentation, Carter was “removed from the selection process until he is able to show a
pattern of responsible financial behavior.”

3
  First Lieutenant Robert Hendrix, in charge of recruitment and selection since 2014, testified at
his deposition that an applicant might be given a score of 2 because of credit issues, but whether a
particular applicant’s financial history warrants a score of 2 is determined without the use of
guidelines or criteria.

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        Carter filed a complaint on behalf of himself and others similarly situated on December 7,
2015, asserting one count of disparate impact4 and two counts of intentional discrimination under
the Elliot-Larsen Civil Rights Act (ELCRA), MCL 37.2101 et seq. Relative to the instant appeal,
plaintiffs alleged that defendants “intentionally permitted management/command officers to
implement subjective selection criteria for trooper applicants in a discriminatory manner based on
highly subjective criteria, and without specific training in equal employment opportunity practices
or oversight[,]” and that “[s]uch subjective decision-making predictably and actually resulted in
adverse impact on African[-]American trooper applicants.” Plaintiffs further alleged that
defendants failed to monitor the adverse impact of its hiring practices on African-American
applicants.

        On March 28, 2019, plaintiffs moved for certification of a class defined as “[a]ll African[-
]American applicants for the position of Michigan State Trooper at any time on or after December
8, 2012 who received a score of ‘2’ on the Pre-Screening Interview[.]” Plaintiffs asserted that they
had properly met all of the criteria for class certification. Regarding commonality, the criterion at
issue in this appeal, plaintiffs contended that the commonality requirement for class certification
was satisfied for their class action because the use of subjective criteria in the prescreening
interview applied to all class members. Anticipating defendants’ reliance on Wal-Mart Stores, Inc
v Dukes, 564 U.S. 338; 131 S. Ct. 2541; 180 L. Ed. 2d 374 (2011), plaintiffs distinguished Wal-Mart
by asserting that the present case, unlike Wal-Mart, “involves a small group of common decision-
makers, following the same organization-wide evaluation method regarding the subjective criteria
used in the Pre-Screening Interview.”

        In their opposition to plaintiffs’ motion, defendants argued that plaintiffs failed to establish
the commonality, typicality, and adequacy requirements for class certification. They argued that
plaintiffs failed to satisfy commonality under Wal-Mart because they failed to establish “
‘significant proof’ that MSP has a general policy of discrimination.” Defendants attacked the
substance of the findings of plaintiffs’ expert and argued that individualized proofs would be
required for each class member.

        Subsequent to a hearing on plaintiffs’ motion for class certification, the trial court issued
an order and written opinion denying the motion. Focusing only on the commonality requirement,
the trial court found that plaintiff had “not presented significant proof of a general policy of
discrimination” or “shown that the MSP maintained a common mode of exercising discretion that
pervaded the entire department.” The court found plaintiffs’ expert’s analysis “unavailing,”
observing that his analysis showed only “a statistically significant difference between minority
and non-minority applicants in terms of the proportion selected within the time period” but failed
to control for differences in the backgrounds of individual applicants. The court deemed such
differences “critical, because if the groups have various factors in their backgrounds related not
only to their finances but also to their personal histories, including, for example, their criminal

4
  Plaintiffs also alleged that the written examinations administered by the Civil Service
Commission had a disparate impact on African-American applicants. Carter passed the
examination and, as previously indicated, the Civil Service Commission and its personnel director
were dismissed from this case.

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histories, along with their prior drug use, a finding of different selection score outcomes would be
appropriate and would not support a conclusion of disparate impact.” In other words,
nondiscriminatory factors “could likely have contributed to the disparity . . . .” The court stated in
its penultimate paragraph:

               Given the highly individualized claims and defenses in this employment
       discrimination case, which arise out of the various backgrounds of putative class
       members over a significant time period, the Court finds that individualized proofs
       would necessarily predominate over generalized proofs, and therefore, that the
       proposed claim does not meet the commonality requirement. As a result, Plaintiff
       has failed to demonstrate that class certification is warranted.

As noted above, plaintiffs filed an application for leave to appeal the trial court’s decision with
this Court, which we granted. Carter v State Police, unpublished order of the Court of Appeals,
entered September 18, 2019 (Docket No. 349638).

                                  II. STANDARD OF REVIEW

        In the context of a decision on class certification, we review a trial court’s factual findings
for clear error and its decision regarding certification for abuse of discretion. Henry v Dow Chem
Co, 484 Mich. 483, 495-496; 772 NW2d 301 (2009). Under the clear error standard, this Court
“will overturn the trial court’s decision only if we are left with the definite and firm conviction
that a mistake has been made.” Adams v West Ottawa Pub Sch, 277 Mich. App. 461, 465; 746
NW2d 113 (2008). “The trial court abuses its discretion when its decision is outside the range of
reasonable and principled outcomes.” Heaton v Benton Constr Co, 286 Mich. App. 528, 542; 780
NW2d 618 (2009). “The proper interpretation and application of a court rule is a question of law,
which we review de novo.” Henry, 484 Mich. at 495.

                                         III. DISCUSSION

        Plaintiffs first argue that the trial court abused its discretion when it denied their motion
for class certification on the ground that they had not satisfied the commonality requirement. We
agree.

       MCR 3.501(A)(1) allows a suit to proceed as a class-action suit only if all of the following
requirements are met:

       (a) the class is so numerous that joinder of all members is impracticable;

       (b) there are questions of law or fact common to the members of the class that
       predominate over questions affecting only individual members;

       (c) the claims or defenses of the representative parties are typical of the claims or
       defenses of the class;

       (d) the representative parties will fairly and adequately assert and protect the
       interests of the class; and

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       (e) the maintenance of the action as a class action will be superior to other available
       methods of adjudication in promoting the convenient administration of justice.

        These requirements are generally referred to as numerosity, commonality, typicality,
adequacy, and superiority. Henry, 484 Mich. at 488. The trial court may not “simply ‘rubber
stamp’ a party’s allegations that the class certification prerequisites are met.” Henry, 484 Mich. at
502. “[S]trict adherence to the class certification requirements is required.” Id. at 500. “A party
seeking class certification must meet the burden of establishing each prerequisite before a suit may
proceed as a class action.” Id. This is accomplished by “provid[ing] the certifying court with
information sufficient to establish that each prerequisite for class certification in MCR 3.501(A)(1)
is in fact satisfied.” Id. at 502. “Because there is limited case law in Michigan addressing class
certifications, this Court may refer to federal cases construing the federal rules on class
certification.” Neal v James, 252 Mich. App. 12, 15; 651 NW2d 181 (2002), overruled on other
grounds by Henry, 484 Mich. 483 (2009). While this Court may look to federal court decisions as
persuasive authority, such decisions are not binding on this Court. See Abela v Gen Motors Corp,
469 Mich. 603, 607; 677 NW2d 325 (2004) (“Although lower federal court decisions may be
persuasive, they are not binding on state courts.”).

        “To establish commonality, the proponent of certification must establish that issues of fact
and law common to the class predominate over those issues subject only to individualized proof.”
Duskin v Dep’t of Human Servs, 304 Mich. App. 645, 654; 848 NW2d 455 (2014) (quotation marks
and citation omitted). “The common contention . . . must be of such a nature that it is capable of
class[-]wide resolution—which means that determination of its truth or falsity will resolve an issue
that is central to the validity of each one of the claims in one stroke.” Id. (quotation marks and
citation omitted). Commonality “does not require all issues in the litigation to be common . . . .”
Hill v Warren (On Remand), 276 Mich. App. 299, 311; 740 NW2d 706 (2007).

         Defendants rely on Wal-Mart Stores, Inc v Dukes, 564 U.S. 338 (2011), to contend that
plaintiffs have not satisfied the requirement of commonality, while plaintiffs rely on it to argue
that they have. In Wal-Mart, the named plaintiffs brought a class action against Wal-Mart on
behalf of themselves and approximately 1.5 million current or former female employees, alleging
that the company “discriminated against them on the basis of their sex by denying them equal pay
or promotions.” Wal-Mart, 564 U.S. at 343; 131 S. Ct. 2541. The federal district court certified the
plaintiffs’ class, and the Ninth Circuit Court of Appeals affirmed that decision. Id., at 346; 131 S
Ct 2541, 2549 (quotation marks and citations omitted). At issue before the Supreme Court was
whether the class satisfied the criterion of commonality under the federal rules, which required the
plaintiffs to show that “there are questions of law or fact common to the class.” Id. at 349; 131 S
Ct 2541. More specifically, the plaintiffs had to show a common contention “of such a nature that
it is capable of class[-]wide resolution—which means that determination of its truth or falsity will
resolve an issue that is central to the validity of each one of the claims in one stroke.” Id. at 350;
131 S. Ct. 2541.

       The High Court concluded that the plaintiffs did not satisfy the commonality requirement
under the federal rules because there was no common contention that tied their discrimination
claims together. The evidence showed that the company left pay and promotion decisions to the
broad discretion of local store managers, who exercised their discretion “in a largely subjective
manner.” Id. at 343; 131 S. Ct. 2541 (citation omitted). The Supreme Court explained that “[i]n a

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company of Wal-Mart’s size and geographical scope, it is quite unbelievable that all managers
would exercise their discretion in a common way without some common direction.” Id. To
overcome this, a plaintiff would need to show “[s]ignificant proof that an employer operated under
a general policy of discrimination . . . if the discrimination manifested itself in hiring . . . practices
in the same general fashion, such as through entirely subjective decisionmaking process.” Id. at
353 (quotation marks and citation omitted). However, the plaintiffs had failed to present such
proof. Id. at 354; 131 S. Ct. 2541. The Court explained:

        The only corporate policy that the plaintiffs’ evidence convincingly establishes is
        Wal-Mart's “policy” of allowing discretion by local supervisors over employment
        matters. On its face, of course, that is just the opposite of a uniform employment
        practice that would provide the commonality needed for a class action; it is a policy
        against having uniform employment practices. It is also a very common and
        presumptively reasonable way of doing business—one that we have said “should
        itself raise no inference of discriminatory conduct,” Watson v Fort Worth Bank &
        Trust, 487 U.S. 977, 990; 108 S. Ct. 2777, 101 L. Ed. 2d 827 (1988). [Id. at 355; 131
S. Ct. 2541.]

Because the discrimination alleged in Wal-Mart resulted from the exercise of discretion by
hundreds of thousands of local store managers, made without any common policy or guidance
from the company—i.e., without any “glue” to hold them together—the Supreme Court concluded
that the plaintiffs had not established the existence of a common question. Id. at 359.

         The present defendants contend that, like the plaintiffs in Wal-Mart, plaintiffs here have
not presented significant proof of a general policy of discrimination. Defendants posit that there
is no “glue” holding together MSP’s alleged reasons for its employment decisions, and because
“the claims, defenses[,] and substantive law applicable to this employment discrimination case
will require particularized proof[,]” the trial court did not abuse its discretion by denying plaintiffs’
motion for class certification. Contrariwise, plaintiffs rely on the Supreme Court’s observation in
Wal-Mart that the Court has “recognized that, ‘in appropriate cases,’ giving discretion to lower-
level supervisors can be the basis of Title VII liability under a disparate-impact theory—since ‘an
employer’s undisciplined system of subjective decisionmaking [can have] precisely the same
effects as a system pervaded by impermissible intentional discrimination.’ ” Wal-Mart, 564 U.S. at
355; 131 S. Ct. 2541, quoting Watson, 487 U.S. at 990; 108 S. Ct. 2777. Plaintiffs argued that theirs
is just such a case.

        In support of their position, plaintiffs rely on McReynolds v Merrill Lynch, Pierce, Fenner
& Smith, Inc, 672 F3d 482 (CA 7, 2012), abrogated on other grounds as recognized by Phillips v
Sheriff of Cook Co, 828 F 3d 541 (CA 7, 2018). The relevant issue in McReynolds was whether a
class of 700 African-American brokers who accused Merrill Lynch of discrimination could be
certified under federal rules. McReynolds, 672 F3d at 488. The federal district court denied the
motion. A month later, the Supreme Court’s decision in Wal-Mart was handed down and the
plaintiffs renewed their motion for certification. Id. at 487. The federal district court again denied
their motion, thinking the case like Wal-Mart because Merrill Lynch

        delegates discretion over decisions that influence the compensation of all the
        company’s 15,000 brokers . . . to 135 “Complex Directors.” Each of the Complex

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       Directors supervises several of the company’s 600 branch offices, and within each
       branch office the brokers exercise a good deal of autonomy, though only within a
       framework established by the company. [Id. at 488.]

         Two elements of that framework were at issue: Merrill Lynch’s “teaming policy” and its
“account distribution policy.” Id. The teaming policy allows—but does not require—brokers in
the same office to form teams for the purpose of sharing clients in order to increase the number of
clients, client investments, and revenue. The brokers form the teams and, once a team is formed,
decide whom to admit as a new member. Account distributions occur when a Merrill Lynch broker
leaves the company and his or her clients’ accounts must be transferred to other brokers. Id.
“Accounts are transferred within a branch office, and the brokers in that office compete for the
accounts. The company establishes criteria for deciding who will win the competition. The criteria
include the competing brokers’ records of revenue generated for the company and of the number
and investments of clients retained.” Id. at 488-489. Local branch managers and Complex
Directors have the discretion to veto teams and “supplement the company criteria for
distributions[,]” but exercised their discretion in support of the two company policies at issue. Id.
at 489.

        The plaintiffs asserted that Merrill Lynch’s teaming policy exacerbated racial
discrimination by the brokers. The Seventh Circuit recognized that brokers formed teams in a way
that maximized their chance for success, but also observed, “[t]here is bound to be uncertainty
about who will be effective in bringing and keeping shared clients; and when there is uncertainty
people tend to base decisions on emotions and preconceptions, for want of objective criteria.” Id.
To illustrate its point, the federal appeals court provided the following, useful hypothetical:

       Suppose a police department authorizes each police officer to select an officer
       junior to him to be his partner. And suppose it turns out that male police officers
       never select female officers as their partners and white officers never select black
       officers as their partners. There would be no intentional discrimination at the
       departmental level, but the practice of allowing police officers to choose their
       partners could be challenged as enabling sexual and racial discrimination—as
       having in the jargon of discrimination law a “disparate impact” on a protected
       group—and if a discriminatory effect was proved, then to avoid an adverse
       judgment the department would have to prove that the policy was essential to the
       department's mission. That case would not be controlled by Wal-Mart (although
       there is an undoubted resemblance), in which employment decisions were
       delegated to local managers; it would be an employment decision by top
       management. [Id. (citations omitted).]

The federal appeals court observed that, just as in its hypothetical, where police officers selected
their own partners as allowed by their department’s policy, so also at Merrill Lynch, brokers
formed teams as allowed by the policy framework that Merrill Lynch established. The federal
appeals court concluded, “[i]f the teaming policy causes racial discrimination and is not justified
by business necessity, then it violates Title VII as ‘disparate impact’ employment discrimination—
and whether it causes racial discrimination and whether it nonetheless is justified by business
necessity are issues common to the entire class and therefore appropriate for class-wide
determination.” Id.

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         Also instructive is Ellis v Costco Wholesale Corp, 285 FRD 492 (ND Cal, 2012), which
follows the reasoning of McReynolds in distinguishing the claims of the plaintiffs alleging
discrimination from those alleging discrimination in Wal-Mart. At issue in Ellis was certification
of a class of plaintiffs who alleged that Costco’s “tap-on-the-shoulder” method of promoting
employees to General Manager and Assistant General Manager discriminated against women. At
first glance, there did not seem to be a common contention that would provide the “glue” to the
plaintiffs’ allegations. There were no written policies explaining to employees the criteria for
promotion to these two positions, no written guidelines explaining how to get on the list of
promotable candidates, no posting of openings for these positions, no requirement that more than
one candidate be considered for an open position, no requirement that performance evaluations or
other documents be considered in the selection process, no consistent practice of interviewing
potential candidates, and no records kept of the selection process. Ellis, 285 FRD at 498.
Nevertheless, the federal district court found the “glue” that Wal-Mart was lacking in company-
wide substantive criteria and procedural ground rules guided and supervised by a “relatively small
and coherent group of company executives.” In other words, although the selection criteria for
these two positions was discretionary, discretion was exercised within a framework established
and controlled by company executives, thus resulting in a common mode of exercising discretion
that, according to the plaintiffs’ statistical evidence, discriminated against women. Id. at 530.
Accordingly, the federal district court found commonality satisfied under the federal rules for class
action. Id. at 533.

        Plaintiffs in the present case allege that the framework established by the MSP, i.e.,
allowing a prescreening interview in which the interviewers have the discretion to give applicants
a ranking of 2 based on subjective criteria, has a disparate impact on African-American candidates.
This case is not like Wal-Mart, where guidance from the company on pay and promotion decisions
was lacking, and store managers were left to the exercise of their discretion, resulting in hundreds
of thousands of store managers across the country making individual decisions that were allegedly
discriminatory but not held together by any common content or common mode of decision-
making. Here, as defendants point out, there is a rigorous selection process, of which the
prescreening interview is one part, and which itself is subject to some guidance through the use of
prepared questions. Thus, this case is more like McReynolds, wherein Merrill Lynch established
facially neutral policies that it left to its brokers to execute, and the brokers then executed the
policies in ways that the McReynolds plaintiffs claimed disparately impacted African-Americans.
That the decision whether to give a 2 ranking to an applicant based on subjective criteria was made
by the two interviewers and, after 2014, by a small group led by First Lieutenant Robert Hendrix,
the officer in charge of recruitment and selection, arguably resembles Ellis, wherein the evidence
showed that Costco had a subjective selection process established and supervised by a small,
coherent group of decisionmakers, which resulted in a common mode of exercising discretion.

        We conclude that whether the framework of the prescreening interview, which allows
discretionary ranking based on subjective criteria, discriminates on the basis of race and is not
justified by business necessity are questions common to the entire class and appropriate for class-
wide determination. Whether plaintiffs can prevail on their claim is not at issue here, and the trial
court’s observation that there likely were nondiscriminatory reasons for the results of the expert’s
analysis, was tantamount to questioning the actual merits of the case, a violation of the “well-
accepted prohibition against assessing the merits of a party’s underlying claims at this early stage

                                                -8-
in the proceedings.” Henry, 484 Mich. at 503. Therefore, we reverse the trial court’s order denying
plaintiffs’ motion for class certification, and remand for the trial court to consider whether
plaintiffs have established typicality and adequacy, the other class-certification requirements
defendants challenge.

        Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.

                                                            /s/ Jonathan Tukel
                                                            /s/ Deborah A. Servitto
                                                            /s/ Jane M. Beckering

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