Court Opinion

ID: 9474827
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:10:04.379824+00
Date Added: 2024-06-11T17:44:21.687911
License: Public Domain

MERRITT, Circuit Judge,
dissenting.
I do not agree that King’s suit is barred by the res judicata effect of the settlement in the Louisiana class action against the telephone company.
King had four claims against South Central Bell that arose from Bell’s alleged Title VII violations with regard to the company’s maternity leave policy: (1) a monetary claim for Bell’s delay in reemploying King when she requested return from maternity leave, (2) an injunctive claim seeking restoration of the seniority lost as a result, in principal part, of the above delay, (3) an injunctive claim seeking reinstatement to the job King had held before her leave, and (4) a monetary claim for wages lost during the three years that King worked in the lower paying job after her return from leave. All four of the claims were of types dealt with by the class action.
King submitted claim number one in the class action and received compensation for the claim under the settlement. King notified the court of her second claim but apparently did not submit it as a claim. As a result of her comments (and the comments of other class members) the settlement agreement was revised to provide a restoration of lost seniority to class members. The record does not disclose whether King’s claim for lost seniority was satisfied by the settlement. By the time the class action neared settlement, King had already worked her way back up to her original job. Consequently, her third claim, for restoration to her original job, no longer existed. King’s fourth claim, for wages lost during the three years while King worked at the lower paying job, is King’s principal (and perhaps only) remaining claim. She estimates that with interest it amounts to approximately $13,000.
The panel’s holding that King’s action seeking declaratory relief related to her remaining claim is barred under res judicata by the settlement of the class action depends on the conclusion that the class action was binding on King as to this claim for lost wages. The question is, should the Louisiana class action, certified only under rule 23(b)(2), Fed.R.Civ.P., be interpreted to include lost wages claims arising from reemployment in a job paying less than the one to which a claimant is entitled?
According to rule 23, certification under 23(b)(2) is proper when “the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole.” The Advisory Committee’s notes to rule 23(b)(2) make clear that “[t]he subdivision does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages.”
The Fifth Circuit has developed a mechanism to deal with class action representatives who wish to assert both claims for injunctive relief and claims for substantial monetary relief. Under Fifth Circuit precedent an action brought by such a class may be certified under rule 23(b)(2) and is referred to as a “hybrid” (b)(2) class action. See Johnson v. General Motors *532Corp., 598 F.2d 432 (5th Cir.1979). The Louisiana action was such a “hybrid” class action. Under this so-called “hybrid” action, an absent class member who wishes to assert substantial claims for monetary relief will be bound by the judgment or settlement in the class action and has no right to opt out of the class (although the trial judge has discretion to provide class members with opt-out rights, which he did not do in the case at bar).
The courts of this circuit have never embraced the Fifth Circuit’s “hybrid” (b)(2) class action scheme. In my opinion, the procedure violates the due process rights of absent class members who possess claims for substantial monetary relief. If the parties to a class action wish to include in the class the claims of potential individual class members who mainly have large monetary claims, due process requires that such class members be afforded all the protection that would be present in a rule 23(b)(3) action — including the right to opt out of the class. Accord Greenspan v. Automobile Club, 22 FEP Cas (BNA) 180 (E.D.Mich.1977) (employment discrimination suit certified under rule 23(b)(2) for equitable relief and rule 23(b)(3) for back pay). Because King could not, consistent with due process, have been bound in regard to her lost wages claim by a judgment in the “hybrid” class action, this Court should not hold that the Louisiana class action settlement barred King’s suit.
Even if the “hybrid” (b)(2) class action scheme were acceptable, it does not appear that King received adequate notice as required in such actions under the Fifth Circuit’s opinion in Johnson v. General Motors Corp. Johnson holds that in a “hybrid” (b)(2) class action, due process requires that absent class members receive notice that the “hybrid” action is pending and that damage claims may be barred if not submitted. 598 F.2d at 438. If proper notice is not given, the class action does not bar a subsequent suit on the monetary claims. 598 F.2d at 437.
The notice King received told her, “You may be owed a settlement” if “you were not reinstated to your job or were delayed in reinstatement to your job when you requested to return to work from your maternity leave.” Supra p. 526. Further, the notice stated that the only class members who were entitled to monetary relief were “[t]hose who requested to return from their maternity leaves and were delayed in such reinstatement.” Supra p. 527. The notice continued, “Unless you intend to claim that South Central Bell delayed your returning to work during or at the end of your maternity leave, you can stop here, as you will not be eligible for any monetary or reinstatement relief.” Supra p. 527.
The notice of settlement in the Louisiana class action is ambiguous and led King, she says, to believe that the settlement covered only claims arising from Bell’s refusal to promptly reemploy a worker returning from maternity leave. The notice gave the impression that if a returning worker were immediately reemployed but to a lesser job, that worker’s claim was not included in the settlement. Thus, King believed that her claim for Bell’s 8-day delay in reemploying her was covered by the settlement, and she submitted the claim. However, King’s main claim — seeking lost wages equaling the difference in pay between her original job and the lower paying job to which she was returned — did not appear to be included in the settlement. King, therefore, did not submit this claim, but raised the question of lost seniority resulting from delay in reemployment, and, because the notice referred to the fact that certain claims might be barred, she notified the court and counsel that she was not waiving other claims. Her response indicates that she did not understand what the settlement included. Her lack of understanding was reasonable, and perhaps inescapable, in light of the notice.
The notice did not make King aware, and would not make a reasonable person aware, that her back pay claim would be barred if not submitted for satisfaction by the settlement. It left King with the justified belief that the settlement did not reach *533claims for wages lost as a result of reemployment in a lower paying job. Thus, the notice did not do what Fifth Circuit precedent requires notice in a “hybrid” 23(b)(2) class action to do. According to Johnson, the settlement cannot, consistent with due process, bar King’s subsequent suit by which she asserts this unsubmitted claim.
The panel’s opinion does not squarely address the obvious shortcomings of the notice. The panel quotes the District Court stating:
Although the notification of the proposed settlement received by plaintiff may have been subject to some misinterpretation, a review of the entire record makes clear that the class action adjudicated all claims presented in this case.
Supra p. 529. In so doing, the panel repeats the District Court’s error. The fact that the class action adjudicated King’s claims is irrelevant because due process requires that King’s suit not be barred by a previous “hybrid” (b)(2) class action of which she did not receive adequate notice. The panel continues, “[e]ven if it can be argued that the notice was somewhat ambiguous, King could not opt out because the action did not include that privilege. The most she could do was object to the decree and she did.” Supra p. 530. As discussed above, I believe denial of the “privilege” of opting out of the class denied King due process. However, putting aside that argument, King had another option. If proper notice had informed King that her lost wages claim was included in the class action, she could have intervened in the class action, being represented by counsel, in order to protect her claim. Because the inadequate notice failed to inform her that her monetary claim was part of the action, she would have had no thought of intervening to protect that claim.
Additionally, the panel quotes the District Court:
Although plaintiff was uncertain of the full scope of the class action, she filed an objection to the settlement in the event that the class action did fully cover her claim. This objection was considered and apparently rejected by the Louisiana Court.
Supra p. 529. King did not file any objection indicating that she wished to have the settlement revised to include her lost wages claim. The fact that she commented about, the seniority question does not indicate that she knowingly decided not to submit her monetary claim.
Fifth Circuit case law does not require that the required notice in a “hybrid” (b)(2) action be given at any particular stage of the litigation. Here no notice was given until 1983, almost seven years after the Louisiana class was certified. It appears that the only notice that King received was the notice of compromise or settlement of a class action as required by rule 23(e). Logically, it seems that if Johnson requires that notice be given to the absent members of a “hybrid”(b)(2) class, the notice must be different from or give more information than the notice of settlement required by rule 23(e). If the notice required by rule 23(e) is enough, then the “hybrid” class action concept is nothing more than a 23(b)(3) class action stripped of the notice and opt out privilege.
Suffice it is to say that the notice King received was inadequate for purposes of the Fifth Circuit’s “hybrid” (b)(2) class action precedent. To give only scant notice of settlement in a class action that should properly have been divided into a (b)(2) class seeking injunctive relief and a (b)(3) class seeking monetary relief, and then to use the res judicata effect of the settlement to bar King’s subsequent action, is a violation of King’s right to due process. The class action settlement was therefore not a valid judgment as against King’s lost wages claim, and should not be held to bar her action.